by Tom Goodwin
Faced with complexity and new things to learn, we replicated the familiar units of the past. We took all the old-world systems and digitized them. Skeuomorphism, the design concept of making digital items resemble their real-world counterparts, was a way to aid the transition into the new era. Mail became e-mail, with ‘addresses’ and inboxes. We made ‘folders’ and ‘trash’ and ‘desktops’ as digital equivalents. PowerPoint had ‘slides’ like early slide projectors and floppy disks represented ‘saving’, which is wonderfully anachronistic, as is ‘return’ which stands for ‘carriage return’ from typewriters – and don’t even start me on ‘cc’ for carbon copy.
Slowly new things were made, retailers used barcodes to allow better stock-keeping and make checkouts slower and then faster as people adapted. These changing, uncertain times proved to be incredibly profitable times for management consultancies and experts. The extremely potent power of computers was clear to see, but advice was essential.
Questions kept business leaders awake at night: what new equipment, staff and training were needed, what did it really mean for individual businesses, and what could be outsourced? It’s while advising people in the moments of greatest change, deepest complexity and most potential and fear that consultants can both charge the most and create such valuable advantages. As illustrated in Figure 3.3, it was at this time that companies invested the most in new software and hardware to best adapt to this change, reaching a peak in the period 1973 to 2002.
Figure 3.3 Capital investment from companies in software and hardware
SOURCE Economic Policy Institute, http://www.epi.org/publication/robots-or-automation-are-not-the-problem-too-little-worker-power-is/?utm_content=buffer27c7b&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
Yet at the same time, businesses mainly stuck to the order and methodologies of the past. Cloud computing didn’t necessarily lead to the era of working remotely. Extra computing power didn’t necessarily mean schools used digital whiteboards. We didn’t use less paper and the paperless office of the future never appeared. Instead we had a parallel life. In this mid-computing age, computers were most visible. Universities and schools had big computer rooms, the newness was gathered in a place and almost shown off.
The post-computer age
While we still suffer things that don’t work, fill in an inordinate amount of forms by hand and await the paperless office, we’re now ostensibly in the post-computer age. You don’t see many retailers who don’t scan items and automatically link them to inventories, or office workers carrying briefcases, or calculators on many desks. Things generally work: even my Mac will talk to my PC, they both use Google Drive and the internet has been the glue. The computing power behind what we do has been all but forgotten about.
Today no management consultants talk about computerization strategies, no companies have people tasked with adding computing power to businesses. The very role of IT has gone from the job of the future to a support function, maintaining, not building. We don’t have conferences about ‘unleashing the power of computers’; it’s just known to be part of the foundational elements of the world in which we live. Figure 3.4 showcases the drop in the use of the term ‘computerization’ in English language books from 1800 to 2000, illustrating how it took off in the 1960s then gradually faded away from our collective consciousness.
Figure 3.4 Frequency of the term ‘computerization’ in the English language corpus, 1800–2000
SOURCE Google Books
Of course we could use computers better, but the focus now is increasingly on the connectivity of the devices we use, on the automation made possible by data sharing and processing, all of which is more about the next era: the digital age.
The shortening cycles
At this point it is important to note the change in pace which characterizes the adoption of new technologies. Many theorists talk about the four ‘Industrial Revolutions’. And while the descriptions and starting points of each one varies between proponents, one change is impossible to go unnoticed – the speed at which these cycles commence and terminate:
The first revolution: the arrival of water and steam power as well as the creation of huge factories and industrial production happened over a period of around 100 years.
The second revolution: the uptake of electricity and the creation of new appliances based on electricity took around 50 years.
The third revolution: the last revolution to be completed, the use of computing and automation to increase productivity, took perhaps 25 years for the world to fully embrace.
Today we live in a post-electrical, post-computerized age. We don’t reflect on how many hours a day we use power, we don’t think of what appliances are electric, or how many have chips in them, but we probably do know which and how many items are connected to the internet. Let’s explore what is happening in the current revolution:
The fourth revolution: the digital and connected age.
The pre-digital age
Remember an age where devices had just one function? It was when media was physical, and when technologies lived alongside and in parallel to each other, but rarely intertwined. Retail was either in-store or via mail-order home shopping, or if you were impatient, the phone. ‘Dial now, if operators are busy, do try later’ and ‘please allow six to eight weeks for delivery’.
Media channels were labelled after the singular device we consumed them on: TVs, newspapers, magazines, radio. There was no confusion or overlap. You wouldn’t see content on a TV that then couldn’t play in your region. Banknotes and coins were our primary way to spend money in the world. We had credit cards too, the ‘shunk shunk’ of carbon paper, and cheque books, a sort of IOU note that people took seriously. But our use of technology wasn’t messy.
