The Organisation of Tomorrow

How AI, blockchain and analytics turn your business into a data organisation

Mark Van Rijmenam

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781000007671
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

The Organisation of Tomorrow presents a new model of doing business and explains how big data analytics, blockchain and artificial intelligence force us to rethink existing business models and develop organisations that will be ready for human-machine interactions. It also asks us to consider the impacts of these emerging information technologies on people and society.

Big data analytics empowers consumers and employees. This can result in an open strategy and a better understanding of the changing environment. Blockchain enables peer-to-peer collaboration and trustless interactions governed by cryptography and smart contracts. Meanwhile, artificial intelligence allows for new and different levels of intensity and involvement among human and artificial actors. With that, new modes of organising are emerging: where technology facilitates collaboration between stakeholders; and where human-to-human interactions are increasingly replaced with human-to-machine and even machine-to-machine interactions. This book offers dozens of examples of industry leaders such as Walmart, Telstra, Alibaba, Microsoft and T-Mobile, before presenting the D2 + A2 model – a new model to help organisations datafy their business, distribute their data, analyse it for insights and automate processes and customer touchpoints to be ready for the data-driven and exponentially-changing society that is upon us

This book offers governments, professional services, manufacturing, finance, retail and other industries a clear approach for how to develop products and services that are ready for the twenty-first century. It is a must-read for every organisation that wants to remain competitive in our fast-changing world.

Chapter 1

Welcome to exponential times

We live in exponential times. We are experiencing a paradigm shift, where businesses and technology change and grow at an exponential rate, causing profound social and economic change. The fast-changing, uncertain and ambiguous environments that organisations operate in today require them to rethink their internal business processes and customer touchpoints. The last time such rapid changed happened was the advent of the internet. The internet caused organisations to completely rethink their business and enabled the success of organisations that embraced the new paradigm, including Amazon, Google, Facebook and WeChat, to become monopolists within record time. Now, we are experiencing another change due to emerging information technologies (EIT) such as big data analytics, blockchain, and artificial intelligence (AI) and trends like the Internet of Things (IoT).¹ These technologies make it easier for startups to compete with existing organisations. As a result, and because of the lack of legacy systems, these startups are more flexible and agile than Fortune 1000 companies. Within a short timeframe, startups can become a significant threat if not paid due regard. Therefore, only paying attention to the day-to-day operation is simply no longer enough. Organisations have to become innovative and adaptive to change if they wish to remain relevant and competitive. New technologies can help achieve this shift. When big data analytics, blockchain and AI are combined, it will change collaboration among individuals, organisations and things. When implemented correctly, these technologies can significantly improve consumer engagement, increase transparency, reduce costs and improve production efficiency or service delivery. Thanks to these technologies, we move from “computer-assisted work” to “human-assisted work”, particularly as human-to-human interactions are increasingly replaced by human-to-machine interactions and then machine-to-machine interactions. When these technologies converge, it enables organisations to design smarter businesses and incorporating these technologies within your organisation has become easier than ever before.

However, in the words of Commander Chris Hadfield, a retired Canadian astronaut, engineer, and former Royal Canadian Air Force fighter pilot, during a keynote in 2018, “smart only matters when you do something with it”. You can have all the technology in the world, but it comes down to what you are going to do with these new tools. How will you put (existing or new) technology to work and how will you take an idea and change yourself and the organisation? In today’s world, it is no longer only about collecting as much data as possible, simply because collecting data has become too easy. It is more about doing smart things with that data, while ensuring privacy and security. To achieve that, you need intelligence, human and artificial, to work together seamlessly. Organisations can now leverage data and embed learning in every process. This can empower people with all forms of intelligence and “put smart to work”. We now experience the greatest opportunity of all time, forcing organisations to make big bets for the future and to dare to think the impossible.¹ Organisations should go on to the offensive and disrupt their industry if they want to survive in this fast-changing and fiercely competitive world. Emerging information technologies are rapidly changing how we work and live. Organisations have to adapt to these new technologies if they wish to remain relevant in the future.

This book aims to help organisations understand these fast-changing times by providing clear insights into what these technologies are, how they can work together, and how it will change your business. Only if you understand these new disruptive technologies will you be able to incorporate them into your organisation. Therefore, this book will also pay attention to the downside of these emerging information technologies and what organisations should do to prevent consumers from becoming victims of an increasingly data-driven world.

1.1 The importance of data

In constantly changing environments, organisations remain competitive not only by focusing on excellence in the day-to-day business operation but also by being innovative and adaptive to change.² Thanks to emerging information technologies, it has become easier to compete as a newcomer in traditionally closed markets.³ This means that the ability to cope with, react to, and anticipate industry disruption becomes important for organisations if they want to remain competitive. Detecting, anticipating and responding to disruptive changes while displaying industry leadership and managing shifting behaviours of stakeholders is called “organisational ambidexterity”.^{4, 5}, It is considered especially important when facing a fast-changing and uncertain environment.^{6, 7}, Organisations that wish to achieve this ambidexterity should rely on data as a key resource for their business and develop data-driven business models.⁸ This requires organisations to use a variety of internal and external data sources. To apply a variety of activities to that data, including processing, analysing, and visualising, and use the insights of those activities to develop new products and services that target the right customers at the right moment and at the right price.⁸ For many, this requires a different mindset, as many organisations still base their decisions on experience and intuition instead of data analytics.⁹–¹¹

