In this edition of the Digital Change Podcast, our host, CEO of Innovation Platform, David Swank, sits down with special guest, Ian Slesser, to discuss the future of Smart Cities in the digital economy. Read the full transcript below.
David: Welcome to another edition of the Digital Change Podcast. We're glad that you've joined us again today. This is a podcast focused on our digital AIM and when we say digital AIM, we mean achievable solutions, impactful results and meaningful experiences in this digital economy that we're really trying to unpack and discuss. We're excited, today, to have with us, Ian Slesser, who is with Pitney Bowes. He's their global product advisor. Ian is really leading the charge in Pitney Bowes for what we would call Smart Cities. Ian, it is just absolutely great to have you here. Ian is joining us from the UK and flew over here yesterday so we're just so glad you're here with us and looking forward to having a discussion with you today.
Ian: Thank you. Happy to be here.
David: Well, Ian, we're hearing more and more about Smart Cities and the value of Smart Cities and just how important they're going to be to the economy of cities and communities across the globe. But, I think equally, today, one of the things we want to share with our audience is the risk associated with this this exponential evolution or revolution, whatever we want to call it. I think today, perhaps one of the greatest risks, and I hope we're able to convey this to our audience, is the status quo- of really just continuing to wait while technologies are coming at us at such an exponential rate. Bain & Company just recently did a survey where a thousand companies around the world were asked to gauge their level of the digital readiness and what was interesting is that two things become abundantly clear:1. The payoff for the digital transformation can be impressively high.2. But unfortunately, equally the success rate is regrettably low. I know, recently, you wrote an article called Smart Cities: A Road Map for the Future and I hope one of the things we're able to provide to our audiences is not only to understand the risks, but to also understand that there is a road map to the future. I'm really excited that Innovation Platform has Pitney Bowes as our partner to underpin our platform because I really believe that what Pitney Bowes is offering, and its vision is going to help us make this digital transformation. You know, the study (Bain & Company) also indicated that conventional transformations have a success rate of 12%, but digital transformations are as low as 5%. That tells us that transforming our companies and our businesses is not an easy task. Today, we're going to get to hear from one of the experts and I say that sincerely. I've had an opportunity to be around a lot of people talking about Smart Cities in the built environment space, the utilities space and I think I shared with you yesterday, I truly appreciate not only your vision, but your skill set and expertise in this area. So, to start I’d like to ask you this: From Pitney Bowes’ perspective why is the Smart City evolution or revolution so important and what is the effect from kind of an economic standpoint?
Ian: I think it's really interesting. Over the last decades, the pace of change and the rate of change has been accelerating. It's been increasing all the time and at Pitney Bowes, we've been working with infrastructure for a long time in traditional ways. We're good at maintaining assets across the community; keeping environments good, clean and safe; but with the explosion of population, the explosion of technology and more demand from the communities, we all have to react in a different way. We must make the best of those available opportunities to make things work properly and more effectively. With population growth, the challenge that cities are fighting is to bring in the best and brightest talent to ensure their cities grow in an effective way and bring in the most value and economic growth alongside that. It's unavoidable, but we've got to change the way we work. We've got to be able to work more efficiently, work more cohesively and deliver more value with less money. The only way to do that is to make best use of technology and make that go forward. That technology is available to us. We know it is, but as you rightly said, many of those projects are failing or they're short-term projects. They're not actually delivering the benefit, value and growth that's needed to sustain the environment. Really, the challenge for those owners of whatever the asset is, whether that's infrastructure, power grids, cities, highways- it doesn't matter- have got to think again about how they can make the projects they're doing achievable, impactful, and really meaningful for the citizens and that they're going to make a difference. That's the main challenge that lies ahead.
