From the Editor
Creative Destruction II, Winter 2020
FROM BANKING TO RETAIL, healthcare to manufacturing and education to professional services, digital technologies and innovative business models are upending organizations around the globe. The humbling fact of life for the modern leader is that virtually everything you thought you understood about successfully running your business is open to new and better ways of doing things.
The term creative destruction was coined by Economist Joseph Schumpeter 80 years ago to describe the process of ‘industrial mutation’ by which a new innovation brings about the demise of what existed before it. Schumpeter was very clear: when creative destruction occurs, there are winners and losers. And yet the net economic benefit of a radical innovation is always greater than if that innovation had never been introduced.
Our first issue dedicated to this topic was published in Winter 2018, and even in two short years, much has changed. In this issue, we put creative destruction in the spotlight once again to examine the mindsets, tools and leadership required to fuel it — and survive it.
We kick the issue off on page 6 with my interview with Harvard Business School professor Gary Pisano, in which he describes the antidote to creative destruction for established organizations: creative construction.
From data privacy to bias to ethics, teaching machines to use data to behave intelligently raises a number of difficult issues. On page 28, Rotman Professor John Hull looks closely at some of these challenges in Machine Learning: Issues for Society.
Increasing diversity is not just a moral imperative for organizations, it has become a powerful business requirement. On page 60, Miki Tsusaka and her BCG colleagues show that diversity is key to building two things every organization needs to thrive in a world of change: resilience and innovative capacity, in Winning the 20s: Innovation and Resilience Through Diversity.
Elsewhere in this issue, Creative Destruction Lab founder Ajay Agrawal interviews billionaire venture capitalist Vinod Khosla in our Thought Leader Interview on page 14. And Rotman Professor of Strategic Management Laura Doering shows how personal relationships continue to create significant value in a digital world on page 66. In our Idea Exchange section, Linamar CEO Linda Hasenfratz describes how to prepare for the future on page 94; RBC Chief Scientist Foteini Agrafioti talks about embracing AI in financial services on page 98; UC Berkeley’s Ken Goldman explains how AI can amplify human competencies on page 104; and Rotman faculty Joshua Gans, Partha Mohanram and Peter Wittek discuss their latest initiatives and research. In September, Peter went missing during a mountaineering expedition in the Himalayas, after being caught in an avalanche. He was a valued member of the Rotman community and his loss is keenly felt. We are honoured to present his final interview about his passion — quantum computing — on page 129.
While we address some of the potential downsides of AI and machine learning in this issue, we also show that ironically, technology might actually make us all more human — by freeing us up to be more creative, empathetic and innovative. Whether your organization is fully prepared for what lies ahead or you’re still figuring it out, that is something we can all get behind.