Startups that threaten your existing business are already used to this new, data-driven approach. They leverage new technologies and experiment with new approaches. This allows them to benefit from opportunities available in our constantly changing global market. Such startups, which sometimes experience exponential growth, are usually characterised by a so-called “platform approach” to organisational design. A platform organisation is a meta organisation, where members benefit from economies of scale while remaining independent.¹² Well-known examples include Uber, the world’s largest taxi company that does not own any taxis; Airbnb, the world’s largest accommodation provider that does not own any hotels; or Facebook, the world’s largest media company that does not create any content.¹³ Another emerging approach to organisation design is that of the Decentralised Autonomous Organisation (DAO). This radical new form of organisation uses blockchain technology and smart contracts to establish governance without management or employees, run entirely by computer code¹⁴ (where If This Then That statements are deployed on a blockchain, but more on this in Chapter 4). These approaches fundamentally challenge incumbent industry practices. Almost all new technologies produce large amounts of data, which can be analysed using algorithms to help derive actions and improve decision-making. As a result, these companies are at first data companies that happen to offer a certain service, such as connecting people (WhatsApp), moving people from A to B (Uber), or allowing consumers to experience local accommodation (Airbnb).

Viewing your organisation as a data organisation will completely change all your processes and customer touchpoints. This is a difficult change, but it is required if you want to be able to compete with startups that have been doing this since inception. When you see your organisation as a data organisation, a “gestalt shift” will occur; all of a sudden, you will see your organisation from a different perspective. For example, a car company should no longer see itself as a car manufacturer, but as a software company that is in the business of helping people move from A to B. It should look at how the company can do so in the most reliable, comfortable and safest way. Once the mindset has changed, the organisation can ask whether it wants to produce cars, flying taxis, or develop “Uber-like” apps. The same goes, for example, for a bank. A bank is no longer a financial institution, but a data organisation that enables people to store value and make secure transactions. Whether this is done using a cryptocurrency, as a mobile-only bank or to store digital identity data are then questions that can be asked. Nowadays, any organisation, regardless of industry, should see itself as a data organisation. When doing so, it can remove any barriers that prevent the business from delivering the product or service in the most efficient, effective and customer-friendly way. In the digital world, anything is possible, although it might take some time to figure it out.

1.2 The downside of data

There is also a downside to the abundant presence of data in today’s society. Today’s tech giants such as Google, Amazon, Facebook, Microsoft, Tencent and Alibaba have long recognised that data is a valuable asset. They have been aggregating vast amounts of data in return for “free” services from the outset. Unfortunately, the problem with “free” services is that you and your data are the actual product. This has resulted in a centralisation of the web and a handful of organisations dominating and controlling it.^{15, 16}, This has caused problems with truth and trust – such as fake news, clickbait, trolling, spam, lack of privacy and absence of accountability. This book, therefore, will not only help you to change your organisation into a data organisation, but also help you to do it the right way.

This centralisation, where the internet ended up in the hands of a few very powerful companies, is not how the world wide web was originally envisaged. As Sir Tim Berners-Lee said during the Decentralised Web Summit in 2016:¹⁷

The web was designed to be decentralised so that everybody could participate by having their own domain and having their own web server and this hasn’t worked out. Instead, we’ve got the situation where individual personal data has been locked up in these silos.

These centralised internet corporations are incredibly powerful. They have access to vast amounts of data of their users, which they use and abuse to follow (potential) customers around the web. They often ignore existing privacy practices.^{15, 18}, Tech giants use their enormous data silos to make money through advertising (85 per cent of online advertising spend goes to Google and Facebook, according to Morgan Stanley analyst Brian Nowak¹⁹). They use the data to their liking, often without properly involving or informing the consumer.²⁰ In addition, while some organisations take data security seriously, many do not. As a result, many consumers have become the victim of one of the hundreds of data breaches happening every year. Their details ending up in the wrong hands, resulting in significant costs for organisations, individuals and society at large.²¹

One of the biggest scandals and privacy breaches happened in 2018, when it became clear how many consumers’ Facebook data was stolen and abused by Cambridge Analytica. Cambridge Analytica was a data mining and data analysis company that played a pivotal role in the US presidential election of 2016, the Brexit vote, and a number of other recent political races. Behind the company were key figures backing President Trump, including Steve Bannon, Trump’s former strategic advisor, and Robert Mercer, founder of the (ironically labelled) Government Accountability Institute, which uses the dark web and bots to denigrate political opponents. In 2014, the company used personal information obtained without the authorisation of these users to develop a highly effective system to target individual US voters. Under the pretence of academic research, they harvested 87 million profiles without the notice or consent of those whose data was being harvested. Cambridge Analytica then used that data to influence the US election. It was a privacy breach at an unprecedented scale. It showed that Facebook’s attempts to protect its users were not working. Already, Facebook faced a huge problem with fake news on its platform. This massive data leak made it clear that it is time for us to rethink how we deal with data. The centralisation of the web has caused consumers to be increasingly dependent on these monopolies and, as a result, we, the internet user, have no control over our data. Instead, companies such as Facebook, Twitter and Google harvest our data and use it for advertising purposes to make billions of dollars. Unfortunately, escaping the power of these companies is rather challenging. Even if you do not have a Facebook profile, the company is capable of tracking you via so-called “shadow profiles”.²² These shadow profiles are possible because Facebook’s “Like” button is present on almost every website. This enables the organisation to follow internet users by collecting disparate data such as your location, computer ID, IP address, browsing behaviour and other valuable data sources. Through these live captures, they can discover patterns i...