On Technological Change: 3 Learnings.
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For four decades my career at Publicis Groupe has been deeply intertwined with technology, allowing me to observe its changes across several industries including the communications industry.
The communications business has always changed as technology shifted. The company was first a print-based business and then a print and broadcast business, with radio initially and then television dominating it. In the early ’90s with the advent of the internet, a team of us began some of the first digital marketing and digital media companies, and in the past three decades, the entire business of marketing, media, and communications has restructured itself around the internet. Wave after wave of technology, from search to e-commerce to social to mobile to now AI and Web3, have shifted every aspect of all businesses.
Having observed all of this firsthand, I’ve come to three conclusions that apply to all organizations experiencing this technological evolution.
1. Technology does not care about anybody’s business model or way of working.
Nearly fifteen years ago, I spoke to leaders at a major newspaper conference, imploring them to rethink their business in the light of search and mobile technology. I warned them that every aspect of their business model, from local monopolies and distribution routes to auto, classified, and other advertising, would disappear unless they embraced the internet, stopped thinking about their paper publication as central, embraced multimedia with continuous publishing, and attracted new talent. Essentially, I was suggesting that they rethink every aspect of their organization.
Most papers did not adapt, and the newspaper industry is a shell of its former self.
Just as technology rendered many newspapers obsolete, it’s having the same effect on a wide range of industries and functions today. Business models cannot be sacrosanct. “Adapt or die” is a good adage for an age of rapidly advancing technology.
2. Technology can be used as an accelerant, but its real power is often the capacity to reinvent.
Companies may invest deeply in technology to automate and upgrade their way of working, but they still fail.
This is because they often do not change their way of doing business.a
Procter & Gamble invested deeply in technology to automate its manufacturing plants and be a leader in digital marketing. They leveraged search and mobile and video to reach people as their habits changed.
But what technology really enabled was not just better ways to communicate but new ways to do business, giving rise to a range of competitors.
For instance, social media leveraged YouTube video’s cost effectiveness and ease of distribution. The advent of e-commerce made it possible to sell without Walmart or Walgreens, and companies like Harry’s and Dollar Shave Club were born and ate into Gillette’s market share, despite Gillette having a superior product, brand, distribution, and spending. The new media allowed for direct distribution, subscription services, word of mouth, and sampling, and customers recognized that the new blades were good enough but much cheaper and much more convenient.
Similarly in the age of AI it is not just increased efficiency (more for less) and greater effectiveness (higher impact) that companies should focus on but also existential risk and opportunities. Running your current business model more efficiently and effectively will not save you if others are using AI to rethink your business model.
Digital marketing reinvented the newspaper business versus making printing presses faster or truck delivery more effective.
The really smart firms are not just thinking about how to make their businesses more efficient or effective using new technology such as AI but have teams who are reimagining their businesses.
They behave as if they were beginning the firm again today with access to modern technology, new ways of working, changing demographics and new market places, but without any constraints except how best to satisfy changing customer needs and expectations in a world of new competition.
3. It is not the technology—it is the talent.
As technology is widely distributed it helps individuals as much as it does institutions, and every advance in technology places a premium on superior ability.
AI will be like electricity. Few companies differentiate on their use of electricity because all their competitors use electricity. Similarly when every company utilizes AI often accessed from the same firm it is highly unlikely that an AI strategy will differentiate the company.
In some cases it may be proprietary data but in every case it will likely be talent.
Remind yourself that the typewriter did not write A Farewell to Arms; Hemingway did. If I had a word processor and ChatGPT and Hemingway had a pen, he still would write better. Of course, if Hemingway also had ChatGPT, he would be that much better than me. Hemingway with a Substack would have scaled amazingly better than most.
As talented individuals do with TikTok.
Today, streaming and the internet make the popular courses on justice at Harvard and on happiness at Yale available to everybody for free. It’s not the technology that makes these courses great, but the talent of professors Michael Sandel and Laurie Santos, respectively.
From Rethinking Work which is at the printers and available for pre-order everywhere. More here: https://rishadtobaccowala.com/rethinking-work
