John Rossman is a managing director with the global technology consulting firm Alvarez and Marsal and a prior executive with Amazon. An influential digital strategist with over 25 years in technology. He spoke ReadWrite about his latest book “The Amazon Way on IoT: 10 Principles for Every Leader from the World’s leading Internet of Things strategies.”
During the interview, John provided insights on IoT and reasons why corporations need to understand this emerging technology. He also shared examples of how the technology is currently being used and how it might be used in the future.
ReadWrite: I think your book offers a unique angle on IoT. It looks a little bit different than other IoT books on the market. It seems like more of a high-level book, but at the same time, you’re applying the principles that you’ve utilized at Amazon and also some of the principles you had written about previously. Can you describe the impetus for the book?
John Rossman: The impetus for the book was a number of different factors. I had the opportunity to do a few client engagements where we were helping to frame and understand what the opportunity was for IoT in their business. What I found was, there was a lot being written in very segmented use case ways of IoT and how it was impacting and really big predictions about the number of sensors, etc, and there’s a lot written in the technical space. But there was nothing that really helped you answer the question ”How should IoT impact my business and how do I go about evaluating the potential for IoT in my business?’ I thought ‘There’s a customer segment that needs to be served, because that’s an essential question that every business leader needs to be asking themselves.” Then as I started to frame out ‘How should a business leader think about IoT in their business? What are the different models? Every model, every principle, every strategy, one of the best use cases was always — What was Amazon doing in that space?’ And then I looked at ‘What can I write about and think about authentically?’ So those three, factors came together for me and that’s why the book is for business leaders who really need to evaluate ‘What should my IoT plan be?’ I told the story through the lens of Amazon and other great companies to demonstrate the different strategies that IoT can have for a business and leave the user for a set of questions to ask themselves on each strategy. Is this potentially a strategy for me or not?
RW: Can you describe IoT? I really don’t think the general public or companies really understand how IoT is going to impact their immediate future.
JR: I think of IoT in kind of three layers. On one layer, IoT is a set of technical capabilities. It’s sensors, it’s connectivity, it’s cloud computing, it’s analytics and algorithms. All of those things being stitched together. On the next layer, IoT is kind of the use cases and scenarios that it can enable in terms of whether it’s a connected health scenario or list avoidance or any of the great IoT use cases that we hear. At the top level, IoT is really a core business strategy enabler. And that’s where I think leaders need to really start in their thinking. Understanding how can IoT impact my customer’s experiences. How can IoT drive the next wave of operation excellence within my organization and how can IoT help me build new business models and new service models in innovative ways. IoT is really all three of those things. On one layer it is a set of technologies and as you said, it’s many different technologies kind of integrated together for any one scenario.
RW: Years ago, Bill Gates, in his book “The Road Ahead,” he predicted IoT. He talked about handheld devices communicating with the environment. He also said that there was a division between eras. There was a division between the PC era and the Information Highway. Now, we’re on the cusp of the next era with IoT. Do you think the general public is prepared for this?
JR: I think it depends on what level of impact. I think the public is ready for some of the maybe simpler scenarios and for the good things that can happen out of this and whether that’s like some of the scenarios that Amazon’s doing, like partnering with DHL and Audi so you can have a package delivered to your car from DHL. The public is ready for that. But I think, some of the under the waterline issues around the automation that this is going to open up and some of the privacy matters that are only going to be heightened and some of the security things that are going to happen. Good things come along with the potential for dramatic change and it’s going to be disruptive. I like the word ‘disruptive,’ because it kind of describes that it’s not all going to be fun along the way, and it’s going to cause challenges for individual and cause challenges for employment and it’s going to cause societal challenges, but we’re up to solving those things, but it doesn’t mean that it’s going to be easy along the way.
RW: In the first chapter of your book, you referred to IoT as ‘’A tsunami of opportunity and a threat.’’ Why is it a potential threat?
JR: For two reasons, one is because of some of those under the waterline implications and challenges that we just talked about and also existing business models are going to be dramatically changed and that’s a threat to the establishment and traditional businesses. As much impact as digital models have had to date, I think that IoT is going to be the next wave of digital model and the impact and the speed of that oncoming wave is going to come even faster than the first digital wave has come at us.
RW: Let’s talk ethics. We’re already heavily connected. Now we’re in an era with smartphones and glasses that learn about us. Potentially, a decade from now, IoT will try and connect as much as possible. A person like yourself who has seen technology evolve, what ethical concerns do you have regarding IoT?
JR: I would say it’s not my area of expertise… I think that’s a big topic in security and privacy go along with that… As in most things with ethics there’s healthy debate on both sides of every topic. I think you really have to target that on a scenario by scenario topic. But the comment that I would have, when it comes to security or privacy, as it comes to legal matters. Those topics are not checkpoints that you do like ‘Hey I’m ready for launch of my IoT capabilities now, I’ll do my legal review or now I’ll do my privacy review!’ You really need to involve those and those are really core requirements that need to be designed from the very beginning of your strategy and your scenarios that you’re going to develop. Those are big and important topics and they need to be considered from the very beginning.
RW: In the first chapter, you mentioned that you were creating a roadmap to help leaders understand this technology. Within the next five years, in terms of transportation, health or entertainment, what kind of changes will IoT bring about? What kind of changes will we see thanks to IoT?
JR: I think that you’ll see on the transportation front, where kind of managed situations where automation has a dramatic impact and is a really viable solution. Transportation and commercial transportation in shipping and container yards, I think the opportunity for IOT both in terms of transportation that provides the overall monitoring and management is pretty great.
RW: In your book, you provided examples of how IoT is being implemented currently. Are there any case studies or recent examples that you’ve seen of IoT in use that impressed you or you thought was a very good sign of how the technology should be used?
JR: Some of the examples or use cases that I think are some of the most compelling is around worker safety and worker’s compensation insurance management. The nice thing is what everybody’s aligned when it comes to creating safer work environments. There are some really neat scenarios where workers are equipped with sensors to help measure the stress and strain that they’re putting onto their bodies to help avoid and measure workloads so that they can avoid worker’s compensation claims and that benefits everybody and when there are accidents or incidents that happened, the ability to have a better picture of what happened and better analytics so that those can be managed better, so that frauds avoided, so that subjugation is better managed is a real interesting scenario. I really like those scenarios involving worker safety and helping to operate in a more assured environment.
RW: In terms of when enterprise companies were introduced to the internet in the mid-90s, what’s the biggest mistake that companies made then, that they can’t afford to do right now with IoT?
JR: When the first e-commerce models were coming along, a lot of very smart people were very dismissive to the impact that that would have over time. I think retail is maybe the easiest one to look at. Today, e-commerce and digital capabilities is a significant piece of the overall retail environment, and it’s where almost all of the growth is. Too many companies dismissed it and sat on the sidelines and so my advice to companies even if now isn’t the time to go big in IOT or to change a business model based on IoT, you need to at least be paying attention and getting really smart on what are your competitors doing, what are similar industries doing, where are investments going on IoT in your industry and I would encourage you to start building some organizational capacities. Some smarts and abilities to execute on these models, because when it becomes late in the games, it’s going to be really hard to build those experiences and that organizational capacity. I think the mistake to avoid is to think that it won’t impact you and to do nothing.
RW: In closing, who really need your book immediately? Who benefits from reading this book right away?
JR: Anybody who’s in an organization who is in a position to be answering the question ‘What is our IoT strategy?’ Sometimes that’s in the business, sometimes that’s in the technology organization, sometimes it’s in the product and field organization. It can be in a lot of places, but anybody who’s asking that question ‘What’s our IoT strategy?’ I think should read the book.