Industries: Finance

The Future Requires Engaging in Situational Unawareness Training

”Be very, very careful what you put into that head, because you will never, ever get it out.”—Thomas Cardinal Wolsey

Question: What two colors are the yield sign?

Did you say yellow and black? That answer would have been correct if Marcus Welby, M.D. was still the top-rated TV show; Richard Nixon occupied the White House or NASDAQ had yet to become a leading stock market index. The yield sign, though, has been red and white since 1971. Interestingly, a large number of people—including many born after 1971 - still erroneously believe the yield sign is yellow and black.

This phenomenon demonstrates that once a thing has been learned—even something as common as the color of a sign—it can be very difficult to unlearn.

Compare this situation with the actions of computer industry executives in the 1980s who had learned about computers in the era of mammoth mainframes and were accustomed to producing their own proprietary hardware and software and then having internal sales teams market and sell the expensive products they created.

With the advent of the personal computer the rules suddenly changed and companies began relying on microprocessors and packaged software and using third parties to distribute and sell the product. A handful of computer companies adjusted but many others such as Digital Equipment, Wang and Burroughs did not because either they didn’t unlearn the old rules or were late in adjusting to the new signs.

The same situation occurred more recently in the telecommunications industry. Prior to the creation of the iPhone, providers dominated the telecom industry and dictated to phone manufacturers the terms of agreement. The creation of Apple’s multi-touch, gesture interface and “apps"--laden device flipped the industry on its head. In a matter of months, millions of people switched providers and began using mobile devices to access the Internet (with a user--friendly browser), watch videos, read books and, together with the growing universe of software applications, do everything from locate their parked car at an airport and identifying obscure birds and songs to keeping their child mildly amused with an easy-to-download “fart app.”

In each case, the signs of change were not immediately obvious but they could have been picked up on if industry leaders had engaged in some situational “unawareness” training by stepping outside their industry’s existing paradigm and scanning the environment for subtle changes in technology, consumer behavior or the competitive landscape. For example, in the automotive industry, new advances in nano-materials and battery power could lead to radical new designs; the continued growth of social networking may demand the cars of the future to maintain constant connectivity and improve the driving experience; and advances in robotics and rapid prototyping could transform both the manufacturing process and the supply chain. In each case, automotive professionals will have to unlearn what a car looks like; how it is made; what it is expected to do; and who they will have to partner with in order to build the car of the future.

Homework Assignment: Using Starbucks as a case study, indentify three emerging trends in technology, consumer behavior or the beverage/food industry that may necessitate company officials to unlearn some aspects of its current business model.

Extra Credit: Identify at least two things which have contributed to Starbucks past success but that it should consider stop doing? (Hint: In 2009, the company dropped its name from a store in Seattle and replaced it with a name that more closely resembles a neighborhood corner coffee shop.)

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Jump the Curve Strategy #15: Mandatory Recess

A mandatory recess might not sound like a sure-fire path to prosperity, but providing employees a period of unstructured free time to pursue activities of their choosing can be very beneficial. A handful of companies have already instituted such policies. Among some of the better known companies are Google, Genentech, and 3M.

All three companies have policies that allow some of their employees to spend anywhere between 15 percent and 20 percent of their time pursuing independent projects of their own choosing. In essence the companies are giving their employees permission to play.

3M has been a proponent of this practice for the longest period of time. According to company officials, the practice dates back to the 1920s when an employee reportedly disobeyed an order to abandon a project and ended up creating Scotch masking tape--one of the most successful products of all time.
One of 3M’s better known and more recent success stories is that of the Post--t Note, which was developed by an employee who, because of 3M’s policy, was free to pursue the project.

The benefits, though, go beyond these isolated successes. 3M has an incredible history of developing new products. For years the company has publicized the fact that 50 percent of its annual revenues can be traced back to products that were developed within the past five years.

One of the reasons it has been able to regularly achieve this goal is because employees have been encouraged to innovate and have then been given the freedom to pursue new ideas. The mandatory recess policy has not only reinforced the idea that continued innovation was critical to the company’s success, it has given management the confidence to stay focused on ideas that at first might have seemed either like dead ends or were too off the wall to pursue.

Another company that has embraced a discretionary time policy is Genentech. For the past few years the biotechnology company has consistently been ranked as one of the best places to work in America. There are many reasons for this, but one is because it allows its scientists discretionary time to pursue independent projects--in some cases up to 100 percent of their time. Genentech officials credit the creation of the anticancer drug Avastin--a product with over a $1 billion in annual sales--to its “discretionary time” policy.

As I explained before, the cost of the price of sequencing genes will continue to plummet due to the creation of ever faster computers and more sophisticated gene sequencing techniques and tools. As these things occur, not only will new drug treatments become available, but scientists and researchers are more likely to find innovative solutions to create drugs that are increasingly tailored to individual users.

Finally there is Google. In many ways, it has the boldest recess policy because it applies to all of the company’s employees (3M’s and Genentech’s programs are limited to its scientific and R&D staffs). Among the programs company officials attribute to its policy are the creation of Google News Service, Orkut (its social networking site), and Gmail.

