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From FOBO to Go, Go!

February 29, 2016
Being disruptive is the gold standard for executives and citizens of the digital-industrial era, but it seems FOBO—the fear of becoming obsolete in the face of technological disruption—has Australians thinking that “digital Darwinism” may do them in. GE’s Global Innovation Barometer 2016 shows 89% of Australian business leaders fear that many businesses will not adapt to the fast pace of digital evolution. Only 32% feel their own company is adapting very well. Here, four confident innovators contemplate the root causes of our anxiety, and how we can ditch shock and awe to become drivers of change.
Hint: Entrepreneurialism can be learned. “Absolutely!” says serial business builder and author of ebook Blue Sky Mining,  Adrian Turner. “People misunderstand entrepreneurialism as being about risk taking, but entrepreneurs are calibrated risk takers. There’s methodology to de-risking any new venture.”

><br /> <br /> <em>Adrian Turner of Data61, Kate Bennett Eriksson of PwC, Andrew Jenkin of Rio Tinto and Suzana Ristevski of GE Australia, New Zealand & PNG</em><br /> <h3><strong>Adrian Turner, CEO, Data61</strong></h3><br /> As CEO of Data61, the entity formed in 2015 by the merger of CSIRO’s Digital Productivity flagship and NICTA (National Information and Communications Technology Australia), Adrian Turner heads up one of the largest digital innovation teams in the world. “We’ve got 200 projects underway, with 680 PhDs including students focused on all aspects of data, and its applications for endeavours such as healthcare, agriculture and mining,” says Turner.<br /> <br /> <strong>1) What lies behind our fear of becoming obsolete in the face of technological disruption?</strong><br /> <br /> I think that as humans we have a fear of the unknown. History would suggest that we won’t become obsolete, that we as a society, and people themselves, will move to solve higher-order problems, focus on higher-value things. But people fear change and don’t like change in a lot of cases, and certainly fear the unknown.<br /> <br /> <strong>2) Which two catalysts could most help Australians overcome inertia?</strong><br /> <br /> I think there are two, and they’re related. One is to promote more entrepreneurialism. You can have entrepreneurialism inside a company like GE, or you can have entrepreneurialism opening a coffee shop, but once you’ve mastered the skills of being able to build businesses and create businesses, then regardless of the underlying conditions and changes, you’ll find ways to capitalise on those and have more control over your own destiny.<br /> <br /> Probably the most important catalyst is to encourage curiosity, encourage people to question and try things and not be concerned if their attempts don’t work out because we’re operating in such a complex system that no-one can predict the future.<br /> <br /> <strong>3) What will characterise innovative goods and services in coming decades—the era of the Fourth Industrial Revolution?</strong><br /> <br /> Up until now, technology and machines have been the limiters—they haven’t been able to satisfy us or do the things we need them to be able to do—but I think we’re going to cross over a point here where people become the limiters. Once we solve some of the technology challenges around things like security and interoperability, the whole behavioural-economics, cognitive-science piece of this becomes crucial. I was shared a statistic by one of the health insurers here that when somebody has a heart attack and they’re given a regimen to change their behaviour and take medications, or risk a second heart attack and high probability of death … the compliance rate is about 5%. So we’re creatures of habit. We have something like 179 documented cognitive biases—the lens through which we look at the world that distorts or influences how we interpret things. The really innovative services will build an understanding of that and tailor the offering and services for me as an individual.<br /> <h3><strong>Kate Bennett Eriksson, head of disruption, PwC</strong></h3><br /> AT PwC Kate Eriksson develops programs for driving innovation in the corporate ecosystem. She has worked in Asia, Israel, Europe and the US, nurtured the design and operation of the world’s first mobile Skype system, and established the AT&T Foundry (collaborative global innovation centres). She is passionate about contributing to the success of Australian innovation and growth. “I think this is absolutely Australia’s time,” she says. “There is strong optimism in the market for doing things differently and collaborating. We are one of the most liveable countries in the world, we’re the highest adopters of mobile technology, and we are open-minded and generally well received in global markets.”<br /> <br /> <strong>1) What lies behind our fear of becoming obsolete in the face of technological disruption?</strong><br /> <br /> The change we’re going through is exponential, so the processing power of computers, the number of computers, the number of things connected. The fear is that if you have value to add, if you are a bank or a telco or a retailer, and you’re not up for the technology, you’ll miss the boat. The river is flowing very fast, and as an employer of 6,000, 10,000, 20,000, if you don’t respond quickly enough, then other people will have your market share.<br /> <br /> We define disruption as creating new value, as disintermediating—people or processes or steps or friction are cut out of the process—and as introducing new scale. If somebody comes along and does those three things and you’re disrupted, it’s very hard to come back.<br /> <br /> <strong>2) Which two catalysts could most help Australians overcome inertia?</strong><br /> <br /> We need everybody who is capable of showing leadership and vision to exercise their talent: the leadership to encourage their people to be curious, or the vision of how things could be better or reimagined. People need to be able to look up and see that their ideas are welcome. Leadership and vision will come from teachers, it will come from the Prime Minister, and it will come from the Andrew Paynes (Active Biotech) and the Andrew Thorburns (NAB) and the Larry Pages (Alphabet/Google). More people need to be doing an Elon Musk—”I believe we can colonise Mars”—and then an industry forms around their vision. Or it might be at the dinner table, asking, “So how could we do this, what could be another way to solve this?”