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There are few absolute certainties in this world, but Benn R. Konsynski has a new one for you: you can be absolutely certain that the job that you will have 5 years from now doesn’t exist today.
The same goes for companies and markets when it comes to serving customers: the models that will be standard in 5 years are difficult to imagine right now, in 2015.
Konsynski isn’t a fortuneteller or a futurist, but in his role as the George S. Craft Distinguished University Professor of Information Systems and Operations Management at Emory University’s Goizueta Business School, he does a lot of thinking about the intersection of technologies, customer expectations and new possibilities. He has been a consultant to organizations that include IBM, AT&T, UPS, Bank of Montreal and the U.S. Army.
In a conversation with Gerald C. (Jerry) Kane, associate professor of information systems at the Carroll School of Management at Boston College, guest editor for MIT Sloan Management Review’s Social Business Big Idea Initiative (and a one-time student of Konsynski’s at Emory), Konsynski describes how both the McCormick spice company and UPS are shaping their futures, and what companies, whether large or small, old or new, can do to keep ahead.
Let’s start with the big picture: analytics, mobile, wearable, cloud computing. What do you think the big digital trends are going to be in the next couple of years?
Well, the first thing that comes to mind is — all those things you mentioned are, to me, attrition warfare. It’s where we’re at going forward. I think the exciting things are going to be the leapfrog things that will leap further into the horizon for us. It is interdiction warfare that is more interesting. It is the acceleration that is more exciting than the velocity — how change is changing.
A part of that means I start to work backward, not forward — the future is best seen with a running start. I’ll go backward to better see the future possibilities — standing starts are poor means of seeing the future. The elements that you’re talking about are sort of the evolution of the, quote, “normal” today, and that would be in the social digitization of our historic practices. Internet of Things, personal area technologies, core predictive analytics and other current pursuits are profound, and a basis for social and economic innovation, and worthy focus. It is the nexus of these changes that make radically new things possible.
The constant caution, to me, is to make sure that we are not merely speeding up the mess. Ten years ago, we would not have predicted some of the revolutions in social or in continuous or predictive analytics capabilities. We are 14 years into the iPod; not 10 years into YouTube, Facebook (open), Twitter and other social media platforms; 8 years into the iPhone; not 5 years into the iPad — the list of platform changes is profound. The democratic accessibility has shifted institutional content management into democratic production by the user communities.
So, I’d rather start from the standpoint of rethinking business and rethinking commerce and challenging patterns of social interactions and then work back into how those capabilities are made available or enriched by the digital trends. New capabilities make new solutions possible.
Okay. Can you walk us through that?
I’ll do even better. I’ll give you an example, because some elements of tomorrow are here today, and some elements of that tomorrow are suggested.
McCormick & Company, a Fortune 1000 spice and flavor manufacturer, has over 126 years of history of knowledge of flavors and food. They’ve established something called FlavorPrint, which represents a flavor of a spice or dish as a point in a 50-dimensional space.
If I’m an expert on spices and flavors, and if I can represent a flavor for a spice, I can do it for a dish. If I can do it for a dish, I can do it for a meal. If I can do it for a meal, I can map your preferences, your own FlavorPrints. If I can do it for you, I can do it for your household. If I can do it for your household, I can do it for your neighborhood.
So I’m McCormick, and I look at a $4 billion industry, some half of which is industrial spice — where I play a significant role. Major food manufacturers come seeking insight about flavoring their offerings as they advance new product flavors to new market demographics. Witness the product proliferation of the recent decades in drinks and spices and flavors in meals, ingredients and variations. We’re even running experiments in contests in the market. We’re gamifying flavors, and crowdsourcing product/flavor configurations.
If I can do that, if I can get the right kind of personal profile and preference data, I can target even to a store level. A store in one neighborhood might have a different flavor preference than a store in another neighborhood. The exact same SKU may be hotter in your neighborhood than in somebody else’s neighborhood.
In the end, we are augmenting the traditional retail market and employing a same-day delivery structure to target your household. The consumer interest is in having the product to your house that you want in your house at the time you want it.
When we start thinking of the disruption of capabilities like same-day delivery and that kind of product profiling and variance in fabricating the product on its way to market, obviously a hard product might be a 3D fabrication, or it might even be a flavoring issue in a regional distribution.
It’s that kind of disruption that I think brings the nexus of things, rather than just taking one shift going forward. We are leveraging the social. We are leveraging continuous and predictive analytics. We are leveraging deep knowledge and the ontology of the marketplace to create a new pattern of social and commercial association.
How far down the road to that vision that you describe is McCormick now?
