Updated: May 22
How to Thrive When We Can't Compete with the Machines
We are living in one of the most exhilarating times in human history. A time of new discoveries and fast changes unlike any other era. What makes this time particularly unique is that these changes are happening at a rate that is difficult for our brains to comprehend, represented graphically by a mathematical expression that is not found often in nature: the exponential curve. Our minds have been conditioned to think of growth and change in linear terms because that is what we are familiar with. Think about how we age, one year at a time. Think about how a tree grows as new branches sprout, slowly and predictably. We are not used to seeing situations where things change gradually, then suddenly at unexpected speed.
To illustrate the point, let's borrow from the famous fable of the origin of the game of chess. Legend has it that the creator of chess presented it as a gift to an emperor in India. The emperor was so impressed with the ingenuity of the game that he felt compelled to compensate the man and asked him what he would like to receive as his reward. The man humbly responded:
"Oh emperor, my wishes are simple. I only wish for this. Give me one grain of rice for the first square of the chessboard, two grains for the next square, four for the next, eight for the next and so on for all 64 squares, with each square having double the number of grains as the square before."
The emperor was astounded that this ingenious man only wanted a few grains of rice as his reward for such a wonderful game. Without much thought, he granted the man his wishes. It wasn’t until sometime later that his treasurer came back and advised the emperor that it would be impossible to pay the man the quantity requested, as the amount of rice added up to an astronomical amount, far more than his empire could produce in many, many centuries.
How could the emperor be so easily deceived? Simple. He was thinking linearly like most of us often do, while the ingenious man understood and used the power of the exponential curve. And herein lies the threat, or the opportunity, depending on your point of view and the time horizon in which you see it. Humans tend to think linearly, but the technology changes we are experiencing now follow an exponential curve.
Gerd Leonhard, a regarded futurist, is known for saying that technology is exponential, but humans are not. His advice: Don’t try to compete with the machines. Instead, focus on doing the things that are inherently human, and that the machines cannot copy, like being creative and compassionate.
A New Era is Born
The times we are living in now are unlike any other before. This new era is characterized by changes that first appear to be gradual, but that suddenly and unexpectedly become explosive. We call it the Exponential Era.
To understand how exponential growth can be deceivingly slow at first, but then suddenly explodes, see the simulation below of filling Lake Michigan with water using an exponential curve. This was used to illustrate how computers can achieve the same computational power of the human brain following Moore’s law of doubling computational capacity every 18 months. Notice how it starts slowly with a small blue dot on the south end of the lake, then progresses gradually, and suddenly in the last few doublings, fills the lake at the blink of an eye:
According to the World Economic Forum there has been no historic precedent to this current phenomena, which is also referred to as the 4th Industrial Revolution, in terms of its velocity, scope, or impact on everything in our lives. You would have to go back to the late 1800’s and early 1900’s to see just three significant innovation platforms come together over several decades: Electricity, the telephone and the internal combustion engine.
Today there are at least ten of these platforms, depending on how you categorize them, that have surfaced in the last few years or decades: DNA Sequencing, Nanotechnology, Autonomous Vehicles, Robotics, 3D Printing, Energy Storage, Artificial Intelligence, Blockchain Technology, Augmented Reality, and the Next Generation Internet. The latter contains several sub-components such as Mobile Payment, Internet of Things, Online-to-Offline (O2O) and 5G.
These platforms are generating multi-trillion-dollar economies, and their convergence and combinatorial power are spawning ever increasing innovation and economic opportunities and threats. For example, today we see China leapfrogging to modern technologies like O2O, machine learning and mobile payment, the latter currently amounting to 24 trillion dollars, almost twice the size of their GDP. When these synergistic technologies with multi-trillion-dollar scope start converging and feeding on each other as we see in China, the explosive nature of the Exponential Era becomes frighteningly obvious.
Strategies for the Exponential Era
All these explosive changes and mega platforms seem a little daunting and even scary. How are we going to keep up? How are individuals and organizations to prepare for changes of such magnitude and impact? How can we take advantage of the opportunities and thwart the threats facing us in the Exponential Era?
