The Choice Ahead Regarding Digital Technology
by John Hagel

We humans are a paradoxical species. On the one hand, we are uniquely endowed with the power of extraordinary imagination – the ability to see what could be, but has never been. On the other hand, as humans, we are imperfect, we have weaknesses and we make mistakes, lots of them. It is the ability of our imagination to triumph over our imperfections, weaknesses and mistakes that has driven human progress over the millennia.

 

Here’s another paradox: the rise and spread of industrial society was at one level a product of that powerful imagination and yet that very same society has been on a quest to limit and contain that imagination. Our industrial society embraces scalable efficiency. It thrives on predictability and reliability and views imagination with some ambivalence – it drives innovation, but on the other hand undermines predictability and reliability.

 

As if that weren’t enough, there’s a third paradox: digital technology has intensified the quest for scalable efficiency and undermined our humanity while at the same time opening up the possibility of a new renaissance of the imagination that can help us to recapture our humanity.

 

Let me explain.

 

Digital technology indeed has a dark side – a dark side that is intrinsic to the technology. The dark side is mounting performance pressure that comes in three different forms – intensifying competition, accelerating pace of change and the increased likelihood of extreme events that disrupt our best laid plans and predictions. In part, these extreme events surface because we have turned over decision-making to our globally connected machines. For example, at least part of the increasing price volatility in stock markets is driven by automated trading that instantaneously responds to the latest event, without leaving any time for reflection. On the other hand, these extreme events also surface because global connectivity makes it far easier to scale initiatives than ever before, especially through the development of platform businesses that harness network effects.

 

We all are experiencing that mounting performance pressure as individuals and institutions. As examples of this mounting pressure, my analysis in the Shift Index shows that return on assets for all public companies in the United States has declined by 75 percent since 1965 and companies that manage to make it into the top quartile of ROA performance topple out of that position at an accelerating rate.

 

The dark side leads to very understandable human psychological reactions. We magnify perception of risk and discount perception of reward. We shorten our time horizons. We tend to adopt a “zero sum” view of the world – it’s a “you win, I lose” world. We therefore find it increasingly difficult to trust each other and our trust erodes – just look at all the surveys showing deteriorating trust in all of our major institutions.  These natural psychological reactions are in many cases amplified by the isolation that we experience as we begin to interact more with machines than with each other.

 

While understandable, these psychological reactions are highly dysfunctional, creating a vicious cycle of steadily increasing performance pressure and stress. We tend to become even more conscious of our imperfections, weaknesses and mistakes and determined to hide them from others, in the fear that they will create vulnerability that others will exploit. In that kind of world, we tend to suppress our imagination and stay within our comfort zone, looking for narrow ways to squeeze out that next increment of performance improvement, hoping that we can at least make it to the next quarter. In other words, we suppress our humanity and look longingly at the efficiency and reliability of the machines around us. We tighten our focus on the computer generated data and analytics that offer the promise of greater efficiency within the world as we know it.

 

But does it have to be that way? The very same technology that is generating this mounting performance pressure also provides us with the platforms and tools to re-awaken our imagination and overcome the cognitive biases that keep us confined within the practices of the past. We can harness the powerful processing power of computers to help us imagine, visualize and explore worlds that go far beyond anything we have experienced to date. We can use sophisticated analytic tools to test and refine what we have imagined so that these new worlds can become even more fertile seedbeds of possibility and potential.  We can then harness computing power to imagine and design the products and services that will begin to make these imagined worlds a reality.

 

As our imagination revives, we’ll begin to find ways to transcend our imperfections, weaknesses and mistakes.  They are indeed part of being human, and should be acknowledged as challenges that we all face, but they should never be allowed to stand in the way of the imagination that can help us to achieve more and more of our potential.  In fact, digital technology can provide effective tools to help us compensate for our imperfections, weaknesses and mistakes. As one example, we are able to deploy experimentation platforms that simulate environments and allow us to test new approaches before deploying them in the real world.

 

Done right, we can unleash a virtuous cycle. The more we succeed in overcoming our imperfections, weaknesses and mistakes, the more willing we are to imagine more boldly and the more boldly we imagine, the more motivation we have to address and overcome our limitations

 

But the first requirement is to step back and reflect on what makes us uniquely human and what the consequences might be if we surrender our humanity to the mounting performance pressure that we are all experiencing. We need to understand that the choice is ours – that there is nothing inevitable about the trajectory that we are on. If we choose to re-claim our humanity, we can take the very same technology that is squeezing the humanity out of us and re-focus it on ways to reinforce and amplify our humanity. We can create worlds that were previously unimaginable and that will allow our humanity to flourish.

 

If we choose this path, the mounting performance pressure that we experience today can be transformed into excitement as we begin to see the opportunity to create new worlds that open up new potential and possibility.

 

It will be up to us to ultimately determine how we use that digital technology. Will we use it to narrowly squeeze out all inefficiency in the work we do? Or will we use it to catalyze and amplify the imagination that makes us uniquely human and that could identify entirely new avenues to create fundamentally new sources of value?

 

About the author:

John Hagel is Founder and Chairman of the Deloitte Center for the Edge, a research center based in Silicon Valley. A long-time resident of Silicon Valley, he is also a compulsive writer, having written 7 books, including his most recent – The Power of Pull.