Can you imagine a world without Amazon or Apple? Of course not. Ever heard of RCA or Republic Steel? Probably not. In 1955 — the first year the Fortune 500 was printed — they were at the top of the list. Now they are part of a cohort of 440 companies driven out by disruption.
The ‘Dotcom Boom’ has been the most devastating disruption these companies have faced. Now AI is next.
- To understand who will excel in the midst of enterprise AI, we can analyze the victors of the most recent technological disruptions.
- Two successful cohorts: new entrants from the ‘Dotcom Boom’ and the survivors from the 1955 Fortune 500 list who are still on it today.
In one cohort, you have the 12% of the Fortune 500 giants who have withstood the brute force of technological innovation and continually beaten the competition. These are the Money Mayweather’s of the big business elite. They're old, you may not like them, you’re wondering when they’re going to leave the scene. But they keep showing up, they’re extremely keen in their understanding of the market and they just keep winning.
In the second cohort, you have the companies who were born in disruption. The best of the new school, the guys who have out hustled all their innovative peers.
All of these winning companies exude three values: being nimble, employee evolution and early experimentation with new technology.
In terms of education, if you ask sixty people what AI means, you will get sixty different answers. This is not about the future of AI, the world has heard enough of that. We need to get educated around how AI is impacting business right now. Namely, how can you use AI today to make money, save money or avoid losing it altogether?
Andrew Ng, Stanford professor of machine learning, said in a 2017 EmTech speech that the majority of economic value in AI is derived from ideas such as facial recognition (iPhone X security), credit evaluation (loan repayment), speech recognition (call center efficiency), enterprise machine translation (AML Compliance) and image recognition (used in self-driving cars).
AI presents the challenge to either respond, adapt or do nothing. The dawn of humanity faced the same challenges we face today. Language was a barrier to communication which creatures far less advanced than us were able to overcome. Adapting to a new language required quick learning and being nimble.
Jeff Bezos may have best captured the sentiment of being nimble:
Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations.
Jeff Bezos, CEO of Amazon, in his April 12, 2017 letter to shareholders
A bias towards learning is what the old and new winners of disruption have in common.
To help the country learn to use the tools of the industrial revolution, the K-12 education system was born.
One Challenge is the perception that AI will ravage the job market. Jobs are a set of skills, ones that can expand, adapt, and evolve into new roles and responsibilities. AI can learn a certain skill set, but it can’t take over a job. Not when the employee base is continuously adapting.
In his 2016 TEDx talk, David Autor, author and MIT economics professor stated, “In the 45 years since the introduction of the automated teller machine […] the number of human bank tellers employed in the U.S. has doubled. Going from ¼ million since 1972 to half a million today.”
He goes on, “As their routine, cash-handling tasks receded, they became less like checkout clerks and more like salespeople, forging relationships with customers, solving problems and introducing them to new products.”
The sixty Fortune 500 companies who withstood the earthquake of disruption caused by the Internet figured out how to design education into their culture and get early access to disruptive technology. These two surviving companies are prime examples of that:
A company just over 100 years old, still finding success in an industry laden with competitors who were dragged out of the arena, Boeing is the New York Yankees of the airline industry. They both have two main success factors: agility and early access.
Agility requires decentralized knowledge transfer. Since their debut season in 1901, the Yankees have seen over 30 different managers, 1600 different players, and even three name changes. They’ve had to adapt to changing norms every season since. But one thing that’s never changed is that they win. Countless other teams have tried to make it in the city, but only one has been there since day one, with more world series victories than any other team in the game.
In its very early existence, Boeing shaped it’s culture to depend on the power of the team, not an individual. Many other airline companies at the time were too reliant on the vision of a single person, and upon their leaving the company, their ideas went with them. Boeing, more than 61 years after the passing of their founder, is still dominant in their industry, much the same as the Yankees without Babe Ruth. They have a culture built to adapt to new leadership, not stuck on one man’s shoulders.
They also have the advantage of early access. Boeing engineers operate like high-velocity entrepreneurs, working in their own garages testing new technology and product ideas. It’s a productive paranoia: “What’s coming next? Who’s working on it that might disrupt us? And how can we be the ones to implement it first?” Like their baseball equivalent, Boeing is delivering premier results before the competition can even say liftoff.
Another Fortune 500 veteran, making the list in both 1955 and 2017, AT&T has actually moved up the list (had it not been for the FCC, they might be a few spots higher). They’ve had an impressive run, moving from strictly phone service to all-in-one telecom provider, facing new entrants Google and Amazon in addition to longtime competitors Verizon and T-Mobile.
AT&T’s CEO, Randall Stephenson, is also pushing for agility by offering a corporate education program to help employees develop a modernized skill set. The aim is to create a 21st century employee base that’s prepared to move into the future. With all of AT&T’s successes (mergers, acquisitions, expansions) since 1955, they’re a prime example of keeping ahead of the rest of the pack.
Who will be on the Fortune 500 list in 2055? Early adopters of AI who spend countless hours testing it’s full capacity, unencumbered by the fear of failure, and identify ways to implement AI today. AI enables faster decision making. Look at how machine translation is used by a top pharmaceutical company to translate customer feedback around the world, to gather insights and enable faster decisions.