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As with anything, the opportunity around the idea of the ‘smart home’, and the reality of what will transpire, varies to a large degree. We are in early days yet!

That was the essence of an exchange I had with a potential client in the home/condo construction market; they were looking at me for an executive offsite concerning their plans in this space, and wanted a senior level executive session that outlined opportunities with smart home construction in the future.

My key goal was to get across to them that a smart home doesn’t just involve throwing in some Internet-connected devices;  it’s not just about the Internet of Things; there is a lot more potential, and the scope of the opportunity is pretty significant in the long term. Given that, they really needed to take a substantive approach that involved not just short term goals but some long term thinking.

Here’s what I outlined:

  1. It”s bigger than you think. The smart home of the future will not only play a role in security and energy, but also also a role in economic development, healthcare virtualization, the reengineering of local energy grids and much, much more
  2. We’ve only just begun. Major organizations, such as appliance and other home device manufacturers, are only just starting to understand where they can go with the smart home. This is outlined in my recent post, The 11 Rules of IoT Architecture – they are coming to understand that just as Tesla is building cars that can be upgradable, they can play a role in smart homes that will be upgradable and changeable over time. That’s a pretty big scope of opportunity.
  3. The energy side is much more than just connected thermostats The real smart home of the future will be designed with major energy implications in mind. This will involve @ home energy generation, as well as sharable energy systems and support for local community micro-grids. Catch my video on this, Will the Energy Industry be Mp3’d?
  4. AI will play a big role, but no one is sure what that means yet. We are in early days with home AI devices such as Amazon Alexa and other intelligent assistants. Alexa and other devices have caught the attention of the innovators; someone out there is busy engineering future solutions that are barely an idea yet. We don’t know where this aspect will take us!
  5.  Virtual healthcare in the home is a bigger component of the smart home than you realize. Bioconnectivity – the virtualization of healthcare, is massive. The hospital is being reengineered to incorporate the monitoring of patients from afar. Big, bold thinking in the seniors care and other industries will lead to transformation of the very essence of what we think a hospital is – because the home becomes a part of the hospital. Look to the MedCottage for guidance on the opportunity with this issue.
  6. Making it work is pretty complex. An API has been built, but people are only just beginning to use it. Head over to the site, If This Then That. It’s at the vanguard of where we can go with this massive form of hyperconnctivity. It involves a series of rules -if this device does this, then do that. Talk to your phone to turn on your thermostat. Use your phone to see where you are and define a rule if your garage door should open. The number of companies joining IFTT is staggering — it is likely the World Wide Web for the Internet of Things!
  7. Existing players aren’t necessarily the major players. Google was big and early into the game with NEST, but don’t expect that big organizations like GE, Whirlpool and others will easily give up the potential market. While big companies aren’t necessarily the best innovators, I’m seeing a lot of deep, substantive thinking in these organizations as to the real nature of a smart home eco-system.
  8. The economic implications are huge. In the 1950’s, the modern suburb defined the future of economic relocation – companies made decisions based upon where the employees might live. In the future, smart communities wired by smart infrastructure, particularly those supporting the nomadic worker, will have an economic leg up. Wild card: self-driving cars and economic success.
  9. Architectural / design issues are only just being explored. If we can build ultra-smart, energy efficient, secure homes, have we yet hit an understanding of the design opportunity? In this area, think about the Jetsons – it really provides guidance!
  10. The skills issues are massive! I had one of the first Internet enabled thermostats about 17 years ago. My HVAC contractor flipped out when he saw it, complaining he didn’t know how to wire Ethernet stuff. I said that’s ok, my teenage son will do it — and he did! Its going to take a lot of knowledge re-skilling for the future of the smart home!

For each of these areas, I’ve spent a lot of time in the last 20 years. By way of examples:

  •  I’ve spent time with many of the companies in the home energy sector; all of Honeywell, Trane, and Lennox have had me in for CEO level events or dealer meetings
  • with the era of smart appliances, I just keynoted a session at Whirlpool/Maytag on the implications and opportunities of the Internet of Things.
  • in the energy field, I’ve spoken about the future of micro-grids and shared energy for the CEO of PG&E, as well as many global energy conferences
  • I’ve done multiple keynotes around the future of virtualized, community oriented healthcare, most recently, for several thousand folks in the seniors care industry
  • on the economic implications , lots of talks — I’ve just been booked by the Western Nevada Economic Development Association for a keynote around this theme, by way of example
  • on the architectural / design issues, I recently had a keynote in St. Louis for Alberici Construction…. and others
  • and on the skills issues, a lot of time, including talking about the future challenges for HVAC contractors and others at the WorldSkills conference in Sao Paolo, Brazil!

