How Technology Will Enable Business to Solve the World’s Challenges
August 10, 2016 By: Andrew Winston
The power and responsibility of companies to help build a thriving, resilient world has never been greater.
The next 5 to 10 years will be a critical time for humanity, as we leverage new technologies to solve some of our biggest challenges: a dangerously changing climate; pressure on natural resources, especially water and food; historic levels of inequality.
For decades, business leaders have considered these systemic challenges as solely the domain of government and civil society. Companies, they thought, should focus on creating jobs and making money. But no longer. Expectations are rising fast that business should help tackle our societal challenges, and do it profitably. Fully 87% of millennials — soon to be half of the global workforce — believe that the success of business should be measured in more than financial performance.
Technology will clearly shake up how organizations operate in every way — no part of management will go untouched in a world of big data, ubiquitous sensors, and powerful analytics providing new levels of insight. But perhaps the most powerful transformation will move business beyond operational shifts and change how companies manage their relationships with the larger world.
Business, using technology wisely, will help build a thriving, resilient world. Of course, technology comes with its own environmental and social costs. Better AI and robots could mean fewer jobs. And the “Cloud” itself is not actually very light on resources; our IT-based world requires very real — and sometimes hard-to-extract — metals, and it’s powered by a lot of energy. But the case for techno-optimism is strong. Consider how new hardware and software will make businesses run better and improve our lives.
The Internet of Things, paired with smarter analytics, will help managers understand a company’s impacts on the world in much greater detail. They will know, for example, how much energy and carbon it takes to operate their business at global, brand, geographic, facility, and product levels. Once you measure something, you can manage it. Making better decisions about efficient use of resources is getting easier.
In the largest sectors of the economy, progress is coming quickly. The cost of renewable energy is dropping fast, making clean, distributed energy competitive with fossil fuels today. Managing and strategy in the utility industry will never be the same. Physical infrastructure is getting smarter and cleaner as well. New building systems can find heating and cooling systems that someone left on, or shut off lights and computers when nobody is around. These often highly effective operational improvements are becoming trivially easy.
Moore’s relentless law driving more powerful computers and cheaper data will also make our transportation systems smarter. Companies with big fleets and good algorithms plot out delivery routes to eliminate hundreds of millions of miles. Self-driving cars create some operational and moral concerns, but cars in an autonomous system can move much closer together at a steady, energy-saving speed. And they’ll save millions of lives.
Data and technology are also helping to optimize infrastructure through resource sharing. Car sharing, apartment/room hopping, and worker “hoteling” (which allows a smarter building to house more people) are saving money and physical resources.
The sector with the largest footprint, food, is undergoing deep change as well. So-called “precision agriculture” — leveraging modern, computerized farm machines — enables farmers to apply fertilizer, pesticide, and water in exact, optimized amounts. And better data on the flows of food through the system should help reduce the monumental food waste (40–50%) that squanders precious embedded energy and water.
But as powerful as these rosy scenarios may seem, the biggest role of technology will be the radical transparency it enables. New data on supply chains — and generations of workers raised to share everything — will open up everything a company does to public scrutiny.
Someday soon, we will find it quaint that VW could conduct a large-scale fraud about their cars’ emissions. In the near future, this subterfuge will be impossible — people inside every company will be talking openly about their work on social media, and each car will have sensors collecting real-time emissions data anyway.
Over the coming decade, business will be at the core of helping humanity tackle climate change and manage our shared resources equitably. Companies will willingly help build a thriving world for two reasons (beyond it being personally rewarding): (1) it will be more profitable and (2) customers, employees, and society will be watching closely and demanding better of them. The way we manage companies is undergoing a deep change: from focusing solely on shareholders to pleasing a broader array of stakeholders, from short-term focus to longer-term strategy, from pursuing operationally narrow goals to collaborative, systems thinking.
Technology is both forcing these changes and also providing the solutions. That said, we’ll also need to change in how we use the ultimate tech, our brains. A mindset shift, to rethink the purpose of business and its role in society, will make all the difference.
http://sloanreview.mit.edu/article/...tter&utm_medium=social&utm_campaign=sm-direct
August 10, 2016 By: Andrew Winston
The power and responsibility of companies to help build a thriving, resilient world has never been greater.