It may not have seemed like it at the time, but in retrospect, life was simple. Progress was steady but largely linear. Of course, things changed: we moved from VHS to DVD; cassettes fell aside as the compact disc took over. Mail-order shopping got a bit better, but was still essentially 100 years old. The changes were small. They didn’t change the retail landscape or logistics supply chain. There were no software updates to get headphones to work, a light switch didn’t need a firmware flash, in a world with no connectivity your toaster didn’t stop talking to your kettle because it never started to. There were no terms and conditions to start using your oven.
We cared about what pictures we took because we could only take as many as the films we carried could store, and getting them printed, the only way to see what we took, was expensive and took time. It was a land of the physical. Cars were chosen on how they looked, how they handled the road, how they were made. Specifications and improvements were very tactile: a better TV was a bigger TV with a crisper picture. Better loudspeakers could go louder and be a bit more bassy. As things got older, from radios to cars to cameras, things got worn out, and worse, cassettes got mangled, CDs scratched. This was life in the analogue age.
We owned a lot of things, but we had to. Without a camera you couldn’t take pictures, without a TV you couldn’t watch anything, without a radio you got no local news. While we spent a lot of our disposable income on things, it never seemed extravagant. Overlaps were small so the benefit each device brought was simple and clear.
The mid-digital age
At first, the pre-digital age evolved slowly. Products became digitized. Photos became bits. Knowledge moved from volumes of encyclopedias to Encarta on a CD (or 20). At first the change wasn’t great. While CDs were technically digital, they felt physical in nature. Renting a DVD wasn’t a different behaviour to renting a VHS tape. We still lived in an era of limited choice of most things, of geography being key to retail, of distribution being a key cost.
The internet started to change things, but we still looked through the past in the rear-view mirror. The phone book became an online directory. Printed magazines became websites. Newspapers became ‘digital paper’ versions of what we knew, and we placed th
e same content ‘online’.
The connected world has made everything more complex and created challenges. Now that music or video is merely data on a server, not a CD that you touch, it makes it harder to charge money for it, which has destroyed entire manufacturing, distribution and retail industries. Now flights or hotels, insurance policies and pretty much everything we can own can be compared online. It has suddenly killed smaller outfits and created an open, global marketplace in which the former information asymmetries which enabled businesses to make a profit no longer exist. The mid-digital age has seen the role of many companies vanish, especially middle layers in processes. Why do we need department stores, talent agents, record labels, travel agents, insurance brokers? It makes no sense. A lot of destruction has been felt. Blockbusters was killed by Netflix. Despite inventing digital photography, Kodak lost its way, and Nokia moved to irrelevance despite pioneering the smartphone. Coming first and being a pioneer has not been kind to companies in this era. There is much confusion and uncertainty. Newspapers and magazines face the toughest challenges; they find it harder to make money from advertising online, but dare not place content behind paywalls, when people expect everything for free.
The early stages of the internet have been brutal for many. We’ve collectively failed to find ways to build value. We exist amidst the foundations, the principles and the built environment of the pre-digital world, embellished only by the potential of what’s next. We take the thinking of the past, and cram it into containers of the future, where it just doesn’t fit. It’s a nightmare for incumbent companies, for brands, for regulators, but a wonderful time for lawyers and consultants.
I call this ‘peak complexity’. We are in the mid-digital age. This energy – the disruptive forces, the vast feeling of change, the acceleration of complexity, the stress of companies fighting for the profit margins of the past – is where we now lie. The complexity is found in every aspect of our lives and we tend not to notice it because we’re enamoured by the wonder of the new.
In 2005 I would wake up to perhaps 50 e-mails and 3 texts. I had a personal e-mail, a work e-mail and one phone. Today, as form follows funding, all apps grow towards the sun that is monetization and they all offer messaging. We now have the same number of people to reach, but messages to check on Yammer, Dropbox, Slack and 45 other inboxes. We have to think not of who we want to chat to but how. Cognitive burden is rife in this age, as are the lost opportunities. The BBC won’t play any content outside the UK because global usage rights have not been cleared, despite the internet being popular for over 10 years.
Payment systems don’t make sense. If you jump in any taxi in any city and ask if they take credit cards, they either scoff ‘of course yes’, or ‘heck no’. You can only pay with cash (not cards) on American Eagle (American Airlines’ regional brand) flights, but can only pay with cards (and not cash) on American Airlines flights. You can authorize a payment with 30,000 data points on your fingerprint with Touch ID, but then need to squiggle a pen on a paper receipt to combat fraud. It’s a time where the teething problems of digitalization and the battles for territory define our experience. Facebook want to keep you in their app, Amazon Echo doesn’t want to show YouTube, Google Home won’t play nicely with Apple. Some retailers won’t accept the collection or return of online goods in real stores. At other stores, if you want to know if they have an item in stock, they may have to make phone calls to each branch.
