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“Driven by Global Challenges”

Remarks by
Shirley Ann Jackson, Ph.D.
President, Rensselaer Polytechnic Institute

Women Corporate Directors Fall Institute
Union Club Ballroom
New York, NY

Thursday, November 8, 2012

Thank you. It is a great honor for me to speak before such a distinguished group and to be on the program with such accomplished business leaders.

You have asked for a look into the future, in particular for some guidance on how trends and technology will have an impact on business… perhaps, to make a few predictions.

One must approach such an objective with humility. The future always has the ability to surprise us. We have an amazing ability to see what we want to see. This especially is true when we are looking directly at things that are of the most concern to us. Sometimes we can see more with our peripheral vision.

While I do not advocate ignoring the trends and emerging technologies that impact those businesses you lead or oversee, I do suggest that you find a way to glimpse the future through a less direct means. By coming to a good understanding of some of the global challenges we face, and by monitoring how these challenges are met, you may obtain a new perspective on your own futures.

Many important technological advances will take unexpected turns and develop more slowly or more quickly than we imagine–and, perhaps, will find their most profitable uses in surprising arenas. Our global need to expand the food supply, make more clean water available, deal with the health care requirements of a growing and aging population in many countries — including our own, along with other concerns tied to energy security and our environment–are sure bets. For some of you, these already are areas of intense strategic focus. You may be impacted directly if, for instance, you are involved in planning or oversight for an oil company or a pharmaceutical firm. But, this whole array of challenges, which are virtually certain to be part of our collective future, will impact the businesses you care for. It just may not be obvious how. So let us look at six ways that these challenges may make a difference to your strategies.

First, all of the global challenges will draw attention and investment. This is what happened with the U.S. Space Program. Talented people got involved; investments were made in materials sciences, information technology, and education. This put humans on the Moon, but it also transformed our economy and our culture.

Many of the people who are essential to the companies you direct (and perhaps you yourselves) formed their life goals and received their education because of the Space Race. The computing and communication systems that are essential to how business operates today, indeed to our daily lives, emerged, in part, because of the research that was funded to enable space travel.

We should expect that, as global challenges become more acute, we will see similar investments that will have sweeping impact. Clearly, it will lead to the preparation of a new generation of scientists and engineers. One hopes that the new generation will include American students, but we will find and educate the people who are needed from wherever people are wise enough to invest in education.

We also will see new technologies emerge. For instance, our energy concerns will create new materials aimed at energy storage and distribution. Smaller, lightweight, and rapidly charging batteries will power many of our mobile devices and enable new devices that may be difficult to imagine today. Healthcare concerns are likely to lead to sensors that will monitor our health–through the touch of a light switch or modified clothing, or even through embedded devices. Our great needs for rebuilding and improving the resiliency of our physical and transportation infrastructure will drive new manufacturing and construction technologies, new materials, new transportation management technologies. They may include embedded control systems, sensors and more. Such technologies may find application in agriculture, and may even form networks that help us to better monitor our environment.

Again, think about what small portable sensors that operate continuously will do to planning in your businesses. We already have seen how RFID tags have revolutionized logistics, going far beyond the initial planned uses. In fact, pets, and even some of our elderly with dementia, now have embedded RFID tags so that they can be identified quickly if they go missing.

The surge of information from multiple sources points to the second thing to watch—organization and systems models. With the rise of new data sources, we will struggle to manage and make sense of the information. Some of this will be handled through algorithms and computational models. But it also may impact hierarchies and processes.

You just heard Jeanne[ Johnson]'s wonderful presentation on Big Data. I have a concept that is closely aligned to that area–what I call “Clouds, Crowds, Jams, and Data”. This neatly blends the new information and communications technologies with human participation. It also references both technology and leadership.

Scarcities, in particular, lead to new organizational models, so I would watch to see what happens as new resources are needed. As we seek substitutes or sources in different geographies, this will shift power, force new alignments, impact allocation mechanisms, and change efficiency models. For instance, you may find that some of the models created in response to the global challenges can be adapted to your supply chains.

The third thing that will have an impact will be even greater complexity than we face today. Whatever is being done will have more moving parts; it will involve more people from different cultures; it will embed unexpected elements; it will include more visibility and create more vulnerabilities.

Think, for instance, of emerging security needs, both physical and cyber. These will be woven more tightly into whatever you are involved in–from personnel assignments to strategic planning, from employee benefits to research, from engaging with collaborators to countering competitors. And the collaborators and competitors may be the same people. Factor in constant change. These ever more complex systems also will need to be upgraded continually without creating openings for disruptions,  attack, or disadvantage.