<br /> <br /> Another catalyst is teaching the skills and the mechanisms for solving problems—critical thinking and design thinking and STEM. I don’t think we should make everybody go through the STEM machine, but we should all have a process to go about investigating something that we’re curious about. In the next five to eight years, we’ll all use effective mechanisms for solving problems. The question will become what problems are we going to work on—not how do you go about it.<br /> <br /> <strong>3) What will characterise innovative goods and services in coming decades—the era of the Fourth Industrial Revolution?</strong><br /> <br /> Firstly, most things are going to need to have global relevance and scale. Imagine if Telstra spent a billion dollars a year on a new mobile network that was only available to Australians ... Innovative goods and services need to have a global relevance.<br /> <br /> The next thing I think will characterise future products and services is the multidimensional business model. You need to have a set of levers to pull: cost advantage, customer experience, technological advantage. It’s not just something that you sell to somebody; it’s an ecosystem or an environment or an adjacency. For example, you see RSVP going into HR because it already has an engine for matching people and profiles. You see a company called Standard Plumbing, which, when Amazon started going into plumbing and supply products, went to Amazon and said, “We bet you have distribution problems, we have warehouses everywhere.” So, it’s that ability to be fluid, to be connected to the ecosystem that can go peer to peer.<br /> <h3><strong>Andrew Jenkin, director, innovation partnerships, Rio Tinto</strong></h3><br /> Andrew Jenkin began his career as a research engineer, and has successfully melded engineering expertise, business analysis and a drive to innovate, in his role at Rio Tinto. In the Pilbara, Rio Tinto runs the single largest heavy-haul rail network in the world, powered by GE high-tech locos. The network hauls some 318 million tonnes of iron ore from 15 mines and 31 pits, to four ports. Rio Tinto and GE have worked together for decades implementing innovative technologies to drive ever greater efficiencies for the major miner. Rio Tinto’s current major innovation project, a world first, will automate the rail network. Change and some level of obsolescence are intrinsic to automating such a huge operation as Rio’s, which already runs a fleet of automated trucks and drilling rigs, but the rewards in terms of increased worker safety and productivity, and work satisfaction from new roles within the company are considerable, says Jenkin.<br /> <br /> <strong>1) What lies behind our fear of becoming obsolete in the face of technological disruption?</strong><br /> <br /> Jobs and industries have come under pressure from technological disruption since the start of organised work. In the past, the main basis of disruption was physical, such as larger, faster, more automated equipment. As such, the pace of change was relatively slow and noticeable, and therefore reasonably predictable and manageable. Today, the dominant basis of disruption is digital, which is less observable, faster and cheaper to develop and deliver, and therefore more problematic for existing industry participants. Whilst people fear digital disruption, they should in fact embrace as it is making work more productive, more targeted, and creating opportunities that didn’t previously exist.<br /> <br /> To date, physical asset-heavy industries, such as mining, have been less impacted by the digital revolution than other industries, but digital disruption opportunities have increased and are likely to significantly impact relative shareholder returns. Almost a decade ago Rio Tinto commenced its Mine of the Future™ programme, and the results to date on several key projects have reinforced our view that digital disruption will be a key element of our industry leadership.<br /> <br /> <strong>2) Which two catalysts could most help Australians—individuals and businesses—view the future differently and overcome inertia?</strong><br /> <br /> The key barriers to overcoming inertia are myopia and over-confidence. To address these, individuals, businesses and countries benefit from broadening their horizons, and actively seeking a diversity of views in key strategy and investment decisions. Education is a key element, with a high focus on the connected world we now live in. Collaboration is another; that is, working very closely and openly with others, and at the very least learning from others.  At Rio Tinto, we actively seek input and partnerships from organisations across the world—many without any history in mining—who we believe may assist us to create value from our business innovation efforts.<br /> <br /> <strong>3) What will characterise innovative goods and services in coming decades—the era of the Fourth Industrial Revolution?</strong><br /> <br /> I suspect future innovative goods and services will be more tailored to specific customer needs and value-creation opportunities. They will also more clearly and fairly account for the ownership and use of associated intellectual property and data.<br /> <h3><strong>Suzana Ristevski, chief marketing officer and head of strategy and growth, GE Australia, New Zealand & PNG</strong></h3><br /> Suzana Ristevski’s <a href=mission at GE is to create, not imitate. She’s been declared one of Australia’s top 50 CMOs, and despite a stellar, continuously evolving career in industries that have included movie making and insurance, she readily admits having felt twinges of FOBO. “Yeah, anyone can become obsolete,” she agrees, but she offers encouragement:  “Acknowledge what you don’t know and hang out with people who do know, and you’ll find yourself in a community of innovation—it’s exciting!”

