VUCA | Volatility, Uncertainty, Complexity and Ambiguity
VUCA is an acronym used to describe or reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations. It was first introduced by the U.S. Army to better prepare for complex situations resulting from the cold war. Later, business leaders found it quintessential to respond to the fast changing and every complex global market situations. Vuca principles are foundational to disruptive innovation expert tactics and responses.
Blockchain Changes the World
Blockchain broke into global consciousness when Bitcoin spiked to $19,783 on
December 17, 2017. At the time the market capitalization of all crypto currencies
peaked at $853 billion… More from Jim Harris, Blockchain Keynote Speaker
Death to Driving
Why Worry About Disruptive Innovation?
How autonomous vehicles will disrupt dozens of industries
North America’s best disruptive innovation professional speaker will delight your conference delegates
A staggering 94% of car accidents are due to driver error. So think about the 40,000 lives that will be saved in North America every year in 2025 when the only new car that you can buy is an autonomous car (self-driving cars).
Think of the 2.5 million people who won’t be maimed or seriously injured annually every single year in North America. Think of the emotional trauma that families will be spared. That’s the GREAT news.
Now think about the $190 billion of savings in health care costs, the value of wages not lost and of government benefits not paid. (Globally 1.3 million lives will be saved every year and up to 50 million people not maimed or seriously injured).
If you sell auto insurance, however, you’re going to witness a $500 billion a year market disappear. There will still be insurance – but when you buy your new Tesla, it will come bundled with the car. Tesla will buy insurance at wholesale to insure its autonomous system. The value of the consumer auto insurance market will plummet.
If you’re an insurance agent or broker or working at an insurance carrier, you’ll have to find a new half trillion dollar market. Thankfully there is one – cyber risk. The challenge is that a) the public doesn’t understand it, b) carriers don’t know how to price it and c) brokers aren’t yet selling it.
Cascading Impacts of Autonomous Vehicles
Driverless vehicles will have a profound and cascading impact for other industries as well insists artificial intelligence speaker Jim Harris.
When a staggering 2.5 million people aren’t killed or maimed every year on North American roads, do we have an over capacity of ambulances? Is this bad news for ambulance makers?
This is surprising: In Manhattan it takes 2.4 minutes on average to get to the emergency room using Uber of Lyft. It takes 10 minutes by ambulance. If you’re having a stroke or a heart attack do you think those minutes matter? Might this further depress ambulance sales?
And what about emergency room capacity? Taking more than 2.5 million people out of ERs every year is a lot. If you’re building a new hospital maybe you should design the ER to be flexible and able to contract when demand drops in 2025 and redeploy it to a maternity ward. Or a geriatric ward.
Avoiding 2.5 million people being maimed will reducing revenue for American HMOs by $190 billion a year. Improved car safety will have a significant impact on their bottom line elaborates futurist speaker Jim Harris.
Disruptive Innovation Speaker
Jim Harris is a leading disruptive innovation speaker. He has been ranked as one of North America’s best business speakers, speaking internationally at more than 50 conferences a year. He is also a thought leader on digital disruption and digital transformation – writing columns, articles and white papers on disruption. One of the disruptive innovation books he has written is called “Blindsided” which discusses how businesses can mitigate the impact they experience from disruption in their market.
In the San Francisco, Bay Area drivers waste $10 billion dollars of their time every year in traffic. (In the US traffic congestion is estimated to cost drivers $US305 billion) isn’t there anything better we could do with $300 plus billion of time?
In 2025 when you drive to work – you won’t be driving, explains futurist speaker Jim Harris. You’ll be in the back seat watching a movie, or writing a report, or reading the news, or Skyping with your grandchildren or answering email or sleeping.
We listen to radio when we’re driving today because we have to keep our eyes on the road. But that won’t be the case in the future. So what are the implications for radio stations?
Drive time radio will experience significant declines. So what will happen to the value of radio stations – which have their highest listenership in the drive time slot? What will happen to radio stations unless they seriously innovate?
And when you arrive at work you won’t park your car – instead you’ll tell it “Go forth and earn your keep” – you’ll send it out to be part of Uber or Lyft’s autonomous vehicle pool to earn you money while you’re working rather than paying $40 a day for downtown parking.
And just before you want to head home, you’ll signal to your car to stop taking fares and come back to pick you up, explains disruptive innovation keynote speaker from Toronto, Jim Harris.
So what happens to the value of parking lots? How can I short parking lots in my stock portfolio asks futurist keynote speaker Jim Harris?
McKinsey & Company (the management consulting firm) estimates that there is 61 billion square feet of excess parking in America given the rise of autonomous fleets like Uber and Lyft! So how will cities redeploy that unused space?
And what will happen to the paving companies that primarily pave parking lots? And what about the asphalt companies that supply companies that primarily pave parking lots?
