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Your company will be an algorithm in 5 years

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El Periódico de Cataluña
Your company will be an algorithm in 5 years
January 2016, article published originally in Spanish in El Periódico de Catalunya

 

Your company will be an algorithm in 5 years

Routing-in-Barcelona

Paths through Barcelona. Map of 30.000 geotagged routes chosen randomly (source: Eric Fischer)

Just what we needed, what a joke. I guess that’s what you’re thinking. Here comes another quack futurologist with ridiculous theories. Maybe so. Perhaps I’m exaggerating and it’s not 5 but 10 years, but it smells like algorithm and it wasn’t me. Nonetheless, I want to start the year with a bang. If in 2010 I had told you that in 6 years 85% of the population of this country, including you (yes, you), would be in the ‘book of faces’ (known as Facebook), you would have told me to get lost.

I have to admit, I didn’t say it, although I wish I had, because now it’s true. This time I am going to say it, algorithm, algorithm, algorithm. What makes me think so? Let me ask you: What do L’Oréal and Google have in common? Or Mercedes and Spotify? Or Telefónica and Zara? LinkedIn and Ikea? Some more offline and some more online. Some sell products and others sell services; some to end customers and others company-to-company. Basically, they all understand the value of algorithms for enhancing their commercial process and giving their customers a better experience.

An example: the Swedish rail company Stockholmstäg has developed an algorithm for offering better service to their customers. How? When a train incidence occurs at one location of their rail system, they are able to calculate what impact this will have on the service they will offer to all of their customers that day. This way, they are able to anticipate problems and look for solutions while informing their passengers (an old way of saying ‘consumers’).

Isn’t that wonderful? If we could do that here, how would it look? Imagine, a train station in Elche, 16.30 in the afternoon, August. An elderly couple waits in the shade for the Alvia, which will take them to visit their daughter Encarna who lives in Benidorm. Antonio, the father, picks up his cellphone and calls his daughter: Encarni, dear, don’t rush to get us because we’ll arrive late. The RENFE algorithm has just predicted that, as a consequence of an incidence in Coruña, our train will leave 25 minutes late. Yes, we love you too. Oh, we’re bringing your favorite for dinner. For me, that would be the country of Champions.

Campos de cereal en Kansas

Satellite picture of crop fields in Kansas, USA. You need a machine to control when to irrigate, plant or harvest each one of the fields, nobody is able to have all the parameters in his head! (source: NASA)

I know what you’re going to tell me: look, bigshot from IESE, I sell dairy products (for example cheese or yogurt), or my company is a business-to-business, this has nothing to do with me. Well you’ll see, I think it does. Let me ask you a question: do you sell something? I know the answer. That’s why no matter what you do, put an algorithm in your life. Start to think how and with whom you’ll do it. Because on Amazon they have on and they sell everything in infinite categories. In the end it’s about having the vision that, whether to sell more or to generate better relationships with your client and potential consumers, it’s useful to have an algorithm. That’s my first bet of the year.

Are you in?

Formado en la Escuela Suiza (habla 4 idiomas), Pablo Foncillas es licenciado en derecho y MBA del IESE Business School. Compagina su vida en el entorno académico y como conferenciante junto con roles directivos y de consultoría en varias industrias desde los años 90. ¿Hablamos? Clica aquí para contactarme por correo electrónico