My fourth point may seem obvious now. No matter what business you are in, you will not be able to sit on the side. These changes will sweep over you, link you to people who are not on your radar screen now, force you react to their reactions to changes, and reshape your businesses. No matter how isolated you may be now, it will not last. You will have more connections, and they will be more vital to the success of your enterprises.

Moreover, they may impact you personally because of how they will require leadership capabilities to change and adapt. This requires new thought about your roles as directors, and especially your expectations about the executive leadership of your companies. The essentials of leadership — things like strategic thinking and planning, organization, managing talent and developing human capital, and, of course, ensuring execution—do not change over time. However, technology can have both positive and negative impacts on traditional approaches to leadership.

A hundred years ago, many enterprises were small enough so everyone knew the boss, and the boss knew all the employees. As inventions such as the telephone and the automobile worked their way into how business was done, leadership approaches needed to be reevaluated. Perhaps, most famously, Alfred Sloan of General Motors did much to develop the concept of the corporation, and how it might be reorganized to take advantage of new technologies.

Now, we hear about new technologies everyday, and many of them force leaders to rethink and refresh their approaches. Cloud computing makes complex applications and massive amounts of data and information available for a wide array of people across an organization — and, sometimes, those in the general public who may have an interest in an endeavor.

Significantly, the cloud brings this information and processing power to the mobile world, making it practical for individuals in the field, or executives on the move, to access and share this information, even when the file sizes are enormous. This is something that was unheard of, at least at this scale, even ten years ago.

As you have heard, we live in a world where “big data” is coming to the fore. Social networking leaves behind “digital crumbs” for us to follow and study. The Internet is the new library – with more information than anyone can think of really ingesting. GPS signals from mobile devices and other electronic communications — and even on-line shipping — all leave trails of data. Sensors and networks are embedded in everything from buildings to automobiles to cameras to satellites, to digital processing and control systems, and are creating what often is referred to as “the Internet of Things.”  All of this leads to trillions of bits of unstructured data in different formats. The ability to process that data in an efficient and relatively inexpensive way provides us with new bases for decision-making. It also brings data to more participants, and allows them to manipulate this data to discover patterns that heretofore were invisible.

Advanced visualization systems can take matrices of data from a variety of sources and put them together in ways that allow them, despite their complexity, to be understood — with new insights coming from seeing changes over time, and by more easily recognizing anomalies.

One of the more intriguing possibilities for the emerging role of big data is illustrated by the ability to “mash up” data from different sources in ways that create compelling new insights. A simple example of this is the pairing of real estate data with crime data to create maps that can be used to reveal problems and suggest possible solutions.

At Rensselaer, one of our professors, Jim Hendler, through data.gov, has been developing interfaces that allow government data from a huge variety of sources to be combined in unexpected, but useful ways.

However, Nate Silver, author of “The Signal and the Noise,” reminds us that, even as we seek to harness vast amounts of data to make our predictions, we can sabotage our efforts by introducing bias, building faulty models, and seizing on random patterns to prove our points.

We also have seen the phenomenon of crowdsourcing (and a related phenomenon of crowdfunding). The applications that make this possible allow us to engage the expertise, perspectives, and enthusiasm of many people, including those who previously have not had a voice in enterprises that concern them.

Crowds can help to identify problems, suggest ideas, and assist in the execution of solutions. They also make available a precious resource, voluntary activity, in a new way.

Of course, you all are familiar with Wikipedia. This online encyclopedia provides a good illustration of the pluses and minuses of crowdsourcing. On the one hand, Wikipedia is a rich resource, providing a powerful starting point for research. On the other hand, this online encyclopedia, despite the efforts of many people who take it upon themselves to make corrections, is riddled with errors—such as false reports of the deaths of celebrities. Some of these may be ephemeral, and some may be persistent. Some may be added in good faith, while others are added maliciously. However, no matter how they got there and how long they persist, they can mislead and misinform. This brings up concerns around trust in an online world, a theme to which I will return.

The new technologies also promise to benefit leaders by giving them more finely-tuned and complete pictures of questions, challenges, and opportunities. In addition to gathering new perspectives, the simulation and visualization capabilities that come with big data already are helping leaders to be better informed, before they build their plans and make their decisions.

Now, I suspect that many of you already have jumped in with both feet on making clouds and data part of your strategic planning, and, indeed, investment planning. You also may have interest in crowdsourcing.

Perhaps less familiar to many of you is the idea of the jam which brings together interested participants to concentrate their attention on a selected challenge over a short period of time. Participants work from shared data sets, propositions, and questions — within a carefully designed controlling framework – that includes stakeholder specifications and many of the essentials of the designs from day one. Experts and interested parties come together to share knowledge, express concerns, and brainstorm projects and solutions that can have high impacts. The distilled results of these jams can lead directly to new endeavors. And because of the broad participation, the work begins with a level of buy-in from the impacted community, which facilitates acceptance of the changes the innovations bring. All of this is accomplished quickly, over the course of just a few days.

