Strategic Alliance Magazine Q3 2017 - 46

THE

Can Alliance Management Keep Pace
in the Fourth Industrial Revolution?

By Cynthia B. Hanson

"Adapt at the speed of light-or risk expiring."

That seems to be the mantra of the Fourth Industrial
Revolution.
Just ask managers in the music industry. Between 2000
and 2015, when file sharing and streaming was on the
uptick, worldwide revenues from recorded music plummeted from $37 billion to $15 billion. The digitalization
and modernization of music, and resulting platforms such
as iTunes and Spotify, quickly dominated the industry. Yet
while the Swedish leader, Spotify, invoked massive disruption, it has never turned a profit. Now there is talk of
possible bankruptcy. Meanwhile, countless music companies significantly downsized or went belly up in the wake
of the disruption.
While some hope that a return to vinyl can save the music
industry, its more likely that an entirely new platform will
sweep in. As musical genius and innovator David Bowie
predicted in 2002, "the absolute transformation of everything that we ever thought about music will take place
within 10 years, and nothing is going to be able to stop it."
Consider yourselves forewarned. "[T]he economic architecture of free, perfect, and instant platforms" is
creating competition that is disrupting nearly every
management practice and business leader, say the authors of Machine, Platform, Crowd: Harnessing Our
Digital Future (see Page 23 for book review), who
provide the example of the music industry. Add in
rapid-fire tech developments in artificial intelligence-
such as self-driving trucks that can replace entire fleets
of drivers with a half-dozen managers-and it's time to
peer into the looking glass and reflect on whether your
company is agile, innovative, and alert enough to keep
pace. "Digital machines, in the form of everything from
self-driving cars to drones to 3D printers to neural networks, are blowing past their previous limitations and
assuming new roles," the authors state.

Consider the developments of conductivity and the
likely entrance of quantum computers as consumer
STRATEGIC ALLIANCE MAGAZINE | Q3 * 2017

products within the next decade or two. Quantum will
be millions of times faster than present computer technology. Present cryptography systems used for writing
and solving codes will be crackable by quantum systems
and outdated in 20 years, according to the National Institute of Standards and Technology (NIST). "We need
to start renovating the current cryptographic systems
now, as it will take just as long (around 20 years) to get
new algorithms selected, standardized, and implemented," advises NIST mathematician Dustin Moody.
History provides us countless lessons on the need to adapt
or die. Consider the turn-of-the-century cataclysmic
change from the steam engine to electricity on business
and labor. "[M]any successful incumbent companies-in
fact, most of them-did not survive the transition from
one power source to the other," the authors state. "Businesses that want to thrive in the coming era of digital
transformation need to understand why this happened
and to heed some critical lessons from the past. ... Adopters of the new technology eventually came to realize that
some long-standing constraints no longer applied."
It's inevitable. We are bound to morph again-but this
time at warp speed. Recent articles by Jan Twombly,
CSAP and Jeff Shuman, CSAP, PhD, of The Rhythm of
Business and Lorin Coles, CSAP, of Alliancesphere,
identify three trends that are reshaping business-"Fourth Industrial Revolution technologies, the
primacy of the customer experience, and new competitors and new partners." Companies in every industry
grapple with these trends-and they are especially disruptive to the makers of Fourth Industrial Revolution
technologies themselves, as discussed extensively at the
June ASAP Tech Partner Forum in Santa Clara, Calif.
ASAP's first tech conference was a stellar success based
on feedback and the engagement of participants. Such
opportunities for networking and sharing are critical to
help alliance managers light the way and avoid the pitfalls that befell the music industry as it transitioned into
a digital world. n

Table of Contents for the Digital Edition of Strategic Alliance Magazine Q3 2017