Rethinking the Cloud

While predicting the future of technology is never easy, the harder part of that process is actually predicting how technology will change behavior.

Saturday, June 16, 2012
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Tom Koulopoulos, recognized by InformationWeek as one of the world's six most influential consultants and author of his just-released seventh book, Cloud Surfing: A New Way to Think About Risk, Innovation, Scale and Success, will open the 2012 HR Technology® Conference and Exposition by sharing his keen insights on the cloud.

Koulopoulos, president and co-founder of Delphi Group -- a 20-year-old consulting group based in Boston that focuses on innovation, knowledge and process management -- will explore in his keynote why taking the human element into account as you shape and execute your HR technology strategy matters more than ever today.

What follows are two excerpts taken verbatim from Cloud Surfing, in which Koulopoulos explores how the cloud is altering the way we work and fostering a new level of innovation.

As we've already established, the cloud is an evolving phenomenon. Consider that there are seven billion people on the planet, yet only five hundred million even remotely qualify as knowledge workers -- that is, people who make a living based on the use of their minds rather than their muscle. Eighty percent of the world's inhabitants still make less than ten U.S. dollars per day. And, lest we believe the Internet is somehow changing all of this overnight, only 1.7 billion, just over 25 percent, have 24/7 access to an Internet connection.

Imagine running your company with just 25 percent of your employees talking to each other. Yet that's precisely what we are doing on a global scale. Despite all of the talk about the flattening of the world, jobs moving offshore to developing economies, and increases in productivity brought on by technology and the Internet, we are still in the dark ages when it comes to employing the world's talent. In other words, we are still using plows to move ideas.

The fact is that all of the innovation and achievement we have experienced until now has involved a ridiculously small fraction of humanity's potential. Research and development, education, and access to the resources needed to develop and exploit ideas have been closely held assets. This phenomenon is reminiscent of the factoid about how we humans use less than 10 percent of our brains. The cloud is about tapping into the other 90 percent.

Describing the full impact that the cloud will have on this equation would be tantamount to explaining the effects of e-publishing to a thirteenth-century monk hand-illustrating the Nuremberg Chronicle.

The good news is that we do have some sense of the near-term changes and are already seeing the impact of the cloud. Investments in higher education, health care, and the Internet are creating a workforce unlike any other in the history of humankind, with the potential to be amazingly connected across social and national boundaries. These are workers who will live longer, work longer, and play longer. And that workforce is not only growing in real terms, as population increases, but it's growing exponentially in terms of its ability to reconnect itself in whatever manner is needed to solve the problems of the moment.

Don't lose sight of the power of connections. This is not just about having more smart and educated people. It's about having more of these people connected to each other. We put a lot of our hopes into the notion that the more people who are on the web, the more ideas will flow from it. Perhaps, just maybe, one of those ideas will solve our problems. Casey Mulligan, a well-known Chicago economist, has even proposed that we need to grow the world population to increase the odds of that happening!

The cloud is not about throwing more brains at the problem. That's an interesting idea, but it's linear.

The cloud is exponential in its impact; it has a multiplier effect that goes well beyond the power of any collection of individual skills. What we lack is not brains but the ability to connect them.

We need to stop playing dice with our future and start leveraging the power of this wealth of ideas. This means putting in place the processes that innovation needs in order to thrive.

We need to go beyond the fundamentals of an Innovation Zone, which I talked about in my previous book, to build a global Innovation Factory that will produce an engine for connecting, driving, and developing new ideas through hypercollaboration.

In many ways, there is an amazing parallel between the hyperconnectivity of the cloud and the advancements that took place during the early part of the twentieth century, many of which began as experiments in small business and collaboration. Globally, there was an amazing rush of upstarts, which leveraged one another. In large part, it's the reason that there is so much contention around the ownership of twentieth-century inventions like the internal combustion engine, radio, telephone, and television.

Ideas flowed freely in the early days of patents, resulting in one of the most prosperous periods in history. We put in place the political, organizational, legal, and educational cornerstones to scale this era of invention; we protected intellectual property and formalized methods for teaming and partnering. The model worked for the problems and challenges of that day and age. But it no longer works for today's complex problems.

In addition, the cloud is increasingly made up of an aging demographic in developed countries, which creates a talent pool of free agents that will radically alter the notion of retirement by working long past traditional boundaries of "old age." It's proven that as workers age, the likelihood of their becoming free agents increases; while 25 percent of those under fifty years of age are working as free agents, the rate increases to 40 percent of those workers over age fifty.

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This just adds to the ocean of entrepreneurs that will flood the market and challenge all of our notions of work and employment, creating an amorphous human cloud that is always available and on demand to solve the world's greatest problems. But this will only occur if it is empowered and enabled beyond the sort of hopeful serendipity that Mulligan talks about.

How does this pool of talent contribute to the cloud? Well, as much as we'd like to believe that we can each understand our own domain of expertise better than anyone else, the greatest ideas rarely come from the places we most expect them, large companies and labs. Sure, discovery may be facilitated by the scale of large players, but that is not where most discovery starts. Instead, big ideas come from outliers.

It's counterintuitive, but the biggest companies today started in times of economic recession. They were strapped for cash and they were extreme outliers. Yet they altered markets and social behavior. What is it about the lack of resources and capital that is so essential to creating fertile soil for good ideas to grow and thrive?

In large part, creativity thrives in difficult circumstances because these situations foster collaboration and networking, creating connections between like minds and similarly impassioned people who have far less to lose than incumbents. Think of it this way: in times of crisis and uncertainty we instinctively migrate toward a tighter bond of community. This is when we network best, enhancing the likelihood of our success. It's why sites such as LinkedIn became so popular among professionals during the economic downturn. In fact, LinkedIn had been around for almost a decade before it reached critical mass during the recession of 2008.

What if we could sustain this level of innovative capability and collaboration? That is exactly what's happening, as social networking in the cloud is altering the way we work. We are raising the bar for what constitutes normal communication and community to a new high-water mark.

The impact of this is just starting to make its way into how we do business. While many people discount social networks as the province of distracted youth and out-of-work professionals, the ability of these networks to scale is incredibly powerful, giving them a reach much greater than that of many large companies. The formation of these virtual groups in the cloud is rampant and constant.

Cloud employment is already topping $100 million in annual revenues through human clouds such as Elance, oDesk, Live/Work, InnoCentive, NineSigma, and others. In these human clouds, problem solvers reconstitute themselves around work as and where they are needed. The result is an inversion of the power structure, from power based on organized scale to power based on disorganized networks and individuals.

The cloud is the foundation of all of this connectivity.

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