The word exponential is one of the most used and least understood words in the lexicon of political and managerial speak, and yet it is fundamental to the way our world is being driven by technology in an unprecedented way. It also heralds a move away from our slow, stable and predictable industrial past, to a new era of speed, non-linearity, and greater uncertainty. It is not by accident that our working and leisure activities seem to be accelerating – everything is now mobile, intelligent, connected and communicating whilst changing at an accelerating rate. If we are to cope, if we are to win in this new environment, we have to think and act differently. The old tools and methods will not only fail, they will pose a significant and growing threat. Here we identify and consider the big game changers, look at failure mechanisms, and identify changes to come including some aspects of growing complexity. We also point out some of the basic management errors and the need to innovate in new ways that allow organisations to quickly learn and adapt on the hoof. This includes business modelling, war gaming, and celebrating failure!

1. Winning in a
F a s t
Changing World
Peter Cochrane
cochrane.org.uk
ca-global.org
COCHRANE
a s s o c i a t e s
Tuesday, 7 August 12

2. du strial past
pac ed in
om a slow
com e fr nd,
We nde rsta
asy to u
ed ,e nage!
l be hav ma
r, we l easy to
as l i nea t, very
thatw rospec
d in ret
an
Tuesday, 7 August 12

3. ything is so fast
ever
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4. Seemingly out of control,
unpredictable, with non of the
old rules working anymore !
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5. What happened ?
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6. Four BIG game changers !
• Microelectronics revolution
• Computing and software
• Internet, mobility and networking
• Globalisation and distribution
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7. Our world went digital,
non-linear & exponential !
• Huge manufacturing capabilities
• Massive computing engines
100,000 • Instant connectivity
10,000
• Everyone & everything networking
1000
100
10 • Non-obvious cause and effect
1
• Unintended consequences
1 23
4 5
6 7 8
9 • A growing lack of understanding
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8. Digital Failures
• Always abrupt
• Mostly avoidable
• Often caused by people
• By unanticipated mechanisms
• From a direction we are not looking
• Can be very expensive & threatening
• Almost always reputationally damaging/fatal
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9. How come, and
what caused all
this?
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10. We went from a single transistor in 1947 to
10Bn/chip in 2012 and by 2020 10Tn/chip at a
much reduced cost and improved performance at
every stage...
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11. Production transistors
are now smaller than
the flu virus
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12. > 10Bn Networked
and active devices on
the planet and growing
exponentially...
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13. BUT WE are such dimensionally challenged thinkers
that even the simplest of exponential
problems have unlikely outcomes
to our way of thinking
One grain of rice on square 1, 2
on square 2, 4 0n 3, 8 on 4, 16
on 5 ....and on the last square
more rice than we can grow on
the planet in a year!
1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1024.....264
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14. Networking
social & business
now vital tools
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15. Big cultural shifts resulted in society and
business that see: •Insourcing
•Less loyalty •Outsourcing
•Multi - careers •Crowd sourcing
•Shorter tenure
•Self funded training •Soda straw expertise
•Continual education
•Self funded IT & Support
•The rise of the insider threat
Transient relationships
Broader innovation
Faster innovation
More start ups
Higher risks
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16. Complexity and non-linearity are here to stay...
...with emergent behaviours...that are in
general impossible to predict
We have to
be thinking
and acting
differently!
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17. The ratche
t o f c h a n ge
just went‘c
is no going lunk’ ...ther
back ! e
This is the
new norm
- the new
stability!
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18. Some things are inherently complex...
...and some things are made complex by us!
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19. Networks of all kinds naturally exhibit complexity
...of interaction, behaviours and outcomes!
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20. Networks of all kinds naturally exhibit complexity
...of interaction, behaviours and outcomes!
Interconnection
of yeast proteins
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21. The internet wakes up
in the early morning
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22. Although it is fully understood that layered complexity
does not solve the problem, people mostly continue to
build more layers in the hope that it might...but it never will!
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23. So what do
we have to
do as leaders
& managers ?
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24. Our systems and networks will
Accept that
increasingly surprise us if we
the business
continue world current
on the is now
trajectory !
a bit of a blur
& somewhat
out of control...
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25. Understand that business and commerce has now
entered an evolutionary phase...
it is no longer about
the biggest and the
strongest...it is about
the most adaptable !
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26. Vital is is
at th re
pt th futu
cce y to
A
ke ess
the ucc
s
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27. In Short: Get innovating or get dying !
Vital
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28. Incrementalism is reasonably safe but just only
staves off death a little longer !
The card companies
need to do far more Vital
than move from ‘slide
to swipe’ !
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29. Whilst giant
leaps can be
risky!
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30. A few really
do get it
right and
change the
world!
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31. The consultants standard formula
Vital
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32. In the past all of this was static
and reasonably certain !
The consultants standard formula
Vital
∂
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33. Today it is all dynamically
uncertain !
The consultants standard formula
Vital
∂
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34. Today it is all dynamically
uncertain !
The consultants standard formula
Vital
∂
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35. Today it is all dynamically
uncertain !
The consultants standard formula
Increasing Uncertainty
Vital
∂
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36. Business Plan
No longer a static
document handed
down by managers
to be implemented
and blindly followed
by those below
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37. Business PLan
But a dynamic
document engaging
managers & people
with continual feedback
at all levels capable of
adapting to a rapidly
changing environment
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38. Success demands talented, multi-disciplinary, and very
capable, teams...
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39. Never recruit in talented & capable multi-
Success demands your own image
disciplinary teams..
Mono-
cultures are
lethal - literally !
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40. Keep a close eye on the: Competition
Technology
Innovation
Markets
And don’t forget:
Politics
Fashion
Taxation
Economics
Global trade
Investments
...it is no longer all disconnected and independent - it it all linked
- and as a result causality is increasingly complex !
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41. Garner, value, protect and exploit expertise
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42. No matter what age or sector...
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43. Invest in data mining, business modelling, and decision
support - gut reaction and knee jerk management is now
very dangerous !
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44. Here is why: complexity compounded by greed,
ignorance and old management thinking was the
cause of all this.......
Tuesday, 7 August 12

45. lem
ob n
pr io
ny rat
a
ch side
oa on
p pr c mov es
t a due d
n’ ut
- do ho ns an
g wit
in n ti o
am sio
rg ci op
a e
w d ll t he
in ss
t ne fa
es si
Inv bu tin go
or and t es
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46. You wouldn’t expect a pilot to fly a plane without
due training and experience
And running a company is far more complex a task
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47. Make a virtue of failure
In fact - make it a qualification
If people are not failing from time
to time - they are not trying !
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48. Fail fast but avoid any critical
damage...
...and recover
even
faster !
If people are not failing from time
to time - they are not trying !
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49. Be prepared to be very different - to challenge
convention - to try the new
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50. ple
am
ex
ne
to
Jus
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51. - No proven market
- No demand
- No project
- No funding
- No design
- No team
- Design & build 18 months
- First flight 1964
- Over Mach 3.5 Lockheed SR71 Blackbird
- Over 80kft
- In service 25 years
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52. We
can
only
. ..
...w
hat
the
futu
re h
olds
. ..
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53. For sure fortune favours
those prepared to take risks!
IP over WDM...Ethernet...
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54. But they should be
calculated and not foolish or
unqualified risks!
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55. All of this needs leadership and constant attention
to detail...but not micro-management, just decide on
the direction, point the way, and apply the light hand
of management!
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56. And in this context the next wave of change is going to
be a challenge
for a lot of
people
& managers !
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57. Tuesday, 7 August 12