From Hype to Impact: Applying This Year's SXSW Highlights to Business Transformation

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SHELDON INTRODUCE THIS PRESENTATION AS A COMBO OF THE HYPE AT SXSW AND OUR THOUGHTS ON OVERARCHING THEMES FOR THE FUTURE1

From Hype to Impact: Applying This Year's SXSW Highlights to Business TransformationMarch 22, 2017

SHELDON INTRODUCE THIS PRESENTATION AS A COMBO OF THE HYPE AT SXSW AND OUR THOUGHTS ON OVERARCHING THEMES FOR THE FUTURE2

AgendaOverviewThe HypeAccessibility & AffordabilityAugmentation & ReplacementSocial Impact & EthicsCulture & TechThe ImpactReadinessReliabilityEducationPurposeQuestions & Answers

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Our leading collaborators span our capabilities as much as they span the globe, bringing a holistic and cross-discipline view to this years trends.Sheldon monteiroGlobal Co-Chief Technology OfficerChicago, USA

Simon jamesGlobal Lead for Data AnalyticsLondon, GBMelanie cookHead of Strategy & Consulting, SEASingapore

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Section 1Overview

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We hosted our very own Innovation Day, where our speaker line-up was packed with some notable names and topics:Augmented Intelligence: The Next-Gen AI with Melanie Cook, Head of Strategy & Consulting, Southeast Asia, SapientRazorfishThe Future of Content Creation with Ron Nagy, Senior Evangelist, AdobeBuilding the Cognitive Businesswith Simon James, Global Head of Performance Analytics, SapientRazorfishHeyMap: Blending Social Media with the Real World with The Communitys Andy Amendola, Director of Digital Strategy, Juan Aguilar, Art Director, and Lindsey Stormer, CopywriterSame, Same, Different: A Conversation on Changing the Ratio in Creative Technology with moderator Keri Elmsly, CCO, Second Story and panelists Ian Sefferman, GM, TUNE Marketing Console ; Julia Kaganskiy, Director, NEW INC at New Museum & Aina Abiodun, Head of Strategy, Sideways Inc.Lessons Learned from Birthing a Bot with Chris Messina, inventor of the hashtag, former Googler, and proud participant in the open source/open web communities

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Innovation Day

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Our presence at SXSW didnt go unnoticedOne of the highlights from our presence on the ground came in the form of media attention. Most notably, our Innovation Day session with Chris Messina found its way onto CNBC thanks to reporter Michelle Castillo.

We also had encore versions of our sessions. Melanie Cook, for example, saw a full audience both times for her session on AI vs. IA, not to mention getting featured on Forbes!

Our efforts were also bolstered by social media, where our strong focus on Twitter (and the #SXSW hashtag) generated noteworthy impressions and mentions.TOTAL IMPRESSIONS

TOTAL MENTIONS

1651.7M

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Section 2The Hype: Accessibility & Affordability

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Artificial intelligence has reached the state of the idiot savant.40 years ago, AI was a common conversation in academia. Now, the technology has broken out of labs and is being increasingly commercialized.

These are some of the most coveted AI applications today:Virtual assistants (Alexa/Google Home)Insight generation (e.g., advanced analytics)Business acceleration (e.g., personalization)

That being said, were still decades away from generalized intel. Google, for example, may be able to tell you the time, but not how long until something happens.

That future is still being pieced together

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Chatbots are still a testing ground.Yes, you can build your own bot, but should you? Chris Messina did and it saved him 320,000 messages that he would have had to send himself.

Supporting his choice, he highlighted the following:Social media and the Internet of Things are causing connections to grow exponentially.Messenger bots allow for context and history (unlike webpages).Bots aggregate info from various sources that you publish to from across the web.

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Personal assistants are here to stay.Across multiple verticals, leaders are experimenting with voice-activated assistants, asking:What portions of the experience can be automated and how?What does search sound like and how are results communicated?

A great example is Lonely Planet, who has successfully shifted from physical publisher to being a digital-led brand. Case in point: theyre now looking into architecting (and monetizing) the planning of entire family vacations via Google Home.

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Section 3The Hype: Augmentation & Replacement

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Our goal should be to ensure that were augmented rather than replaced.Norbert Wieners concept of the negative feedback loop that in which technology works better than and, therefore, replaces us was a common discussion being had at this years SXSW.

However, the idea of a positive feedback loop is more beneficial and, lucky for us, more plausible. In this case, exponential technology allows us to work less by automating only certain portions of our actions.We must build technology to be a complement to our humanity, and evolve our interactions with it as it evolves its interactions with us.

