Saturday, June 13, 2020

Less Change Than You Think, Early On; More than You Expect Later

It is not hard to find projections that the Covid-19 pandemic will create a new normal that radically reshapes key elements of life and work. One might note similar projections about 5G, artificial intelligence, virtual reality, edge computing, unmanned vehicles or internet of things. 

History and science suggest we ought to be cautious about early levels of change, but also remain open to greater than expected long term changes. 

There is a bit of business wisdom that argues we overestimate what can be done near term, but underestimate the long term impact of important technologies or trends. The reason is that so many trends are an S curve or Sigmoid function

Complex system learning curves are especially likely to be characterized by the sigmoid function, since complex systems require that many different processes, actions, habits,  infrastructure and incentives be aligned before an innovation can provide clear benefit. 

source: Rocrastination 

One practical implication of the S curve or Sigmoid function is that the search for the next wave of products must begin before the current wave is exhausted. John Chambers of Cisco was fond of noting the importance of catching such transitions.

source: John Lusink

Another practical implication is that we generally cannot reap the benefits of new technology immediately. A learning curve happens as firms and industries gradually learn how to use new technology to transform their core business processes. 

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