One of my favourite future phases is from Bill Gates: Most people tend to overstate the rate of change that will occur on a two year basis, and underestimate the rate of change on a 10 year basis. So it is with the smart, connected home. We’re going to be in a different space 10 years from now, but we are only just starting to define that!

Closing comment? Back in the late 90’s, I wrote a monthly column for one of the world’s leading airlines — Canadian Airlines! One of my columns had to do with the smart home of the future. It’s a fun read today – and I was pretty right about the trends going forward! Have a read!

Soon you’ll be programming the drapes
September 1999 – Canadian Magazine
by Jim Carroll PDF

The last few decades have been marked by promised of innovative new technology for the home. The presumption, of course, is that more technology is good for us and that, in the process, our homes will become “smart.” Yet today, as we consider the number of people whose VCRs still flash 12:00, we wonder just how smart our homes have become.

YESTERDAY

Ever since the 1930s, many industries have predicated a variety of fanciful technologies that would find their way into our homes and make our lives much easier. Most predictions are, in retrospect, hilarious.

Perhaps one of the earliest examples was the introduction of the automatic dishwasher at the 1939 World’s Fair in New York City. Westinghouse presented a dishwashing contest between Mrs. Modern (using a Westinghouse dishwasher) and Mrs. Drudge (cleaning her dishes by hand). At the close of the contest (you know who won), the moderator commented that in addition to losing, Mrs. Drudge was not nearly as “neat and refreshed as when she started.” Yes, technology would make us feel better!

Washing dishes seemed to be a favourite theme of the World’s Fair: some 25 years later, the 1964 Fair featured the Norge Dish Maker. The appliance washed and dried plastic dishes – and then ground them up into tiny pellets, which it would then mould them into new plates, cups and saucers!

Walter Cronkite got in on the act, appearing on March 12, 1967 in At Home 2001, a half-hour show about the nature of the home at the dawn of the new millennium. He explained, for example, the duties of the host: “When a guest arrives, he just pulls out his inflatable chair – a small pressurized air capsule would inflate it and it would be ready for use. At the end of the evening he’d just pull out the plug and put the deflated chair back into his little bag.” Need to cook for the guests? Simply reach for the ultimate in convenience food. “A meal might be stored for years and then cooked in seconds,” he said, without a trace of scepticism.

Optimism continued to reign. In 1977, the Vancouver Sun reported on a “domestic android” manufactured by Quasar Industries, which could “serve your dinner, vacuum your rugs, baby-sit your kids and insult your enemies.”

There was a common undercurrent to many of the predictions about the “smart home.” We would have push-button control over everything, a “remote control for the home,” that would allow us to draw the drapes, water the plants, turn down the thermostat, and control virtually every other aspect of the house simply by punching a few buttons.

TODAY

Of course, few of us today have such capabilities – and we wonder if we’d be able to use it even if it were available. After all, how many of us could manage that “remote control for the home” when we find ourselves stymied by the typical 50-button VCR remote control?

The industry is certainly trying to deal with the problem. There is no shortage of ‘smart-home” technology available and apparently some people are buying this stuff – the U.S.-based National Association of Home Builders estimates that, worldwide, some $2 to $4 billion is spent each year on smart-home devices that link security systems, lighting, and entertainment communication systems.

Who buys them? John and Missy Butcher of Chicago, for example. They have spent $100,000 on a home automation system, which means that (if they are in the mood), they can click the “Romance” button on their home automation controller and watch as the curtains are drawn and the lights dim, while listening to music designed to get them in the mood. “Our lives are much easier,” they note.

Of course, we might think, anyone who can spend $100,000 on a home automation system already has an easy life.