Take coding, for example. A significant amount of coding will be done by robots, and coding efforts will have to shift into a process of developing products that complement human roles.

AI:IA

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MELANIE

Fashion is another great example: You cannot decode fashion simply by looking at data: If retail brands want to provide meaningful online experiences and content, you need human interpretation and machine learning. Online retailers need to dig deeper in today's digital age: ask why consumers want to wear something, and the meaning clothes provide. Digital retailers should leverage both explicit data (information willingly provided) and implicit data (assessing your onsite behavior).14

Automation is collar blind.Any tasks that can be automated that can be codified in standard steps and where decisions can be made on perfect information will be.

Fukoku Mutual Life Insurance has replaced 34 of its human claims clerks with IBMs Watson Explorer, saving the company $1.1 million a year.

Chatbots will replace up to 90% of public sector workers in the UK, as well as tens of thousands in the health sector, by 2030.

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MELANIE

Fukoku Mutual Life Insurance has replaced 34 of its human claims clerks with IBMs Watson Explorer, saving the company $1.1million a year. Theyre investment in Watson would be returned in two years just from salary savings. That doesn't take into account efficiencies from less paper work, faster claims and happier customers.

Reform, a British think-thank that looks for efficiencies in public-sector spending, estimates that chat bots will replace up to 90% public-sector worker, as well as 10s of 1000s of people in the NHS and doctor surgeries by 2030, saving GBP4 Bn a year. In the UK it predicts that the healthcare sector will be Uberised. Instead of dealing up a car, youd dial up a surgeon, GP or nurse.

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Is your job at risk of automation?If the answer to the above question is yes, then what can you do to drive technology towards being centered around our human strengths and values?

The following are four courses of action that we can take as technology reaches superintelligence:Disconnect it from the world (i.e., Faraday Cage)Give the technology only binary responsesBuild an AI verifier (always have an anecdote, remedy, vaccine, etc.)Create a derived value system in which humans hold the values while machines execute (i.e., the tech watches and learns from you)

Therein lies the difference between Artificial Intelligence and Intelligence Augmentation.

(Collaboration between humans and machines can) amplify human power and release people from the repetitive drudgery of manual labor, in favor of more creative pursuits in knowledge work and the arts.

NOBERT WIENER, FATHER OF CYBERNETICS

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Additional thought comparing AI to psychopaths. Psychopaths have no inherent moral compass nor empathy. They are also singleminded about achieving their goals manipulating man and machine to get their way. This is the exact description of an AI.

With cooperative inverse reinforcement learning, the human holds the values, and machines carry out behaviour that achieve the values that is has derived.

Here the human holds the values, and machines carries out the behaviour that achieves those same values. For this there needs to be a time where robots are allowed to learn what you value before it springs into action. Now how many of you remember how frustrating it was to wait for your new phone to charge. Then Apple came along we new pre-charged phones. The relief, the joy. Cooperative inverse reinforcement learning takes time!16

Section 4The Hype: Social Impact & Ethics

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Theres no doubt that we saw a significant number of human sessions.Brexit and Trump showed us that profiling is back in a big way and that technology can place us in some uncomfortable situations if we continue to sleepwalk in terms of allowing our data to be accessed and used.

Power without controls is dangerous. Technology can certainly help society, but it can also leave many people behind. Social impact and ethics have become key to the conversation.

For example, M.I.T.s Andrew McAfee and Erik Brynjolfsson show that technology is widening the gap between the rich and poor in a phenomena called the hollowing out of the economy (specifically, the middle classes).

So, who is going to be disenfranchised by technology and who will be empowered by it?Who will decide the regulation around ethics when it comes to evolving technologies such as autonomous cars and data application?Not sure what image to put here

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Autonomous cars are sparking debate.As the autonomous car industry grows, so too will the need for legal, political, and ethical conversations and analyses.

Danny Shapiro (Senior Director of Automotive @ NVIDIA) states that the government needs to start viewing autonomous cars on public roads similar to the pharmaceutical industry.

Automakers will also need to take the responsibility for potential (albeit rare) crashes rather than having fault attributed to the vehicles user.

But the biggest elephant in the room is this: What happens when people can hack into your vehicle (as folks from WIRED were able to do with a Jeep)? Will it be possible to design accidents for malicious purposes?

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As the autonomous car industry grows, so too will the need for legal, political, and ethical conversations and analyses. What will it mean for the future of cities, of the environment, of jobs and the economy? How will car companies choose to program their software to make life-and-death decisions? And how will lawyers and courts and politicians adjudicate those decisions, if and when they (inevitably, eventually) cause damage or loss of life?