David: Ian, you’ve mentioned needing to change the way in which we do business or change our thinking. One of the things that this podcast is about, as we talk about digital change is: Is it going to be extremely important that we change the way we think, the way in which we develop strategies? When I think today about the story of Kodak, the Swiss watchmakers, Yellow Cab versus Uber, Netflix versus Blockbuster, we all like to tell those stories. We all like to share those stories with our organizations, our employees, our customers by thinking that we when we tell those stories, we get it. But the reality is, I really believe that Kodak got it, Yellow Cab got it. I mean, these are good companies. These are companies that understood what was happening around them. I think it illustrates just how challenging it is to think differently when every day your magnet is where you've always come from. We could go on and on talking about JC Penney's and other companies, who we see every day trying to make the transition but ultimately find themselves being drawn back to that magnetic force of the way they've always done things and I think that's so important for us to talk about. In regard to some pivotal strategies, recently, I read a book called The 10X Rule, which talks about the fact that we have got to start thinking ten times greater because change is happening at a ten times faster pace. So, in your estimation, because you work with a lot of companies, globally and so you see this magnetic force and I think it's so important that we have pivotal strategies that let us almost draw away from the magnet to the future vision we need to have: What are some of those pivotal strategies?
Ian: Coming back to the original points, what we must not forget is the transformation that Kodak went through and all the other companies you talked about went through. It wasn't easy. It required vision. It required effort. And it required to change embedded thinking to really move it to the next level. So, it's not something you can just turn on and say: ‘You're right. I'm going to go to the next level’. You've got to take it through a process. You've got to go along a path to make a sustainable change through that journey, through embracing the digital technology and making it work for you. We hear all the time: ‘We don't have time to bring in new technology because we're too busy maintaining or fixing what we’ve got’. Well, that is a declining model. That won't work. Let’s look at bridges across the country. They're in a deteriorating condition and if we just keep doing what we're doing with less money then they're going to keep deteriorating. We've got to change the way we approach that and see how we can use technology, use sensor-based devices, use intelligent infrastructure to actually change the way we're maintaining those assets as an example and move it forward. Now, in order for that to be successful, that has to fall within an organization-wide, citywide, even statewide strategy that comes together to see how everything can be cohesive. That ranges from everything to concrete in the ground to the people that actually move about on it. If you're not thinking at that level, the broad level to start off as a strategy, you're going to create a silo project that's not going to deliver the benefit that you need.
David: I love your saying “thinking at that level” because I think in this knowledge economy, we really are talking about capabilities. The capability to think at levels in ways that allow us to create new strategies. I think about some facts that I recently found that say 89% of industries and businesses today and those who operate communities believe that their organization is going to be disrupted. So, we all know disruption is coming. It's here. 54% of those [companies] say that they're possibly going to go out of business, recognizing that as you just described, if you're going to keep doing what you've always done, you're going to get what you've always gotten. So, it really is about how do I step back and take a look at that from a strategic standpoint. You know, McKinsey and Company in one of their recent surveys indicated that only 8% of those CEOs who were surveyed believed that their current business model would survive this digital disruption. When you hear that, you’ve got to step back and think: “What is your vision?” I come from the utility sector and I worked in the co-operative network. I truly believe our sole purpose is to serve the well-being of our consumers. With that in mind, I think the highest level of stewardship, and I think as you've already described it, is that we start thinking in ways that represent that client base, that consumer base, that member base in a way that captures the value of this. So, with that in mind, can you kind of share some insights on what's that looks like? What's that vision look like and what do companies need to be thinking about to start changing that trajectory?
Ian: The first thing I would say to companies in this conversation we're having, is that a lot of the fears around introducing new technology have actually been introduced by the technology sector. We've got a responsibility to try and help our customers to make that transformation. We've got to make it a lot easier than it always has been. When this technology was cutting-edge maybe five, ten years ago, we made it very hard. Projects were very costly. They were flagship projects, which were high-profile and weren't really looking forward to have we got the right foundations? Have we got the right building blocks in place to build something that's actually going to support us for the next 25-30 years? Because if we haven't got that, if we haven't got that foundation, then we can't effectively build anything that sits on a foundation that's solid. So, I'm a big believer, and David, you've heard this from me before, that you need to know first what you've got. You have to have a clear indication of what assets we are talking about and those assets could be hard assets like concrete, but they could also be people. You know, our people are part of our wealth as an organization. From that, we need to understand what condition those assets are in. What can they do for us currently? What are our challenges? What are our risks? The third stage in that maturity cycle is understanding how we're going to maintain that. How do we maintain a bridge which is in good condition, but also how do we maintain that there's a strange terminology to address to people? How do we help our people grow? How do we help our people move through this cycle to get past the inertia of: ‘I know how to do this because I've always done it’? We're trying to get people to do things in a different way and it's very difficult. It requires that vision to be communicated throughout the organization. Once you've gotten to that point that's the solid business foundation that you can then start building the digital transformation on. Then you know if you're using technology that allows you to innovate fast and fail fast, if necessary, without spending an awful lot of money and an awful lot of investment. That's how you're going to get the best benefit out of this environment. We're now at a position with the technologies that we're working on together that we have sensor technology that could go into a city and doesn't require a massive amount of investment. We can pivot really quickly. We can monitor different things and if it's delivering value, we can extend that into an organization-wide infrastructure. If it doesn't deliver value, we can throw it away and start again and go differently. That ability to have the solid foundation underneath, the ability to play in certain circumstances, analyze and adopt very quickly and without spending off a lot of money, is absolutely key. It shows the value of the digital transformation and helps not only the business to succeed but also our employees to succeed and deliver value to the community.
