How will your organization capture value in the next five years? Because we’ve all enjoyed our digital “fun” over the last decade through our Facebook likes and Twitter spats. But until recently, market developments have mainly, as technology writer Kara Swisher has said, been driven by “big minds chasing small ideas”. We’re now entering an era of “big brains focused on big ideas” – using data and insight to transform how we’re educated, fed, transported, insured, medicated and governed. “We’re all software companies now” so the saying goes and the saying is right because we’re beginning to virtualize everything from products and services to entire value-chains and industries.
No industry is immune from the rise of software. The insurance industry is now awash with data as wearable devices generate individual health profiles and customized premium quotes, and our driving insurance policies can be based on actual driving performance (you’ve seen the ads and yes, if the price is right, we’re willing to be tagged and tracked!). In big pharma, data is supercharging an era of innovation and opportunity as smart medical devices, intelligent pill bottles, bio-sensors and now even digestible chips on pills create a trail of data that can be analysed for meaning and value. Data is now the basis for intercompany innovation. It’s triggering a wave of experimentation like the recent tie-up between Novartis and Google (Google is ALL about the data). Novartis wanted to license Google’s smart contact lens to measure a wearer’s blood sugar levels (and gain a data feed) and begin to build a platform for innovation (co-creating with the data feed). It hasn’t yielded a return but it shows the direction of travel. Business value increasingly flows across many different players. Business value is a shared enterprise across new partnerships and consortia.
Brands are no longer single entities because end-to-end customer journeys and customer experiences now depend on many different inter-related dependencies and players. It is happening now—new market niches like the connected car, connected home or the smart city are much more than lofty concepts; rather, these entities are developing into synchronized products and services set among a diverse range of players. I wrote about this previously here; a great example are the world’s car manufacturers that are busy organizing into commercial consortia to capture the opportunities from the predicted rise of the self-driving car. The autonomous car is starting to trigger an industry mashup way beyond the current spat for control of the ride sharing software or the in-car entertainment interface between Apple and Google. These ecosystems that are now forming are the backbone for future value.
Once you start looking for them you will see these new software ecosystems everywhere. Look at the big shift in banking strategy as Fintech builds. Many of the established banks now run platform strategies and open architectures to aggregate 3rd party Fintech data and enable the delivery of newly slick, personalized products and services in compelling new ways. (BTW If you’re serious about how eco-systems work then get scrubbed on platforms and application programming interfaces (APIs) which are the glue that sticks these and other services together). For example, S&P’s Capital IQ uses APIs to integrate key information, including investment research, companies’ financials, credit ratings, and global market data, and alpha and risk models, into personalized business applications for customers. In this accelerated world of APIs and consortia, companies will have to interact with many more partners covering a broad range of functions and it’s fiendishly complex to master: check out the customer data ecosystem for example; it needs customer analytics solutions, engagement agencies, social media marketing folks, tag management expertise, loyalty solutions, customer engagement agencies, data aggregators, recommendation engines, pricing engines, back to market research panels and interactive agencies. Where does this stuff get put-together? How does it work? Who makes it work?
This is why I’ve just wrapped up some research that shows how the spaces where we come together to work matter. Because if you take a second to understand the interplay between workflow and space you’ll understand why the space where work gets done matters now more than ever. Workflow is changing as data infuses everything but the emerging market opportunities described above call on companies to assemble work-teams to blend skills, capabilities and innovative thinking inside, outside and across traditional organizational structures. The crackle of innovation needs to happen somewhere and it’s not just going to happen online. Your people, if they’re good, will be keen to discuss the trajectory of the work they do and the structural shifts that are now playing out everywhere. The future of your space still matters...so watch this space.
PS. The next wave of value that Kara Swisher rightly points too we think will come from more established companies in more traditional industries that can see and seize the opportunities ahead. It means organizing around platforms, boosting innovation and assembling new machines for work—this is Europe’s digital imperative. Entirely new market sectors are now emerging that blend talent, disciplines and technologies in a super-charged wave of innovation—connected cars, social insurance, smart homes, digital health – the list goes on. These ecosystems supporting these markets have radically switched in the last 5 years...what is interesting is they’ve taken the talent pool with them!