TOMORROW

Will the smart home remain largely a concept, an expensive curiosity available only to the richest and most gadget-hungry among us? Likely not. This is one technology that is set to explode in terms of the number of customers it will gain and the practical role it will play in our daily lives. There are several reasons for this.

First, many people now have more than one computer in the home. The computer industry recognizes that linking them together into a home-based local area network is going to be one of the biggest opportunities of the next three years.

We won’t simply be linking the computers in our home. The technology will link all of our devices based on the computer chip into a central control panel, bringing us one step closer to the remote control concept of earlier decades. Three years from now, you may be buying a set of drapes with a microchip. Plug them in, program them – and forget about them.

Second, the emergence of the Internet plays a significant role. Though we think of it as a tool to surf the Web and read e-mail, it is also a technology that will one day link our refrigerator to its manufacturer, notifying the company when the appliance is about to break down – and, in the process, taking us through the next step in home automation.

And finally, there is the ever-decreasing cost of technology. The smart home has always been held back by the fact that the minimum investment was at least $2,000, but that figure is dropping quickly.

And, most significant of all, we’ll barely notice the technology as it sneaks into our home! We’ll be buying appliances, garage door openers, alarm systems and other things for our home, unaware that they contain the necessary intelligence to plug into our home network.

It’s not that we’ll choose to have a smart home – one day, we’ll discover that it’s already smart.

Not quite convinced? Let me quote Walter Cronkite, from that 1967 program. “Sounds preposterous,” he told his audience, with a bit of a smile, “but some people are convinced it will happen.”

My message on the speed of change in retail is drawing attention, further and further afield.

Case in point – yesterday, I was a keynote speaker for a global leadership meeting of Pladis held in London, UK. This is the newly merged entity of three iconic global brands — Godiva Chocolate, McVitie’s biscuits from the UK, and Ulker from Turkey.  I was asked to provide my insight to 300 executives from around the world in a morning keynote, and then followed this up in an intimate discussion with members of the board and the senior management team.

It’s hard to discount the speed of change occurring in the world of retail and consumer products. Consider this:

  • e-commerce could be 25% of the retail – grocery and convenience — experience by 2021
  • “shopper marketing,” which combines location intelligence, mobile technology and in-store display technology for a new form of in-store promotion, continues to move forward
  • mobile payment involving Apple Pay and disappearance of the cash-register, providing opportunity and challenge with loyalty, infrastructure and disruption
  • the continued migration to the same-day shipping model from titans such as Google, Amazon, John Lewis
  • Amazon Alexa, AI and shopping bots! Simply talk and products are added to your shopping cart, and delivered within an hour
  • the rapid installation of “click and collect” infrastructure (i.e. an online purchase, with same day pickup at a retail location)
  • faster ‘store fashion’ with rapid evolution of in-store promotion, layout and interaction
  • the arrival of active, intelligent packaging and intelligent (“Internet of Things”) products
  • collapsing product life-cycles, rapid product obsolescence and the implications on inventory and supply chain
  • the evolution of the automobile to an online shopping and credit card platform (yes, this is real….)

Here’s the thing – we are going to see more change in the world of retail in the next 5 year than we have seen in the last 100. Savvy brands, retailers, shopping mall and retail infrastructure companies are working to understand these trends, and what they need to do from an innovation perspective to turn them from challenge to opportunity.

That’s my role. This is all happening in the context of massive and fast disruption as new competitors enter the food, CPG and retail space. Consider this chart of players in 2016 from Rosenheim Advisors, and look at the players in each category.

 

The rate of change is going from fast to furious, and innovation is critical!

My keynote title for London yesterday? “Achieving Agility: Aligning Ourselves for an Era of Accelerating Change!” Learn more in the retail and consumer products trends section of my Web site.

 

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An interesting article in the Globe & Mail yesterday on trends with corporate boards. This article struck close to home, because last November I graduated from the University of Toronto – Rotman Director’s Education Program, which provides individuals with a key range of skills to serve on a corporate or not-for-profit board.

"...boards are increasingly searching for younger directors who are up to date with changes in business and technology...."

I certainly keep busy with some 60-80 keynotes worldwide, and this is certainly one of the most thrilling careers that one could imagine. I’m regularly providing high level strategic guidance to CEO’s and senior management teams for some of the largest organizations in the world. Yet being a futurist, I’ve always had in my mind a 5 to 10 year plan for my career, and looking forward, I anticipate taking on some more substantive strategic work on several corporate boards. That’s why I took the Rotman program.