David: I want to follow up on just a few thoughts you had there, because I think you're talking about getting our act together, data in order, knowing what we have. We talk about the word platform and we talk about enterprise architectures. I've spent 27 years in the utility sector, and I can honestly say that what excited me about Pitney Bowes is its convergent architecture. I say convergent because I think that what really attracted me, and I think we as communities and utilities have to start recognizing, is that we're having a convergence of these assets to where we really can begin to look at them in a kind of a shared economy in a different way. As we think about Smart Cities, there are so many infrastructure providers, so much IoT that is being siloed, not only within organizations, but across sectors. What I think is so important for our audience to know and hear is that this platform we built is a platform that is agnostic. It has the ability to bring together assets that have never been looked at in a collective way and analyzed from a standpoint of how we lower the capex and the opex. I truly believe we're in a time where the cost of infrastructure can come down because of data and because of joint investments and finding ways to optimize these assets. Peter Diamandis wrote a book called Abundance that said we can increase the abundance of energy and the list goes on because of better optimizing assets. So, could you just speak for a moment about there’s a lot of kind of verbiage here in terms of convergent architecture, agnostic asset management, just why that is so important to the larger Smart Community initiative?
Ian: Oh, absolutely. So, one of the key challenges at Pitney Bowes that we've been addressing for over three decades now, in terms of asset management and infrastructure asset management, especially, is breaking down these silos between what organizations see as disconnected assets. If I take a took a road, for example, the roads team might not talk to the streetlights team. They might not talk to the traffic signal team. And they're seen as separate and independent units, but, of course, they're not. They all work together, and we now have the opportunity to use our streetlights to monitor our roads. Use our routes to monitor our drainage and bring collective monitoring together to give an insight that before we couldn't do. Let’s give an example on the ground. A real-world example is storm drain monitoring. Understanding that the biggest single cause of road fatalities in the U.S. is surface water. That's what causes vehicles to crash more than any other incident, any other eventuality. We now have the technology to be able to detect when we're going to get a surface water problem while it's in a position that the weather is dry, and we can go and fix the problem easily. Traditionally or currently in many places, we don't actually react to that surface water until it comes out of the ground. At that point, the water is going into the assets, going into the roadway and causing damage or reducing life. It's creating a safety hazard. We're putting our people at risk and we've got to go and deal with it as an emergency. We've got to close roads. We’ve got to put diversions in. We've got to work nearly always at night because that's the way it happens with a lot of teams and that costs a lot of money.
So, by simple monitoring with simple devices, we can actually understand the condition of the drainage network which is usually hidden and address those problems in the dry conditions. The important thing about the platform that we've put together between us, the Innovation Platform allows all of the strategy and the change in approach to change your mindset as part of that offering, but it also provides a platform where you can add any sort of sensor into the ecosystem. So, yes, we have a network of suppliers of monitors. We can put those in, but it doesn't have to be our own and that's important. If the city has existing sensors or existing monitors or if an infrastructure company is already monitoring their digital assets into silos, we can pull all that siloed data together. We can provide a cross-asset analysis to deliver, initially, benefits in maintaining the condition of the infrastructure, but ultimately, as we go to Smart Cities 2.0 and start interacting with the community, we can deliver real value back to citizen. And on that point, I'm a passionate believer that the city, the environment itself, should be part of the community. It should feel like it's looking after the people in the city and be reactive to their needs, not just a piece of concrete. At that point, you've got a city that lives and breathes and attracts the right people because they want to go and live there. Because they feel it's something more than just bricks and mortar.
