Bio-connectivity and the rapid emergence of new markets
In a keynote to a health care industry conference last week, I emphasized that in the high velocity economy, new business models, products, markets, and careers are appearing at a fast and furious pace. And it's by watching for, observing, and understanding these trends that you'll discover opportunity for innovation.
Consider the rapid emergence of new markets. As new scientific discoveries occur at an ever more rapid pace -- due to the massive global collaboration with Web 2.0 as well as new information research sharing paradigms within established peer review based research methodologies -- there are countless new products and markets that are being brought to life.
Take that reality, and apply it to any industry. Say, health care. Then parse that industry down into dozens or hundreds of sub-markets, and you'll discover forthcoming new, billion dollar markets.
Consider, for example, the concept of bioconnectivity, which will be one of the most significant trends -- and new markets -- to play out in the next twenty years in the health care industry. What is it? Quite simply, the marriage of the computer chip and connectivity technology to medical devices, and ultimately, to people.
One small submarket that will come with bio-connectivity is the emergence of smart, intelligent, home-based medical devices. Have you ever seen a Sharper Image catalogue, or its online Web site? It's the ultimate source for unique gadgets and toys of every type. Think about what the catalog might look like in 10 years, when its full of home-based bioconnectivity devices aimed at the baby boomer set.
Digital Connect Magazine, which monitors development with home and business connectivity devices, suggests that U.S. revenue from digital-home health services will quadruple to exceed $2.1 billion by 2010.
The two fastest growing areas? "Wellness monitoring services" and "e-health services" will each achieve a compound annual growth rate of more than 50 per cent. The former allows doctors to remotely monitor a patient’s condition (such as their insulin levels), while the latter provides active medical care (such as an intelligent sub-dermal medicine patch, which not only provides a patient automatic ingestion of a particular pharmaceutical, but allows the doctor to monitor its effect.)
It might sound like science fiction, but it is a very real development. Sit back and think about the business models and opportunities that flow from such a transformative trend. Link it to another trend: a whole bunch of baby boomers are getting older, sicker, and the health care system is breaking down. Hospitals will go virtual, extending their services through bio-connectivity, so that non-critical care boomers can be treated and monitored at home. This is slam-dunk obvious!
It's BIG TREND. Its' but one of many.
Simply put, our new reality is that science, and hence markets, industries, products and services, are evolving and changing at a rate never seen before.
And that's where your own opportunity for innovation comes from!
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Infrastructure is the new plastic
In my "Where's the growth?" trends overview written a few months back, I noted that one of the key drivers for growth into the future will come from the massive spending to occur on infrastructure -- globally. One estimate suggests global spending will go from $750 billion to $1 trillion in a few years. I think we'll see more.
This morning, I caught wind of a blog entry that commented on the general crankiness of American's towards their "crumbling infrastructure." For example, Thomas Friedman commented in a New York Times article this week: "A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons.
It's the rapid ramp-up in sentiments like this that drive the reality that infrastructure is the new plastic. It's one aspect of the global economy where spending is going to increase at a furious pace.
Consider the trends that are coming together that provide for this simple reality:
- spending on infrastructure through what has been fondly known as the "first world" will increase, by virtue of the simple reality that much of what is there is crumbling and creaky. After 50 or 75 or 100 or 150 years or so, stuff simply breaks down, and needs to be replaced.
- spending on infrastructure throughout Asia and the Pacific region will continue to ramp up as society moves up the rung of personal wealth
- sophisticated solutions to challenging problems -- think energy, and spending on solar / wind / tidal solutions -- will drive ever more complex infrastructure projects, and hence, more infrastructure spending. Simply put, there will be lots more options of where to spend money as new ideas come to market.
- global competition simply means that economic regions will have to boost their infrastructure -- simply to stay as a global competitor. It's a matter of economic pride -- and necessity.
One really interesting aspect of all this is that anything that goes with infrastructure spending is set for a rocket ride. Think intelligent project management, global collaboration capabilities, and resource/skills scalability: these will be the defining success factors for anyone working in this global marketplace.
Who wins? Construction companies, specialized skills, economic regions that decide to invest -- and most important, firms that have a deep, scalable global talent pool.
And perhaps one of the biggest, yet unforeseen markets, will have to do with "intelligent infrastructure." Think thermostats!