So the use of all of these technologies can be quite enabling, but the mixture of humans and technology can be unpredictable, even volatile.

For instance, in many cases, thanks to online technologies, you have participants who, in previous times, would not have had a voice. In addition, many people who are essential to achieving goals, which may be strategic, are participating on a volunteer basis, even as employees of an enterprise. Anyone can tell you that managing an organization of direct reports and volunteers, together, differs in a substantial way from managing only people who are required to accept direction.

Do leaders’ finely honed skills of persuasion translate into online communications? Leaders will need to build arguments and to find approaches to persuasion that work in this new context. How do they build trust — especially for endeavors that include risk or important consequences — when they may never get to look people in the eye or shake their hands?

Clearly, as the world of such virtual leadership evolves, indeed, even when there is a blended approach that includes both face-to-face and electronic interactions, the challenge of trust is large. Knowledge management guru Larry Prusak did a study for the U.S. military, and found that face-to-face contact, every 90 days, is a requirement for unit cohesion. But, more and more, we live in a world where people are responsible for working together on important tasks, when they never have had the chance to meet in the same room. As an added challenge to trust, many may come from different cultures, and may have different first languages.

On the plus side, if leaders can solve the trust problem, they will have access to a wider variety of perspectives, and more talent than ever before.

The new technologies create a number of immediate and important challenges for those who seek to lead. However, in what would seem to be a contradiction, they also create opportunities.

This may be seen from an online experiment: in a study done by IBM a few years ago. It was found that, for some of their managers, leadership capabilities were being reshaped for an online world through participation in games, such as World of Warcraft. These people had led volunteers on a variety of successful quests, effectively simulating the dynamic of working with volunteers in an online environment. The skills and capabilities they nurtured, by the reckoning of those managers who were surveyed, were transferable to their work with virtual teams.

I mentioned earlier that the Space Program ultimately contributed to our having communications and information technology that transformed the business world. It provides the setting for my fifth point – pay attention to what people can contribute.

Talent recruitment and management become more critical. New skills will be required to be brought into the workplace. Blending new kinds of talent with a pre-existing workforce can be challenging. Leadership must set clear goals, define success, set the right expectations, as the right questions, and continue to demand accountability.

But remember, once more people get involved, of course, they are likely to be involved fully. They will have expectations with regard to their influence, which will make them more activist.

When people get concerned and have a greater voice through multiple channels, it naturally leads to regulatory changes and challenges – the sixth thing to watch.  As we move to meet the challenges that have life or death consequences, people with a variety of perspectives will emerge with their concerns. As an example, look at the stir genetically modified organisms (GMOs) have ignited in Europe. What was intended as a powerful means to increase our food supply has been relabeled Frankenfood. Closer to home, intelligent agents have become part of the way that financial instruments are traded. This has an impact on everyone since it can build or destroy both short-term and long-term investments.

Regulation is inevitable and often appropriate, however, we need to ensure that we have smart regulation, based on knowledge and evidence.

Overall, we need to watch what happens beyond our own industries, because the approaches to regulation and to engagement of the public often do not stay in fenced off areas. A response to concerns about safe use of nuclear energy spills over into the way that regulation for GMOs is developed and into, perhaps, an approach to ensuring that we have “safe and effective” investment instruments.

Engagement, thought, knowledge, communication, and judgment need to be part of the public discourse on regulation across our concerns as a society, and I believe that these concerns will become more visible and socially relevant as we move to solve our global challenges.

Now, global challenges do not provide the only way to get a peripheral perspective on your future. I am sure that you are considering other means to detect weak signals that matter and to understand and analyze endeavors and trends that surround us. Each of us need to detect the winds of change. But, looking out more broadly and paying attention to what is happening across different fields as we wrestle with the global challenges is likely to give you an early view into new opportunities and, perhaps, dangers.

So watch to see where investments are being made, what new understandings we have, and how we respond with new organizational and systems models. Pay attention to new players and new connections that increase complexity. Look for changes in your participation, collaboration, and competition as integration increases. As clouds, crowds, jams, and data work their way into how we do business — and as they are used to solve global challenges — think about how they might be used for your own businesses. And, as concerns emerge and conflicts erupt, watch what happens with regulation, even if it seems to be far away from your own areas.

Source citations are available from the division of Strategic Communications and External Relations, Rensselaer Polytechnic Institute. Statistical data contained herein were factually accurate at the time it was delivered. Rensselaer Polytechnic Institute assumes no duty to change it to reflect new developments.

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