When a butterfly flaps its wings: the unintended consequences of digital disruption

At EY’s recent Innovation Realized event, Professor Yuval Noah Harari, author of international bestsellers Sapiens: A Brief History of Humankind and Homo Deus: A Brief History of Tomorrow, delivered a keynote address on some of the unintended negative consequences of disruptive technology advances. He described how the increase in autonomous driving vehicles, for example, could have a ripple effect on patients awaiting organ donations. Like a butterfly flapping its wings, a seemingly small action can have significant consequences at a much larger scale.

Automation, the professor reasoned, would lead to fewer road accidents, fewer casualties among young drivers and therefore fewer organ donations. Of course, you could argue that by the time autonomous driving vehicles become the norm, we will have made significant strides in precision medicine and the 3D printing of organs. Nevertheless, I was struck by the idea of the unintended ripple effects of digital disruption.

Far-reaching impact across boundaries

Let’s stick with the autonomous driving example to dig deeper into some other obvious and not-so-obvious ripple effects.

Automotive OEMs will change/evolve their business models, moving from selling cars through dealerships to consumers to providing “mobility solutions.” However, the impact of autonomous driving vehicles will stretch way outside automotive. Cities and transport authorities will need to upgrade, connect, or maybe remove critical infrastructure like roads, traffic lights, and signage. They will need to invest in state-of-the-art analytics and cyber command centres, constantly monitoring for security threats and optimizing traffic on multi-modal networks.

Telcos will need to provide the 5G networks infrastructure required for autonomous driving vehicles to communicate. Insurance companies will need to reconsider their proposition and who their customer is: the driver? The manufacturer? The mobile network provider?

New supply chain and logistics models will emerge, both for the manufacturer’s suppliers and any business wanting to solve the final mile dilemma. Consider, for example, how Zipline is delivering emergency blood supplies to rural hospitals in Rwanda through the use of artificial intelligence, robotics, and drones, or how the Port of Rotterdam is leveraging driverless trucks and cranes to push through a high-degree of automation in their operations. Autonomous vehicles will enable many new opportunities for local businesses to reach their customers faster, more reliably and at a lower price point. They may also create new opportunities in many other industries from real estate developers (opening up previously “non-commutable” areas), healthcare providers or media companies as the way we live, work and commute changes.

Fail fast or scale fast?

Of course, predicting the future is fraught with difficulty. New technologies are being unveiled at an unrelenting pace. Some hit global adoption in days, others fizzle out and are superseded just as quickly. Most businesses were never designed to cope with the pace at which the world is moving.

In an environment of constant change, it’s tempting to jump from one tech pilot to the next, hire a team of developers, fail fast, learn and repeat. Nevertheless, I think we can challenge this approach. Who would have thought that a pay-as-you-drive mobile app created by an insurance company could allow hackers to apply the brakes of a car? Prior to GDPR, who would have thought that harvesting personal data without the right permissions could result in a fine of 4% of global group turnover? Should companies consider the potential to offset the cost of digital innovation with grants and tax credits? Should we continue to assume that if we build technology, users will adopt and embrace it, regardless of their ingrained cultural beliefs and behaviours?

Every new disruptive technology and every digital decision we make has ripple effects. I’m all for “fail fast,” but the real aim is to “scale fast” and manage risk appropriately. To get this right, I think companies need to challenge the diversity of their digital transformation “squads and tribes.”

It’s much better to have lawyers, cyber professionals, regulatory and tax expertise at the design table (alongside creatives, technologists and innovators), thinking through potential grey areas where legal tax and regulatory frameworks haven’t yet caught up with technology. This is what EY refers to as looking at digital from every angle. All parts of a business need to be involved in the transformation process.

My advice is to actively seek out people with diverse perspectives who will challenge assumptions and ask tough, if not awkward, questions early in your digital transformation journey. You can’t predict the future, but you can plan for likely scenarios and improve agility of response.