About the Author: Kathryn Tang is a current MBA student at the Ivey Business School with an undergrad education in Mechanical Engineering and Political Science. Coming from the Wind Engineering Consulting industry at RWDI, Kathryn has experience managing people for greater performance and recognizes the impact potential of effective leadership and the importance of having an ethical foundation.
Tom Jenkins, the Chairman of OpenText Corporation in Waterloo, spoke to HBA students at the Ivey Business School on November 3rd as a part of the Annual Ivey-Thomas D'Aquino Lecture on Leadership. Having come from the twin cities of Kitchener-Waterloo (KW) with a focus on technology, I had a keen interest in the topic of disruptive innovation. I was impressed with the insight Jenkins offered, and think this is critical perspective that we should all understand.
To start the talk, Jenkins claimed that in a very un-Canadian fashion, we are winning. Technological innovation is a driving force in the modern economy, and we out-compete other nation-states of our size. The Waterloo-Toronto corridor is the second biggest tech hub in North America next to Silicon Valley, and is home to Google Canada, Shopify, Desire2Learn, among others. 2000 start-ups currently exist in KW, which are supported by accelerators and incubators like Communitech and Velocity. We are innovating at a rapid pace both bracing for and driving the next wave of technological disruption. To stay in the game, we need to continue to progress at an even faster rate.
On a more disconcerting note, disruptive innovation has significant implications for business. Jenkins shares that "as a company, you need to be productive and innovative, or you will fail." Automation is becoming an integral part of life, and we need to focus on decisions that require a level of creativity in order to offer value that cannot be easily automated. A large percentage of jobs in the banking industry are expected to disappear in the next 10 years, and we do not yet know where new opportunities will emerge. As businesses, we need to be open to pivoting toward new markets, even if they disrupt our own established product lines. I was employed at IBM back in 2010 and did not fully understand its transition into analytics at the time. Now after seeing how fast industries are evolving and having taken courses across disciplines at Ivey, I have developed a greater appreciation for just how critical this has been to its recent success.
Our technologies evolve at a geometric pace. Unfortunately, our tendencies to linearly extrapolate our historical performance no longer suffices as an effective predictor of where we are going to be. By 2020, we expect to have one trillion machines connected globally, which was recently revised from an earlier estimate of 50 billion machines. For our local businesses to thrive, we need to invest in adequate network infrastructure to support these activities. Jenkins talked about a meeting where Canadian policy leaders thought that we would need to support 5 MB transfer speeds which would allow us to stream videos. However, after hearing that Germany was looking at 1 GB speeds that are necessary for a 3D printing company in Hamburg to connect, it became clear that our Communication and Information Systems (CIS) are a foundational component in our ability to compete globally.
To manage the complexities of this evolving economy, Jenkins stressed the importance of having people working at the intersection of industry, academia, and the public sector. The challenge, however, is that people with skills in business, technology, and public policy at the same time, are extremely rare. Coming from a background in engineering and technology, having pursued an interest to study political science, and now pursuing my MBA at Ivey, Jenkins makes me feel great about my life choices. At the same time, these challenges worry me when it comes to their implications on our society at large.
While the previous industrial revolutions have created wealth for many, Jenkins comments that digital innovation has not really helped blue collar workers in developed nation-states. With increased connectivity, we have democratized information. Surprisingly, the wealth gap has only widened, not narrowed, in response, and threatens the very stability of our political institutions.
We want to turn to governance to mitigate some of these challenges. However, designing a system that works for everyone is incredibly difficult. We want to build incentive systems that reward entrepreneurs who take the risk to craft disruptive solutions, yet ensure that the rest of our communities are brought along on this journey. We want our products to be competitive globally while at the same time ensuring that our consumption patterns are sustainable. The balancing act to manage these inherent tensions poses a huge challenge. As emerging leaders, our role is to navigate these challenges so that we not only run successful businesses, but build more functional and sustainable societies as well.