Winter is coming for digital immigrants

The other problem with white old men…

There wouldn’t be a day that goes past I don’t read about a major Australian institution introducing a new framework for a more diverse workforce. Whether it be more female software developers, LGBT, ethnicities, women on boards… every PR savvy exec is out to prove just how inclusive they are it seems.

Maybe companies are being more inclusive. Maybe it’s more PR bullshit.

I don’t really know.

What I do know… another serious problem is at play which doesn’t seem to be getting the airtime it deserves. AND it is not about your gender, ethnicity, socio-economic background or sexual orientation.

Is your company run by Digital Natives or Digital Immigrants?

Much of the ASX200 and beyond is governed by digital immigrants who don’t intuitively understand technology nor are they prepared to invest heavily in emerging technologies. To say there is an iceberg on the horizon is a massive understatement as 57% of ASX200 board directors are aged 60+. Unfortunately they will be long gone to accept the consequences when Australia’s largest industries are all owned by global behemoths and we become a country of service workers.

Hence why Spaceship – the new Superannuation startup – has the backing of some of Australia’s most visionary and astute investors. Core to Spaceship’s thesis is the ASX might not be the best place for your Super given there is not one pure play technology company on the ASX50 and conversely the 5 largest companies globally are all tech companies at heart. When billionaires are divesting their Australian based Super, take notice. *REA Group currently sits at #52 on the ASX.

2 weeks ago I was at Australia’s first Insurtech conference. There were a lot of ‘White Old Men’ in the room. One of them in the elevator up boasted “there is a lot of money in insurance”. He wasn’t kidding. Insurance makes up 5.7% of Australia’s GDP – a $100B market.

Given the massive market size and with many pundits proclaiming 2017’s most over used expression “insurance is ripe for disruption” you’d think there might be a little apprehension in the room.

Not exactly.

In fact when one speaker announced brokers and insurers would soon be disintermediated through Artifical Intelligence based technology, for a moment I wondered if I was at the Melbourne Comedy Festival and not an insurance conference, such was the hysterical reaction.

“People buy from people, it’s all about relationships” one senior pro at my table quipped.

Maybe for Baby Boomers but Millennials don’t give a flying F how good your banter is when they can save 20% buying through an AI chatbot which in all likelihood will underwrite a better policy.

And considering when in 5 years time Millennials make up 50% of the workforce you might want to start giving a F about how they operate.

The thing about Machine Learning / Artificial Intelligence is…

You can’t really play catch up. It takes years to train your machines on the data you have collected. There are no shortcuts.

When IBM’s Watson won Jeopardy! it was an 18 year old algorithm and 4 terabytes of data trained over 3 years which ultimately brought success. In essence, it was the dataset and not the algorithm which made the world first breakthrough.

Therefore, if your organisation is a follower and not a leader, when it comes to investing late in Machine Learning, you will always be behind. Many large insurers are already 18 months (and counting) behind AI insurance startup Lemonade which is funded by the people (Sequoia Capital) who backed Google and Apple in the early days.

Hypothetically, your competitor works out how to automate 8/10 customers’ journey from sign up to claim time through Artificial Intelligence, lays off 80% of its workforce and has a 20% cost advantage – It is curtains for you.

If your company is run by digital immigrants who are not investing in Machine Learning / AI technology, winter is coming.

Like to continue the conversation?
Nick Teulon