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August 19, 2013
Twelve truths that will become self evident in the digital decade
By: Mark McDonald

We are entering a dynamic digital decade. Dynamic in the sense that change is increasing in frequency and amplitude. Digital as the next decade unfolds based on changes in technology. We have faced this situation before, at the turn of the 20th century. Michael Hugos, the author of the book Enterprise Games, described that situation in a way that captures the necessity for a different way of thinking. I paraphrase.

“It required the first World War (WW1) to figure out the realities of 20th century technology and drop the pretenses of the prior Victorian era. I hope it does not require a similar event to shake out of those same pretenses and figure out the realities of the 21st century.”

The realities of the 21st century are digital realities and its impact on individuals and enterprises. Literally anything is possible with digital technology, making it essential that we start the decade with a set of principles that help us see the emerging digital world for what it is, what it could be and what we want it to be.

Societies have made declarations in the past. For example the U.S. Declaration of Independence provided a starting point based on statements of beliefs and values. Declarations defined the start of the eCommerce era from Negroponte’s “Being Digital” to Weinberger, Levine and Locke’s Cluetrain Manifesto. Following that tradition and based on the interviews with more than 30 thought leaders, we propose the following ‘truths’ will be come self evident in the first digital decade.

  1. Raising human ability is the expectation for everything digital. There are no users, customers, or associates, only people. People looking to improve their lives, meet their needs, achieve their ambitions, complete tasks, etc. Human ability should be the source of value for digital technology. Digital technologies that do not support raising human ability either directly or indirectly are worth less than those that do.

  2. Everyone and everything is an actor on a digital stage. Nothing is inert in a digital world as individuals, institutions, instruments all interact to create connections, context and capability. The ‘internet of things’ is a world of “makers”, individuals and organizations that create rather than consume the future. Their actions make innovation the velocity of market change – another principle below.

  3. Supply exceeds Demand as digital technologies such as 3-D printers and increasingly sophisticated global supply chains create a world where the means of production and distribution are available to all. The resulting increase in customer choice raises the importance of applying technology to create meaningful digitally based differences.

  4. Results trump responsibilities as the value of organizations and individuals derives from what they achieve rather than the resources they control. Customers, markets and executives will assign greater value to the efficacy of outcomes rather than the efficiencies of processes because people pay for the outcomes not the process. Yes business must be ethical and sustainable, but beyond that results still matter.

  5. Variance is the source of continuous value. Variance has been a source of cost and an imperative for management control. In the digital world, variance provides a source of new ideas and future value rather than reason to maintain conformance to current practices. A lack of variance indicates an inability to innovate, grow and engage the diversity and dynamism of the digital world.

  6. Information is crude oil of the future. Neelie Kroes, the European Commissioner for the Digital Agenda recognized this trend as raw information is crude in nature, requiring refinement before it can fuel organizations. Big data and analytics capture and process the rising tide of digital information and place it at the center of organizational strategy and operations. Once refined, information becomes oxygen, taking on other characteristics.

  7. Information is also oxygen, without it everyone suffocates in ignorance. You cannot control information in the same way as the past. Living in a ‘world without secrets’ a term coined by Gartner’s Richard Hunter, is reality. Individuals and organizations will either offer transparency and translucency – transparency’s weaker form - or accept that others will shed their light on you.

  8. Learning is the license to operate in the future. In a digital world anyone can have 4 wins and 0 losses. It is much better to have 24 wins with 14 losses provided there are 38 lessons learned. Sustainability in a world of change rests in intelligent adaptation to customers, technologies and strategies. Assume that no one person or organization will get it right the first time or all the time, but if they learn and improve they will always have the chance to win.

  9. Innovation sets market velocity as markets move from planned product launches or strategies to a plethora of individual pulses and innovations. This is a natural outcome of “makers” creating the future on the digital stage.

  10. Attention is a currency you earn that goes beyond selling advertising and aggregating customer eyeballs. Attention makes things important and increasingly people engage their attention via digital technologies. This will move beyond apps, email and games on mobile devices into deep customer engagement and experiences that organizations must build and bank for future success.

  11. Capital has left the building. Perhaps the most esoteric and most important of the principles is based on an observation of Erik Brynjolfsson and Andrew McAffee that technology based productivity increases return gains to capital more than labor as operations become more capital intensive. The current situation of record equity share prices and record unemployment hint at this decoupling. Technology based changes in finance and financial innovations, such as derivatives, increasingly enable capital to walk on its own down Wall Street and around the world independent of Main Street.

  12. Technology is greater than IT (Technology > IT) as the nature, role, ability and capacity of digital technologies builds on and extends beyond traditional IT applications and infrastructure. IT largely concentrates on automation and integration of back office operational processes. Technology, in general and digital technology particularly extends into front office generation and fulfillment of demand.

And an extra one to make it a baker’s dozen.

  1. Comprehensive value defines sustainable value. The ability to consistently grow via value creation rather than exploitation becomes critical in a dynamic world. Comprehensive value, the subject of a prior report, describes the economic, shared, sustainable environmental and personal values organizations must deliver to grow in the future. Economic returns are important, however in a world based on these principles, how you turn a profit becomes increasingly important to the ability to create profits in the future.

What do you think? What are the principles and declarations we need to make in defining the emerging dynamic and digital world.

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