Have you ever heard of a management team that goes to Silicon Valley to observe the natives in their natural habitats and decode their success strategies? Or maybe you've heard of big organizations that have invited a number of students to a hackathon, where they were going to disrupt the core product over the course of 24 hours, with the help of a large amount of (probably bad) data, pizzas, coffee, and Red Bull. Perhaps you have even encountered companies that have invested in an accelerator programme where they follow a group of startups over a few months in the hope of reaching the achievements that the core organization itself struggles with. There is nothing wrong as such with the aforesaid initiatives, even though I am describing them with some irony. I use these initiatives myself, and I sometimes find them to be extremely valuable. However, there is a great risk that the initiatives do not create the value that organizations want and need. And there is a great risk that they give organizations a false sense of security. For far too often, experience expeditions, hackathons, and accelerator programmes end up being singular events that do not materialize into anything of real value. They end up becoming innovation theatre rather than creating innovation culture. The companies’ innovation efforts wind up not being ambitious enough, and management does not incorporate the initiatives in their corporate strategies because they do not fully understand how huge the implications of accelerating technological development are on their organizations’ need to innovate.
Where the world was once local and linear, and we humans got up and went to bed with the sun's rising and falling, moved within a demarcated geographical area, and interacted with a rather limited number of other people, reality looks different today. The world is no longer local and linear. It is global and exponential, thanks to the technological achievements that have largely been sustained by Moore's law.1 This law, which is not a law of nature but an observation, is named after Gordon Moore, co-founder of the computer chip manufacturer Intel. More than 50 years ago, he observed that there was a potential for computer power to double roughly every two years by placing more transistors in the microchips that give computers their computing power. The doublings that he pointed out were in fact what are called price and performance doublings, i.e. the amount of attainable processing power per $1000. These doublings have evolved to be exceedingly stable and have been the foundation of the development of computing power for more than 50 years and, thus, also the basis for the digitization we see in our businesses and societies, and the fantastic developments within networks, sensors, artificial intelligence, robotics, 3D printing, digital biology, and a whole host of other technologies. It can be hard to understand how significant the development is and how strong it really is. But here are a few examples that illustrate the pace.
In Alphabet's (Google's parent company) annual Founders’ Letter in April 2018, Alphabet co-founder Sergey Brin described just how extreme price and performance development has been since Google's first year. In Google's first year of existence, the Pentium II processor they used to run their search engine had a performance of approximately 100 million so-called floating point operations per second. Today, it has 20 billion. That's an increase by factor of 200,000.2 But, as he also wrote, even this amazing development would mean nothing if they or others succeed in quantum computing experiments, which are receiving billion-dollar investments from Google as well as Microsoft, Facebook, Amazon, Alibaba, Tencent, and Softbank, just to name a few, along with major research efforts around the world, and even in Copenhagen, my own backyard, in the last few years. Development is also rapidly accelerating in artificial intelligence. According to the non-profit research institution Open AI, which researches artificial intelligence and was founded by Tesla's CEO Elon Musk and Sam Altman of Y Combinator (the world's most successful accelerator), the amount of compute for executing the biggest artificial intelligence training programs is doubling every 3.5 months (for comparison, Moore's law dictates a price-performance doubling time of about 18 months).3 Thus, larger and larger datasets can be used to train artificial intelligences, which is crucial for their learning. It is, for example, this method which was used to train Alpha Go, the artificial intelligence that in 2017 beat the world's best Go player in this complicated game.4
The food producer Impossible Foods produces plant-based burgers that look like meat, taste like meat and bleed like meat, even though the burgers are 100% plant-based. The burgers behave like meat because the producer has developed a method of simulating the meat experience by adding heme, a component of an oxygen-bearing molecule that is also found in blood, to the plant material, thereby recreating the meat-like experience. In 2016, Impossible Foods sold their burgers in around 200 American restaurants. In 2018, they began to produce over 500,000 kilograms of plant-based ‘meat’ mince in their new factory, thus truly preparing themselves to offer their products to the wider market,5 which is increasingly open to a future where the cow itself gets disrupted, and meat no longer needs to be on the menu, as long as the meat experience is still possible.
In 2018, the first self-driving taxis were piloted on specified routes in selected cities in the United States (though still with a human controller for safety, and not without accidents and problems) and overall, the self-driving car manufacturer Waymo has now test-driven more than 16 million kilometres on the road,6 and drives an additional 16 million virtual kilometres a day in a virtual world, a so-called digital twin that the company created to conduct more thorough testing.7 Peter Thiel, investor and co-founder of payment solution PayPal and the data company Palantir, is known for the quote ‘We were promised flying cars, instead we got 140 characters’ (i.e. Twitter) in a critique of how little innovation tech companies have created. But this quote is about to be put to shame, as Dubai is playing with autonomous flying taxis and claims that they will be put into operation shortly. The latest virtual reality glasses from the manufacturer Oculus, launched in May 2018, do not need to be connected to a PC, inserted into a smartphone, or connected to headphones, like other models on the market. And they already cost only a quarter of what Oculus's own products did in 2017,8 which means that the price level is about to hit a point where virtual reality glasses could actually become available to a broader target group.
The CRISPR-Cas9 genome editing technology was developed in 2012. It can, simply put, be compared to the cut-and-paste feature in a Word document, with the slight difference that CRISPR-Cas9 cuts and pastes DNA, the building blocks of life. We've been able to edit genes for more than 30 years, but precision, time, and pricing have been huge obstacles, and CRISPR seems to be the technology that radically changes this, thus paving the way for, among other things, rendering the world's biggest killer malaria mosquitoes harmless,9 improving food resistance to disease and decay,10 storing data in DNA,11 bringing extinct animal species like mammoths back into the world,12 and, not least, curing cancer.13 Much of this sounds like science fiction, but it's scientific fact14 and it is in the process of radically changing the world as we know it.
As a modern person, you would need to be walking around with blinkers to be completely unaware of even one of the developments that I have briefly described here. Nevertheless, only a minority of organizations possess sufficiently broad and deep knowledge about these developments, and many do not take them seriously enough. In fact, established organizations tend to do one of two things. Either they are dismissive of whatever is new and different, because these things are almost by definition difficult to fit into existing strategies. That is to say, that as a food producer, for instance, you look at Impossible Foods, which produces plant-based burgers, and say ‘It's niche’, ‘It will never amount into anything’, or ‘It has nothing to do with us, we produce meat’, while not realizing that consumers are increasingly open to meat alternatives, as long as they don't have to give up the meat experience . Alternatively, organizations recognize, on some level, that they should explore new things, but they don't do it thoroughly, ambitiously, and strategically enough. That's when they take the trip to Silicon Valley, or conduct a hackathon, or join an accelerator programme, all of which can be good and value-creating tools. But if you have not put forward a strategy for the future, these otherwise excellent initiatives end up becoming isolated events, a kind of innovation theatre, where you say and do some of the right things, but do not convert any of them into a strong innovation culture. Let's, therefore, look at the questions that you must ask or re-ask yourself to lay the foundation for the right strategy and the right innovation design.
