Worried about New Technologies disrupting your Industry ? It's time you bring in a DESI CTO

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Are you worried about new technologies disrupting your Industry?  then, what you need is a DESI CTO

Dr Shankar Venugopal

Technology Disruptions – Friend or Foe for the CEO ?

Imagine playing a game where the rules of the game are continuously being changed, or being at a familiar place where people around you start speaking a new language that you don’t understand or being taken on a multi-mode journey without letting you know the destination – you would agree that these are not  scenarios where you can perform at your best efficiency. CEOs, leading business enterprises in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world, very often face this kind of a situation when a new technology changes the ground rules of their business. You may remember how Kodak’s business was disrupted by digital photography technology, many of our traditional businesses are being disrupted by digital technologies today. The performance of these disruptive technologies is growing fast and their cost is falling – these technologies are converging fast to create radically new solutions. For instance, businesses that were thriving for decades on fossil fuels, are being disrupted by the emergence of affordable renewable energy technologies (the price of solar photovoltaic technology has fallen by about 85% over the last ten years and the cost of energy storage has also reduced significantly). Yet another example, the automotive industry that has been manufacturing vehicles powered by internal combustion engine (ICE) over many decades is being disrupted by the emergence of electric vehicles (EVs) and autonomous vehicles (AVs). The traditional manufacturing industry is being swept away by the digital wave – popularly referred to as Industry 4.0. While many CEOs feel threatened by these new disruptive technologies, there are a few CEOs who are successfully leveraging the very same technologies to create radically new customer value and redefine their business. Behind every such successful business leader, there is a DESI technology leader. A technology leader who has supplemented his domain knowledge with certain unique skills that help him to convert the technology shift into a business growth opportunity.

The DESI CTO

Domain knowledge, either of the business or the technology, helps the business to respond to changes effectively only when the changes are linear and incremental. When the changes are non-linear and exponential, which is typical of the forces driving the VUCA world, the traditional strategies are of no help. The technology leader needs four unique skills to ride the way of technology disruption – we proceed to describe these skills with the acronym DESI. Hypothetically, if a DESI CTO had led technology for Kodak, he might still not have predicted the invention of digital photography but would have recognized its disruptive potential when Steven Sasson, a Kodak engineer, demonstrated the first digital camera prototype to the senior management (in 1975). He would not have got deceived by the fact the first proto had a poor resolution of 0.01 megapixels, weighed 8 pounds and took 23 seconds to record an image. The DESI CTO would have systematically tracked the steady evolution in the performance of the digital photograph technology and helped his CEO to systematically explore the business opportunity – this could have possibly avoided the subsequent collapse of the business ( https://www.forbes.com/sites/tendayiviki/2017/01/19/on-the-fifth-anniversary-of-kodaks-bankruptcy-how-can-large-companies-sustain-innovation/#653665ae6280). In the case of automotive industry, the DESI CTO would not only follow technology trends to visualize the converge of the electric, autonomous and connected technologies in future but also follow the global mega trends that led to the emergence of shared mobility models. He would also focus on the sustainability of his new EV business by studying the critical dependencies on the global demand vs supply of lithium, cobalt, rare earths etc. The DESI CTO achieves all these feats by constantly practicing four powerful thinking skills:

Figure 1. Four Thinking Skills of the DESI CTO

Design Thinking

Design thinking is best understood from the words of David Kelly (Founder of IDEO)

“A human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Thus, the method focuses on the three main elements of a product or solution: people, technology, and business, all of which evolve around the customer.” 

The CTO, as a design thinker, sharpens his customer focus by carefully observing his customers and develops certain unique insights. These customer insights help him not only to precisely define the technical problem, but also to segment his solution in such a way that it caters to the critical needs of various customer segments. He understands the unarticulated pain points of his customers and leverages technologies to create a great user experience. The DESI CTO, just like GE’s MRI Inventor Doug Dietz, will use empathy to connect with his customer and go beyond the product to create a rich and meaningful experience.

(https://challenges.openideo.com/challenge/creative-confidence/inspiration/the-story-of-doug-dietz-creative-confidence-in-the-mri-suite ). A DESI CTO in-charge of designing electric cars will study the usage patterns of his customers across various geographies and age groups and then decide on the vehicle specifications -  realistic range, modular battery capacity, charging method (and time), differential pricing etc He goes beyond the functionality of the product to create delightful customer experience.

Exponential Thinking

Peter Diamandis, the founder of X-Prize Foundation and co-founder of Singularity University, introduced the power of exponential technologies through his books Abundance and Bold (New York Times bestsellers).

