The connection between abundance and technology may have been immortalized in a TED talk from Peter Diamandis, but that hasn’t stopped the fear-based conversations about robots greeting us in hotels or drone fleets delivering our packages.
Michael Leadbetter, head of Strategy at ExO Works, picked up where that TED talk left off during a presentation at the recent SAP Financial Services Innovation Summit held at the SAP Leonardo Center in New York. Here’s a summary of Leadbetter’s thoughts on why AI, machine learning, and other exponential technology advancements aren’t all bad for society, and how established financial institutions can learn to innovate.
Cashing in on Singularity and Abundance
Leadbetter works with Singularity University, an organization in Silicon Valley educating leaders on how exponential technologies can address the world’s problems. Co-founded by Peter Diamandis, Singularity’s self-described mission is to positively impact the lives of one billion people. Diamandis wrote a book that said exponential technology will generate sufficient abundance to raise global living standards. Jumping off from this concept of singularity and abundance, Leadbetter outlined what he saw as the ten attributes of the exponential organization.
“Large corporations don’t like doing disruption, and they find innovation difficult. Corporate antibodies attack you the minute you try to innovate,” said Leadbetter. “Exponential organizations keep the same business model, and focus on iterative innovations in the core to show progress with small wins. At the same time, they pursue a second kind of innovation at the edge. Ultimately the exponential organization at the core can outgrow the main organization.”
Six Ds of Exponential Organizations
Leadbetter explained how Diamandis divided technology into six phases of emergence and adoption.
“Empowering any product or service with technology gets it on an exponential curve,” he said. “In phase one, it’s digitized. Second is the deceptive phase when it gets smaller, cheaper and more powerful over time but it hasn’t emerged yet. Phase three is disruptive when it’s too late to get into the market if you’re not already there. The fourth phase is dematerialization, the way things have disappeared off our desks and onto our computers and phones. The fifth phase is demonetized where everything is less expensive, and phase six is democratized, when companies can have the same impact as governments, and individuals can have the same impact as companies.”
Millennials would rather do their banking with Facebook and Amazon than traditional banks
Move From Scarcity to Abundance-Based Model
Social robotics were among the most fascinating emerging technologies Leadbetter discussed. He said a bank in Australia was investing with partners in robots that are learning how to interact with people, and will provide a different experience for consumers in retail banks. A bank in India is working on something similar, where a robot welcomes customers, asks them what they want, and guides them to right place. Eventually the robot will manage transactions.
“Millennials would rather do their banking with Facebook and Amazon than traditional banks, and that’s a problem for established institutions,” said Leadbetter. “Banks are challenged because the financial services industry is in the deceptive phase.”
The fundamental challenge for banks is to flip from a scarcity-based business model to one of abundance. “Banks have operated like we have a scarce commodity, and we’ll give you access to it and that’s how we make money,” said Leadbetter. “That’s no longer the case. Every company has to think like a software company, years ahead of where they are now, managing the business simultaneously on three horizons — defend and extend the current core business, build momentum for emerging business, and create viable options for the future.”
Instead of hiring outside consultants for innovation, Leadbetter recommended companies build a network of specialist coaches, and engage in “a 10-week sprint process to define the problem, and iterate solutions and results.” Besides understanding the technology itself, the established financial community needs to embrace innovation as a business imperative. Disruptive upstarts and demanding consumers won’t have it any other way.
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