Over recent months I have had ample time to catch up on my “to be read” collection of interesting articles and magazines.  I will confess to having consumed a large number of publications related to cycling that probably could see me be labelled obsessive  particularly as since October I’ve not been fit enough to ride my bike!  However, among all the cycling material consumed I read an article in MIT Sloan Management Review (Fall 2012 edition, volume 54) that really struck a chord with me.

The article was titled The Benefits of Combining Data With Empathy (the majority of it is behind a pay-wall I’m afraid).  It argues that to succeed in the future companies will increasingly need to find an approach that whilst being optimised in terms of business processes and technology enablement is also able to foster emotional connections with their client base and as part of that relationship building be able to use data empathetically.  The authors Ritu Agarwal and Peter Weill make a strong argument  for what they term “softscaling”.  This is an approach which has three key strands

• creating emotional connections to customers, employees and business partners,
• achieving operational excellence in terms of both cost and outcome, and
• combining timely analysis of data with a clear understanding of the context to arrive at optimised empathetic decisions.

The authors argue that you need to excel at all three aspects of “softscaling” to reap the rewards.  The paper is based on research conducted in India and at five major companies in detail.  What particularly registered with me at the time was the human centric nature of the approach they are advocating.

The article was given resonance when I read the annual IBM Next 5 In 5 forecast of the five innovations that will most impact our world in the next five years.  This year IBM is talking about the innovations that will underpin the next evolution of computing, an era which IBM describe as “the era of cognitive systems“.  They believe that “this new generation of machines will learn, adapt, sense and begin to experience the world as it really is…..predictions focus on one element of the new era, the ability of computers to mimic the human senses – in their own way to see, smell, touch, taste and hear.”  The promise of these “cognitive systems” is that by operating from a human centric perspective they will help us “see through complexity, keep up with the speed of information, make more informed decisions, improve our health and standard of living, enrich our lives and break down all kinds of barriers – including geographic distance, cost and inaccessibility“.  Bold and exciting statements that the paper from IBM then continues to explore in detail in a very clear and engaging manner.  I urge you to take the time to read the IBM material, I think it is their most compelling annual forecast so far.

It is not just the technology sector that are seeing major potential in the bringing of digital intelligence to the physical world.  Recently there was an interesting article in The New York Times on General Electric’s plans entitled  Looking To Industry For The Next Digital Disruption.    The article outlines how General Electric will have invested £1 billion by 2015 in a new software centre to leverage what many call “The Internet of Things” and which GE term the “industrial Internet”.  GE believe that they have a $150 billion sized opportunity to drive efficiency into their operations by enabling their “industrial Internet”.  To reach that goal GE are embedding sensors on everything, from “a gas turbine or a hospital bed” and investing heavily in the software component to gather and make sense of the vast streams of data created.   It certainly brings a strong sense of concept becoming reality when you have an leading industrial company outside of the technology sector investing this materially.

Ensuring that innovations are viable and can deliver value in the real world is always a key concern.  A recent article in the McKinsey Quarterly looked at this necessity in an article entitled Battle-Test Your Innovation Strategy.  Ensuring that your “great new idea” is as good as you believe it to be could save a lot of wasted time and money, ensuring that if you are going to fail that you fail early.  McKinsey looked at how some companies are using war games to assess their product and services innovations by simulating the competitive real world and how the many variables might react to a given startling brilliant new idea.  This approach is an interesting variant of the scenario planning technique that many companies use at the strategic level but don’t always take to sufficient granularity as the idea evolves into a proposed new product or service. I found the McKinsey article a thought provoking read and it certainly hammered home the importance of ensuring your beloved innovation is sufficiently road-tested at each stage of its evolution.