Stefan Korn, CEO and founder of Creative HQ, headed up Randstad’s premier Tech & Touch event for 2017. The Randstad Tech & Touch event series brings together experts across the tech industry in New Zealand to analyse the confluence between tech and human touch in the workplace.
Stefan’s presentation in Auckland and Wellington for Randstad’s clients and colleagues accelerated the conversation about where exponential disruption will lead businesses and why innovation is so crucial for our survival.
“As soon as something is digitised it grows exponentially” – that’s the message from Creative HQ’s Stefan Korn.
Innovation leading to large-scale disruption is a historic concept. It has always existed in our modern society, but what Stefan points out is that the current “exponential disruption” has a different feel to the disruption we are used to – it’s faster and it’s more unpredictable.
We’ve seen radical growth take place across our modern history, from the agricultural revolution to the World Wide Web. But the rate of change today is even more extraordinary.
This trend that everything digital grows exponentially is known as “Moore’s Law” and was originally identified by Intel. It’s the idea that year on year computational power doubles in size at the same cost.
How does disruption affect companies?
The rate of “exponential disruption” usually means that as soon you have found out about the change (which usually comes in the form of innovation), it’s usually too late.
Stefan highlights that companies today are just about to be disrupted, but it’s almost impossible to know where this is coming from. We struggle to predict disruption, because we have never had to predict this type of change in our evolutionary process.
Experts predict that about 66% of New Zealand’s current exports are at risk of disruption – but it’s hard to say exactly which ones, although we know energy and computing will be greatly affected.
We are in the process of digitising our lives, and experts predict that by 2045 we will have a computer that has the combined processing power and intellectual capacity of all human brains on the planet.
Where is disruption coming from today?
Right now, and for the last 10 years, startups are taking the biggest piece of the exponential pie. Startups have the ability to miss out some of the stages that can restrict companies; they are exponential organisations by design and are able follow different rules as a result.
One of their most important attributes is that they can “leverage assets”. They have worked out that we don’t have to actually own an asset, but we can use an existing asset to make a business.
For example, Airbnb reuses people’s homes, as opposed to having to pay the costs of maintaining a hotel.
How can businesses compete with this business model?
Many businesses often go through a long period of not knowing what kind of innovation is happening in their industry.
When they do find out, the change is already on the exponential disruption path. The “thing” whatever it is, is first dematerialised, then demonetised and finally democratised.
Businesses and countries that have not subscribed to an existing business model can skip some stages to make innovation work for them. This can be seen in developing countries, for example, when they choose to skip straight to mobile phones instead of landlines, and use those mobile phones as a proxy banking system.
Stefan believes that the key to 21st century business is to work out how to make money from abundance.
There is an underlying assumption when it comes to innovation that it always has to relate to technology, when in fact some of the best ideas simply come from having a different mindset.
According to Deloitte’s “Ten Types of Innovation” many aspects of innovation are practical and thought-inspiring, but if you are seeing innovation coming from someone else in your industry then you are already behind.
In order to achieve innovation, companies need to avoid having unrealistic expectations of staff. As humans, we cannot work like this. It takes time to “become” innovative. A simple training course simply won’t cut it in this evolving environment. Choose the right time to bring in the experts.
While it may seem like a contradiction, innovation in fact needs a structure. People can get lost in innovation if they don’t implement a timeframe. Stay ahead of the curve and plan your innovation like a startup – with creativity and input from employees, without the constraints of big business and by sticking to an innovation time frame.
Stefan Korn is an experienced entrepreneur, business strategist and investor with over 10 years of experience in managing high growth ventures, early stage investment and software development. Stefan has a PhD in Neural Networks/Artificial Intelligence and an MBA in International Business.
At Creative HQ Stefan works with a team of 30 passionate individuals who look after a portfolio of over 200 startup ventures.