David: I love what you're saying there. As a matter of fact, you talk about interactive communities being something more than just concrete, bricks and mortar and the last thing I want to talk about is really on that subject matter. We talk about integrating assets, just how important it is we begin to have a broader collaboration of integrating people and having discussions about these types of things. One of the key capabilities that I'd like for you to touch on for just a moment, is just how important it is we begin to collaborate, how important it is that we have crucial conversations. We mention books on this podcast quite frequently. I love to read and there’s a book I read several years ago called Crucial Conversations because I think it's going to require crucial conversations. It defined crucial conversations as the fact that the stakes are high, that opinions vary, and emotions run strong. I think that describes, in large part, what we're going to face as Smart Cities. But that does not mean we shouldn't have those crucial conversations. It means that we should really be prepared as we sit down at the table, cities talking to co-ops, investor owns, water companies, telecommunications companies, sitting down together for the betterment of the people we serve.
We have such a tremendous opportunity today, I believe, to make impactful change. To make meaningful experience for those people we serve. For the quality of life that all of us depend on. We can increase that that experience of living and working and playing in the environments we’re in but it's going to require these crucial conversations. I hope this Innovation Platform and what we've created is a platform that's not just about integrating assets and creating a digital strategy, but just as important, it creates a platform for people to collaborate. As we begin to wrap up today, what's your thoughts on that? Because, again you engage with a lot of folks, so you see this this challenge probably every day.
Ian: Yeah, we certainly do. The days of saying the environment that people live in is something that happens to them are long-gone. We used to think: ‘Well, we'll keep the electricity flowing and we don't need to talk to the consumers about that. It doesn't matter”. Collaboration, for me, starts in the community. The community expects, in a technology world, to be able to interact, to be able to have instant access, to understand what's going on with the things that they're consuming. They need to be able to feedback, report problems in an easy way. And then beyond that, get the feedback that comes back through from the systems. Not just a communication that goes into a hole and disappears. So that's the first stage. That's where the communities really start to engage and gain some ownership of the environment in which they live. Then the communities and our citizens expect us to be able to talk to each other. We've had so many conversations over the years and political platforms that have stated: ‘Why do you lay a new road and then dig it up to put an electricity cable underneath it and then dig it up again to put a water line underneath it’. Well, they're absolutely right. There's no reason for us to do that and in order to collaborate effectively, we've got to be more transparent, more open and share data more effectively. And that I believe is one of the key pieces of this platform, is that we can do that. We are using an accessible, scalable architecture that means we can choose what to share and share the insights that are important. That can make a difference in the city and allow different organizations with very different agendas to work together towards making the city a better, safer, smarter place.
David: Well, Ian, I will tell you this has been very insightful today, talking with you. I'm sure our audience would agree that you have a lot to offer in terms of insights. And I want to tell our audience, our goal is to try to have you back here once a month. Not necessarily in the States, but somehow to have you on this podcast because I believe your voice and your overall knowledge base and experience in this space of smart cities, smart places, smart developments and smart buildings is just so important. I can't tell you how much I appreciate you, your involvement with what we're doing with Innovation Platform, your leadership and your friendship. We’re really enjoying working with Pitney Bowes, to say the least and before we wrap up here, any last insights that you would provide our audience?
Ian: Firstly, thank you for giving me the opportunity to come and talk to you today. We're enjoying this as well. It's a journey and that's the theme as well, it's a journey. What I would say to the asset owners out there, the people who are running this and have their heads in their hands, is that we can help. It is a journey and if you take it one step at a time- who was it that said every journey starts with the first step- we can do it. It's achievable. Just do it based on a staged approach and based on the foundation and build a strategy. That way, working together, we can achieve amazing things.
David: Again, great to have you here and we thank you for joining us today on The Digital Change Podcast.
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