“Right now, and for the first time ever, a passionate and committed individual has access to the technology, minds, and capital required to take on any challenge.” 
― Peter H. Diamandis, Bold: How to Go Big, Create Wealth and Impact the World

The DESI CTO, as an exponential thinker, believes in the exponential growth of digital technologies and their convergence. He has derived his lessons from how the semiconductor technologies followed Moore’s law over so many decades and doubled their performance every eighteen months (accompanied by a 50% price reduction too) and how it has in turn fueled the digitization wave across diverse industries beyond ICT. He will actively seek opportunities for digitization in his business. More importantly he will not be deceived by the initial limited results of his digitization efforts and convince his CEO of their true disruptive potential. He will prepare his business units to respond to the waves of dematerialization and demonetization that follow the disruption. He will anchor his vision on the true aim of disruption – which is democratization. He will have an abundance mindset and will actively apply Peter Diamandis’s 6D framework to steer his business through the turbulent waters. The DESI CTO of an automotive company will even be able to predict the exponential improvement in performance and fall in price of the lithium ion battery or the LIDAR and put his bets on EVs and AVs at an early stage when many of his colleagues were looking at EVs as lab curiosities and AVs as science fiction. ( https://singularityhub.com/2016/11/22/the-6-ds-of-tech-disruption-a-guide-to-the-digital-economy/#sm.00001bkluym4xgdgvxtzg5juygxwv )

Systems Thinking

Peter Senge, in his seminal book “The Fifth Discipline”, describes systems thinking as one of the pillars of a learning organization.

“[...] vision without systems thinking ends up painting lovely pictures of the future with no deep understanding of the forces that must be mastered to move from here to there.” ― Peter M. Senge, The Fifth Discipline: The Art & Practice of The Learning Organization

The DESI CTO, as a systems thinker, studies the relationships across the entire ecosystem and carefully makes his technology decisions based on the readiness of the ecosystem. You may remember how Thomas Edison did not stop with inventing the electric bub but went on to explore the generation and distribution of electricity. Edison knew that he cannot expand his customers for the electric bulb without making safe and affordable electricity available to all. A DESI CTO in an automotive company will not look at EVs in isolation, but look at the co-evolution of fast charging infrastructure, wireless charging technology, renewables powering the grid, battery storage technology etc. He would also track the development of emission regulation policies for EVs and legal and insurance policies for AVs. He uses the systems thinking approach to make the right architectural decisions and pick the right technologies. His technology roadmaps are not limited to the evolution of the product (EV) but to the evolution of the entire ecosystem. For instance, he would study the global trade patterns and future demand vs supply dynamics of critical metals (lithium, cobalt) to decide the right battery chemistry for his EV. He would also think across the entire lifecycle of the product and factor in end of life issues at the early design stage itself.

Inventive Thinking

Inventive thinking offers a systematic approach to creating inventions that solve critical problems. Innovators like Steve Jobs have often talked about the importance of “connecting the dots” – creatively connecting diverse ideas across many domains. One often wonders how lesser mortals can connect the dots as seamlessly as Jobs. Genrich Altshuller, the father of TRIZ, has created an algorithmic approach to inventive problem solving and this methodology has been adapted across industries to create ground breaking innovative products.

“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. “ – Steve Jobs

The DESI CTO, as an inventive thinker, connects ideas from many domains and diverse experiences to synthesize new solutions. When he solves a problem, he identifies the contradictions underlying the problems and resolves them using Inventive Principles. He is not under the illusion that he is the first to try to solve the problem – he actively looks for patterns across industries where inventors have solved similar problems. He brings together inventive ideas across different domains and creatively connects them. He visualizes the ideal solution (IFR), in a constraint free world, and succeeds in creating innovative solutions that have no tradeoffs. He follows the technology evolution trends across various domains to continuously define the next set of problems that he needs to solve. He actively uses TRIZ (Genrich Altshuller’s Theory of Inventive Problem Solving) philosophy, tools and techniques to create inventive solutions.

Figure 2. Disruptive Technologies – Friend or Foe ?

We started our discussion with the question whether the disruptive technology is a friend or foe to the CEO. We conclude that the disruptive technologies can be effectively leveraged by a CEO who is advised by a DESI CTO to correctly assess their disruptive potential and to invest early. The same technologies can disrupt the industry and take the CEO by surprise, if his CTO has underestimated their disruptive potential and not taken a proactive stance.

Key Takeaways

·        Traditional Businesses are being disrupted by new technologies. The business leaders can make the conscious choice to view the disruptive technologies either as threats or as opportunities. The CEO needs the support of a CTO who assesses the new technologies for their disruptive potential and articulates the business opportunity that they offer.

·        The CTO needs to supplement his domain knowledge with four unique thinking skills to effectively handle the disruptive technologies. The DESI CTO practices Design thinking, Exponential thinking, Systems thinking and Inventive thinking.

·        If your industry is being disrupted by new technologies, then your chances of emerging successful are higher if you are guided by a DESI CTO.

For further reading on managing disruptive technologies, please refer to the Author’s blog -  http://innovationflow.blogspot.com/

Author profile – Dr Shankar Venugopal is a Vice President at Mahindra & Mahindra. Shankar leads technology innovation, intellectual property and technical capability building for Mahindra’s Automotive and Farm business. Prior to joining Mahindra, he has held global technology leadership roles at Cummins, Honeywell, Dow and GE. He holds a Ph.D from the Indian Institute of Science, Bangalore and an executive management degree from the Indian Institute of Management, Bangalore. He is a prolific inventor and holds ten international patents. He has created a proprietary innovation methodology – Innovation Flow – and has coached 1000+ innovators. Shankar’s focus is on driving sustainable technology innovations for the automotive and farm industry.