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At the Tipping Point for Predictive Technology: The Two-Second Advantage

By September 26, 2011Article

Editor’s Note: One of the most important books to be published in recent times is “The Two-Second Advantage: How We Succeed by Anticipating the Future – Just Enough” (Vivek Ranadivé and Kevin Maney; Crown Publishing Group, NY; July 2011). The authors explain how computer technologies can become more like the human brain in its ability to read an immediate situation and predict what will happen next. The book is rich with examples of extraordinarily talented people such as hockey star Wayne Gretzky, whose brain was able to understand what would happen next – an instant or two before anyone else on the ice – so he could skate to where the puck was going to be. Ranadivé and Maney explore how companies will not only have competitive advantages because of such brain-like technologies but also will operate in a completely different fashion.

And the early adopters are already there. Why did you write this book? What do you hope will be the result?

Vivek Ranadivé: Earlier this year, I spoke of the tipping point in our business and a new era in enterprise computing, as companies shift from transactional or database-centric architectures to event-driven architectures. This new era has arrived, and the 21st century has begun.

All kinds of crossover points are happening. There are more cell phones than landlines, more laptops than desktops, more smart phones than regular cell phones. Technology is reaching a breaking point, with too much data overwhelming computing’s capabilities, and a new model of information technology is needed.

Our book is meant to give a little nudge – to those organizations such as the Fed who still do things in batch and continue to operate in slow motion – and get people to start thinking about how they can use a little bit of the right information, at the right time and in the right context to make the world a better place.

I felt co-writing the book with Kevin, who has explored theories of how the brain operates as a predictive machine, seemed like a good idea as his thoughts sounded a lot like the systems that I believe companies need to implement to be competitive in the 21st century. Do you think companies are ignoring the possibility of the two-second advantage or do they just think it can’t happen?

Vivek Ranadivé: I think it’s a little bit of both. Problems exist that sometimes organizations are not even aware they need to fix.

One of the examples in the book is about the world’s greatest pick-up artist. I think we can learn a lot from this gentleman who has unraveled the greatest mystery in the universe, which is the female brain.

He has figured out the exact right thing to say to a woman at the exact right point in time. Wouldn’t a phone company or bank like to be able to say the right thing at the right time to its customers? With the kind of technology we describe in the book, companies will be able to anticipate customer needs before the customer even realizes they have those needs. Similarly, companies want to be able to prevent problems before they arise.

For example, I had dinner last week with the head of technology at a major U.S. airline carrier. With the use of real-time data and the two-second advantage, airline carriers can know that you got on a flight to Chicago but your bag didn’t make it, and then automatically send you an email or text message while you’re still on your flight telling you where your bag is and when it will be delivered to you. And 5,000 miles have been deposited into your frequent flyer account.

Companies need to be better at connecting the dots to help an airline, for example, get ahead of events like storms or aircraft maintenance issues. The domino effect of such events is hugely complex, and there’s no time to analyze mountains of data after the fact to arrive at an optimal plan.

The other thing that’s emerging is that math is trumping science. One doesn’t really need to know the why; one just needs to know that if A and B happen, then C will happen. This is actually quite an important concept because that is how the human brain works. It’s all about finding patterns. You predict that “in the near future” companies will have anticipatory-thinking technology. Can you narrow down “the near future?”

Vivek Ranadivé: We’re just hitting that proverbial tipping point in the adoption of this approach, and over the next few years everyone will be applying the two-second advantage in some shape or form.

Whereas content was king in the 20th century, context will be king in the 21st century. Context is the ability to bridge past occurrences with current behavior and understand what is happening at a precise moment in time. And every one of our prospects and customers today needs context – as they look to acquire new customers, deepen their relationships with existing customers, and grow and manage their business.

For example, we have early adopters such as retailers that want to offer the right promotion to customers before they leave the shopping aisle; we have utilities that wish to detect a power outage before it actually occurs; and we have banks that want to prevent fraud before it happens. To get this important context, all organizations must fully leverage the Internet, exploit mobility, operate in real time, and harness the resulting explosion in data volumes.

I think adoption will take a similar path as the evolution of the cell phone. Ten years ago if I had told you that you would be doing most of what you do on a cell phone, you wouldn’t have believed me.

The next one to two years will determine who the 21st century companies are. As you point out in your book, technology is reaching a breaking point overwhelming computing’s capabilities. A lot of companies are developing solutions for managing and analyzing Big Data. Are most of them taking the approach you discuss in the book, or are they mostly focused on analytics to uncover trends from historical data?

Vivek Ranadivé: The big database vendors have convinced people that Big Data equals big database. That’s absolutely the wrong approach. Databases have major handicaps in today’s world. They’re inherently focused on the past. They analyze what’s already happened, not what’s about to happen. And they cannot keep up with the overwhelming waves of data from a constantly expanding number of sources.