The next 5 to 10 years will be a critical time for humanity, as we leverage new technologies to solve some of our biggest challenges: a dangerously changing climate; pressure on natural resources, especially water and food; historic levels of inequality.
For decades, business leaders have considered these systemic challenges as solely the domain of government and civil society. Companies, they thought, should focus on creating jobs and making money. But no longer. Expectations are rising fast that business should help tackle our societal challenges, and do it profitably. Fully 87% of millennials — soon to be half of the global workforce — believe that the success of business should be measured in more than financial performance.
Technology will clearly shake up how organizations operate in every way — no part of management will go untouched in a world of big data, ubiquitous sensors, and powerful analytics providing new levels of insight. But perhaps the most powerful transformation will move business beyond operational shifts and change how companies manage their relationships with the larger world.
Business, using technology wisely, will help build a thriving, resilient world. Of course, technology comes with its own environmental and social costs. Better AI and robots could mean fewer jobs. And the “Cloud” itself is not actually very light on resources; our IT-based world requires very real — and sometimes hard-to-extract — metals, and it’s powered by a lot of energy. But the case for techno-optimism is strong. Consider how new hardware and software will make businesses run better and improve our lives.
The Internet of Things, paired with smarter analytics, will help managers understand a company’s impacts on the world in much greater detail. They will know, for example, how much energy and carbon it takes to operate their business at global, brand, geographic, facility, and product levels. Once you measure something, you can manage it. Making better decisions about efficient use of resources is getting easier.
In the largest sectors of the economy, progress is coming quickly. The cost of renewable energy is dropping fast, making clean, distributed energy competitive with fossil fuels today. Managing and strategy in the utility industry will never be the same. Physical infrastructure is getting smarter and cleaner as well. New building systems can find heating and cooling systems that someone left on, or shut off lights and computers when nobody is around. These often highly effective operational improvements are becoming trivially easy.
Moore’s relentless law driving more powerful computers and cheaper data will also make our transportation systems smarter. Companies with big fleets and good algorithms plot out delivery routes to eliminate hundreds of millions of miles. Self-driving cars create some operational and moral concerns, but cars in an autonomous system can move much closer together at a steady, energy-saving speed. And they’ll save millions of lives.
Data and technology are also helping to optimize infrastructure through resource sharing. Car sharing, apartment/room hopping, and worker “hoteling” (which allows a smarter building to house more people) are saving money and physical resources.
The sector with the largest footprint, food, is undergoing deep change as well. So-called “precision agriculture” — leveraging modern, computerized farm machines — enables farmers to apply fertilizer, pesticide, and water in exact, optimized amounts. And better data on the flows of food through the system should help reduce the monumental food waste (40–50%) that squanders precious embedded energy and water.
But as powerful as these rosy scenarios may seem, the biggest role of technology will be the radical transparency it enables. New data on supply chains — and generations of workers raised to share everything — will open up everything a company does to public scrutiny.
Someday soon, we will find it quaint that VW could conduct a large-scale fraud about their cars’ emissions. In the near future, this subterfuge will be impossible — people inside every company will be talking openly about their work on social media, and each car will have sensors collecting real-time emissions data anyway.
Over the coming decade, business will be at the core of helping humanity tackle climate change and manage our shared resources equitably. Companies will willingly help build a thriving world for two reasons (beyond it being personally rewarding): (1) it will be more profitable and (2) customers, employees, and society will be watching closely and demanding better of them. The way we manage companies is undergoing a deep change: from focusing solely on shareholders to pleasing a broader array of stakeholders, from short-term focus to longer-term strategy, from pursuing operationally narrow goals to collaborative, systems thinking.
Technology is both forcing these changes and also providing the solutions. That said, we’ll also need to change in how we use the ultimate tech, our brains. A mindset shift, to rethink the purpose of business and its role in society, will make all the difference.
http://sloanreview.mit.edu/article/...tter&utm_medium=social&utm_campaign=sm-direct