In addition to generating new innovative products, mandatory recess offers one additional benefit that is hard to quantify, but is nonetheless extremely important: It is a powerful recruiting and retention tool. There is a fierce battle to attract and retain talented workers. One of the reasons Google, Genentech, and 3M are doing as well as they are is their policies send a clear message to prospective employees: The company trusts them to pursue interesting and important projects that they believe are in the company’s best long-term interests.

By giving workers this freedom, companies accrue one additional benefit. Employees now have a way of not simply meeting expectations--they have a way of surpassing them.

Exponential Insight

If you want employees to jump the curve, you have to give them the time and space to jump. As I will continue to demonstrate throughout this website, there will be no shortage of wild ideas and strange possibilities arising due to exponential advances in technology. Consider just a few of the possibilities that the emerging science of nanotechnology might enable materials scientists to play around with. For instance, plastic, glass, and steel are already being made stronger, lighter, more flexible and, in some cases, self-cleaning. Soon self-healing materials, flexible electronics, and solar fabrics will be on the market. Some of these advances will lead to innovative new products and applications. Thinking up new ideas will require people to follow their hunches and, sometimes, make counterintuitive jumps in logic. Running such off-the-wall ideas by management could, at best, be difficult. Better those employees just be given some mandatory recess time to pursue their ideas.

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Jump the Curve Strategy #12: Think Small, Very Small
Jump the Curve Strategy #11: Park ‘n Save with Robots
Jump the Curve Strategy #10: Get in Touch with All of Your Sensors
Jump the Curve Strategy #9: Follow Your Hunch
Jump the Curve Strategy #8: Run the Numbers
Jump the Curve Strategy #7: Reorganize Your Data Storage Closet
Jump the Curve Strategy #6: Let the Computer Do It
Jump the Curve Strategy #5: Bet On It
Jump the Curve Strategy #4: Just “Wiki” It
Jump the Curve Strategy #3: Look to the Kindness of Strangers
Jump the Curve Strategy #2: Take a Bird’s Eye View of the World
Jump the Curve Strategy #1: Learn to Spell Zenzizenzizenzic
Introduction to Chapter Two: The Power of Zenzizenzizenzic
Welcome to the Exponential Economy: Prepare to Jump the Curve
Introduction to Jump the Curve

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A Future of Black Swans … or Unlearning the Future

”Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.” Lao Tzu

This famous quote was uttered over 2500 years ago and may strike some people as odd that, as a professional futurist, I have chosen to highlight it.

My rationale is two-fold. First, as I have said many times before, the chief responsibility of a futurist is not to “predict” the future but rather outline a range of future possibilities. Second, and more important, I have highlighted the quote because it is true.

If you have not already read Nassim Taleb’s outstanding book, The Black Swan: The Impact of the Highly Improbable, do so as soon as possible. On Page 177 of the book, Taleb has an illustration of the scattering effect which artfully explains why predicting the future—especially for longer time frames—is virtually impossible.

Because I can’t reprint the figure here, I am left with Taleb’s analogy for understanding the scattering effect: the prediction of a billiard ball.

Assuming one has knowledge of the location of every ball and the speed and accuracy of the cue ball, it is relatively easy to predict the expected movement of the ball after the first shot. A person might even expect that second, third and fourth degree movements can be estimated with great accuracy due to the growing computational power of computers. The problem, however, grows increasingly complex with each subsequent movement. This is because after the ninth movement the gravitational pull of a person standing at the next pool table exerts enough of an effect to alter the trajectory of the ball. And after 56 movements even the smallest particle on the outer edge of the universe will effect the trajectory!

The bottom line is this: There are simply too many factors to consider when contemplating the future 20, 30, 50 or 100 years out. (Even a small effect today can have outsized implications 50 years hence). The situation, of course, becomes even more complicated because of Taleb’s main thesis which is that “Black Swans”—described as “high impact, low probability” events—tend to shape the future more than “expected” trends.

Therefore, whether a future “Black Swan” takes the shape of a pandemic, an asteroid, an E-bomb, a rogue terrorist attack, a North Korean or Iranian nuclear attack, an unexpected breakthrough in quantum computing or synthetic biology, or, more likely, some “unknown unknown;” the future will be difficult too predict because we don’t have—and won’t ever have—enough knowledge about the future.

Related Posts

The Future Requires Unlearning
Unlearning the Future

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To Succeed in the Future: Unlearn Information

Unlearning information. It’s sounds paradoxical, right? After all, who in their right mind, would want less information? Well, you might if you want to succeed in the future.

Consider this quote which I came across in Jonah Lerner’s informative new book, “How We Decide”:

“A wealth of information creates a poverty of attention.”

It is counter-intuitive but often having access to too much information can lead people to make worse decisions.

For example, in a classic study, one group of MIT graduate students were given access to a steady stream of financial information—CNBC, Barron’s, The Wall Street Journal, etc—while a second group was only given information on the changing price of a stock.

Given this disparity which group do you think did a better job in selecting stocks? Most people would assume the first group. After all isn’t this why people read the Wall Street Journal and watch the analysts on CNBC? Well, you would be wrong. The second group—the group with less information—performed better.

Various versions of this experiment have been conducted with other groups, including college counselors who were asked to predict the future success of different students. One group was provided high school transcripts, SAT/ACT test scores, application essays and were even allowed personal interviews with the students. The second group was only given access to transcripts and SAT scores.