And that’s why the Globe article was interesting, in that it noted that increasingly, the demographics of corporate boards are changing in a big way:

The ranks of top corporate directors in Canada are swelling with younger directors, which represents a shift for boards, according to a new review of 100 large company boards by Toronto-based director search firm Spencer Stuart. The average age of new directors added in the past three years was 57, down from 62 in the three-year period from 2000 to 2002.

Andrew MacDougall, who leads Spencer Stuart’s board services practice in Canada, said boards are increasingly searching for younger directors who are up to date with changes in business and technology, and who will be able to serve at least a decade before hitting boards’ mandatory retirement ages.

“Boards are more aware now than they might have been in the past that things are changing rapidly in this world, and the fact is that the younger you are – within reason – the more of a sense you’ll have of what those changes look like,” Mr. MacDougall said.

Directors from the baby boom generation (people born between 1947 and 1966) help bring “a new energy and new perspective” to boards, he said.”

Now that caught my interest – “the younger you are – within reason – the more of a sense you’ll have of what those changes look like.” I’m part of that baby boomer generation, and I often find that there is a huge difference in the reaction to my message on the urgency of (business model, strategic, competitive) change for an audience of mine that is composed of baby boomers or below, and those who are of an older generation. And there’s a big difference in the receptiveness to change between boomers and Gen-X. And an even bigger attitude shift between Gen-X and Y….. I think the younger you are, the more open and able you are to deal with change.

As I say in my keynotes, “for the younger generation, constant change is like oxygen.”

And I think here’s what the Globe article is really asking: how can a corporate board possibly be effective if its demographic is primarily a group of CEO’s and senior executives who are 65+? Not to be disrespectful, but I have long had a sense that many corporate boards don’t really have a sense of urgency in dealing with the very fast paced change that is swirling around the organization.  Social networks, technology, changing workforce attitudes, disruptive business model change — it often seems that much of what i focus upon in my keynotes involves extremely dramatic, fast rates of change, often driven by a younger demographic who is intent on changing the business world at the pace that is faster than previous generations, and certainly shaped in a huge way by the tsunami of technology-driven change.

There’s a phrase I use when I open any keynote,: “The future belongs to those who are fast.”

The role of corporate boards, and as a result the role of corporate directors, is changing quickly, and the observations from the Globe article reflect that reality. Now and in the future, corporate boards will take on a greater role in understanding the massive trends that will impact the organization in the future, and make sure that the CEO properly anticipates that very fast change and continually adjusts the corporate strategy to deal with that fast paced change.

There are quite a few boards that are deficient in that regard. And that’s where I’m hoping to help fill the void.

To read about my Rotman experience, read my article, “Learning for a Living

“We really don’t understand it all, and so we aren’t going to do anything!”

A few years ago, when I was the closing speaker for the Swiss Innovation Forum in Zurich, I made the observation that many  “organizations fail, because their have failure engrained in their corporate culture!”

Do you?

It can be difficult to try to be innovative in many organizations. Many people with an innovation-oriented mindset often find their enthusiasm stymied when they approach senior management with an initiative. And when their effort is turned back, it can extremely frustrating!

One of the most typical situations today in which we are seeing innovation-dead-in-its-tracks involves the many initiatives that people are pursuing with social networks and/or mobile applications. They know that we live in transformative times in which major changes are occurring with branding, production promotion, customer relationships and just about everything else!

So they set off to build a sophisticated customer-oriented Facebook initiative; they roll out a prototype mobile iPhone app; or they simply get a very basic Twitter feed happening that includes a stream of useful news updates that customers might actually appreciate.

Enthusiastic as heck, they take their project to the senior management team — and its’ rejected, with a litany of reasons as to why the organization just isn’t ready to deal with their new ideas right now.

