First the Internet and then the Cloud have profoundly changed our society. The abundance of data and easy access to enormous computing power have triggered the explosion of Artificial Intelligence
(AI). Algorithms that learn from data and are able to see, hear, understand, predict and decide in an optimal way, very quickly and at low cost. In some narrow fields, even with greater than human precision.
Just as electricity was one of the main innovations that carried humanity from the first to the second industrial revolution
, so the cognitive energy produced by AI is taking us into the fourth
strong> (having been the third one for information technology, communications (ICT) and automation).
In any economic and scientific sector, AI cannot be missing from the recipe for a start-up that aspires to success, but the proposed innovation is often a solution in search of a problem. In an approach that for convenience I will define Top-down, we start from the possibilities opened up by a new technology and look for problems that can be solved, often knowing more about the technology than the economic sector of application.
On the other hand, not even the reverse approach (Bottom-up) which, in our case, consists in asking customers what they would like, is unlikely to produce real innovation. One of Henry Ford’s famous quotes is “if I had asked Americans what they wanted to move around better, they would have answered me: faster horses”. Evolution is a good thing but it tends to wear itself out giving ever less advantages. Sometimes a new and still untested technology is the only way to make a leap forward.
In order to innovate it is necessary to possess some characteristics which I will define later, but the preliminary condition is a good knowledge of both the technology and the practices and mechanisms in place in the industrial sector to be addressed. This allows you to combine the Top-down and Bottom-up approaches in the effective guidance of the technicians in charge of the implementation, in order to arrive at an innovation that is accepted, works, and above all produces a quick return on investment.
The mechanisms of innovation
So many authoritative books have been written on innovation that not even attempt a list, which would inevitably be incomplete and partisan. I provide only a few ideas that have always animated me.
- Curiosity also for different sectors, because a new solution in one field can help open new paths in other sectors.
- Constant analysis of technological innovations, more in search of discontinuities than continuity. While the second approach allows you to stay in your comfort zone, only the exploration of unknown territories sometimes leads to real discoveries.
- Accurate choice of technological innovations to adopt because not all of them will give an economic return and some could even turn out to be a dead end. But once chosen, never waste an innovation with simple adaptations. Only a redesign, at least partial, allows you to take advantage of the new paradigms (the new rules of the game).
- Capacity of abstraction and modeling, in other words the search for the essence in the dynamics involved, whether they are technical or economic.
- Ability to put theory into practice through common sense, tenacity and commitment. The 1% inspiration and 99% perspiration that Thomas A. Edison alluded to.
- Habit of questioning the “status quo”. With the speed of change we are experiencing, an answer like “it’s always been like this” is chilling.
- The search for simplicity, to which I will dedicate some additional reflections.
Ode to simplicity
“Complicating is easy, simplifying is difficult” said the late designer Bruno Munari. And to underline the delicacy of the border, Albert Einstein said: “Everything should be as simple as possible, but not simpler”. The worldwide resonance of the Palladian architecture of the Renaissance and of the Bauhaus of the first half of the twentieth century is also due to the search for the right measure.
From the point of view of the software, the simplicity and coherence of the user interface, in addition to bringing beauty closer, favors ease of use, even more essential in a “Retail as a Service” environment where speed and agility are fundamental values. Furthermore, going into the internal functioning mechanisms, it is known that what is not there cannot be broken, but requires a very aware, mature and far-sighted architectural project, so as not to be forced to simplify as much as possible or to complicate everything again with “patches”.
Innovation has no limits
Speaking of Retail, the fourth industrial revolution will bring us chain stores in which decisions
on prices, assortments and supplies, after a period of support, will be automatically taken by intelligent algorithms
. The role of people at the center can be concentrated on more strategic aspects, such as the positioning of the brand with respect to competitors, the type of experience to be offered to customers, the definition and communication of contents and values to collaborators in points of sale, so that they know how to convey the chain’s identity to customers in the best possible way and make coherent decisions in the face of the inevitable exceptional cases.
But we will also see business model reversals. The current model of eCommerce can be defined as “shop then ship
“. The customer examines the products, decides to buy some and finally these are shipped. There are already today Retailers such as Le Tote, Stitch Fix … who have overturned the model into “ship then shop
“. The customer receives products that he has NOT requested (but which an AI algorithm believes will be the most welcome) and chooses which ones to keep and which to return. It is not yet used by Amazon, although in 2013 it filed a patent on this subject, because now the volumes of shipments and returns would be excessive compared to the margins, but with the improvement of the algorithms of recommendation and the automation of logistics, this model could spread quickly. On the other hand, the Cambridge Analytica scandal a few years ago made us discover that Facebook and Google know our orientations and desires better than the people closest to us.