winning in a fast changing world

Winning in aF a s tChanging World

Peter Cochrane

COCHRANE a s s o c i a t e s

cochrane.org.ukca-global.org

Tuesday, 7 August 12

and in retrospect, very easy to manage !We come from a slow paced industrial past

that was linear, well behaved , easy to understand,

everything is so fast

Seemingly out of control, unpredictable, with non of the old rules working anymore !

What happened ?

Four BIG game changers !

• Microelectronics revolution

• Computing and software

• Internet, mobility and networking

• Globalisation and distribution

Our world went digital, non-linear & exponential !

• Huge manufacturing capabilities

• Massive computing engines

• Instant connectivity

• Everyone & everything networking

• Non-obvious cause and effect

• Unintended consequences

• A growing lack of understanding

10,000

100,000

1 2 3 4 5 6 7 8 9

Digital Failures

• Always abrupt• Mostly avoidable• Often caused by people• By unanticipated mechanisms• From a direction we are not looking• Can be very expensive & threatening• Almost always reputationally damaging/fatal

How come, and what caused all this?

We went from a single transistor in 1947 to 10Bn/chip in 2012 and by 2020 10Tn/chip at a much reduced cost and improved performance at every stage...

Production transistors are now smaller than the flu virus

> 10Bn Networked and active devices on the planet and growing exponentially...

BUT WE are such dimensionally challenged thinkersthat even the simplest of exponential

problems have unlikely outcomes to our way of thinking

1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1024.....264

One grain of rice on square 1, 2 on square 2, 4 0n 3, 8 on 4, 16 on 5 ....and on the last square more rice than we can grow on the planet in a year!

N e t w o r k i n g social & business now vital tools

Big cultural shifts resulted in society and business that see: •Insourcing

•Outsourcing•Crowd sourcing•Soda straw expertise

Transient relationshipsBroader innovationFaster innovationMore start upsHigher risks

•Less loyalty•Multi - careers•Shorter tenure•Self funded training•Continual education•Self funded IT & Support•The rise of the insider threat

Complexity and non-linearity are here to stay... ...with emergent behaviours...that are in

general impossible to predict

We have to be thinking and acting differently!

The ratchet of change just went‘clunk’ ...there is no going back !

This is the new norm - the new stability!

Some things are inherently complex... ...and some things are made complex by us!

Networks of all kinds naturally exhibit complexity ...of interaction, behaviours and outcomes!

Interconnection of yeast proteins

The internet wakes up in the early morning

Although it is fully understood that layered complexity does not solve the problem, people mostly continue to build more layers in the hope that it might...but it never will!

So what do we have to do as leaders & managers ?

Our systems and networks will increasingly surprise us if we

continue on the current trajectory !

Accept that the business world is now a bit of a blur & somewhat out of control...

Understand that business and commerce has now entered an evolutionary phase...

it is no longer about the biggest and the strongest...it is about the most adaptable !

Accept that this is

the key to future

success

In Short: Get innovating or get dying !

VitalThe card companies need to do far more than move from ‘slide to swipe’ !

Incrementalism is reasonably safe but just only staves off death a little longer !

Whilst giant leaps can be risky!

A few really do get i t r i gh t and change the world!

The consultants standard formula

In the past all of this was static and reasonably certain !

Today it is all dynamically uncertain !

Increasing Uncertainty

Business Plan

No longer a staticdocument handed

down by managers to be implemented

and blindly followed

by those below

Business PLan

But a dynamicdocument engaging

managers & peoplewith continual feedback

at all levels capable ofadapting to a rapidly

changing environment

Success demands talented, multi-disciplinary, and very capable, teams...

Success demands talented & capable multi-disciplinary teams..

Never recruit in your own image

Mono-cultures are

lethal - literally !

Keep a close eye on the: CompetitionTechnologyInnovationMarkets

And don’t forget:PoliticsFashionTaxationEconomicsGlobal tradeInvestments

...it is no longer all disconnected and independent - it it all linked - and as a result causality is increasingly complex !

Garner, value, protect and exploit expertise

No matter what age or sector...

Invest in data mining, business modelling, and decision support - gut reaction and knee jerk management is now very dangerous !

Here is why: complexity compounded by greed, ignorance and old management thinking was the cause of all this.......

Invest in warga

ming - don’t ap

proach any problem

or business decisio

n without due consideration

and testing of all

the options and moves

You wouldn’t expect a pilot to fly a plane without due training and experience

And running a company is far more complex a task

Make a virtue of failure

In fact - make it a qualification

If people are not failing from time to time - they are not trying !

Fail fast but avoid any critical damage...

...and recover even

faster !

Be prepared to be very different - to challenge convention - to try the new

Just o

Lockheed SR71 Blackbird

- No proven market- No demand- No project- No funding- No design- No team

- Design & build 18 months- First flight 1964- Over Mach 3.5- Over 80kft- In service 25 years

We can only......what the future holds...

IP over WDM...Ethernet...

For sure fortune favours those prepared to take risks!

B u t t h e y s h o u l d b e calculated and not foolish or unqualified risks!

All of this needs leadership and constant attention to detail...but not micro-management, just decide on the direction, point the way, and apply the light hand of management!

And in this context the next wave of change is going to be a challengefor a lot of people& managers !

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