Event Debrief / Harnessing The Digital Revolution
When electricity first replaced steam engines as the technology that powered industry, factories were slow to adapt. Companies just put electric engines where the steam ones had been and carried on as before. It was only when they discovered that they could redesign factories to reflect the assembly process, instead of the limited power distribution of steam engines, that a revolution in efficiency began.
‘The lesson’, says Erik Brynjolfsson, an MIT professor, is that ‘wondrous though new technologies are’ you don’t get the full benefit of them until you rethink how you work.
Brynjolfsson and fellow MIT professor Andrew McAfee were on stage in Westminster to discuss how people can harness the digital revolution, in a talk organised by How To Academy and Contagious.
Researching their new book (Harnessing The Digital Revolution), Brynjolfsson and McAfee have discovered three areas where business is likely to change under the influence of digital tech: minds are giving way to machines in decision making, the focus on product is shifting to platforms, and crowds are usurping core capabilities within companies.
On the optimal division of labour between man and machine shifting in favour of machine, Brynjolfsson compared the process used in most companies (go with the HiPPO – the highest paid person’s opinion) with the AI that in a short space of time has not only become better than doctors at detecting the known signs of cancer, but came up with seven new signs altogether.
McAfee meanwhile questioned the accepted wisdom of companies focusing on their core capabilities when crowds are known to out perform them. He gave the example of a national health institution in the US whose method of sequencing white blood cell genomes was made to look inferior by the efforts that poured in from a crowd-sourcing competition, most of which came from young students with no experience of the health industry.
Just as much of a game-changer, said McAfee, was the realisation that Apple’s biggest achievement was opening its app store to third party developers, not designing the iPhone. By creating a digital platform that connected people around the world, Apple avoided becoming just a commodity producer, like almost every other phone manufacturer is today.
Brynjolfsson and McAfee reiterated several times that these new practices did not spell the end of human decisions, products or core competencies, but they will mean a lot of change. Otherwise you’ll find yourself working in a steam factory in the age of electricity.