The nonlinear gun: who needs connected appliances?
Posted on: Mar 14, 2018 by Thomas Höllweger
I have been fascinated by innovation my whole life. First during my engineering education it was about the technical genius of famous inventors. Later, when I studied management of innovation in Graz and taught at the chair for Innovation and Entrepreneurship in Klagenfurt, I was even more captivated by the driving forces behind innovation and entrepreneurial decision taking.You might understand, that I was totally excited to witness firsthand what, in 2016, Atos called the 3rd digital revolution. We saw growing network infrastructure as an enabler. Cloud, mobile, social media and big data suddenly offering more solutions than businesses could define problems for. The rise of IoT took us IT service providers from optimizing business processes to the center of our customer’s manufacturing value chain.
In my case, I found myself in the heart of the connected home appliance arena, sprinting together with our customers from product launch to product launch, playing catch up with their competitors and sometimes even being a little ahead.
The recent whitepaper The Digital Business Continuum published by the Atos Scientific Community got me thinking about the forces that drive new products and services in the connected home appliance market, when it discusses the approach to adapt in highly uncertain and disrupted environments. Although I understand the vision behind new products in the home appliance business, I´m not convinced consumers will honor all the cool stuff we´re inventing. It´s even common, if I showcase what´s going on in connected home appliance business, with smart apps controlling the washing machine, Alexa turning on my oven or cooking bots guiding through the process of preparing a meal, that I get the question “and who needs this?”.
So, what drives manufacturers to invest in all these innovations?
- First and foremost, there are substantial benefits for the customer in the prospect of direct interaction with their formerly anonymous consumers, getting to know them better by gathering usage data, continuous business and cost reduction through predictive maintenance.
- The second driver is uncertainty derived from nonlinear growth of context. As humans, we originate from a linear context – the natural world – and our cognition routines and planning approaches derive from that context.
The exponential development of technologies, their permutation into a plethora of different solutions and their application to more and more elements of a company's value chain makes it unfeasible – even for industry leaders - to keep track of what´s going on in the market, let alone plan for the future.
According to the Cynefin framework, which is discussed in the whitepaper, we have clearly left the simple (and even the complicated) domain. Categorizing or analyzing the situation does not result in appropriate response guidelines for action. We find ourselves in a complex context where we need to expose entirely new products and services to the market, assess whether they are desirable or not and quickly adapt for the next product cycle.
In some cases, it is even chaotic. The nonlinear, unpredictable environment has no shortage of unpleasant surprises. In the connected home appliance market, we observe behavior more in line with game-theory than traditional customer demand. A poker game where everybody is after something from a pair to a royal flush and suddenly a player puts “nonlinear” a gun on the table.
Even if the killer use case has yet to be found, the moment an innovator presented his first crude connected appliance, the gun was on the table. The rules of the game have changed completely – it is “disrupted”. Product innovations no longer focus on customer demand or desire. In the sense of ACT, other players have also to put a gun on the table and invest in digital transformation programs and IoT platforms. With this heavy commitment, they reserve the right to stay in the game and can return to their principles (SENSE, RESPOND) of customer value orientated innovations and digital services (e.g. like recipe management).
- And third, staying in the game is highly attractive considering the overall value of the ecosystems emerging. Individualized health monitoring services optimize the nutritional value of your meals. Smart kitchen appliances order your personalized bag of groceries – thoughtful of any allergies or preferences - and guide you through the cooking process. Your feedback fine-tunes the next recommendations.
The prospects are exciting and the future moves fast. But how we will handle it? Active or reactive? Complex or chaotic? Do we have an ace up our sleeve or even a gun in our pocket?
So, ladies and gentlemen, the game had just begun - your bets please!