Any number of reasons can be given; each and every one of them is indicative of the fact that a sort of organizational sclerosis has set in, that clogs up the ability of the organization to deal with anything new. Consider the attitudes that you might encounter if you are trying to get something happening:

  • we don’t understand it, so we don’t think we need to do it
  • it’s too easy to not confront the tough issues
  • we are too busy fighting fires right now!
  • we don’t have the skill sets to deal with this. That’s a weak excuse
  • we haven’t thought about this in our strategic planning process
  • we have really spent a lot of time thinking about what comes next
  • we don’t have a budget for that!
  • what we’ve been doing all along is perfectly ok, isn’t it?
  • there’s so much going on, and we don’t know where it might fit in terms of priorities!
  • it’s too far ahead of its time!

Of course, it’s easy to take this wall of negativity and step back from the project and curb your enthusiasm — and give up! Here’s a clip from my keynote in Zurich in which I talk about the challenges you might face.

But real innovators don’t give up! They work to address the organizational sclerosis that might be in place. What you should do  is confront these excuses head on: there are a variety of different reactions depending on the different excuses that are used:

  • if they don’t understand it, educate them! This might involve building a better business case for the initiative; bringing them up to date on the key business drviers and trends that require some bold steps and dramatic change.
  • help them that those who tackle the tough issues usually win. This is a good time to put into perspective the concept of accelerating change. You need to make sure that the leadership team understands that everything around us today is changing faster than ever before, and will continue to do so: business models, methods of customer interaction, new forms of competition. Business today is all about continually confronting a flood of tough issues; we should be bulking up our capabilities to deal with a world of incessant change.
  • if the organization is always in fire-fighting mode, change the agenda. Maybe they won’t be fighting as as many fires over the long term if they have a clear view of the future, and have a strategy that aligns to that future. So rather than asking, “whoah, where’d that come from,” they’re asking “ok, what comes next, and what do we need to do about it?
  • skill sets don’t give us the capability: That’s a weak excuse: if there are shortfalls in certain key skills to deal with current business realities, deal with it and fix it fast. Ensure that you work with HR to undertake a skills inventory with respect to the area you are trying to innovate within, and work to plug the holes.
  • if it’s not part of the strategic planning process, make it part of it. Every organizations has multiple processes in which issues and activities rise to the top because they’ve been idenitified as fitting within the overall strategic plan. If yours isn’t part of the plan, work to get it there; and again, this comes through education, a clear business case, as well as internal discussions with those who are involved with and shape the strategic planning process.
  • get people thinking about what comes next: Does the organization have a regular series of forward looking leadership meetings? Does it take the time to assess the trends which might impact it on a 1, 2, 5 and 10 year basis? Is it busy looking at we have really spent a lot of time thinking about what comes next
  • we don’t have a budget for that! Following the process of getting the initiative into the strategic plan will help to lead to the next step: getting the project properly approved and funded within the overall budget process for the organization. There’s a process for budgeting — and you have to be intimately involved in and respect the process.
  • make it clear that it isn’t ok to keep doing the same thing that has been done in the past. You’ve got to clearly articulate the new threats the organizations faces and the opportunities that it can pursue as a result of ongoing change.
  • there’s so much going on, and we don’t know where it might fit in terms of priorities! This is a tricky one, because in this type of situation, its pretty well certain that there is some weak management in place who doesn’t know how to set a clear action plan that the team must follow. Best bet is to address the other issues on the list, and work to put in place a clear business and strategic plan for your initiative, with sound business reasoning as to why it needs to be done.
  • it’s too far ahead of its time! Frame the future to the organization this way: do we want to always be fast followers, or do we truly want to be market leaders?

In Zurich,I noted on stage that “we develop corporate cultures that stifle — that kill our ability to try to do anything new…..” That’s what you’ve got to work to avoid — it’s not easy to do — but absolutely necessary!

nortel.jpgGosh, I just wish Nortel would wake up one day. They haven’t yet. Their much hyped new “hyperconnectivity” strategy, announced to much fanfare by CEO Mike Zafirovski over the last few weeks, really isn’t anything new. Neither the concept, nor the phrase, which they now claim to have invented.

Their “bold” new strategy is curious, considering I’ve been using the phrase hyperconnectivity for over a decade, such as found within one of my Profit Magazine columns in 2002. [ read the article ] and have used it as a key trend on stage in front of tens of thousands of people … including with people at Nortel, as well as their competitors and industry partners. My observations on hyperconnectivity have also been covered in the media, such as this story which ran in 2003.