Here are 7 strategies that can help you navigate through these turbulent times:
1. Plan with Agility
It is intuitive and well understood that when changes occur at a rapid pace, we need to be swift in response. But what may not be so obvious is that in order to be agile, we need to change the way we do planning.
Individuals doing career planning need to account for the fact that a significant portion of current occupations will disappear in a few years or decades, while many newly created ones will become readily available to those who are prepared. Consequently, individuals need to start thinking of careers not as single specializations for which one spends a lifetime learning and practicing, but as a series of evolving experiences that are discovered over time, resulting in transferrable skills that create accumulated advantages over a multitude of short assignments.
Businesses need to rethink the way they do strategic planning. Existing planning cycles are no longer effective in the current state of technology changes and industry transitions that occur at exponential rates. Strategic planning needs to occur in continuous, iterative short cycles, in response to fast changes in technology and the interaction of multiple horizons.
Agile planning requires flexible prioritization, high organizational involvement, interactive communications, emergent input considerations, and short implementations. An agile plan is an actionable, living document. We can no longer afford to produce stacks of paper that sit on a shelf for several months or years. Nor can we let analysis paralysis bring entire organizations to their knees.
2. Explore More
Philosophers have thought about the explore vs. exploit dilemma for centuries. CEOs often struggle with this problem as they think about whether their companies should dedicate scarce resources to exploiting existing capabilities or exploring new opportunities. Computer scientists have developed Artificial Intelligence algorithms that attempt to maximize value functions to guide these decisions. Humans are naturally predisposed to explore at an early age, but as we get older, we tend to get set in our ways and exploit more than we explore.
In a world where changes are coming at us fast and furious, we need to reevaluate our philosophies, business thinking, algorithms and predispositions, and put more weight towards the explore side of the equation. As changes occur at an exponential rate, the duration and value of exploitation opportunities will diminish proportionally. Cash cows will disappear very quickly, and businesses will need to crank up the innovation factory, creating new star opportunities at a much faster rate.
The Exponential Era is a time for experimentation, entrepreneurship and lean startup mentality. It requires the willingness to pivot and rapidly redeploy resources when needed.
Jeff Bezos famously left his cushy investment banking job to start his ultra-successful online marketplace. He used what he calls a “regret minimization framework” to help him make the difficult decision to explore other paths. Martha Stewart changed direction a couple of times before becoming the homemaking icon we all know today. Twitter started out as a podcast subscription platform before finding success as a micro blogging platform. Instagram started out as a check-in app that had a photo element before focusing exclusively on photography and becoming one of the most successful social apps in history.
None of these individuals and organizations would have achieved the huge success they enjoy today had they not decided to explore.
3. Embrace and Master Change
We need to acknowledge that change is hard. But adapting to change has been key to our survival. And now, more than ever, we need to master change.
Mastering change is about creating the right mindset and leading people to it. Change Management is a well-researched domain, and the key principles of effective change are fully documented. Leaders need to study and apply these change management principles in their organizations.
It all starts with creating a sense of urgency. It is absolutely critical that organizations understand the nature of exponential growth so that when they see slow or gradual changes typical of the early stages of the exponential curve, they do not fall prey to the flawed thinking that there is plenty of time, that technology predictions are mostly hype and fiction, or that these changes will not happen on their watch. Leaders need to look for the horizons that are moving at a continuously increasing pace and anticipate inflection windows where timely opportunities present themselves.
Gradually, then suddenly. That is the vision that leaders need to communicate to their organizations and that individuals need to internalize. Leaders need to do everything in their power to remove obstacles, achieve quick wins, and let the change mindset mature and be fully integrated into their organizations.
Companies that don’t embrace and master change will become the flash boiled frogs of the Exponential Era.
4. Collaborate with Other Humans and with Machines
Collaboration will become ever more critical in the Exponential Era. Human-to-human and human-to-machine collaboration will result in higher productivity in an increasingly inter-connected global environment. Your effectiveness in communicating and collaborating with other humans and with machines will be critical to your success.
Particularly important will be the ability to develop and apply skills that are distinct for collaborating with humans versus machines. Empathetic listening, storytelling, persuasion, negotiation and servant leadership, are just a few examples of capabilities required to collaborate effectively with other humans. Precision, analytics, data science, and even coding skills are foundational abilities that need to be developed and refined as we enter this new era empowered by Artificial Intelligence and automation, where human-to-machine collaboration will become ever more prevalent.