1) What lies behind our fear of becoming obsolete in the face of technological disruption?

I think it’s the fact that technology is evolving at a pace that we’ve never seen before, and the speed of that disruption is scaring us. We need to think differently about how we deal with that speed.

Previously in the corporate world we may have taken 12 months to go off to research and run different financial models to develop a business case. Now, in a much faster moving world you’re getting data simultaneously, you have to test things in market and then pivot. It’s certainly fear-inducing for organisations that have been running their businesses by setting up business cases.

The media definitely plays a role in inflating success stories, celebrating those that move fast with the times. I think we need to be mindful that there are as many failures, if not more, for every success—so it’s OK to fail!

2) Which two catalysts could most help Australians overcome inertia?

Where we’ve seen innovation work really well, governments have played a part. I’m really pleased to see new incentives for innovation coming through here—a desire to attract investment in Australia, a desire to help startup companies and get their ideas across the line. The next wave of software innovation doesn’t have to come out of Silicon Valley; there are people in Australia who are incredibly talented and with great ideas. We need to provide the support for them to realise those ideas.

And it’s underestimated but we need great storytellers. People who are able to articulate the story and get mind share to create market share are going to be incredibly successful in this environment, because they create a vision of what life could be like. That’s how you get investors and that’s how you get people on board.

3) What will characterise innovative goods and services in coming decades—the era of the Fourth Industrial Revolution?

There are so many opportunities out there to drive better outcomes and better productivity. When I think of what GE does with the industrial internet and its own software, we’re talking about sweating assets for a longer period because we are better at avoiding unplanned maintenance. We’re making the asset more efficient because we’re able to predict when that asset is likely to break down and we’re able to fix things before that happens. So I see this as a really great way to improve productivity for Australia and for the rest of the world.

More features on the Australian innovation race:


Infographic: Australia's innovation optimists
Why we all need to own the Innovation Nation
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