Again, the group with less information performed better. One big reason why this occurs is because when people are inundated with too much information they tend to think of all information as being equal. In the process, they lose track of what information is really important. More problematic is the finding that with more information people increasingly confident of their bad decisions!

The bottom line is not just as Jonah Lerner says that “Knowledge has diminishing returns,” but rather as Nassim Taleb wrote in the Black Swan that “Additional knowledge of the minutiae of daily business can be useless, even toxic.”

So there you go. De-toxify your system. Unlearn. Put down the newspapers and blogs; stop watching TV news programs; and quit following everyone on Twitter—you’ll make better decisions because of it.

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To Prepare for the Future Take a Course on Unlearning

At the end of yesterday’s post on learning to unlearning (on my other website, Unlearning101.com), I posed the following question: How does one learn a new gestalt? To begin a person must start by unlearning some things. But what things do we unlearn? For our purposes, a good place to start might be to imagine what a course on unlearning what might look like.

One place to start is to imagine where the course would take place. Initially it will be--and already is--online. In 2007 the Massachusetts Institute of Technology announced that it was putting all of its courses online for free--for anyone in the world to access.

And let’s remember, the online, virtual classroom of the future is only going to get better. The Internet of the future will be streaming incredible amounts of data-rich information anywhere in the world, students will be capable of wirelessly downloading the latest information from flexible electronic books that display both the written word and video files, and new software programs will be capable of translating text from Mandarin Chinese, French, or Farsi into English--and vice versa. (See ”The Future of Reading.")

Another place a course on unlearning might gravitate toward is 3-D virtual-reality environments such as Linden Labs’ Second Life--a site where anyone can create a personal avatar of himself, meet other virtual avatars, and engage in online training sessions. As of this writing IBM, Dell, Intel, Circuit City, and Sears have all created a virtual presence in Second Life.

Interestingly, one of the initial motives of this move was not to create a stronger presence on the Internet (although that is certainly a factor), it was to achieve cost savings on employee education.

What is more interesting from the perspective of unlearning is how Second Life and other virtual-reality sites can be exploited to provide people with different perspectives. In a virtual environment, people can take on any appearance they want. While some people will undoubtedly use it for escapist fantasies, it could also be a powerful tool to help people unlearn certain habits. Imagine, for example, customer service representatives or managers being required to act as customers in one of their own online stores. The experience could provide a unique and refreshing perspective. (And, as I recently wrote, we could all benefit on occasion from unlearning everything from your perspective of color to your view of a stranger standing across the street.)

Longer term, the classroom of unlearning will likely become even more immersive. Perhaps Second Life will morph into Third Life. Among the technologies this environment are likely to incorporate will be enhanced visual, auditory, voice and speech recognition, and haptic technologies. Doctors and service technicians could use these tools to practice operations and repairs in silico before being allowed to ply their trade in the real world.

These tools will also be a boon for learning, unlearning, and relearning. People are often classified into one of three broad categories of learning: visual, auditory, or kinesthetic. Visual people learn by seeing or reading something, auditory learners by hearing it, and kinesthetic learners learn by doing it with their hands and muscles. (It is not quite this simple. Many people use a combination of different techniques for different things, but in general, most people tend to favor one of the three methods over the other two.)

A course on unlearning could exploit these natural tendencies and help people absorb new ways of doing things. For instance, instead of just reading about how a new drug works on a cancer patient, doctors could watch how it interacts with and disables a cancer cell. Other businesses could use such immersive technology to gain a deeper appreciation of what an elderly person experiences and create products that better address their needs. (See ”Unlearning Your Age.")

Many courses on unlearning won’t have a teacher. They will rather be open source in nature, and the content will not be provided by a single “expert” but rather it will be continually added to and improved upon by a vast collection of people. To this end, a relatively new wiki called Curriki has recently been created. Its goal is to support the development and free distribution of world-class educational material to anyone who needs it--anywhere in the world.

But far from being a shoddy collection of disjointed or inferior ideas, the result of these wikis will be vastly superior to anything a single expert could pull together. In the case of business wikis, they will contain advice and insights from employees, suppliers, and customers.

Among the adjustments this will require is that managers will need to unlearn their own reliance on experts. People will need to unlearn the idea that money and quality are synonymous. In the future, many of the best products will be the creation of open-source methods and wikis.

Another thing people will have to unlearn is that there isn’t always an answer. This is because so many fields are constantly evolving. An admission of one’s own ignorance may well be the first step most people will need to take upon entering the unlearning classroom of the future. Exponential executives may even have to go a step farther and accept that ignorance will be the largest element in their future educational needs.

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The Future of Association Meetings

In my business as a futurist and a public speaker, I have addressed hundreds of business association meetings. They are great networking opportunities, but it is not uncommon at these events to see a great many people stick to the safety of their pre-existing social circles. There is nothing inherently wrong with this, but most people would probably agree that in so doing these people are missing out on a great opportunity to form new connections as well as gain insight from other people whom they haven’t—and might never—meet.

Well, there is a new technology brewing on the horizon which could radically alter the dynamics of future meetings and enhance the productivity of these meetings. The technology I am speaking of is known as ’smart badges” and while they have been around in a limited form for the past few years, the technology is now getting better and they are poised to have a big impact on how future meetings are conducted—especially association meetings.