Similar to the pharmaceutical industry in that the government can never wait until a vehicle has a 0% crash rate, but rather must balance the benefit to the public with the unavoidable (but very small) percentage of side effects that do occur.

Note: Fords Argo AI is going to be big. And by diversifying its portfolio, investing in startups and new technologies and data, the company may also be setting itself up nicely for a future that isnt so reliant on individual car sales.

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Open APIs stand to change the game.FinTechs have changed what safety and security means being in the cloud was a deal breaker until a few years ago.

Going back to cars: Are car companies morally obligated to share information if it could save peoples lives?

Now, consumers are required to understand more and more where their data is going.

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Emotiv brainwear allows you to control the IOT telepathically with your brainwaves. Imagine being able to hack into your brainwaves talk about security!20

The right to repair billWhether they be tractors or smartphones, if you don't own the software in your products, then what do you really own? Hardware is inanimate and useless without the software you merely license. You currently dont have the right to repair most devices. But if you cannot repair it, adapt it as you see fit like you can with clothes, for example then, do you really own the item?Legislation, entitled The Right to Repair Bill, is currently tackling this in the US and getting quite a bit of opposition from tech companies.

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If you want to make something better, then you cannot hack into and do so legally?21

SECTION 5The Hype: Culture & Tech

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This year was all about bringing diversity from the individual level up to the systematic.A lot of companies talk about diversity, but they dont do it. In fact, they dont even know where to begin an unfortunate trend that was overheard across multiple sessions at this years SXSW.

Now, more than ever, the lines between company and community are blurred. People cannot be expected to check themselves at the door and are entitled to certain expectations of their leaders when it comes to support.There will always be opposing points of view, but employees are increasingly expecting the CEO to be a caretaker, listener, and comforter to take a stand in a way that aligns with the companys culture and values.

Weve seen this lately with gender discrimination and sexual harassment allegations brought against Tesla by AJ Vandermeyden and against UBER by Susan Fowler.

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A female engineer at Tesla has accused Elon Musks car company of ignoring her complaints of pervasive harassment, paying her a lower salary than men doing the same work, promoting less qualified men over her and retaliating against her for raising concerns.The allegations of AJ Vandermeyden, who still works at the celebrated electric car manufacturer, paint a picture of a hostile work environment dominated by men where inappropriate sexual behavior is tolerated and women face numerous barriers to advance their careers.Vandermeyden, 33, shared her story with the Guardian at a time when Silicon Valley is reeling from the explosive allegations of former Uber engineer Susan Fowler. In a viral blogpost, she alleged that management and HR dismissed her complaints about documented sexual harassment and sexism, protected a repeat offender because he was a high performer and suggested that women in the company were not as skilled as men.23

How? Whats different now?Shari Slate (CDO at Cisco) and Adam Quinton (Founder/CEO of Lucas Point Ventures) were at SXSW last year talking about unconscious bias at the individual level. This year they showed up to talk about systematic diversity.

They agree that diversity will not be solved by hiring someone or asking human resources to do it. If the CEO doesnt have the time or resources to drive diversity, then he/she is not really taking care of the people. People want to hear it coming from the top to know that it matters.

Picture of women working together

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Adam is at Lucas Point Ventures - talking about diversity challenges in venture backed companies (and the very depressing statistics)Very key to align initiatives to company core values, and drive change from there. For example, Cisco role in marriage equality drive very related to what they value as a company. Not all employees are necessarily going to be alignedBe swift and authentic in engagement in initiatives that matter to the companys core values and businessPrioritize care of employees when you see that people are feeling anxiety from social situations or unrest - even if it means changing the plan for todaySeek to understand, and be authentic about how you understand. Conversation needs to happen. Needs to start with the CEO. Leaders need to have a position - not necessarily on the issue itself, but on making room to talk about the issue24

Culture Is More than DevOps.SXSW speakers had much to say about building high performance software teams and delivering software. These sessions were good refreshers on well understood Recruiting, Agile, and DevOps practices.

One of the more offbeat sessions, The Perverts Guide to Programming Languages, took us on afascinating journey applying psychoanalysis to software development we learned that software architects and developers make choices amongst the over 1000 programming languages in use today for reasons that go beyond the rational.

