Disruptive Talk: Podcast

Harnessing Disruptive Technology for Business Growth

Can we predict change and harness its power to prosper in the future? Steve Thomas chats with Sir George Cox, whose career has spanned the dawn of information technology to the present day.

Sir George uses his unique perspective to highlight the importance of discontinuity as a driver for change and innovation. Technology, he says, is very predictable but divining where its application will take us is a very different matter. Who would have predicted the growth in mobile communications or the impact the internet, which was developed for a totally different reason, would have?

And looking to the future, where will AI and genetic modelling take us? What will it take for us to trust it?

Full Transcript

Steve Thomas 0:10

Welcome to a Kredo podcast on the topic of disruption in business. My name is Steve Thomas. Kredo is a PR consultancy that specialises in the launch and growth of disruptive technologies worldwide. We place customer trust at the heart of our campaigns. Today we ask can we predict change and harness its power to prosper in the future? We are proud to be joined by Sir George Cox, whose career has spanned from the dawn of the information technology age to the present day, a rare perspective on the challenges of change. So George Cox has had a varied and influential career. He is a former Director-General of the Institute of Directors and was appointed the chairman of the Design Council in 2006. He held the role of Pro Chancellor of Warwick University until 2017. Born in Hackney, he spent his early years in aerospace and precision engineering before moving into information technology. He co-founded the research and consulting company Butler Cox and subsequently headed up Unisys throughout Europe. In his personal life, he's had a distinguished career competing and coaching in rowing, including being chairman of the GB Olympic selectors, and the President of the Leander Club until 2013. He wrote the well-received Cox review of creativity in business for George Brown in 2005 and was knighted the following year. George, thank you very much for joining today. And talking about disruption, it seems to me looking at your career, that you span the whole of our other kind of digital age, right from the dawn of computer processing all the way through to the present day. But my first question is, do you recall what the impact was on the status quo on the people around you, when you first started in computers back then?

Sir George Cox 2:37

Well, Steve, you certainly make me feel very old. I got involved in computers as we used to term them. Back in the mid 60s, I was working for a manufacturing company that had a very complex product, it was making complex machines. As a consequence, it was becoming more and more difficult to control this production that had 1000s of different parts. So we're trying to bring together and with great foresight, they decided the answer was to introduce a computer for this purpose. And that was a young manager. And they turned to me and said, George, we want you to go into this new computer department. And we're sending you to a programming course. And Steve I almost resigned. I thought that's not what I want to do. I don't want to become a technician. And I'm being shunted into a backwater here. But I'm gonna do this new department. And over the next two or three years, it became probably the most advanced users of computers for manufacturing in Europe. And I headed up some quite advanced projects. And the interesting thing was, at the end of that period, I asked to leave the department. The reason was, we’ve done it, we'd computerised the business just the same way as back half a century earlier, they automated the factory. Now we automated as we put it, the office and we replaced all your systems. Now, what I didn't realise is that we were moving from a period in which systems never changed, to where they never stopped changing. The systems we replaced in the stores on the shop floor had been like that for half a century. And we hadn't got it quite right. And the management said, well, you know, can you tidy it up and we said we need a bigger computer etc. Systems since then have never stabilised in any business. It was a sea change. So even understanding pretty quickly what computers meant, one couldn't understand or couldn't foresee the direction in which they were going to take us. And this illustrates the point that comes back to what you were saying in the introduction. You get disruptions to a business, you can have a disruption because there's a strike or power failure or whatever. And then what happens is the business picks up again and carries on. Of more consequence is when you get discontinuity. That's when the direction of development of the business which seems so clear and predictable, changes. It changes direction, or it might accelerate or stop. But there's a discontinuity. And you can see that the life of many businesses, and technology, of course, is one of the big drivers of discontinuity.

Steve Thomas 5:42

So, do you see patterns to these changes? Do they come in clusters? Do they come in singularities? What has been your observation?

Sir George Cox 5:52

What one sees is that you have developments in technology. And often they're parallel developments, they are developments in stories, developments in transmission, different aspects of technology moving forward in parallel, and having a combined effect. Also combining with changes in behaviour, changes in markets. And that's what makes it so difficult to recognise what's happening.

Steve Thomas 6:19

So, basically, we're saying that it's unlikely for you to foresee the impact of these changes when they first arise, you just have to stay alert to the prospect of what changes they may deliver?