For instance, if you look at the picture above it is easy to see who is talking to who. Armed with this information, it might be easier for people to make common connections. For example, if you don’t know Bob but you see that your friend Sarah does, it might be easier for you to introduce yourself to Bob. Similarly, the technology can be used to bring together people who share common interests, hobbies or who might have even read the same book. It is even feasible to draw in people who would otherwise prefer to stay on the fringe—and this could be important because these people might have something really valuable to add to the conversation.

MIT’s Media Lab and such spin-off companies as nTag are producing a variety of innovative new technologies that could revolution the field of sociometrics. When one couples this progress with advances being made in the fields of mobile communication, RFID technology and software programs and algorithms, it boggles the mind to think how much more enjoyable, informative and entertaining future business and trade association meetings might be.

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Unlearn by Learning to Ask New Questions

We have all been there at some time—standing in line at the airport waiting to board a plane and thinking to ourselves that “there has to be a better way.” Well, apparently, there is now. According to this informative article a researcher at Fermilab has figured out the optimal way to board an airplane.

His findings are counter-intuitive to say the least. Contrary to what one might expect, boarding from the back of the plane first isn’t the optimal method. Rather, the optimal method is to board passangers 10 at a time in every other row. Apparently, this allows passengers to store their baggage overhead at a faster rate.

As I say in my book, Jump the Curve, accelerating advances in computer processing power and algorithms often result in findings that challenge conventional wisdom. The big question now is whether executives in the airline industry will have the courage to listen to an outsider (the researcher, Jason Steffen is a physicist) and whether the industry itself can “unlearn” its current behavior of loading passengers from the the back of the plane.

Interested in other posts on the topic of unlearning? Check out these articles:

Does the Pharmaceutical INdustry Need to Unlearn?
Is the Health Care Industry prepared to Unlearn?
Learning to Unlearn: Case Study #1
Examples of Unexponential Thinking

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Think About the Future, Today

Effective today, June 8, 2009, General Motors and Citigroup are no longer components of the Dow 30. In and of itself this news has no great relevance, but it does highlight how fast today’s economy continues to change. As I mentioned the other day, many people think that ”tomorrow will be pretty much like yesterday.” This simply isn’t true.

One strategy I have advocated for thinking about the future is to ”develop a future bias.” As a thought exercise and to help you “jump the curve,” I’d like to suggest a second exercise: review the members of the current Dow 30 and imagine which company will be the next to be removed from the list and explain why it might go. (For extra credit, I invite you to imagine which company might replace it.) The purpose of this exercise is to force you what of your comfort zone and come face-to-face with the reality that “the only constant is change.”

To help you get started, here are some possibilities. Advances in nanotechnology could cause many of the materials Alcoa makes to become either irrelevant or obsolete, and the company will be replaced by a nanomaterial company. Or perhaps Caterpillar will not remain competitive due to advances in robotics and it will be replaced by iRobot. A third alternative is that intense competition from Nokia will wreak havoc on both AT&T and Verizon and they will be replaced on the Dow 30 by Google, which may continue to make strides in the communication field with its new Android platform. A fourth possibility is that new advances in biotechnology will render many existing drugs obsolete and Pfizer will be replaced on the Dow 30 with a biotech company such as Genentech.

Really, there is no shortage of possibilities but one of the best ways to prepare for the future is to simply acknowledge that it is going to change. And, as Darwin said: “It is not the strongest of a species that survives, nor is it the fittest; it is those that can adapt the fastest.” Are you and your organization prepared to adapt? Quickly?

If not, you could go the way of General Motors.

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Into the Unknown: A Historical Lesson from Lewis & Clark

In 2004, I wrote the book Into the Unknown: Leadership Lessons from Lewis & Clark’s Daring Westward Expedition. One of my favorite stories—because it has so much relevance for today’s business leaders who are looking to jump the curve—occurred during the early part of June 1805.

On June 2, 1805, Lewis and Clark approached a fork in the Missouri River. During their consultations with the Indians the previous winter nothing had been mentioned of this second river. It was, however, critical that the Corps of Discovery follow the true Missouri River. If they didn’t, they were unlikely to reach and successfully pass over the Rocky Mountains before winter. This setback would have jeopardized the entire mission.

Lewis and Clark split their team up and sent one group up the north river and a second group down the south river. After three days, both teams returned and were still unsure as to which river was the true Missouri.

Lewis and Clark being the good leaders that they were then split up. Meriwether Lewis traveled north and William Clark went south. After a few days the two men returned and they still weren’t sure.

While they were away something very interesting occurred. All 30 members of the team determined that the north river was the true Missouri. They reached this decision the following way: For the past year, the Corps of Discovery had been traveling up the Missouri River and the water was “warm, slow, muddy and brown.” The water of the north river was also “warm, slow, muddy and brown,” therefore they reasoned it was the true Missouri. It is the equivalent of saying that “Tomorrow is going to be pretty much like yesterday.”

Lewis and Clark conferred among themselves and reached a far different conclusion. In the face of complete opposition, they announced the south river was the true Missouri. They reasoned as follows: At some point the snow from the mountains needed to melt and when it did it would create a river that was cold, fast and clear.” Those characteristics matched the south river and, as history demonstrated, the two captains made the correct decision.

