Businesses weren't ready for electricity or digitalization. Here's how they can get AI right

While everyone is talking about AI, I've a feeling pretty much everyone is getting it wrong. Historically we make the same mistakes, we swap out an old technology with a new one, rather than building around what's newly possible.

In our need to be seen to be quick, to get the headlines for innovation, to excitedly embrace the new we ruin everything that is new and transformative, and instead limit the benefits with mere augmentation.

This is a peek into the thinking within my book, published next year.

We've made the exact same mistakes before... TWICE#

The Electrical Non Revolution.

Electricity didn't change the world overnight, it took more than 30 years for industry and society to unleash its transformative power. Business made the mistake of adding electricity to existing processes, sprinkling change around the edge and incrementally. For 30 years everyone was happy with the linear tweaking, it was only in retrospect we realized how we'd got it all wrong.

Prior to the development of electrical motors, factories employed a single method a power, a large line shaft driven by a huge steam engine on site, powered by heavy fuel, which would then drive near endless belts and pulleys that would in turn drive each piece of equipment. The entire design of the factory, it's inefficient workflow, it's huge heavy walls, it's lack of light, it's location, were all dictated by this "millwork". The factories were horrifically noisey, 40% of the space was wasted by the power drive system, accidents frequent and fire risk made insurance incredibly expensive. And of course about 50% of all the energy made was wasted by frictions and vibrations to create heat.

When electrical motors appeared, oblivious to the real potential and daunted by the costs of new investment, factories gradually replaced steam engines with electrically driven systems. Literally nothing else changed. A steam engine swapped for a huge motor. It was obvious, after all electrical energy was merely another form of energy. Why should people rethink something that was ostensibly just a replacement form of power.

Decent gains were found, factories could run more quietly, electrical motors reduced jobs in the steam plant, maintenance was easier, fire insurance far cheaper. Factory owners were happy, so for 40 years little changed in production lines. Over the years the new systems were tweaked and gains each and every year were made.

It was only when a new generation of factories were constructed from scratch and when smaller motors were made was it suddenly clear what electricity was all about.

When factories built themselves for the electrical age, and around what electricity made possible, radical new changes were made.

First each and every machine could be powered locally by far smaller, far more efficient motors. Each machine was controlled individually , meaning staff needed to be more empowered, but could make far better decisions. The quality of products and the ability to charge a premium took off.

It was also clear that machines could now be located in far better arrangements, based around what worked best in the production line and suited staff movement better.

Millwork, the huge network of pulleys, belts and shafts once took unto 40% of factory space, which now made factories more spacious, safer, and reduced heavy overhead structure, allowing windows and far better working environments.

Yet above all else, what electricity really allowed was for the plants to move away from the sources of wood, coal and water, and be instead located near ports and center of population.

To add electricity as a lubricant changed little, to electrify businesses was an incremental change,what was needed was electrical transformation. To work around the possibilities that a new technology made possible, rather that to add it to existing flows.

Digital Transformation.

Businesses have responded similarly to digitalization. We still talk about the paperless office yet consume more paper than ever. We’ve taken pre digital metaphors and digitized them, from skeuomorphic design of interfaces with a “desktop” and “electronic mail” to the “inbox” and “outbox” . From Powerpoint slides that replicate overhead projectors, to forms you fill in that are now in "Word", to folders and filing, we find our whole way of working surprisingly similar, meetings, notes, mail, conferences, all the same as before both the "computerization" of the 1980's and the "digitization" of the 2010's.

I’m not saying this is all wrong or we are all mindlessly dumb, I’m just pointing out that we’ve added digital stuff to what we do, not work around it. We are complicit in not challenging the "command and control" structure of ancient armies, or quick to embrace in any shape or form, what would happen if we had the audacity to consider digital technology, so profound that we let it shape us.

Today it’s a rare office that is constructed around the power of Slack, or that uses IM software for more than casual chat. We tolerate lousy expenses software to awful time keeping systems, to crappy folders that happen to live in the cloud, to incredibly painful payment systems, it’s all a total mess. Most professionals use about 10 different awful systems and processes, from SAP and Oracle that were based around what companies could package and sell most easily, that don't in any way work or talk to each other.

It's a mess that senior management who have the power to make changes, with PA’s and executives never come close to witnessing.