More information:
- Read Where's the growth : global innovation opportunities for the long term
The reality of future trends: grab the What Comes Next trends overview - Intelligent infrastructure: When thermostats get connected
- Read my Credit Suisse interview for my thoughts on "growth"
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If I ran your company, here's what I would do!
Supertramp -- a band from the 80's -- had a minor hit with the song "On the Long Way Home," which featured the memorable line, the line, "when you're up on the stage, it's so unbelievable."
It is, quite. And when you're up there, you realize how lucky you are to be able to share with the audience the wisdom you've picked up by observing some of the world's top innovators.
Recently, after a presentation to an audience of 3,000 people, I was approached by a CEO who was quite inspired by my remarks. He then asked me a fascinating question: “what would you do if you took over the leadership of my company right now?” We chatted for a while and I believe I provided some pretty succinct insight; but since then, I’ve been thinking about that question. Here’s a part of my answer.
- maximize your best revenue opportunities. I’d make sure that any existing revenue relationships remain intact, and then some. I’d work on having my team obsess on growing existing high value customer relationships through service excellence. Let’s make sure that we meet their needs. It will likely be easier to keep existing revenue grows flowing rather than finding new ones, particularly through a time of economic challenge.
- obsess over time to market. I'd work hard to accelerate product innovation; market life-cycles are collapsing, and I'd make sure every member of the team reoriented themselves to that reality. I'd focus on getting R&D to think in terms of faster cycles; I'd ramp up sales force education so that they were better aware of what's coming next. I'd have the team thinking in terms of 3-6-9-12 : here's what will be doing in the marketplace 3, 6, 9 and 12 months from now. I'd layer on top of that some insight into 1-2-5-10: what we might be doing 1, 2, 5 and 10 years from now.
- reduce product costs through process improvement and better project execution: there is no shortage of innovative ideas, structures and concepts involving process and production methodologies. I’d make sure we were looking at finding those who are doing leading edge work in this area, inside or outside our industry, and learn from them.
- reduce structural costs through collaboration: at this point in time, in a global world that allows for instant, smart collaboration among teams, there is no reason for massive duplication of skills and talent throughout an organization. I’d start a rethink those silos, and restructure for a new skills deployment approach. Right off the bat, I’d encourage a few cross-organizational collaboration efforts, to get people used to the idea of tackling fast new problems rather than arguing about structure and hierarchy.
- focus on the pipeline of talent innovation: I've said it before and I'll say it again. The depth the bench strength is critical to future success. I’d have everyone take a good look at our pipeline, to see if it will meet upcoming needs. If not, I’d get a program in place to fix that fast.
- relentlessly and aggressively chase costs: I'm not talking about spontaneous slash and burn spending cuts: I’d refocus on transitioning the role of staff from tactical efforts to a strategic role. I’ve spent time with the CIO's and CFO's of some pretty major organizations: Hunt Oil, Adobe, J Crew, Under Armor. All of them have provided in-depth insight onstage during customer panels that have focused on the role of IT in the business to run the business better, grow the business and transform the business. There remain countless opportunities for IT oriented innovation to rip unnecessary costs out of the business, and it involves this tactical to strategic transition.
- enhance quality and reliability of product: Last year, I spoke to 2,500 global quality professionals on the challenges that the high velocity economy presents to the concept of quality. The fact is, new issues hit us in the marketplace faster than ever before. And the global idea loop means that quality challenges can become a sudden, massive worldwide PR nightmare faster than we've ever been prepared for. That's why avoiding quality problems remains a critical focus. I’d take a look at how well we’re dealing with quality issues, and whether we’ve got the agility to respond in this new world of heightened PR challenges. I’d also have a group prepare an immediate outline of challenges and problems with customer service and satisfaction.
- capture new emerging growth markets faster: I’d begin to orient the team so that we knew about which market opportunities might come next, and then spend time aligning ourselves to innovate faster in such markets. I recently spent some time with one client, and the focus of our discussion was how a new market was set to unfold in the next three months. Expectations were that the market -- for a unique consumer product, with potential sales in the billions of dollars -- might last for a period of eighteen months, before being eclipsed by the next stage of development. Essentially, the CEO was looking at a situation where they had to figure out how to jump into this new fast market, and make the most of it in an extremely short period of time. That's a new skill structure to wrap an organization around, and one that every organization must learn to master.