My point is this: Many, if not most, people think that “tomorrow will be pretty much like yesterday.” From my perch as a professional futurist, I see the trends in biotechnology, nanotechnology, information technology, RFID, social networking and robotics (to name but a few) are accelerating and I know that tomorrow is going to be radically different then either yesterday or today—and we need more leaders with the courage to head out into the unknown.

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Exponential Executive Extraordinare: General George C. Marshall

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An Unlearning Tutorial

Yesterday, I wrote this post entitled Why Businesses Must Unlearn on my other blog, www.unlearning101.com.

Shortly thereafter a thoughtful reader posed this question:

I like this idea of an organization doing some top-down “unlearning” of bad habits. But what new habits do they develop and put in place—how do you get a seasoned exec that’s devoted to a way of thinking to accept another view?”

It is an excellent question. In short, the questioner is asking: How does a person unlearn?

The first step—and I’ll admit this the most difficult—is to get the person to admit their ignorance. (Remember, “we don’t know what we don’t know.") One way of doing this is encourage the person to take the quiz prescribed in this post entitled Have Some Intellectual Humility. A second strategy is to invite them to start what Nassim Taleb calls an anti-library.

The second step is to get the person to at least acknowledge that there is a different way to do things. For a potential exercise, I would invite a person to Study Carneades and learn to debate both (or all) sides of an issue.

Three, as an adjunct to this exercise, ask the person to envision a future scenario that might require the person or the organization they are leading to change either their position or the direction of the organization. It has been proven that merely contemplating a different scenario (other than the one the person thinks most likely to occur) can help people and organizations adapt faster in the face of a fundamental change to underlying conditions. Two strategies I recommend in this arena are encouraging people to ask new questions and training them to see different points of view.

Four, tell stories. Personally, I am a big fan of telling stories and frequently, when addressing corporations, associations or government and non-profit organizations on unlearning and change management, I’ll pepper my keynote speeches and consulting sessions with the antidotes. I recently had this post which served as a warning to the scientific community and, last month, I put together this short four-minute video telling the story of executives at Bethlehem Steel. (If you really want to scare the person into unlearning try this post entitled Unlearn or Die. If, however, your selected audience is attune to sports try these sports-related unlearning stories: Unlearn Barriers; Why Not Granny Style; Unlearn Your Putting Game; and Practice Your Unlearning Game.

The latter four strategies work well for most people, but if the person can’t submit his or her ego to the unlearning concept; I would suggest this post entitled Beware of Growing Icebergs. It outlines why everyone should be open to unlearning.

I hope this post helps and for organizations that are interested in unlearning I now offer full and half-days seminars on the topic. Interested parties can contact me at jack@nanoveritas.com or 612-267-1212.)

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Did You Know … You Have to Jump the Curve

This 5-minute video entitled “Did You Know” has been around in various forms for a few years, but it still serves as an excellent reminders to why organizations must learn to “jump the curve:”

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May 15, 2009 Jump the Curve: Beware of Emerging Technologies

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The Future Requires Unlearning

Recently, I participated in the first-ever Ignite Minneapolis event. The format stipulates that you can discuss any topic you want but you must use 20 slides and you have exactly 5 minutes to make your case. Below is my presentation on why I believe unlearning will be just as—if not more important—than learning in the 21st century. (I apologize in advance for my swearing but when you have to capture the attention of 500 (often intoxicated) 20-30 year-olds who are Twittering during your presentation, sometimes drastic action is required.)

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The Exponential Banking Executive

(Editor’s note: The following article was recently written, along with Kendall Colman, for the Colorado Banking Association.)

We both have young daughters. As a way of imparting financial wisdom on them at an early age, we asked both of them after they lost their first tooth which they would rather receive from the tooth fairy: $1 per tooth or a penny for their first tooth and then double the amount for each successive tooth. After we informed that all children have 20 baby teeth, they both readily opted for the $20 option.

It was a costly mistake because their twentieth tooth would have been worth $5242.88! Such is the power of exponential growth.

The lesson, which is a familiar one to many in the banking industry, is more relevant than ever because society is poised to enter what we call the “exponential economy.” There are a number of technological forces, including computer semiconductors, Internet bandwidth, and data storage capacity, which are doubling anywhere from every 6 to 12 months. Moreover, they are expected to continue doubling for at least the next decade.

Another interesting fact about exponential growth is that anything that doubles just ten times is a thousand times bigger than it was at the beginning.

This recognition requires today’s banking executives to become what we call “Exponential Executives.” That is leaders who understand that as impressive as past technological advances have been—the ATM, online banking and mobile banking, etc—they are just the beginning.

Banking interactions will continue to evolve as customers’ physical and virtual worlds become intertwined, and social networks and mobile platforms will transform customers’ banking experiences and expectations. Still other advances will create an environment where a premium is placed on unconventional thinking and risk-taking.

As we enter the exponential economy there are five skills which will help the Exponential Banking Executive navigate through these turbulent and uncharted waters.

#1 Partnering: The first doubling in exponential growth is always from 1 to 2. The same principal is at work for the Exponential Executive as they head out into a future that seems almost unknowable. Yet if one thinks about this idea of “going out into the unknown” it is not much different than what Lewis and Clark experienced 200 years as they began their exploration of the American West.