More than anything we have the wonderful and amazing promise of the new built on the foundations of the past. Websites that at first look amazing but within four clicks lead you to an old back end system they hoped you’d never find. Amazing mobile apps for companies, clearly designed by better teams and with more money than was available for the clunky website. Airlines that offer pilots iPads to speed up paperwork, but still need dot-matrix printouts on blue computer paper of the manifest paperwork. It’s a time when the very concept of TV channels and electronic programming guides make no sense: the two least important things to most young people are the company that commission the show and when it is broadcast – the two dimensions used to navigate your way round TV shows.
What binds all these lacklustre experiences and all the perceived errors together, and what more positively shows the way into the future, is that, so far, we’ve translated pre-digital thinking and pulled it through a digital lens. We’ve taken every behaviour, product or physical item and changed it remarkably very little. We rechannel the old through the new, we merely pull the old stuff through new frames, never rethinking what is possible. The first radio shows were readings from newspapers, early TV shows were just plays with cameras pointed at them, early websites were digitized newspapers. In fact much of the modern world, when looked at critically, seems amazingly unchanged. Everything we see today is a mere iteration of the past, incremental improvements of the old with added technology.
It explains why online shopping appears both brand new, innovative and slick, but happens to mirror the exact same choice and design architecture from catalogues from a bygone age. We see catalogue shopping of the 1960s but with a website and e-mail functionality. It is so exciting to think of what we can do if we dare to work around what technology can now enable. How can we rethink online shopping? What can car insurance become? How can people pay for things most easily? These are wonderful times to be in business.
It’s in this era that companies hire ‘digital heads’ to champion new thinking and new technology, in order to answer some of these questions. We witness this in the endless articles, the trending topics, the hashtags about disruption, the plethora of conferences.
The post-digital age
The first internet era: digitizing interfaces that already existed (catalogues newspapers). Now: creating the ones that should have existed.
LEVIE, 2014
Apple’s new recently launched Face ID system uses a camera to capture accurate face data by projecting and analysing over 30,000 invisible dots on your face. It automatically adapts to changes in your appearance, like wearing make-up or growing facial hair. It’s pretty advanced stuff.
At the same time, and seemingly unrelated, at this moment the USA is considering building a wall for about $50 billion to keep some people out because it cares that much about security. In order to get back into the USA, or the UK or any other nation, you need to hand over a piece of paper, a passport, which may or may not have a microchip in it. A port-of-entry official will look at you, and establish if you are that person. The entire current global movement of people system, costing hundreds of billions of dollars per year, is rooted in people looking a bit like their picture, carrying around paper booklets, visiting embassies to get other bits of paper put in them, which are then stamped with rubber stamps and ink.
I don’t know if this astounds you, but it seems a bit strange to me. It would be interesting to imagine a system whereby we record people’s faces, have a global database, have visas as digital permissions stored centrally, and never require anyone to carry a passport. It is terrifying to many to imagine this (and the role of privacy in the future is explored later in this book), but it’s hard to see us having more privacy as the world moves forward and it’s interesting to consider what benefits this can bring. It would be fun to consider this: what if we didn’t have boarding passes as digital equivalents of paper boarding passes, but we could board a plane with nothing but our face? Or we never needed to carry a credit card, because our payment was linked to our face or fingerprint? We’ve tended to add digital thinking on top of antiquated devices, paper tickets, passports, boarding passes, rather than rethink systems from new.
We keep making these mistakes. We keep adding technology to broken systems. It’s not hard for a bank to realize cheques are a pain in the neck to deposit and to make a cheque scanning app, but it’s thinking about technology the wrong way. We make robots that can do bricklaying, but shouldn’t we be thinking of entirely new construction methods? This all goes to show that
it’s rethinking the process that’s hard. What needs to change is the underlying system.
In this post-digital age, we will think about people in the age of technology, not the technology itself. We will reinvent physical retail because online behaviours mean we now expect to find things fast, see items that go alongside them and never have to queue to pay.
We will make better products that do more than the sum of its parts, like the Nest thermostat – not just the first thermostat that you can program without a computer science degree, but a thermostat that learns and makes your home more efficient, without you doing anything.
The post-digital age will be amazing. Like pre-digital, nobody will think of ‘digital’ in this age. The concept will move into the background and, much like oxygen or electricity, we’ll understand digital to be transformative yet irrelevant. There will be no more ‘chief digital officers’ in the same way that a ‘chief electricity officer’ doesn’t exist today.
In the post-digital age, digital technology will be a vast, quiet element forming the seamless backbone of life. The internet will be a background utility, noticeable only by its absence. Smart homes will work. Video will follow us around. Content will be paid for … all seamlessly and effortlessly.
We will no longer talk of TV vs online, or mobile vs desktop. Retailers won’t consider online vs physical as a division worthy of note; they will just celebrate sales. Advertising will work around people, seamlessly telling sequential stories to move people to purchase. Content won’t care about national boundaries; even contemporary notions like currency or language will become less central to life.