That’s a good starting point. The key issue: I’d begin by aligning the organization to the concept of “thriving in the high velocity economy.”
Oh, and one of the first things I'd do? I would immediately convene a senior management/leadership meeting, and bring in a futurist and innovation expert to wake my people up to the potential that can come from energizing ourselves towards future opportunities.
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Led Zeppelin Leadership: How do you innovate when you're dazed and confused ....
At a particular keynote last week, I met a number of senior executives who certainly agreed with my message - we need to constantly realign our company to the reality of change that surrounds it. That's where innovation comes from. But they also also indicated that they found it increasingly difficult to keep up with the rapid change occurring all around them.
There's been an increasing number of these individuals, and I've come to call them the Led Zeppelin refugees: they're simply dazed by the changes occuring in the high velocty economy, and are confused about what to do next.
That's why there's such a good question that flows from this: just how do you become an organization that is focused on innovation?
One of the easiest methods is simply by identifying the obvious and the not-so-obvious trends that will impact your business or organization -- and then taking the time to figure out what actions you must undertake to deal with those trends.
Ask yourself this question: are you prepared for what comes next in terms of your business? The likely answer is no: my experience is that many organizations still have a very short-term minded outlook. They're caught in an innovation rut, simply doing day by day the same old things they've always been doing, day in day out. And they don't really think about how their world is going to change.
That's why you should undertake a "trend-and-innovation" audit of your organization: quite simply, figuring out what comes next, and what you need to do about it.
How can you do this? By asking yourself a series of questions:
- How quickly is our marketplace changing? How quickly might it change in the future? What's the impact on what I sell, and how I sell it?
- How are our products changing? Willl they change faster in terms of features? Will support become easier, or more complex? Can we manage to operate in a faster market?
- Are our products moving upscale, or are they becoming commodities,such that you'll be forced to compete on price? Can we do something so that there is more of a service element to our product?
- What new competitors are appearing, or might emerge in the future? Is the basic business model threatened? Is there more likelihood of direct outreach to the consumer rather than through an existing distributor/wholesaler network?
- What moves could we make to make sure we can remain competitive? You really must ask yourself some probing questions as you go through this process. You need to challenge yourself and think what might really be different in five years, in terms of what you sell, who you sell to, how you sell it, and who you are selling against.
What you need to do is ask yourself these tough questions, so that that you're thinking about where there might be new problems and new opportunities that will impact your business in the future, not just in terms of what you sell, but in terms of the structure that you use to get things done.
And therein lies the rub: I think a lot of organizations fail to do this type of simple analysis. There are too many who sit back and react to change instead of thinking: "ok we know some big change is coming what the heck are we going to do about it?" Think of it is a forward-oriented innovation: it's a simple concept, and one of the most important things you should be doing.
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A Mac made in heaven
My latest CAMagazine article, "A Mac made in Heaven," published May 1, took a look at my recent move to a Mac notebook and desktop. I switched to a MacBook Pro last summer, and then purchased a Mac Pro desktop in March. Most of my work is now done in OS/X Leopard. Like many people, I just didn't feel right with the stories floating around about Microsoft Vista.
Seems that more people are feeling the same way, as outlined in a fascinating cover story on Business Week this week. ("The Mac in the Gray Flannel Suit")
It's not like I didn't know what I was doing in making the switch. I've been using computers since 1982 -- and Windows since it first came out. I have a number of Linux servers in my basement, and a fascinatingly complex home network. (A magazine covered this topic in 2002, with the headline: "Is this guy crazy, or just way ahead of his time?")
I believe that Microsoft, with Vista, has created a real disaster on the desktop, and that they have truly lost their way. Which begs the question: what innovation lessons can we learn from the Vista debacle?
I suspect that this question will be the focus of many a business book in the years to come, but probably the most important one is this: market leaders can never be complacent about their business.
We are in the era of rapid market and industry transformation. People still think my story of the Google Car to be a ridiculous one, but it need not be. Organizations that can tackle existing markets with innovative new ideas that work well have the opportunity to displace entrenched leaders. That's always been the case in the past, and will continue to be in the future.
More information
- Read A Mac made in heaven by Jim Carroll
- The concept of the Google Car
- Article:Is this guy crazy or just way ahead of his time?
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