Think about it for a moment. How do you prepare for a journey in which you have no idea of what you might encounter; how long you will be gone; or even what skills you will need?

Not surprisingly, the first decision Meriwether Lewis made was to invite William Clark to become his co-leader.

Tomorrow’s banking environment is going to be equally complex and to survive it may be essential to bring on a co-equal who has skills and expertise in areas where you are less strong. This model of co-leadership is one CO-CEO’s John Addison and Rich Williams have applied at Primerica Financial Services for years.

#2 Jump the Curve: In 1996, Reed Hastings wanted to start a new business that sent movie videos through the mail. At the time, his business model didn’t work because VHS cassettes were prone to breaking and too heavy to send through the mail at an economical cost. Hastings, however, understood something his peers didn’t. He knew data storage was doubling every six months and that by 1999 the movie industry was likely to convert all movie rentals to a DVD format. In essence, Hastings looked at where the curve of technology was headed and began planning his move years in advance.

If one applies this same insight to many of today’s accelerating technologies, such as biotechnology, genomics, stem cell research and nanotechnology, it is clear that most demographers’ life expectancy predictions will be well off the mark. Barring a major disaster, I fully expect life expectancies will soon reach 80 and shortly thereafter 90—and, perhaps, even higher. The Exponential Banking Executive’ should be “jumping the curve” and preparing for this contingency today by developing products, services and tools that will serve this growing population.

#3 Embrace Ambiguity. There is the old saying that if something looks like a duck and quacks like a duck then it must be a duck.  The picture below is a duck, correct? Look again. When viewed from a different perspective it is also a rabbit.

The future must be viewed through the same lens of ambiguity. There is no question that the banking industry is in the midst of a severe crisis. But just as the Chinese character for the word “crisis” is comprised of the symbols for “danger” and “opportunity” so too is this present crisis also an opportunity.

The Exponential Executive faces the same reality as his or her peers, the difference is that he or she uses the situation to revisit old assumptions and fundamentally rethink how to do business in order to best serve their customers.

#4 Unlearn: Among the many trends that are doubling perhaps none is quite as astounding as the fact that scientific and technical knowledge is doubling every seven years. In other words, as impressive as everything we know today is, this knowledge will only equal half of what we will know in seven years—and just 25% of what we will know in 14 years!

From this perspective, it makes sense to think of today’s knowledge as the tip of the iceberg. Future knowledge is the equivalent of that portion of the iceberg that is presently underwater. As this new knowledge emerges over the coming years, one of the more difficult realities to accept is that it will make some existing knowledge obsolete. To prosper in the future then the Exponential Banking Executive must understand that unlearning will be just as critical as learning.

For example, as new wireless and virtual realities technologies become more prevalent how many branch offices will really be needed?  And, if people are living significantly longer, are 15 and 30 year mortgages the most appropriate terms? Change is never easy but if one embraces “unlearning” the rationale for change becomes easier to accept.

#5 Believe in Doing the Impossible: Just over one hundred years ago the idea of human flight was dismissed as the pipedream of a small group of fringe scientists and hobbyists. Fifty years the idea of a “test-tube baby” was similarly deemed impossible. And just ten years ago the idea that people working for free could design and write an encyclopedia which was as accurate as the Encyclopedia Britannica but be twice the size (and doubling every year) and available in a 140 different languages would have been dismissed as implausible. Wikipedia, of course, is a reality today.

If the future teaches us anything it is that the impossible has a way of becoming possible. The Exponential Banking Executive understands this reality and by partnering, jumping the curve, embracing ambiguity and unlearning, they are willing to accept that the path into the future will always be murky; but they also know they possess the tools and flexibility to help shape and create their own future.

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The Future Has Arrived: Notable Technological Achievements in 2008 and What They Mean for the Future

"The future is here. It’s just not widely distributed yet.” The quote, attributed to William Gibson, was brought to mind as I reviewed the technological accomplishments of the past year. The quote is apropos of my job as a professional futurist because, as I often remind my audiences, I don’t predict the future—I merely outline plausible possibilities based on existing trends.

With this caveat in mind, I want to share with you a list of ten notable technological achievements which will significantly influence our near-term future:

#10: Metamaterials: The creation of a Harry Potter-like ”Invisibility cloaks” received a great deal of attention this past year and the breakthrough portends the day when the Defense Department might be able to hide a person or a tank in broad daylight, but a more plausible near-term application of a metamaterial resides in the prosaic application of a noise-abating material which will make life more pleasant for citizens who must deal with annoying sounds such as airplane noise.

#9: Digestable Pills: In December, Phillips announced the creation of the iPill—a digestable pill that can be taken orally by a patient and which will dispense medication at a specific location and a rate pre-determined by the patient’s physician. In addition to being an impressive technology which will soon become mainstream, it is a wonderful example of “convergence”—in that the pill combines a tiny computer, a wireless transmitter and a series of sensors.

#8: The Personal Supercomputer: In September, Cray announced the creation of a $25,000 supercomputer. The machine is obviously beyond the reach of most consumers but a growing number of small to medium-sized businesses are now using the tool to create new materials and products as well as redesign their packaging and determine the most optimum route to deliver packages. The end result is that companies using the machines are innovating at an accelerating rate and saving big money in the process. In the near future look for these supercomputers to become increasingly powerful, less expensive and more pervasive.