And think about the impact on municipalities – New York City collects $2 billion a year in parking fines. Disruptive innovation speaker Jim Harris asks what happens to New York’s revenue if fines plummet because autonomous cars are always moving people and rarely parking? So what are the implications for municipal finance?
And what will governments do about reduced gas taxes with the rise of electric vehicles (EVs). In Canada gas taxes represent $15 of income for federal and provincial governments.
The average car in North America is driven 15,000 miles a year. But an electric car in an autonomous pool can drive 300,000 to 500,000 miles a year. If a significant portion of the populations stop buying gas-powered cars, how will the traditional car companies survive?
This Video It Will Shock You
My favourite video about autonomous cars, explains disruptive innovation keynote speaker Jim Harris, is a clip from the dash cam in a Tesla in a Scandinavian country driving on the highway. The autonomous system sets of an audible alarm – but I can’t see anything wrong with the situation – and then two seconds later one car hits another. The car that’s been hit begins doing summersaults on the road. [On YouTube search for “Tesla Autopilot predicts and accident caught on dashcam a second later”]. Just watch the first fifteen seconds of the clip: https://www.youtube.com/watch?v=om3z1yLQtwo&has_verified=1
That first fifteen seconds communicates so powerfully the value of an autonomous vehicle. In 10 years time who’s going to buy a used car for their 16-year-old son or daughter that doesn’t have autonomous features?
I mean the kid is 16 and they’re bugging you constantly. But you just spent 16 years of your life raising them – you want to make sure that their okay. What’s the value to you of your spouse and children’s’ lives and well being?
So what will happens to the value of used car lots?
I was working a group of executives on the East coast, explains futurist keynote speaker Jim Harris, and one CEO owned 16 car dealerships – each with a used car lot associated with it. He said to me: “Look, autonomous vehicles (AVs) and electric vehicles (EVs) are less than 1% of the market – so they will have no impact on my business.”
One reason organizations get disrupted is that the executives that lead them reject jarring new information that threatens their world view and current business model. And it’s not just executives who do this – we all do it.
So after the break I added these following slides to my presentation (just because I’m a nice guy):
In 2014 Mercedes Benz dominated the US large car luxury market:
Let’s fast forward to 2015. Tesla raced ahead and Mercedes Benz sales slowed:
In 2016 Tesla’s sales accelerated while Mercedes continued to collapse:
In 2017 Tesla Model S sales were off by 1,200 units as Tesla fans began buying the Tesla Model X which is in the SUV category. Meanwhile Mercedes S Class sales collapsed to about half of Tesla Model S sales:
I want to give you a little known, but staggering fact: In the early 2000s Lexus represents just 2% of Toyota’s unit sales, but up to 50% of Toyota’s US profits! In other words – the luxury car market represents a disproportionately large share of car companies’ profits.
So can you hear the huge sucking sound as Tesla strips profitability from the auto industry?! Realizing this, do you think that you can comfortably ignore the Tesla trend because it’s less than 1% of auto sales in North America? Can you dismiss it as irrelevant?
The normal margin on traditional cars sold through a car dealership is less than 5%. Tesla by contrast doesn’t sell though dealerships. In cities it will have a test driving center or two, where you can custom order your Tesla. By cutting out the dealer, Tesla’s margin is 25%. Tesla’s direct to consumer distribution model cuts cost and increases profit.
For traditional auto makers, the majority of profit is in ongoing service. But with Tesla there is next to no service required.
A typical electric vehicle (EV) only has 10% of the moving parts of an gas powered car. So for an EV there are no oil changes. No engine wear. Of course you have to change your tires every 50,000 miles.
In 2017 General Motors (GM) sold 10 million vehicles and in December 2018 the company was worth $US49 billion. By contrast Tesla sold 100,000 cars in 2017 and on December was valued at $US60 billion. That means that GM is being valued at $4,900 for each car it sells, while Tesla is being valued at $600,000 for every vehicle it sold in 2017. How big do the signals have to be before we understand that disruption is underway?
In 2018 Tesla’s stock was the most heavily shorted stock in the US. In the press there was constant speculation as to whether Tesla could survive. Disruptive innovation keynote speaker Jim Harris asks a different question – if half the US population that used to buy private vehicles instead uses shared transportation services (like an autonomous Uber or Lyft service) can the traditional car companies survive on half their traditional sales?
When Elon Musk launched the Tesla Model 3 in March 2016 a staggering 275,000 people pre-ordered the car in the first four days, making it the most successful car launch in the world’s history. The pre orders climbed to 500,000 – making it a $20 billion car launch! That was the two by four to the head of GM executives to get serious about electric vehicles. And then GM then began their eight year development process to bring out sexy electric vehicles to compete with Tesla. Do you see a problem here? If the rate of change externally is greater than the rate at which the organization can innovate and adapt – disaster is imminent.