So what happened if we rethought businesses AROUND computers and new digital processes, how would that look?

Well, both as a metaphor and as a literal example let’s take two cases.

Hotel Check in.

Hotel reception desks 100 years ago were once large sturdy desks to keep all hotel keys safe, to store huge quantities of filing, to keep cash in a safe, to probably host some sort of till mechanism. By 1990 they could be smaller, they merely needed to hold keys and a large PC, by 2005 they could be smaller still and merely have a laptop and credit card scanner and a key programmer, so hotel check-in desks got a little smaller, funkier and often trendy ones had macs.

By 2017 we see the funkier hotels have iPads, but the desk remains big and bulky because we know that's the visual sign we are checking in.

The “body language” of the hotel lobby and muscle memory and assumptions of the past are clear. As a guest we need to head to it. It conveys the meaning of the start of the stay, and it allows the hotel staff to welcome the guest.

We assume we need a desk, we assume someone needs to be fixed to it, and that this is what arrival looks like. A larger desk, a more powerful symbol of checking in, is what the most expensive hotels seek to establish.

Yet what if we rethought the experience around customers and new possibilities.

What if we worked around a tablet? What if we walked into a stunning lobby, and rather than dragging our bags to a desk, we sat down and someone came to us with an iPad that we signed. What if they kept our credit card details from the booking we’ve made online before, rather than asking for them 3 times each visit? It’s both a tiny and specific example

Silly Office Software

We've endless discussions on boring online forums about whether the iPad or Surface is ready to "replace the laptop". The simple answer is totally yes and totally no. It's impossible currently for most people with normal jobs to replace it, but it would be incredibly easy to if we made simple changes.

In many sales or management roles we make powerpoint decks from charts we export from excel,with data we get and copy and paste from email. From marketing updates to sales reviews, to monthly performance trackers, the regular cadence of decks is clear and to do this any other way would be very difficult.

We create forms in word, that we print out, sign by hand and scan in to be printed somewhere else or saved on a server. From status documents in excel, to emails to 12 people we collect and aggregate by hand, we live in an era where tablets could never do what we do.

Yet if we’d only ever known a tablet and worked around it, we’d not be gathering word documents or stuff from email and copy and pasting, we’d use google docs and get each to access and enter data individually. The excel charts would be the same, the sales monthly powerpoint would be a real time dashboard, with graphs auto generated, the presentation wouldn't be Powerpoint, but a few clicks in real time on a cloud hosted "dashboard"

By now, in theory all software should be collaborative, all documents held in the cloud, all presentations hosted online and from data gathered automatically from various sources updated automatically and by hand. But we don't do it because people don't like change and our muscle memory is impossible to change and our imagination pathetic.

Rebuilding with AI.

I'm terrified that most companies who embrace AI now will be so eager to tell the world that they are doing it and to make it happen, they won't come close to the reimagination that's required and will instead bolt it on as a shiny facade. It's will be like putting the body shell of a Formula 1 on a Ford Fiesta, expecting it to reach 200MPH, when instead the car is more about the boring stuff under the hood.

If we use AI as a smarter way to find phone numbers, then we miss the chance to change the way people use phone numbers and dreadful office phones.

If we use it as a better way to find calendar space, and yet most people don't use their digital calendars properly, or turn up for meetings on time, or set a proper agenda or consider if a meeting is really required or who should actually attend, it won't make a difference.

Adding AI to what is essentially a intranet as a nicer way to access data with voice, when most intranets are woefully outdated and unloved.

Using AI to better access old vendors management software, or timesheet systems won’t work unless the systems all work together.

What AI really needs to do is recreate the entire canvas of opportunity. Companies using AI first need to consider what the role of that company will be in an AI driven world. What value do they need to be adding. What decisions, stuff and ideas do they need to make in that world, and then consider both the rule of humanity and machines in that.

If AI doesn't lead to changes in company structure, if it doesn't elevate the role of automation in a big way, if it doesn't lead to significant job changes then it's been done wrong. AI is more like root canal than a polish. It will be painful but what is needed.

It’s only a company rebuilt from scratch, with a culture, process, organizational structure with AI at the core that will unleash the full power, just be mindful that the process is deep, hard, painful and will unleash the realization that many jobs can be replaced.