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Invoking Jacques Lacan, or the French Freud, who proposed fundamental structures of psychosis, neurosis, and perversion, we learned that a programmers obsession with strictness of language rules or degrees of abstraction may have more to do with subconscious psyche attributes than with rational claims of using the right tool for the job.25

What about creativity & the arts?AI can achieve various levels of creativity and, in turn, strengthen a humans ability to reimagine.Googles Deepmind machine learning can be visualized as an art form (in this case playing Atari Breakout)The AI-created film done for Saatchi & Saatchis 2016 New Directors Showcase at the Cannes Lions Festival of CreativityAutodesks Dreamcatcher can generate hundreds of unique designs in a matter of hours

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SECTION 6The Impact: Readiness

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Are technologies such as artificial intelligence and virtual/augmented reality ready for prime time?Novel technology is not just a shiny object, but rather represents a spectrum of possibilities. The question you must ask yourself is whether the technology is ready to solve your specific industry use case.

Artificial intelligence, for example, is a practice that can be used to do something as traditional as structuring data and gathering insights. This is what we see with the opening of APIs to better the customer experience. While many companies are experimenting with this technology, it is the movement of that behavior to actual production that needs to happen in order for the technology (and usage of it) to evolve.

For example, what do we make of IBM classifying Watson as a platform for microservices architecture?

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Where can you see this apply?Brands like L'Oreal are deepening their communications with consumers in virtual and augmented reality. LOrals Matrix Academy, an educational program for its Matrix beauty brand reduces costs and increases scale by replacing in-person training for hair stylists with advanced styling techniques taught via high resolution VR experiences.

Another example stems from sports, where virtual reality is being used to test players decision making within the context of certain scenarios.

And, in Australia, the NDIS (National Disability Insurance Scheme) has created Nadia, an online virtual assistant (voiced by Cate Blanchett) that can speak, write, and chat online while answering questions about the NDIS in a natural way.

Initially Nadia will be used to answer the most common questions people have about the scheme, but over time, with your help shewill develop the capacity to provide detailed responses to a wide range of queries.

LOUISE GLANVILLE, DEPUTY CEO @ NDIA

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MELANIE

LOreal: Creating this program involved solving difficult technological problems such as modeling human hair in 3D. With complex, photorealistic modeling finally feasible, we can anticipate exciting applications beyond advertising and entertainment to fields as complex as engineering and even surgery.

NDIA deputy CEO Louise Glanville, who introduced Nadia, said the avatar had been developed to provide people with disability with information about the NDIS when and how they want it.Initially Nadia will be used to answer the most common questions people have about the scheme, but over time, with your help she will develop the capacity to provide detailed responses to a wide range of queries, Glanville said.She can already understand thousands of questions put to her, and will answer with clear and simple responses. The more interactions she has with people, the more her knowledge bank will grow.29

To drive your use case forwardConsider and speak to some of the most common obstacles in (multiple) industries today:Lack of insightSluggish attitude in the industry; inability to see the advantageComplex, expensive manufacturing processBroken industry modelLack of product/application utilityNot competitively pricedNot sustainable, and at times, downright indulgent and wasteful

We need another Lycra to revolutionize the industry .

CONSENSUS OF PANELISTS DISCUSSING THE FUTURE OF FASHION

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The fashion industry (and wearables specifically) is a great example of these points around driving your use case forward.

Another big question is this: At what point do you become afraid of your bed? We need to connect things because we want to make them better as a first step. Then, later in maturity comes the part where we can completely reinvent products/services/behavior. For this, you need agreement on infrastructure.30

SECTION 7The Impact: Reliability

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When you make a commitment to production, you make one to ongoing support.Product-based companies should (and are) shifting to more service-driven mindsets. For example, as artificial intelligence permeates more and more of each industry, things like cars will need to get more regular updates a concept that is difficult for product lifecycle companies.

And its not just about the software, but the infrastructure, as well. We need new modes and media for rapidly changing technology.Take IBM, for example, whose plug and play model allows for laudable modularization. This leads to increased reliability and sustainability not only for the product, but for the business model and customer relationship, as well.

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DevOps strikes again. You ship it. You support it.

As Capital One mentioned, software delivery (speed incentive) and operations (stability incentive) have traditionally been two separate sections. These silos have been known to create some animosity at the organization level.

Key leaders including the CIO and CMO need to work together to combine the existing focus on speed and agility with consideration for scale and reliability, as well.

Its more than just tooling its an actual cultural change. And it requires the organization to stand by their products with adequate support (not just tech teams, but also information security, legal, finance, etc.).

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SECTION 8The Impact: Education

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Brands and consumers are learning simultaneously.Chris Messina mentioned that its really hard for users to know what to do with chatbots. There is no general awareness of messaging apps/bots and, if there is, it tends to be quite negative.

