Change: Ready or not, here it comes!

The magnitude and rate of change we're involved in today is unprecedented. Mobile devices are permanently changing the fabric of our lives. And speed is changing the way we make decisions. Tom Van Aman has thought longer and harder than almost anyone we know about change, and these are among the topics he brought up when we invited him to a free-wheeling discussion about what's happening today and how it will affect the future.

Tom currently serves as Marketing Manager for the Insight, Design and Innovation Center at Allstate Insurance. He also brings to the topic long years of experience in the consumer package goods business – as a brand marketer, information provider, and market researcher. The views expressed in this interview represent his personal perspective, and are in no way intended to represent Allstate.

Editor’s note: Throughout, regular type indicates Tom is speaking. Bill’s comments appear in italic.

The rate of change is accelerating.

The magnitude of the changes we are undergoing are as big as the shift from the agricultural age to the industrial age. Ten years ago, there was no social media, there were no smartphones, no tablets, and Google was a private company. We now live in an information age, but it hasn’t fully engaged yet and the changes will keep coming, probably at an increasing rate.

Mobile has changed our lives for good.

Mobile phones and tablets have completely changed the fabric of our lives. Clearly, mobile phones are no longer devices whose purpose is making phone calls or even texting. People use them for entertainment, engagement, internet access, information gathering, shopping, payment, even banking in some parts of the world.

I don’t think this change is generational, even though we like to talk about which age group is doing what. Once people of any age adopt new technology, they don’t revert back to old devices. If someone sees something on TV that they want more information about, they don’t leave their mobile device on the couch and go upstairs to sit at a PC.

If you’re building your customer interface around a PC, you are going to be out of the picture in three years, because most of the interface will be via mobile devices.

Innovation is happening in new places.

For the first time in my memory, innovation is happening in the developing world, not here and not in Europe. Innovation is happening in India, the Middle East, China, Africa, the Pacific Rim – because that’s where the money is. Six billion people have cell phones in developing countries.

Bill: Interesting. You’re suggesting we need to start looking for signs of the future in different places than we used to look.

Speed is a given.

We talked about the accelerating pace of change earlier, but there’s another aspect of speed that’s also shaping the future. I speak at a conference on innovation that’s attended by marketers and market researchers, and this year a number of the participants approached me to talk about how algorithms are driving change and becoming the means for a great deal of decision-making and execution.

In the financial services sector, many trading decisions are made by algorithms today, and the speed with which these algorithmic decisions are made is breathtaking. Information about trades is received and acted on in microseconds – one millionth of a second. Companies are building towers next to the source of the signals that broadcast trading information so they can capture it a fraction of a microsecond sooner. There’s no way human beings can match this pace. That blink Malcolm Gladwell writes about? It’s glacially slow by comparison – a blink takes 350,000 microseconds.

Bill: If algorithms are changing the WAY decisions are made, we’re in for a lot more change. We wrote about an app for auto technicians recently that used algorithms to compare a photo of a worn belt with a new one to determine if a replacement was needed. Here, the judgment of an experienced technician is replaced by an algorithm.

The cheap labor of the future is robots. Computer-driven algorithms that allow robots to make intelligent decisions have already made it possible for robots to help build cars and even assist surgeons in the operating room. There will be many more robots in our future, and this is going to have huge implications for society – it will affect how and where work is done, products are made, and services are delivered.

Retail touchpoints

One of the places where speed and change show up in retail is the supply chain. Remember how radical it was when Walmart told suppliers it expected 24-hour replenishment for out of stock items?

Bill: And now we’re looking at same-day delivery for online orders to customers. I came across the idea of “de-averaging” the other day. Most stores are built to serve the “average customer.” What if we use the technology – the data and algorithms needed to analyze it quickly – to take the “average” out of retail and serve the patrons of a particular store more specifically and more efficiently. That’s a big idea.

The biggest challenge? “Keeping up” or “Changing fast enough.”

What will the information age look like in 2022? We can’t know, but some things seem evident:

• There will be more mobile, and less PC – maybe Google glasses or other wearable devices.
• The pace of change will continue to increase.
• There will be more algorithmic decision making.

What concerns me is that we don’t have efficient ways of handling change. The speed with which algorithms can make decisions and create change is very different from the pace at which human beings can make decisions and respond to change. Dealing with the mismatch is going to be a huge challenge for management. We don't have a decision-making process for this situation.

Bill: The image of where we want to take this doesn’t exist yet, does it? And this hampers us. We need to develop this vision, because without it we’ll continue to go in circles.