Pretty far. They have the tools for FlavorPrint and are letting folks explore their preference profiles beginning with simple questions, “do you like A, do you like B.” It will then start incorporating more information on your preferences and behaviors and start building more FlavorPrints associated with individuals, households, neighborhoods, etc.
What have the results so far been that they’ve seen?
We are seeing the early stages rolling out right now just in the last few months on the front-end side of it. But obviously, the industrial side, the commercial and CPG [consumer packaged goods] communities are anxious to get that kind of preference profile information because they buy the flavorings all the time, billions of dollars worth. So, there’s a strong interest on the back end of the chain to having that information piped down the chain. On the front end of the chain, it’s going to enhance the retail experience.
Ultimately, though, it’s going to go directly to the home, to the individual preference. It’s not a smoke and mirrors idea. It’s kicking off now.
How does something like this ultra-individualized manufacturing impact the supply chain of all of this — getting very tailored, custom, personalized flavor profiles of people?
Ultimately, it will evolve to direct delivery. Right now, it will happen through the store retailers. But you talk about backward down the chain because the thing is very broad. It’s not just targeted — it’s not just a front-end, cutting- edge consumer site. We see this beginning in omni-channel initiatives, personalized pharma and the like. The values of the industrial age giving way to the accommodation of consumer/user interests. It’s a whole new ecosystem.
What is it that makes a company see this? Is it loss of market share beyond a certain point? What’s the wakeup call?
I have seen very different triggers. And the historic practice, what I’ll call market practice triggers, don’t always provide timely wakeup calls. If you start feeling change, then it might be too late to prepare, or respond. A radical margin decrease, market loss, market share loss and other things like that — if you wait for that, you’re not serving your shareholders. Industry after industry — from newspapers, to music, to services — have been alerted too late for many to effectively respond.
In many of these companies, it’s been sort of a collective realization either based on customer experience patterns, demographic trends in a market or other early market signals, such as looking in parallel markets and what’s happening there. Shock wakes people up, often too late for response.
Do you know how the ideas evolved within McCormick — if it was driven by the leadership, if there was one person in particular that had the vision?
A former CIO and other key leaders in McCormick started this and started their activities on FlavorPrint. The leadership formed ideas about future markets. Once FlavorPrint started, it became clear that it impacted production, supply chain and planning. And then, they found a big data partner beyond what they had historically done, and so they partnered with Enterra.
By the way, just full disclosure, I’ve been an advisor for Enterra for a little while as well. It’s an amazing story to me, because this is only the beginning. There are several other industries that are starting to get into this kind of broad ecosystems analytics.
Can you give us another example, maybe something out of consumer-facing supply chain?
The point is that all these ecosystems ultimately touch an edge of their market — say, a consumer side. Now, whether that’s in the B2B marketplace or whether it’s a — it’s really unfortunate to use the term “supply chain,” because it is not just about supply and resource and demand structures. It’s about how the ecosystem operates, and logistics and supply are clearly a part of that as well.
You can imagine the large organizations — UPS, say, for example — that have a broad, far horizon; their ecosystem is a lot more than merely picking up packages and delivering. Asset-management and event-planning skills are essential. They have to have extraordinary knowledge and breadth and prediction, forward-looking knowledge, about conditions of an environment. You have an organization in UPS that grows almost the size of its main competitor during the fall, during one season of the year. In the past, we might see that UPS grows the size of its next competitor every holiday season. While that is probably no longer the case, the capacities and capabilities of range of improvisation is only possible with the effective leverage of modern information systems.
Adaptive enterprises have to scale up and scale down in a rapid and efficient fashion, and you can only do that if you have effective knowledge of the environment that allows them to grow and shrink. In fact, UPS ran into problems over a year ago and had an amazing suite of tools employed for this recent holiday season. These issues are true in all size of enterprise and market. Success in the 21st century requires any organization to assemble, and reconfigure, resources and capabilities in ways that were not possible in the 20th century commerce arena.
Part of the problem is, you don’t control all aspects of the ecosystem. So companies have to insulate themselves against risk in that ecosystem. That’s not an easy thing to do. You can control the things you own, but it’s tough to control the things you don’t own or don’t have direct contractual information.
UPS is a great example. Are there any other companies that come to mind that you think are very good at that? Or is that still something that most companies aspire to?
Well, I think it’s a constant aspiration for everyone — timely recognition of needed adjustment, and capability to perform as needed — and each will adjust through success and failure. The question is, can leadership perceive the need and opportunity to improvise as needed? To me the issue is often very simple in the modern times. Are you thinking 20th century, or are you thinking 21st? Historians will tell you that typically, a century begins in the 14th year, and as a student of history, I’m sensitive to those kinds of things. When you look at it, just look at the 20th century, World War I started in 1914 — ending the 19th century. If you go back in the 19th century, 1814 was a major pivot in the transformation of that century. I don’t mean to overstate the case, but the principle informs.