And chatbots are just one example of a lack of comprehension on the user end when it comes to artificial intelligence, its power, and the introduction of it into peoples homes (and lives). Some users are testing the waters with chatbots, but so are brands theyre using these bots to see what AI can do.

So, how can you educate the larger population on the breadth of actions supported by AI? And on its safety?

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What about the designers behind this revolutionary tech?

AI offers substantial potential because of the insight that it can provide designers; however, there's still the equal challenge of educating designers on its capabilities.

One thing that is certain is that we have yet to establish some design principles for conversational user interfaces and we should. These principles should take in things like:Consumer expectations: Does Alexa give you the straight (binary) response to your question or try to answer the question that it believes you are trying to ask?Platform neutrality: These principles will have to be executed the same across platforms in order to maintain a certain level of customer experience and comprehension not to mention usability.

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SECTION 9The Impact: Purpose

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Purpose is the ultimate platform for internal and external transformation.Business transformation is achieved through a combination of both internal and external efforts. And with AI becoming more like the Web circa 1996, the brands that survive will be those that build purpose into their work and their teams.

The concept of purpose is not a new one, but never has it been so prevalent as it is in this moment of proliferation, data access and application, and societal uncertainty. But purpose is not something that leaders deliver via pep talk. It is a combination of those who interact with your consumers, roam your offices, and build your products.

Heres a great example: There will be an increased need for understanding humanities and social sciences in order to collaborate with developers to produce AI that interacts well with people. Once again, humanity can be augmented and scaled rather than replaced with a rationality that lacks semantic understanding.

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SIMON TAKE YOUR TIME GOING THROUGH THIS SLIDE IN ORDER TO DRIVE IT HOME POWERFULLY

In past years, at SXSW, there was an irrational exuberance for purpose, while now its been more of a reflective tone.One of our main goals with clients is to align them on the why rather than the what and how

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When considering a set of internal organizational needs, Marty Weiner (CTO of Reddit) mentions the following key components:#1safetysafetyDiscomfort about funding, company trajectory/mission, job security, or physical/emotional safety.#2trusttrust Lack of communication, inconsistent delivery on promises, subversive individuals.#3respectrespectDisrespectful or offensive people sometimes miscommunication can lead to the same effect, as well.#4motivationmotivationAutonomy, mastery, purpose." Too much or not enough autonomy or unclear purpose.

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How to fix each of the above:Safety: Fixed through sharing information, clear picture of goals/vision, open and honest about career path, fire bad peopleTrust: Fixed by customer orientation, direct communication between people, communicate status, shareRespect: Fixed by clarifying values, chatting with those disrespecting others, hire carefully and fire fastMotivation: Situational leadership, good goals, input from team39

Five next steps to consider.Redefine success and value creation in the companyOwn inclusion and diversity as business leadersCommunicate your companys values and your values as a leaderExpand your mindset to expand your talent pipelineExercise your strengths and build your muscles

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Redefine success and value creation in the company. Not just financial, but the value of the culture they create (Peter Drucker says that culture eats strategy for breakfast). Culture is the bedrock of long term company success -- for example, the concept of diversity debt leads to a toxic culture that you eventually cant fix)Own inclusion and diversity as business leaders. You have to have a point of view (how it affects you, what you have experienced, what you see in terms of difference, and other points of view). What is your story with diversity? Get awareness, and show up in the conversation. Not an HR prerogative or a recruiting scenario - you own it directly. Opportunity is not point in time - dynamic and changing, so you have to be observing and learning yourself about the situationCommunicate your companys values and your values. Proactively decide how to engage and how to communicate, what is your own value system, what do you stand up for and against. This is not a CEO comes down from the mountain thing. Have antennae up for issues that you may not be as in tune to, but finding a coach and getting to a responseExpand your mindset to expand your talent pipeline. Traditional pipelines are easy, but create a tax on innovation and on performance (and diversity debt). Make sure for each position that you have clearly articulated the skills and experience required prior to doing any interviews (not where someone worked or came from but what theyve done and can do). Dont accept I tried really hard but there isnt any diverse talent out there.Exercise your strengths and build your muscle. Startups in particular tend to move really fast, and are very focused on the outcome they want to deliver. How do you leverage ability to move fast and be curious to apply to the diversity challenge. Desire to step into the space, but dont know how? Get a mentor - could be a hired CDO (Chief Diversity Officer), a venture backer, a founder, or a company that helps with inclusion.40

In summary:The HypeAccessibility & AffordabilityAugmentation & ReplacementSocial Impact & EthicsCulture & Tech

The ImpactReadinessReliabilityEducationPurpose

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