For Nortel to claim is has found a bold new strategy in a bold new phrase “hyperconnectivity” is simply untrue, and makes the current management team look rather sillly.

Gosh, over the last decade, I’ve provided my insight through internal and external keynotes and workshops with some of the senior business, R&D, marketing and sales executives at some of the world’s leading companies in the “convergence” space, including Motorola (including a meeting with all of their senior global R&D staff — 225+ people — in 2005), Verizon, the Society of Cable Telecom Engineers, Microsoft, Disney, the BBC. I’ve seen some remarkable thinking, particularly around architectures with respect to the new world around us in which everything is plugged into everything else.

I’ve also done my share of stirring up some futuristic thinking on this trend; it’s captured in a video clip from my site, circa 2002 or so, in which I talk about the “hyperconnectivity” trend. I’ve got dozens of clips from some pretty heavy duty events (Society of Cable Telecom Engineers, Tampa, 2000+) in which I banter around the phrase.


Which brings me to Nortel:

  • can this company do nothing right?
  • how can it claim in a big new marketing strategy that it is doing something “new” when it is doing nothing of the sort?
  • if it is trying to come back to the marketplace after living in scandal-land, can it’s senior management team not do it with at least a bit of intelligence?

To much fanfare, CEO Mike Zafirovski announced to shareholders in early May that it was back in the game, and it’s game was — hyperconnectivity! Their brand new strategy? They were set to be a major player in this exciting new marketplace in which everything is plugging into everything else.

They were onto something revolutionary!

Yesterday, John Roese, the new CTO, in an interview in the Globe & Mail, claimed he “coined” the phrase.

OK, that ticked me off. As soon as I heard Nortel use the word “hyperconnectivity” my ears popped up. Heck, I even think I even had the phrase in my my slide deck when I presented to Nortel customers at the 1995 Nortel PGA Open in Tucson, which included most of the senior management of Nortel (at the time.)

And actually, it ended up being one of the major trends discussed at length in my What I Learned From Frogs in Texas book. It’s a phrase that I’ve used on stage, with tens of thousands of people listening, ranging from the US Army Corps of Engineers to Disney, Motorola, SAP, and hundreds of other organizations.

And it’s not even like I made the phrase up; it existed in various telephony magazines as far back as 1995.

What’s interesting is this: at the end of March, there was a flurry of activity on my web site, as people from Nortel.com googled the phrase “hyperconnectivity.” Many found my video clip; many watched it. At the end of March, they registered the domain name. Then their CEO announces a bold, exciting new strategy!

Except — well, it’s not bold. It’s not terribly exciting. Everyone else is already doing it. Cisco, Motorola, and just about every other organization out there knows we are headed rapidly into a world in which countless devices plug into countless other devices. They might use other phrases, but everyone else seems to be already well ahead in the game.

It’s almost as if this is a bad joke. In the Globe article, the CTO claims “it’s kind of like we went to sleep, woke up, and found the world had kind of circled around where we were.”

Actually, I think most of the rest of the tech world has alread moved well beyond Nortel, and Nortel is obviously still in some soft of semi-awake state.

I’m not into domain name speculation, though it would have been fun if I owned hyperconnectivity.com.

What’s galling — perhaps more so, indicative of yet another fumbling of strategy at Nortel — is how they now claim to have “invented something new” that lots of people have been talking about and thinking about for a long time.

What can we learn from such a series of CEO mis-steps? Several things:

  • innovation isn’t about dreaming up some cool new catch phrase, and building a cool new marketing campaign around the phrase (particularly when the phrase isn’t, well, new….)
  • innovation isn’t about suddenly claiming to the world that you have something unique, when everyone is already talking about it and doing it
  • innovation is about walking into your customer base with a credible architecture, a credible sales team, and a credible vision that will help a company get involved faster in the high-velocity world of telecom, rather than a simplistic marketing phrase

I’m saddened most of all by this Nortel thing because, well, once they seemed to be a cool company. Now, they just seem to be tired, in a marketplace in which everyone is charging ahead at light speed.

I just feel like scolding Nortel, but sadly, this latest bit of silliness just seems to be yet another step in a lot series of fumbling missteps.

Update: for those who are asking about “prior art,” another posting details a bit of that. Find it here.

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