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Ivey

Technology is taking on business – and winning

  • Morse, Seijts, Bansal, and Vandenbosch
  • |
  • Aug 8, 2018
Technology is taking on business – and winning

Late in 2017, we sat down with members of the Toronto business community for a wide-ranging, two-hour discussion. The topics were disruptive technologies, and a broader discussion on disruptions in general. Our participants represented a wide variety of industries, including high tech, corporate restructuring, real estate, health care, private equity, manufacturing, and management consulting, among others. What are you seeing, we asked them? What are you doing about it? And what should we at Ivey be doing about it, in terms of curriculum and pedagogy?

Online technology vs bricks-and-mortar retail real estate

The discussion opened with the impact of online technologies and delivery in the retail sector, and what that may mean for bricks-and-mortar retail real estate in the future. If 25 per cent of the world’s GDP is going to come from India and China by the year 2030 — as one member of the group predicted — then existing Chinese e-commerce companies, such as Alibaba and JD.com, not to mention Amazon, are only going to become more disruptive to existing retail channels. Employment in both the retail and real estate sectors will be affected dramatically. At least some real estate entrepreneurs will decline to own community malls, and will retain interests only in those malls that can attract shoppers “for the experience.”

Another participant with investments in real estate emphasized the disruptive impact of demographic changes, which, he said, had at least two key aspects. One is simple demographics: “We’re getting older, and what was designed and built 30 years ago is just not going to be relevant 30 years into the future.” One example is the changing social behavior of the “new worker,” who is coming to the market with new tastes in housing—as well as work environment, diet, and entertainment.

Discussion of the smart workplace, increasingly replete with intelligent sensors, led naturally to a consideration of Big Data. The proliferation of devices in the home and office, designed to discern our tastes and preferences, has huge implications for the marketing world—and in the mind of at least one participant, also raises serious privacy concerns: “It gives companies the ability to direct campaigns for marketing to people who, in their home, spoke about thinking about buying something. That has huge implications.”

Several participants pointed to the challenges inherent in the demographics of a changing workforce. “The word ‘retirement’ is being retired,” as one put it. Many older people actually want to keep working, but not necessarily 100 hours a week for the same company. Meanwhile, there aren’t enough millennials to go around and those who are recruitable demand flexibility, nimbleness, and control over their careers. “One of the things that our business is now predicated on,” said one panellist, “is the ability of companies to access talent, not own it.”

The discussion about different generations in the workplace led to a consideration of trust: both in business and in the larger society. “There is a discernible deficit of trust that’s getting built up,” one participant noted. “Everybody’s heard about populism, and the impacts of populism.  We’ve got some data coming out that suggests that the next frontier of populism is corporations.” In an era when cybersecurity is coming to the fore—for example—who will be able to trust whom?

A.I. is disrupting almost every business

The group next moved to a consideration of artificial intelligence, which, they said, has disruptive implications for almost every kind of business. One participant talked about the progression he had seen in his own field: security. Two technological “generations” ago, guards patrolled properties. They were largely replaced by people watching cameras. Now, many of those people watching cameras are being replaced (or at least aided) by the algorithms in smart cameras, which use “object orientation” — matching an object in the frame to objects in a database — to determine whether a particular movement is an intruder, or simply a tarp flapping in the wind. “Algorithms are taking over our business,” this participant said. “And that’s given us a 10-per-cent gross margin increase already, which I think will turn into another 20-per-cent gross margin increase over time.”

Proactive leadership must include character

Several participants focused on the importance of leadership in dealing with disruptions, with an emphasis on being proactive, rather than defensive. “Big organizations need to build the entrepreneurial mindset into their organizations,” as one put it. “They need to find ways to harness the incredible streams of information that are out there. They need to provide great opportunities for young people.” In other words, they have to put traditional resources—people, data, and so on—to new and bold uses.

Teach the fundamentals for a lifetime

The final part of the discussion centred on what Ivey should be doing to prepare today’s business students for these disruptions. There was a general consensus that the School should continue to teach the fundamentals, but should broaden the required curriculum to include new kinds of subjects. “We spend way too much time trying to improve on our weaknesses and not trying to build on our strengths,” said one. “There’s this view that if you want to be a leader, you have to be good at everything, which simply isn’t true. Entrepreneurs needs to maximize their strengths, and Ivey should teach them how to do that.”

One participant argued forcefully for more of what he called “cross-cultural learning,” by which he meant exposing business students to their counterparts at schools of medicine and engineering. A second participant pushed this idea still further, advocating exposure to the arts, as well. “You’re talking about broadening the learning base,” he explained. “It’s something that Ivey already does, but which it could do more of.” The goal, of course, is to better equip students to grapple with tomorrow’s problems—including disruptions—with a bigger toolkit.

At the same time, the group agreed, Ivey should put more emphasis on creating a structure of lifelong learning. As one participant put it, “Having access to a peer group that would go back to a common narrative form within the School—that would be really neat! And you could introduce new platforms along the way, as well. It wouldn’t be throwing them into a new pot every time; it would have the benefit of some continuity.” In other words, it’s important to keep taking new ideas and tools on board, but it’s helpful to do so in a context that provides some continuity.

On the research side, participants emphasized the importance of a better understanding of artificial intelligence, block-chain technology, augmented and virtual reality, robotics, autonomous vehicles, biotechnology and nanotechnology, and renewable energy—all topics that again argued in favor of closer ties to researchers at schools of engineering and medicine. Virtual reality, in particular, struck participants as a promising field on which to double down, not only to help students understand its business potentials, but also to help faculty teach in new and more powerful ways, perhaps enhanced by technologies that have yet to be discovered.

Finally, the group encouraged Ivey’s leaders to find ways to bring together two seemingly paradoxical strands in business: risk-taking, and taking the long view. How will the business leaders of tomorrow deal with disruption? By taking wise risks. But what does “wise” mean? “It means investing in big thinking,” responded one participant. “And big thinking means both embracing the near-term opportunity and maintaining the long-term vision.”