Sir George Cox 6:36

Well, if you look back on all the changes that I've seen in various fields, what you see is that the technology itself has proved remarkably predictable, in every field of technology, from very, very few inventions, one off inventions. What really happened is progressive refinement and development. Now, very often, this has been dramatic and spectacular. If you look at our ability for innovation, it's incredible how much is used. Our ability to process information, it's incredible. You know, people point out your wristwatch has more power than the moon lander. Nonetheless, if you look at what's been happening, those increases in power, increases in speed, increases in capacity, have been very, very steep curves but they are continuous and predictable. What hasn't been predictable is the effect this would have. And if I had gone back, let me give you an example, Steve. If I said to you back in the 70s, what would happen if we replaced movies, recording movies, rather than use chemicals on a piece of tape, plastic tape, we used a magnetic surface? You say, well, I'm not sure what I’d say. Well, is it cheaper? Does it give a better picture, not really. What it did was it made it very easy to replicate. And as soon as you did that, you ushered in VHS, video home systems, where I didn't have to go to the cinema to see a film. I could go and get it in a cassette from a local shop and take it home. It was you know, sometime after the movie came out, and you'd have to be on a waiting list if it was popular. But all of a sudden, I could watch movies at home at my convenience. And that turned into an industry, Blockbuster. Every High Street had a big shop full of movies. Now you'd get the recent movies, old movies, everything. But that wasn't the end of it. Because it's transmissible. It works out. No, you don't have to collect it. You can transmit it and download it. And so we've moved from when I was young, you go to the cinema to see a movie to a point, now, if I want to see a movie, I can seen what I like when I like at home. And over that period, you've had an industry, Blockbuster, created and disappeared. So you've had two industries, the old cinema industry, which catered for big numbers, which has gone forever, and the Blockbuster industry which has come and gone forever. And now you have Netflix and so on. Now, all that's come from just coating the tape magnetically rather than chemically. So the technology you can describe, what it means is very hard to predict.

Steve Thomas 9:38

And are we always blindsided by the major changes do you think?

Sir George Cox 9:45

I think we're often blindsided because companies that seem to suffer most tend to be the most successful. Up to that point. When you have a very, very successful business with a very well established formula and you know that business, anything that comes in from the left field, you tend to dismiss. And the first reaction is to say, Oh, we heard this all before. You know, people always said this was going to be a threat to our business, we've heard that. So you're going to deny, and the second is not seeing then its potential beyond what you're doing now. It changes the business. And you can look at things where the kind of change brought about wasn't foreseen by the industry. If you look at mobile phones, it was clear mobile phones were going to become smaller, cheaper, and have greater coverage. Every company in the business involved, every telecoms company recognised that. What they didn't understand or recognise was texting. People with their phone then started punching numbers and letters into it, rather than speak over it. That would have sounded rather bizarre. So that was something which occurred, unforeseen. So very often, you don't see what the change can bring to your business, even when you understand it well, and you're prepared to adapt. So one of the big problems is whether this is an interruption, or is it a discontinuity? And my own view is looking back, the important thing is to keep an eye on what's happening, and to recognise that it could affect your business. But you can't have a crystal ball. I know companies have a lot of money, try and look at the future. Very few get it right.

Steve Thomas 11:34

Okay, so, George let's move on to the question of what you felt or feel has been the most disruptive technology in your career.

Sir George Cox 11:48

I think of the many, it's two. Mobile communications, which we now take for granted. You know, that my daughter went on a year's backpacking. If that had happened just a few years back, she would have disappeared for months on end, as it is we spoke to every day, we've got pictures. You know, I take it for granted. Now I can speak to anybody in the world, reasonably cheaply, anytime, no matter where I am. Steve, that's a massive change. And if anytime your mobile phone isn't working, oh, my God, you know, it’s like you car having stopped, it's worse. Lose your mobile phone, oh, god, it’s worse than losing my wallet. You know, I was so used to this so quickly. But it's a massive change. Anyone in the world can speak to anybody, wherever they are, anytime. That's a huge change. The other one is the internet. And again, when they started, it was quite interesting that there was the .com bubble. And after a year or two people said, Oh, all this internet, you know, which we all got so excited about. That was all hype, but it's not happening. Now, that often happens with the new technology, there's this wave of expectation, when people understand that it's something exciting. And then it doesn't happen quickly enough. And interest tends to drop off or enthusiasm drops off, at just the point it is beginning to really take off in terms of capability. And with the internet. The fact is now, lots of things, my dictionary is redundant. My Atlas is redundant. I can go on to the internet to check how a word is spelt, I can check a fact. I can check on anything. I have the whole world's information at my fingertips. I can answer any question, I can sell to anyone in the world, I can buy from anyone in the world. That is a massive change.