And if there are 90% fewer accidents on roads, what happens to the almost $200 billion a year global auto body industry?
Here’s a staggering fact, explains artificial intelligence keynote speaker Jim Harris: the average car in North America is used less than 4% of the time and only at 20% capacity. For the average family the car is the second largest purchase. This makes the auto industry ripe for disruption.
In major cities it’s cheaper take Uber or Lyft than to own a car. The average cat costs $11,900 a year. But that’s the average. If you’re a young testosterone ridden male aged 16-24, insurance alone can set you back $5,000 a year.
And which would you rather have: Fighting to find parking spaces? Changing oil? Switching from winter to summer tires and back again? Or be treated like the President of any small republic – where a car pulls up, you get it. The driver takes you to where you want to go and you get out? As a result many millennials aren’t even bothering to get a driver’s licence. Driving is so 2016.
When I’m giving a keynote presentation I will ash the audience “How many people have taken an Uber or Lyft? And what wowed you about it the first time?” Answers typically are:
I knew when the car was going to arrive
I knew the price of the trip before I agreed
I knew how long the trip would take.
I could see the route
I didn’t have to pay when I arrived – I could just get out of the car.
I could rate the driver
The car was clean.
I knew the name of the driver.
I could call the driver if I left my laptop in the car.
I could call him once it said he had arrived but he wasn’t at the front of the hotel
There are literally hundreds of points of differentiations that I’ve heard over the years. A powerful insight is that these are all speaking to the user experience (UX) or customer experience (CX).
What’s interesting is that many of these points of differentiation are about customer control: you know when the car is arriving (it’s the opposite with taxis); you know how much it will cost BEORE you even get into t he vehicle (not with cabs); You can see whether the driver is taking the recommended you or is taking you on a wild goose chase to rack up the fare (not so with cabbies). You can easily file a complaint about bad service – orienting drivers to provide great customer service. For instance, have you ever been offered a bottle of water getting into a taxi?!
I am sure you’d agree with me that a taxi and a Lyft are exactly the same in that they involve a driver and a car taking you from point A to point B. – so the product is exactly the same. But the EXPERIENCE is COMPLETELY different.
Uber and Lyft have identified all the points of friction of the classic taxi experience and designed them out. This is a powerful insight: have you ever done a friction audit on your organization? What do you customers HATE about dealing with you? Identify it and then design it out of the user experience.
That’s why Uber is worth twice as much as every taxi cab company in North America added together!! And yet Uber doesn’t own a single car! Artificial intelligence keynote speaker Jim Harris stresses that this highlights some critical points for executives: your business model, processes and UX are more important than your product.
In 2007 a taxi license plate in Toronto was worth $400,000. Recently they have traded as low as $50,000. That’s almost a 87.5% decline in asset value. That’s the impact of ignoring disruptive innovation.
Artificial intelligence speaker Jim Harris explain that if disruptive innovation can cut your business valuation by 90% as in this example – is your organization focused on the future enough or are most people too busy focused on day to day activities in the way you’ve always done business?
Who is closest to the future: the 65-year-old CEO who has his assistant print out all his emails, or the 18 y are old who’s on Tinder? Who does all the strategic planning? Who is most disenfranchised from strategic planning? Is it any wonder that we only get incremental innovation within most organizations?
Once we have autonomous cars, we will have autonomous Lyft and autonomous Uber to access. In an urban centre one autonomous vehicle working in a pooled capacity can replace up to 30 traditionally owned cars. This will spell the end of many auto makers.
If I can get a car anywhere any time via Lyft or Uber, what happens to the $28.6 billion a year car US car rental industry? From 1990 on I used to rent a car more than a 100 days a year because I travel so much. But in the last year I have only rented a car for five days – instead I use Uber and Lyft everywhere I go.
Jim Harris, disruptive innovation speaker, explains when you ask people on the street, “What’s innovative?”
They will often answer the iPhone is innovative. A staggering 75% of the answers will be about a product. Similarly within organizations product innovation received 75% of the focus.
While product innovation gets 75% of the focus, it only yields 10-15% of the value of innovation. The other 90% is in business model innovation, process innovation and user experience innovation.
“Innovation is essential,” say 88% of CEOs to the top and bottom line. Not surprising. But what is shocking is that only 22% admit to having a formal system of innovation. Imagine that CEOs took the same approach to sales? Yes, 88% say sales are essential but only 22% have sales people, a sales process, sales training, sales systems like a CRM. The other roughly 80% of CEOs hope that sales will just magically, organically happen.
Disruptive innovation keynote speaker Jim Harris summarizes, are you making sure that your entire organization has had a wakeup call about disruptive innovation? Why not make sure by hiring one of the best disruptive innovation speakers at your next company conference or industry event? Jim Harris is one of the best speakers on disruptive innovation in North America. His clients give him rave reviews. Here’s a sample of him speaking at a recent conference
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