Even tighter, the historians’ pattern is that every decade really begins in the third year — think about it, the 1960s began with the Kennedy assassination in 1963 and other patterns like that — and every century begins around the 14th year. The culture and social transformation aligns with the shifting environmental structures.
So, if you take that pattern, we’re really just beginning the 21st century now, and I would submit that too much of commerce and society at this point is still scaling up and operating according to 20th-century values. Industrial values and perspectives, perceptions of ownership, ignorance of environmental or social impacts, and other values that proscribed our 20th-century thinking that will unlikely survive the 21st century.
So how do managers start thinking in a 21st-century mindset?
I think a lot of it is challenging assumptions and beliefs about how their enterprises work, how their market works. The scariest thing to many of the large corporations is being blindsided by what some call the “ankle peckers” that come in and don’t operate within the historic rules of the system. They ignore the old rules of the market. They often arrive in mode of “cherry-picking” high-margin aspects of the market, and seek scale and scope more opportunistically.
The large corporations have often been protected now by capital and investment opportunities that allow them to apply resources that small ones can’t, but in the digital world, the capital is less critical to it. I can disrupt an industry by not doing it the same way, but by leveraging digital capabilities to disrupt a current practice. Patterns of intermediation, and neo-intermediation, permit new roles and order.
In our “remix era,” new skills and capabilities raise the value of an ability to rip things apart, assign new roles and responsibilities, and reassemble a new alignment of stakeholders that better serves the evolving markets. They challenge all assumptions of roles and responsibilities in their market.
Any other glimpses of the future, of the digital future that we’re seeing today?
Well, our industry structures have been relying on the historic buffers of time and space, that they could count on things moving slow or count on contractual arrangements. The 21st century contracts are going to be different. Contracts like ownership transfer, for example. Instead of owning something on arrival, I might own it in transit. Instead of buying a product, I might be leasing. Uber and Lyft and other things like that are the tip of the iceberg with a society of Millennials, who are not so vested in acquisition but willing to pay on use. Our commerce infrastructure is going to change. How buyers buy, and how sellers sell — will change as dramatically as the nature of value exchange.
Our living infrastructure will change, as well. My aspiration as a Millennial might not be for home ownership and living in the suburbs, as it might have been for my parents. My aspirations are very different, and my lifestyle will be different, and the commerce that serves me will differ from today. We have to gear up and align with those kinds of things.
Here again, it’s an issue of breaking away from a 20th-century mentality and assumptions.
How do you see work for the average employee changing? What skills are they going to need?
I think those are interesting questions. First of all, we know the assumptions they make are very different. Recent surveys show that many of the Millennials find higher security in entrepreneurship than in corporate work. That would be shocking to a member of the Boomer generation, who has always expected that the corporation is the secure path.
And yet the Millennial experience is that they saw their parents failing to receive promised pension or being misled on job longevity. They no longer find that a secure pathway. Entrepreneurship actually is perceived as more a secure path than traditional career paths.
In terms of skill sets, in the remix era, my skills are going to be different. I need to be able to break things apart and put them together, put them together in new ways. Traditional skills are going to be less important than an ability mix and remix. I think you see that in the successful Millennials as well, that willingness to not take things as permanent, to break them up and reconfigure them in new ways rather than looking for operational efficiency or improvement along the historic lines.
That is a new kind of skill to many. The certainty of unknown, I would call it. They emerge in a market, absolutely certain that the job that they will have five years from now doesn’t exist today. And so, how do I prepare for that? I prepare for it by being prepared at the time it arrives, or even helping it to arrive or making it arrive — inventing it myself.
If I was an executive at a big company at this point and I read what you’re saying, and I say, “Okay, you’ve convinced me to say the 21st century is just starting, I need to be aware of where the future is coming,” now, what do I do? How do I start thinking in this way?
Well, I think you start doing the activities like McCormick is doing, like UPS is doing. UPS focusing on analytics and mapping their Orion system and their visibility tools allow them to be flexible and facile in reshaping their supply chain — continuously. You have an organization like UPS that’s over 100 years old and has the very engineering mentality that has evolved to be very flexible and facile for a logistics movement now, multimodal delivery, for a global world.
Even for the large organization, my strategy has to be making facile that which has not been facile. In other words, the 20th century drove us to operational efficiency and industrial values and scale and scope economics. The 21st century is about that constant agility, adjustment, adaptation and creation of new opportunities.
So, my challenge to management would be to challenge everything about what they do, who they sell to, how they sell in those markets, and almost reinvent themselves virtually and then decide how to aspire and evolve towards that. That is how they will survive, and find extraordinary growth opportunities.