#7: Voiceless Communication: In one of the year’s more impressive videos, Michael Callahan from Ambient demonstrated how his company has figured out how to decipher brain neural signals and translate those signals into the corresponding words. The technology is years away from prime time but its day is coming and it will lead to a series of unpredictable applications, including augmenting human intelligence.

#6: Brain Neural Technology: To better understand just what some of these applications might be, I’d refer you to this video which shows a monkey in North Carolina controlling a robot in Japan by thought alone, as well as this 60-Minutes segment on brain neural technology that demonstrates how the technology is being used on real patients today.

#5: Voice Recognition Technology: This is hardly a new technology but in November Google brought voice recognition one step closer to the masses when it introduced its new voice recognition application on the iPhone. The day when consumers navigate on their computers using only their voice is one closer than ever. (The technology is also an excellent—albeit early—example of how technology can augment human intelligence. See # 7.)

#4: The Memristor: This fall Hewlett-Packard announced the creation of the ”Memristor”—or memory transistor—and it is expected to allow for the creation of computers that will remember what is stored in its memory when the device is turned off. In other words, within the next 3-5 years we will have computers that won’t need to be booted up. Granted, it’s not the biggest development in the world, but it will remove yet another one of those nagging, little issues that sometimes have a way of getting our day off on a sour note.

#3: Rapid Prototype Manufacturing: With little fanfare, Stratasys announced in December that it had created a new rapid prototype manufacturing machine capable of competing with injection-molding. Now, the creation of new plastic parts sans injection-molding might not seem like a big deal but as advances in RPM continue to progress look for a major-shift in the manufacturing paradigm as many products will soon be produced on location. To this end, it is worth noting that some RPM machines have dropped from a price point of $100,000 to below $5,000. (To get a better idea of the type of products which can now be manufactured via RPM, I refer you to this informative article.)

#2: The UMan Robot: Progress in the field of robotics over the past few years has been nothing short of amazing. Robots are now driving cars, conducting surgery, roaming oil pipelines, and flying into craves disguised as insects. As impressive as this progress has been, it was the UMass Mobile Manipulator --UMan for short-- that most caught my attention this year because it demonstrated that robots could learn how to use new objects. Obviously, a robot that can learn and adapt to changing conditions is a huge step in making robots more practical for a wide range of applications—including becoming helpful assistants to America’s aging Baby Boomers.

#1: Genomes for the Masses: It was only three years ago that Craig Venter sequenced his genome for an estimated $70 million. Today there is a company that claims it can do it for $5000 and, soon, the cost will plummet to under $1000. It will take some time for healthcare professionals and citizens alike to understand the implications of how all of this genomic data will manifest itself in healthcare and lifestyle decisions (e.g. changing our diet based on genetic factors, etc.), but it is evident that this day will arrive sooner than many people—including medical professionals—realize.

And that, my friends, is an appropriate note to end on. The future, as I said at the beginning of this post, is already here; it’s just not evenly distributed. It is also fair to say that based on the progress made in 2008 the future is also arriving sooner than most of us realize.

If you don’t believe me, just watch the news this month. It is quite likely that Craig Venter will announce something should shock the world: The creation of the first form of artificial life.

Interested in reading related posts from America’s most respected futurist? Check out these past articles:

The Most Significant Breakthroughs fof 2007
The Future of Education is Now
The Power of Zenzizenzizenzic
The Future is About to Get Personal

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Change is in the Air

After almost two years of campaigning, it is finally here: Election Day! Change is in the air, but not for the reasons one might expect.

Regardless of a person’s preference for Obama, McCain, Nader or one of the other candidates, I don’t actually believe they (or any politician for that matter) will be the primary instrument of change in the near future. That mantle will instead belong to technology.

Let me just provide a quick glimpse from the world of technology through the lens of a single day—today.

I began my morning by reading this article on a “solar power game changer.” The piece describes how a new antireflective coating now allows for the “near perfect” absorption of sunlight. In other words, society is one step closer to solar technology replacing a number of conventional energy sources. Politicians can clamor all they want about “clean coal” and “more drilling” but my hunch is that technological advances will render their opinions and policy suggestions moot.

Next, I stumbled across this article discussing a new ”heart-patching” technology. Combined with yesterday’s announcement by a Medtronic official that the “medical device industry is done,” it doesn’t take a rocket scientist to figure out that health care is quickly moving in the direction of preventative care.

Finally, over the weekend 60 Minutes ran a fascinating story describing the advances in brain-computer interface technology. If you didn’t see it, I strongly encourage you to watch it below. After you have done so, ask yourself this: How much do you think society will change by the time we vote again for president in 2012 and 2016?

Now, I believe in democracy and I believe it matters which individuals (and which political parties) control the White House and Congress, but our elected officials should spend less time promising that they will “deliver” change and more time helping society prepare for the change that is coming because it is going to be massive.

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Future Flash with Jack Uldrich

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Your Main Job

Recently, I came across this informative article, ”Intel Reboots for the 21st Century.” It’s an interview with Intel’s CEO, Paul Otellini. Two quotes jumped out at me. The first one was: “A CEO’s main job is to see the need to change before anyone else does.” It’s a wonderful quote because it is so true. The second quote, though, is no less valuable. Otellini paraphrases Intel’s old CEO, Andy Grove, who once said, “You won’t believe how long it takes for the change you’ve started to work its way all of the way through the rank and file.”

