In a world of ever-changing technologies it can often feel like the rules of today will be irrelevant tomorrow. The rate of change is so rapid that any patterns we see are irrelevant, leaving the only course of action to keep looking forward. Three years ago we spent several months seeing if we could untangle this not by looking forward, but by looking back to extract a set of principles that could be used to:
- Make sense of what’s driving the technology-driven change we’re experiencing
- Act as design principles and guides for designing future digital innovations
These were originally defined in late 2012 and over the intervening years we’ve used them on multiple innovation projects. Each year we review them on the basis of delivered projects, shifts in the market, and the longer arc of change since they were devised. They’ve remained constant since their inception though in this fourth review, there are two small changes:
- ‘Disintermediation’ has become ‘Cyber-intermediation’. This reflects the importance that technology takes in dis-intermediating established flows of value
- ‘Intimacy’ has been renamed ‘Personalisation’
The Digital Future themes
Traditional delineations between different types of organizations and actors are blurring; a customer can be a supplier, and a competitor can be a customer.
Online forums where customers help other customers mean that they’re essentially acting as pseudo-employees, taking on tasks that were previously performed exclusively by the enterprise. Moreover, competitors can now be customers as infra-structure used to run the business can now be sold as a service.
For example, Netflix is both Amazon’s biggest competitor on VOD (Video-on-Demand) but also its biggest VOD customer (for Amazon’s cloud services). The clear delineations that used to exist between the different actors in the value chain in the past have all but disappeared.
A shift from connecting information, people and businesses to connecting people, data and machines.
This enables disaggregation by not only increasing the number of parties that are connected, but also adding data and new forms of sensors into the mix. As the Internet of Things (IoT) becomes more prevalent the importance of ‘connectedness’ will only grow. This was covered in more depth in another blog post.
Established flows of value will be deconstructed as ‘connectedness’ increases.
This will expand further as companies increasingly use technology to simplify services, narrowing the gap between the producer and the customer. This continues to be the area where we’re most familiar with the disruptive effect of digital and includes the Digital Disruptive Intermediaries (DDIs) like Uber, Air BnB, iTunes, Netflix, Amazon etc.
There’s more on this and how to leverage this type of business model innovation in this short white paper published last year.
Our interaction with technology will transition from the foreground (using devices) to the background (automation).
For example, the Kore app. allows you to automate tasks at work using simple, natural language commands. On the consumer side IFTTT, established in 2010, continues to grow. There are now tens of thousands of pre-defined options that allow you to simply connect data and devices.
This includes an extensive Connect Your Home library so you can now, for example, connect your location and your thermostat so that your home is heated or cooled to the prefect temperature by the time you arrive. As this progresses further we see this shifting from rules that you setup manually, to AI-supported automation that learns your habits over time. Google Now is already providing this.
The type of data that is collected on, and available to us is increasingly intimate (biological, physiological, psychological).
The data which is available to us will extend from the familiar, like our current location and our physiology (i.e. wearables), to biology (e.g. facial recognition) and even values. In the past year this latter data type has taken significant leaps forward. Take IBM Watson’s Personality Insights for example.
Using around 100 words it can provide a detailed analysis of your personality (there’s a neat demo that it’s worth having a look at). Along with the Tone Analyzer that detects and interprets social and emotional cues, it’s now possible for responses from machines to be tailored to your personality traits and the tone of the conversation.
Digital Future themes and how to use them
Whilst these themes help to make sense of what’s happening, their main intent is to inform innovation. Take BMW’s DriveNow car sharing service, for example. Available in multiple cities in Europe the service means that you no longer need to own a car. With no monthly fees you simply pay for the time you use the car.
And unlike services like ZipCar, which are essentially self-service rental services, you can use the car almost like it’s your own. You can drive it one way and, within a set area, leave it almost anywhere for the next person. If we apply the principles to this idea you’d have drawn on:
- ‘Cyber-Intermediation’ (primary principle); using several emerging technologies BMW have re-shaped the value chain. You no longer buy a car from a dealership and own it, you pay only when you use it.
- ‘Connectedness’ (secondary principle); this model would not be possible without considering how you connect people and machines (the car) but also people and data (location of available cars).
- ‘Frictionless Tech.’ (establishing principle); arguably applicable to every innovation design, the experience needs to be simple to use. In this example the mobile app. makes it easy to locate and book the nearest available car.
Although these design principles do not provide an answer for everything they do help to spark different ways of thinking. They’re also an entry point for determining how all the change that’s happening around us could be applied to your company. What would ‘Cyber-Intermediation’ mean for your business model? Or ‘Disaggregation’? Or how would your company be disrupted if one of a competitor decided to apply these to your industry?
Framing these questions can help us step back from the noise and the potential distraction of the shiny and new to focus on the fundamentals that are driving the continued progression to our digital future.
These themes are licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. To find out more about these themes follow the #OurDigitalFuture tag on Twitter. These themes were developed by Ben Gilchriest, Jean-Baptiste Vincent, and Mark Anderson with contributions from Mani Thiru, Andrew Stubbs, and Mathieu Hege.