Now every event becomes a bit of digital data. A transaction is one kind of event, but there are many others too. Every time a customer logs on to a bank’s website, even if no transaction is completed, that’s an event. Cell phone signal analysis may tell a bank how many people walk by a branch every day – more events. Debit card purchases are events. A bank should be able to recognize patterns of events and anticipate what a customer might want next, proactively capturing that business.

Competition is driving the world to work at an ever-faster pace. So, while the amount of data keeps going up, the useful shelf life of that data keeps coming  down. The amount of time that you have to do something is coming down even faster. No one can afford to react too late, based on information that’s too old. The threats and opportunities of the 21st century require a software platform that is engineered to operate in real time and to handle events and not just transactions.

We are still in the very early innings of what I believe is the greatest opportunity in enterprise software. As you point out, some businesses won’t be able to cross the threshold and policies will have to change. Do you have suggestions for building this kind of environment that drives the necessary cultural change?

Vivek Ranadivé: To solve the problems and take advantage of the opportunities of the 21st century, you need to operate like a 21st century enterprise. I think the best way to make the two-second advantage a reality is to hire the right kinds of people and partner with the right kinds of people.

There’s no silver bullet, but the good news is that circumstances are forcing people to change because the status quo isn’t working. It is going to cause dislocation and going to take people out of their comfort zone, but the rewards will be huge for those who do it. After all, what’s the point of knowing you lost a customer after the fact, or knowing fraud has been committed when the money is out the door or knowing you have a power outage when you are already immersed in darkness? In your book, you segment people as either “ones”  (leaders) or “twos” (managers). Of course, if a company is saddled with a CEO who is a two, it can hire a different CEO. But you seem to imply that oneness or twoness is innate and can’t be changed. How can twos become more effective?

Vivek Ranadivé: People who are ones operate at a higher level. It’s essentially a different personality trait. Ones will always challenge the status quo. A person who’s a two can hire ones. The thing about ones is that they’re able to attract other ones and other smart people. So if somebody is a two, then they need to get over that hurdle, hire ones and let the ones flourish.

The analogy that I made in a past book is to think of a two in music terms, as being like a Sousa marching band, where everybody marches in unison to the beat of a single drummer. That’s a 20th century approach. The 21st century is more like jazz, where you have really, really smart people and you make them each feel like they’re doing their own thing and they have the ability to improvise. Then the job of the CEO is to be the director of that jazz band and make it come together as music. You dedicated the book to your employees “whose technology skills and business insights helped form the founding principles behind the concept of the two-second advantage.” How does TIBCO find and hire such “creative, intelligent and tenacious” people?

Vivek Ranadivé: We build long-term relationships with the best schools because I like to hire fresh from college. I also like to hire athletes because a good athlete will succeed, no matter what the game is. I also like to hire generalists more than specialists because change is the sole constant in any business.

We set the bar very high for employees, and we organize the company’s structure so that workers empower themselves. TIBCO employees are fiercely entrepreneurial at all levels. I’m a big believer in that. From what direction do you think will come the most progress toward technology becoming more brain-like to support the two-second advantage over the next two years? Government, healthcare, retail or somewhere else?

Vivek Ranadivé:I think it will come in the retail sector. We’re seeing a massive sea change with the emergence of platforms like social networks where you can reach large numbers of people through a single platform. Mobility and location-based awareness are also affecting this sea change by allowing people to have the things they want, when they want it. I think that we’ll see progress across the board and everything will end up looking like a retailer – an airline, an insurance company, a bank – they are retailers. How they interact with the end consumer will be the area that’s most affected by this technology. It seems to me that one of the best outcomes that could result from your book is that individuals read it to help them assess whether they’re ready for these changes so that they don’t get left behind.

Vivek Ranadivé:The good news is that the next generation is absolutely ready. I said the 21st Century started a year ago. Last year, my daughter graduated from high school; her class was the first class that was 100 percent brought up on the Web from the time they started school. This generation feels very comfortable with the whole concept of the two-second advantage. But you’re right about the current generation. The people who are currently in the workforce need to read the book to understand what the future is going to look like and how they need to adapt.

Technology that provides a two-second advantage is a simple concept but a powerful one. I really believe that there is not an area, whether it’s government, business or healthcare, where the two-second advantage won’t make the planet a better place. You can avoid disasters or minimize the impact of a disaster, minimize the impact of security problems and eliminate the dynamics of terror threats. The implications of this two-second advantage are actually  quite far-reaching and broad in scope.

For more information about the book, and to read the first chapter, click here. Also visit the blog and read about the Fed being stuck in the 20th century as well as other current events in connection with the two-second advantage.

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