Steve Thomas 14:02

Yeah, but um, you surprised me somewhat because, I mean, you've seen the full commercialisation of say jet, jet aircraft, and nuclear energy. There's the whole rise of semiconductors. But you're pointing to mobile communications and the internet and I wonder why that might be?

Sir George Cox 14:24

Because both of those have fundamentally changed my life. Fundamentally, they truly did every hour every day. Whereas nuclear energy? Well, you know, I switched the lights on and whether it's nuclear or it is wind power, I don't really know. Aviation, yes, aviation has improved up to the last year and again, we've had mass travel, but that's not mass travel for everybody, Steve. 89% of the world of people have never been on an aeroplane, but mobile phones, you know, they have in the middle of Sudan, let me tell you, you know, up mountains in Nepal, you know, it's everywhere. It's everywhere. Those two things have altered the whole world.

Steve Thomas 15:14

Yeah, I take your point there. And let's apply this to the test. Would we have seen either of these things as groundbreaking when they emerged?

Sir George Cox 15:28

No, no, not when they emerged. I don't think we understood the impact they'd have. No, we understood what they could do. You know, and I remember giving talks back in, you know, 25 years ago on the internet. Remember, the internet wasn't even invented for what it's used for. And I talked about the things you could do with it. And we used to speculate all the things that might do, still inspires impact. Now, and I think that that's the general point I made earlier, even if I could tell you and I can't, the way technology is going. We could spend all evening arguing about things that may or may not be opened up by self-development, and we would still miss the big ones.

Steve Thomas 16:16

Well, let's move then to the future. And look at what you think, are the disruptive technologies of the future?

Sir George Cox 16:26

Yes, I think there are two. And that's not ignoring the fact that we're still going to see a lot of advances in information technology. But the two advances, I think are the most important over the next half-century are going to be artificial intelligence, and I believe genetic engineering. I think the effects of these will again be quite profound, and many of them quite worrying.

Steve Thomas 16:55

So what are the similarities? Again, I suppose we would anticipate great changes from AI, in particular. But I suppose we still don't know exactly what applications will be drawn from them?

Sir George Cox 17:11

No, we don't. And a lot of it comes down to how much we trust to a machine or to a system. You can look at the obvious immediate example of driverless cars. And we are at a point where I don't know about you, but my car can park itself better than I can. It takes a little bit of trust to say, well, I'm going to drive along the motorway with my hands off reading a newspaper. But in a relatively short time, that would be much safer than having a person behind the wheel. And you can get, you'll get to the point where you get an aeroplane, if you saw a man at the front, sitting back to control it, you'd get rather worried. And you think God, we're trusting it to a man. So I think we're going to change on things like that. But a much more, I think, challenging application is when we give it a medical diagnosis to deal with. If a doctor tells me, George, this is the problem, and I think we ought to operate and take that out. Hmm, he can explain it. I can look at him. Do I believe him and get a second opinion. What happens when we give a diagnosis over to AI? Because already, you're at a point where AI can be given so much case history, that its diagnostic abilities, arguably are better than doctors. The problem is, when you say to the system, why do you recommend that? The system just really comes back and says, Look based on the fact I've seen hundreds of 1000s of cases, this is what it is. You're no longer able to interrogate the reasoning. Because the system can't understand it reasoning. Explain its reasoning to you. Because the system reasons in a different way. It's based on massive experience, massive amounts of data. So I think that's going to be a huge challenge for us, how much we give of controlling our roads, our transportation, our medication, medical treatment, or diagnosis, decisions on everyday life over to a system, that's going to be a huge challenge for us.

Steve Thomas 19:31

So we're acknowledging that trust is a big factor in the future. And with technologies. But, but we are saying that with the growth of AI and, you know, big data and modelling, in general, you know, things become a bit like a space shot, you know, in their complexity. We’re gonna find that harder, than say engendering trust from another human being?

Sir George Cox 20:04

Yes, we are. I think that’s true. But I think the essentially though the trust we built up through performance. Statistically, we'll get to a point where, you know, machine, computer controlled cars are safer. Nowadays, if you have a driverless car knock someone down, it’s headlines. You know a driverless car in San Francisco, you know in a trial it knocks a lady off a bike and God these things are dangerous. Hundreds of people were killed yesterday on roads around the world by people. So I think it’s just going to be a question of time and building up confidence in these things and trust progressively coming. And I think it's it's tougher for people to deal with midlife. People who are born in to this, young children who have grown up with the technology won't think twice about it. You know, if every time you got into a vehicle, into a plane, a train, a ship and the system dealt with it, you won't even think about why a man is not doing this. So I think trust will be built up, but it will come generationally. And you'll always get, you know, people later in life, struggling to accept it, I recognise it myself.