The reason both quotes are important is because it is not enough “to see the need for change” first. It is vital that executives “work” the need to change. And to achieve this I am of the opinion that the CEO must not only be a part-time futurist (and see what is coming next), he or she must also become their organization’s “chief unlearning officer.”

One of the big reasons that change takes as long as it does is because employees, customers, institutions and, yes, even leaders must often first unlearn what they think they know before they can change and incorporate a new idea or adjust their practices to a new way of doing things.

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Jack Uldrich Speaks on the Future

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Don’t Incrementalize Yourself into the Future

Knowledge, it has been said, is the key to success. It is a statement that is hard to disagree with unless you buy into that old adage that ignorance is bliss. Proceeding on the assumption that if you believed the latter you probably wouldn"t be reading this blog, I will go farther out on a limb and state that for years one of the world’s better recognized fonts of knowledge has been the Encyclopedia Britannica--a reservoir of 30,000-plus pages of information replete with titillating tidbits of data about everything from atoms to zettabytes.

In the late 1990s the revered encyclopedia came under assault from a new form of media distribution--the CD-ROM. Able to store vast amounts of information in a more convenient, colorful, and vivid fashion, Encyclopedia Britannica was forced to deal with this new competitive threat and proceeded in good haste to provide its information in a similarly fresh, snappy, and visually pleasing format.

By 2001 the company was back on its feet and headed down the sweet path of profitability. No sooner, though, had that storm passed when another began forming on the horizon. But just as a hurricane begins with a single molecule and is not immediately discernible, so was this one.

The storm was called Wikipedia, and it started in 2001 with nothing more than 100 encyclopedia-like entries drafted by a few amateurs and posted to a Web site. It seemed innocent enough. After all, how likely was it that a bunch of strangers, working for free, could someday produce an encyclopedia that would rival the esteemed Encyclopedia Britannica in terms of depth, breadth, and accuracy. It sounded about as plausible as a few molecules in the middle of the Atlantic Ocean turning into a Category 5 hurricane.

Yet in late 2005 Wikipedia smashed into the Encyclopedia Britannica. That year the prestigious scientific journal Nature announced after a comprehensive study that the average entry in Wikipedia was nearly as accurate as the typical Encyclopedia Britannica entry.

The advantage is still in Encyclopedia Britannica’s favor, but how much longer will it be able to withstand the gale force winds? The answer: not much. That is because we are now living in a world of exponential advances, and the scales are tipped in Wikipedia’s favor.

To begin, the very subject matter of the encyclopedia, which is to say knowledge itself, is growing exponentially. It has been said that human knowledge is doubling roughly every seven years. This leads to the almost ridiculously sounding (but mathematically verifiable) conclusion that by 2050 everything we know today will represent less than 1 percent of the sum total of the world’s knowledge.

Even if one disagrees with this statement, it is difficult not to acknowledge that radical advances in medicine, physics, chemistry, and biotechnology are changing both the content and value of the material in encyclopedias and that the old print-and-publish method of storing and displaying such information is, if not obsolete, at least impractical.

Neither a printed encyclopedia nor even a CD-ROM can react to this volume of change. Only Wikipedia, by posting information directly to the Internet, can respond in a timely fashion.

Wikipedia also has the advantage in terms of human horsepower. Advances are happening so fast, in so many different fields, that it is virtually impossible for the staff at Encyclopedia Britannica to keep pace. The challenge is not nearly so great for Wikipedia because it doesn’t have a staff. Instead it relies on a self-selected universe of experts and enthusiasts to keep track of all of these developments. (To this end, Wikipedia now has over 7 million entries in 200 different languages.)

Third, Wikipedia has a distinct economic advantage. Not only does it not need to print its material in either book or even CD-ROM format, it doesn’t need to pay an army of researchers and writers or underwrite the cost of housing any physical resources or employees.

The final kicker is this: Even if the Encyclopedia Britannica decides to put all of its content online for free, most people will still go to Wikipedia because its content consistently shows up near the top of most search engines.

What Encyclopedia Britannica is facing is a severe reaction to the exponential economy, but it is not alone. In fact, if history is any guide, a number of other companies, institutions, and organizations will soon be facing a comparable amount of change in the not-too-distant future.

What this means is that in order to survive in the Expoential Economy, we should all heed the words of Kurt Yeager, who once offered this sage advice: ”In periods of profound change, the most dangerous thing is to incrementalize yourself into the future.”

Related Posts

Our Accelerating Future
Dangerous Curves Ahead
Exponential Evolution
A Useful Analogy for Thinking About the Future
Think 10X, Not 10%
Einstein, Intel and All the Rice in China
Do You Believe in the Tooth Fairy
How to Turn 2 Cents into $5.36 Million
Embracing Change

Jack Uldrich is a writer, futurist, public speaker and host of jumpthecurve.net. He is the author of seven books, including Jump the Curve and The Next Big Thing is Really Small: How Nanotechnology Will Change the Future of Your Business. He is also a frequent speaker on future technology and future trends, nanotechnology, innovation, change management and executive leadership to a variety of businesses, industries and non-profit organizations and trade associations.

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