Automobiles and Unintended Consequences

It started small. A German built the first practical internal combustion engine in 1876 and then another German invented the carburetor in 1893. In 1903 fifty-seven U.S. automobile companies came into existence and twenty-seven went bankrupt. But one of the surviving companies was owned by a man named Henry Ford. And he changed everything when he introduced his Model T in 1908.

His automobile is an interesting story of success (15 million Model Ts over 19 years) and, ultimately, failure (he refused to modernize the car); but the more interesting story is the story of “consequences.”

  • Cars need steel and rubber and glass. In the 1920s, they used 20% of the steel produced in the country, 80% of the rubber, and 75% of plate glass.
  • Unlike horses, cars need paved roads. There were almost no paved roads in 1900; 369,000 miles of roads by 1920; and 662,000 miles of “smooth driving” by 1929.
  • Cars need gasoline. The first purpose-built gas station was opened in 1905. By 1930, there were tens of thousands.
  • Cars and roads made the suburbs possible and single family housing flourished.

Lots of consequences. Now, what might happen when cars DON’T need drivers?

Google, Audi and others are experimenting with autonomous vehicles. Cute? Maybe. Disruptive? Absolutely! 

Most cars are idle about 95% of the time. Why own one when you can share one. Really, does everyone need their own car?

What happens when Uber goes into the autonomous car taxi business? No drivers needing sleep, so car utilization could hit 75 – 80%. A study for the city of Austin, TX concluded that an autonomous taxi with dynamic ride-sharing could replace ten private vehicles.

Fewer cars on the road? Less pollution? Fewer gas stations. Fewer parking garages in downtown Chicago.

If trucks become autonomous there won’t be as many truck drivers stopping at roadside restaurants.

What about the insurance industry? Over 90% of auto accidents are due to human error and the three leading causes are alcohol, speeding and distraction. Accidents should decrease (unless the computer stops for a beer). Also, who or what will they insure? Non-drivers don’t need automobile insurance.

Here’s the bottom line. The impact of the automobile rippled across the economy in the twentieth century and looks like the ripple is picking up speed.

If you spend all of your time in the reaction zone you will spend most of your time solving problems. But if you spend more time anticipating the future, you’ll have the opportunity to make sense of it before it hits you. The choice is yours.

What changes are occurring today that will ripple across your industry tomorrow?

 

We Need Some Inefficiency!

How did the taxi industry miss Uber?
How did iTunes miss Spotify?
How did McDonald’s miss Millennial taste buds?
How come so many Boomers aren’t ready for retirement?


The glib answer is that they focused on “today” and ignored “tomorrow.” They spent too much time and energy dealing with Reaction Zone challenges. Reaction Zone? Read on. 


In my critical and strategic thinking workshops we spend time discussing three zones that define our mental radar screens: the Reaction Zone, the Adaptation Zone, and the Anticipation Zone.  We also discuss the value of inefficiency. 

The Reaction Zone encompasses all of the problems and challenges associated with running life in the here and now. Look at your calendar and you see that you are reacting to others’ needs and wants -- client meetings, vendor problems, workforce issues, etc. 


Adaptation Zone thinking addresses emerging and established trends. You have time to respond to them, but they will play out whether you act or not. iTunes is suffering from the shift in renting music versus buying music. No need to spend 99 cents for a single song when you can subscribe to Spotify and get as much as you want.

 
Anticipation Zone thinking recognizes isolated events on the horizon and attempts to connect these seemingly disparate dots. For example, connect these dots and think about the future of geriatric medicine: 23andMe (inexpensive genetic testing), Apple Watch, aging Boomers, driverless automobiles, personal GPS, and smaller families. My kids may watch over me, but not in the way I envision it today.

 
And now comes the challenge. Adaptation Zone and Anticipation Zone thinking require time to actually think. But, we have spent the last twenty years trying to make our companies “lean and mean.” Unfortunately, some have become lean and anorexic. 


Sorry to say it, but thinking doesn’t look like work and we want our bosses to see us working. So we don’t think enough about the future even though we will spend the rest of our lives there. 


I’m all in favor of a bit of “inefficiency” so that people can take the time to think. 

 

Moving Fast Enough?

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Sometimes we keep up with the pace of change and sometimes we don’t. Consider the following:

  • Best Buy moved too slowly in their response to on-line (Amazon) retailing and they are struggling for retail relevancy.
  • Elon Musk is roaring ahead of established battery manufacturers. Too far ahead?
  • I have friends who are prepared for retirement and others who seem surprised that they are getting old.  How can we be “surprised” by aging?
  • Should a driverless car be allowed to kill its occupants to save others? (More about that below.) 

As the saying goes, “the only constant is change.” And the question we have to answer is “What’s my responsibility?”

I contend that you have four responsibilities, whether you are thinking about change affecting your company, your team, your family or your personal life. You are responsible for:

  1. Sensing the signals of tomorrow.
  2. Making sense of these signals.
  3. Deciding on a course of action.
  4. Acting on your decisions.

And these four responsibilities form a cycle, the Sense-Response Cycle. Run the cycle too slowly and you risk becoming irrelevant. Run it too fast and you may waste resources on something that will never become reality. But the key point is to remember that these four responsibilities form a CYCLE. You and your company may excel in one or two of the four responsibilities, but you have to be “good enough” in all four in order to maintain the needed cycle-speed. You can’t pick and choose.