Opinion / 12 March 2019, 4:00pm / Kizito Okechukwu
JOHANNESBURG –Last week I attended a symposium on disruption in Sandton, hosted by Absa.
The guest speaker was Salim Ismail, a Canadian entrepreneur, founding executive director of the Singularity University and the lead author of Exponential Organisations.
Just to set the scene, disruption is not only a new buzz word in the 21st century, but it’s also real, happening and rapidly gaining momentum.
Its primary objective is to create a new market and value system using innovative methods that aim to derange or disrupt the status quo in an existing market.
The question now is: why do some organisations fail? Research shows that 70percent of small businesses or start-ups fail within two to five years of operation. Research also shows that many large businesses or corporations that were relevant in the 20th century will be redundant in the 21st century.
So why is this? More often than not, organisations fail, not because of increased market competition and other external forces, but rather because they failed to innovate internally.
Organisations love their comfort zones, are highly protective of their territory and find it difficult to change or adapt introspectively.
When individuals become disruptive, their positions within the company are affected. Imagine if those that failed (or are failing) to exist tried to harness change? Maybe our world would be a better place.
On the flipside, maybe it’s for the better that they do not because then we’re almost forced to create new wealth, embrace new thinking and fresh technology to improve our lives.
We need to accelerate the use of disruptive technologies that can help improve our lives.
Let’s take Elon Musk with his proactive, forward-thinking and anticipatory mindset for example, which is all about where will the world be in 10 years?
This visionary approach saw Musk develop SpaceX, electric cars and even the Hyperloop. So where will banking, transportation, education and even energy be in 10 years?
Coal is now regarded as a toxic pollutant, a climate-change foe and fast-becoming a redundant energy source. Yet here at home, we’re still pumping billions into financing coal-based solutions and plants because jobs will be lost if we don’t - and this is just not seeing the bigger picture at all. The truth is, that in 12 years from now, all energy will be solar-driven.
Energy, which has been scarce, is about to become abundant and it will change everything.
A quarter of the farms in California are now solar-powered. Chile, as poor as it is, generates so much power that it’s sharing it with its neighbours for free.
A battery is also another invaluable source, as Musk proved with his Tesla range. Also, waste to energy is gaining momentum and it’s another energy mix to consider.
To improve and accelerate the use of technologies we must do four things: digitise, disrupt, demonetise and democratise. There are many institutions that will face disruption, even including marriage - where predictions and technology will make it possible for people to live and stay married for longer with an injection or something. No one expects to be married for more than 50 years, so does that make marriage redundant from the get-go?
Disruptive technology will change everything from the institution of religion, stock markets and democracy to the criminal justice system and voting systems.
Technology enables us to live in a world where everything is open, there are no boundaries and there is no bureaucracy. When a company moves digital, three things happen - marginal cost moves to zero, domain explodes and problem space shifts.
The existing policies we have now form an immune system. We cannot resist technology and cannot regulate it.
In the automotive industry, ride-sharing and self-driving cars will take over in the next eight years. Any entrepreneur, even an inexperienced one, can enter an industry and disrupt it.
Uber is “deliberately" breaking the law and waiting for the policymakers to catch up. Even companies the size of Facebook, which get fined for data protection breaches, know that the fine is a mere slap on the wrist, will just keep pushing to conquer the world.
According to the writer Lance Ng, Facebook’s new ambition is to be the biggest bank that ever existed by creating its own cryptocurrency to be used on WhatsApp (owned by Facebook) to facilitate transactions between users. Collectively, Messenger, WhatsApp and Instagram, all owned by Facebook, have 2.7 billion users.
If Facebook decides to back the value of its digital coin with a basket of foreign currencies, then it could potentially become the largest central bank in the world - because that's what central banks do; print money backed by their country’s economy and foreign currency reserves.
Not only will this become monumental in the world’s economic history, it is also going to become a serious and rapid threat for the existing giants in the financial sector.
Technology has even made it easier for us mere mortals to design our own cars and build them off the shelf, so no more need for engineering school. The education system will be heavily disrupted - spending five years at varsity will be a thing of the past, as a year learning critical market-relevant skills will be ample. We now have more unicorn companies than ever before, about 320 to be precise, worth more than $1 billion (R14.42bn) that never existed ten years ago.
Back to guest speaker Salim Ismail, who wrote in his book that “new organisations are 10 times better, faster and cheaper than yours”.
His business advice to bring your company/organisation up to speed includes the following salient points:
* Transform leadership: ensure diversity, good skills and education, board management.
* Inspire EXOs at edges: Disrupt, but do this outside your firm by partnering with incubators, accelerators and hacker teams (more reason to partner with the likes of 22 on Sloane start-up campus).
* Invest or partner with adjacent EXO. Leverage or expose data, hire a black ops team, set up a Google X equivalent.
So how did we fail or how are we going to fail? We are failing both gradually and suddenly. Company lifespans are reducing significantly. I think maybe it's not just technology, it’s also about our inability to predict, plan and produce for the future. We need to build exponential organisations.
Ask yourself, what Elon Musk would do?
Kizito Okechukwu is the co-chairperson of Global Entrepreneurship Network (GEN) Africa. 22 on Sloane is Africa’s largest start-up campus.