Steve Thomas 21:25

So what is the best mindset for this, you know, disruption into the future? I mean, not just for the individual, but for a corporation? What's the best way to approach it?

Sir George Cox 21:41

Yes, I think it's a very good question. I think for a corporation, it's firstly to be alert to what's happening around the world, to take a broad view on things that are developing, and not always direct threats to your business. But opportunity. Isn't it incredible that all the major banks didn't start PayPal? You know it’s such an obvious system, but the banks didn't start it. For the big auction houses, you know, the Bonhams and the Sotheby's and that. Why didn't they start eBay? Massive opportunity, which could have expanded all their skills, they didn't look at it. You know, they looked in there, well, we might have to put some of our stuff online, and maybe that will come about, but we have our name and our customers and so on. Didn't look broadly enough. So I think you have to look very broadly. But the future and recognize, there could be big opportunities here, building on our name, building our expertise, building on our market access, which is different to our traditional business, constantly remaining alert and questioning that. And I say it's much more difficult when you're doing well. And the second to be agile, that if you do spot something to be able to move. And that's where a lot of well-established companies have real problems. You know, they've lost entrepreneurial flair, which they will build up the ability to move quickly into something new. That's really counter to corporate culture. So I think being alert, avoiding denial, when something happens, and being flexible, are the keys to succeeding and surviving discontinuity.

Steve Thomas 23:27

George, can you give me an example of a mindset coming against change and not working out?

Sir George Cox 23:38

Yes, I have a very clear example from my own experience. And it illustrates perfectly the point that it is successful organisations that often find it most difficult to recognise what's happening. And in this case, I was a non-executive director on the board of LIFFE, London International Financial, Futures and Options Exchange. Now, LIFFE was a relative newcomer and the city member options trading is very recent compared with, you know, trading stocks and shares and traditional city business. It was a very dynamic organisation and hugely successful, hugely successful. It was rivaling Chicago to be the world's largest exchange, dealing in futures. And it was growing. And it was growing so fast that we looked at taking a whole new building with more trading floors because it was an open outcry exchange. In other words, you had a trading floor with people shouting, waving their hands. Amazing setup, very efficient and worked well. And I remember talking to my colleagues and saying on the board and saying, don't you think the future is electronic And they said, well, maybe it is George, but in a long period of time. You must understand how efficiently open outcry works, you know how good it is at stopping abuse, how good it is in delivering a genuine, reliable market. Right, you know, and these people are respected. These were very good people, quite young people. And I say, a relatively young business, thrusting, business growing. And then the Deutsche Boerse, an electronic exchange launched an assault on it's London equivalent. And at first, the view was George, don't overrate Frankfurt, there are more people in financial services in London than the population of Frankfurt. And they were very successful, they were electronic, and they undercut us enormously on the fees. And all of a sudden, our business was plummeting. And it wasn't just losing a slice of the business. It was threatening the whole existence of the exchange. Now being a remarkably dynamic business, once that was realised, it moved remarkably quickly, to restructure, reorganise, do away with a floor, replace it with a computer system. It was incredible the speed at which it reacted and reasserted itself and became very successful once again. But it was a huge crisis. And the interesting thing was, even though one could see what technology could do, the people in it didn't believe it was a serious threat. Because they understood the business, they were immersed in it, they looked at its history, and it was very successful. So there's an example of how discontinuity comes along, major disruptive change is a real threat to the leading organisation at the time, even though it was a very alert and very dynamic business.

Steve Thomas 27:12

So maybe we can end with some advice to your equivalent now, from that person who started in computers. So what would you say to someone in AI or whatever, what's your advice to that person? Keep going, I guess.

Sir George Cox 27:29

I think my advice to anyone early in their career now is to be quite clear. We can't foresee the future. We can speculate on what might happen, come up with all sorts of scenarios. We can predict some technology and the way it's going and be sure that's going to happen. We can speculate on the future. But we can't be sure of it. And when I first started to speak to graduates at Warwick University where I was Pro-Chancellor and Chair of Council, I would say most of you are concerned with what job you're going out to do. What you don't realise is that you're going to end up in a job that you never even dreamt of. You're going to work in companies, industries, roles, which don't even exist today. Speak to most graduates who are retiring, and they all ended up somewhere they didn't expect to be and that's going to be even more pronounced in the future. So you cannot see the future. You cannot say this is the way it's going to go, this is the future you are going to be in. What you need to do is to stay alert to what's happening. To be flexible. Be ready to move and keep learning.

Steve Thomas 28:42

Sir George Cox, thank you very much for your time.

Sir George Cox 28:46

Steve, thank you very much. That was a pleasure.