Collaboration in the Exponential Era will be diversified, borderless, and digital. The gig economy and sharing platforms will facilitate the creation of new social contracts where individuals and organizations are highly-aligned but loosely-coupled. A study by Freelancing in America predicts that freelancers will become the US workforce majority within a decade, with 47% of millennials already freelancing, generating $1.4 trillion to the US economy.
In this new era, there will be less formal hierarchical organizations sitting under one roof, and more geographically dispersed, digitally connected, ethnically and culturally diverse, self-directed, autonomous entities working towards a common goal. The concept of stability is being redefined as independent workers increasingly think that having a diversified portfolio of clients is more secure than having a single employer. An entrepreneurial mindset, regardless of whether you are an employee, a freelancer, or a business owner, will be paramount.
5. Become a Life-Long Learner
Slow moving and staid institutions are primed for disruption. Academia generally falls under this category. The educational framework still used today was developed for the first industrial revolution, preparing students to do repetitive work under rigid organizational structures designed to exploit existing capabilities, not to explore new ones. In the age of the 4th industrial revolution it is time to leapfrog to Education 4.0.
The 4-year college degree is becoming obsolete. The idea that you should cram 4-years-worth of instruction into your brain and that this information should last you a lifetime is archaic. In the Exponential Era, by the time you finish college, much of the information you have accumulated will have been replaced by new discoveries.
New educational frameworks are establishing accreditation for cumulative, life-long learning. We are starting to see the proliferation of certifications, nanodegrees, and other forms of innovative accreditation mechanisms that are getting traction and recognition with corporate recruiters. Even conservative organizations like Ernst and Young are replacing the requirement of a 4-year college degree with other criteria in their selection process.
Individuals that want to succeed in the Exponential Era will have to adopt a life-long student mindset. Organizations will have to allocate more time to training and find effective ways to continuously upgrade skills and capabilities.
Education in the Exponential Era is being transformed into a new model that is highly accessible, cost-effective, hybrid (delivered both online and in-person), social, mentored, gamified, and accredited cumulatively over an entire lifetime.
6. Develop Tenacity
In the Exponential Era, as we tilt the balance of the exploit vs. explore equation towards more exploration, we will encounter one often misunderstood and undervalued side-effect. More exploration will inevitably lead to a higher degree of failures and disappointments.
More exploration will result in finding and discarding more options; fast changes will require turning directions right after investing significant time and resources on initiatives; hard-earned skills will quickly become obsolete. This can be understandably frustrating, but it is part of the learning process and is the pathway towards new discoveries and opportunities.
In this type of environment, those that can persist will naturally do better. Therefore, it is critical to develop a positive attitude, to discover ways to cope with frustration and disappointment, to find a support mechanism, to be surrounded by mentors, coaches, and like-minded individuals that have similar interests and are pursuing similar goals.
Organizations will need to develop leaders skilled in communicating with transparency and optimism. Leaders will need to provide hope and to articulate a sense of purpose, tapping into people’s intrinsic motivations, and developing camaraderie, loyalty and tenacity.
7. Leverage Your Humanity
Take Gerd Leonhard’s advice to heart. Don’t try to compete with the machines. In the Exponential Era, anything that cannot be digitized or automated will become extremely valuable.
To deal with fast changes at exponential rates we need to find our own space where we can provide the most value. Let the machines do what they do best and let humans do what we do best. Leonhard has a great saying: “Machines are very good at simulating, but they are not good at being”.
In the Exponential Era, organizations will have to wrestle with increasingly complex ethical questions. From privacy concerns over personal data records and facial recognition to the transparency dilemmas of black-box decisions. These are problems that only humans can solve, as they require a sense of justice and fairness. They require intrinsic human values, insights and wisdom that are deeply entrenched in our own understanding of what it means to be human.
So, let your humanity flourish. Focus on the things you are best at, that no technology can replace. Bring to work your creativity, intuition, imagination, emotion, compassion, and ethics.
Only then, you will be able to thrive in the Exponential Era.