Are you a cybernetic collective?
In Elon Musk’s now-infamous live interview with Joe Rogan last year (that one where he smoked marijuana mid-broadcast and caused Tesla stock to fall 6%) he said something very interesting about modern companies that has stuck with me ever since.
“You could argue that any group of people, like a company, is essentially a cybernetic collective of people and machines.”
The more I thought about it, the more I kept coming back to that being true. It may be glaringly obvious but the implications are interesting.
For example, if you think about an office today, it’s likely rooms of humans interacting with computers. It’s a combination of human intelligence and technology-driven ‘intelligence’.
Of course, today, the value we provide to clients is no longer entirely, or even mostly, the direct result of human labor. It’s a combination of our work and the work done by our tech; it’s the collective human/tech intelligence that’s delivering value to clients.
What a company provides now really is that “cybernetic collective”. Yes, it’s the team, but it’s also processes, software, data and automation. It’s human decisions driven by data and people working, supported by automated processes. If you get it right, it’s the best of those two worlds.
We can even see this phenomenon playing out in the exit value of companies and advisory firms. Acquirers are no longer simply looking at the value of your client book, increasingly it’s the quality of your client data, the efficiency of your processes, the standard of your tech stack - that’s what acquirers really care about.
Of course, this trend isn’t just playing out in our industry. If you look at the market capitalization per employee of top technology companies, the figure has gone through the roof in recent years.
When you compare it with more traditional brick and mortar firms, there’s certainly a difference.
In my view, getting this balance right is the true meaning of the much-touted phrase “hybrid advice”.
That means putting the human part of that cybernetic collective to its unique and best uses: having deep conversations with clients, putting clients at ease, taking their individual circumstances into account - things technology could never do.
While conversely putting your tech stack to work in a way that plays to its strengths: eliminating repetitive tasks, communicating at scale, predicting and analyzing data sets.
By getting the elements of that collective intelligence right, I believe firms can play to the strengths of both parts of that union. Serving clients with the best of the human side of advice and the best technology has to offer.
That’s the real value firms will have to offer as we go forward as I see things.