Creating a Culture of Innovation to Thrive in the 5G World

Whenever a major new technology enters the scene, one with paradigm-shifting potential, companies must make strategic decisions about whether to aggressively pursue it, take a wait-and-see approach, or strike some kind of middle path. Each approach involves inherent risks. In this episode of Mastering Innovation on SiriusXM Channel 132, Business Radio Powered by The Wharton School, Mack Institute Senior Fellow Scott Snyder discussed the technological potential of 5G, as well as the challenges facing firms who decide to assertively take the lead.

Looking back just a decade, it is easy to see how drastically wireless technology as changed. From the beginnings of smartphones, to tablets, smart speakers, connected homes, and the plethora of related applications, the evolution has occurred so quickly that it can be hard for even consumers to keep up. This explosion of wireless devices and demand for real-time connection exceeds the capacity of the current 4G system, but firms and governments must grapple with significant infrastructural and regulatory challenges before 5G can truly take off. With several decades of experience with firms like Safeguard Scientifics and Mobiquity, a digital engagement company he co-founded, Scott highlights ways that companies can set themselves up to be resilient amid the coming changes.

An excerpt of the interview is transcribed below. Listen to more episodes here.

Transcript

Scott Snyder (Partner, Heidrick & Struggles)

Nicolaj Siggelkow: Way back in 2009, you wrote a book called The New World of Wireless: How to Compete in 4G. Now we’re in the 5G world. What are all the technical opportunities and challenges out there? Then we’ll move to the management part, the hard part.

Scott Snyder: I may need to go back and revise the book now because 5G is coming. 5G is a bit of a different paradigm for wireless. 4G really was much more about data, where the previous generations were really suited towards voice and data was a bolt-on. We saw this with streaming movies, rich conversations, and other things we now do with mobile internet: data was dominant. Thankfully, we had 4G to come along with LTE. That gave us the capacity to at least stem the tide of consumer demand for the wireless systems.

Now, we’re starting to break in a different way, and it has to do more with connected things. The current generation of cellular wasn’t designed to handle thousands, millions, billions, or even trillions of things connecting to it, because all those connections consume resources and capacity even if they’re small, even a sensor on an oil tank or a forest sensor communicating back in.

One challenge is expanding the number of connections that the current system can handle. The second is we’re starting to get into the real-time world. Whether it’s an autonomous vehicle or a surgical robot, without the ability to give commands to that specific device using a real-time connection (or what we call low-latency connection) that has almost no delay in it, the artificial intelligence becomes ineffective. We’re seeing that with virtual reality. The reason why we’re not untethered and running around with virtual reality headsets is because the experience isn’t great with high delay in it.

The other thing about 5G is that it brings the latency down very low, almost below the human perception level, or what we call tactile internet, of one millisecond. Then obviously, there’s the capacity. With 5G the capacity grows anywhere from 100 to 1,000 times what today’s systems can handle. You will get your hi-def movie in a few seconds.

“The more 5G is associated with these other emerging technologies, it may become more strategic for these countries to push ahead and make it a priority.” – Scott Snyder

Siggelkow: What’s the timeline on this? It sounds great. I want to have it tomorrow, but there’s probably a lot of infrastructure required.

Snyder: Well, as you can imagine, with every technology, there’s still not alignment on the standards. The official standards are coming out over the next two years. Then there’s spectrum; each country and region of the world is wrestling with how to let out spectrum. One of the unique wrinkles of 5G is in addition to operating in the current bands in which cellular operates, it has something called millimeter wave, which in the past has been relegated to scientific and military bands.

In the past, there was something called LMDS that did some terrestrial microwave, but now that bandwidth is seen as really valuable. We’ve got improvements in computers and microelectronics that allow us to take advantage of that. That’s a whole new spectrum that governments are wrestling with whether to let out. The potential is enormous because it can handle very high speeds, but the cells have to be very close together.

Millimeter wave is a big deal, and the other thing is handsets. Nobody is making handsets yet that have these new bands in them or the new protocol. Next year is the first time several of the handset manufacturers will actually have pre-approved 5G handsets out.

Siggelkow: As you say, this has become a global industry, a global technology. We’re creating a new global standard. I could imagine different countries have different opinions on who should be the leader of this. Usually, when I look at these developments, Asia seems to be at the forefront of at least consumer adoption. Is there something similar we are seeing here?

Snyder: Yeah, I think so. There are a bunch of reasons why Asia is leading. China got mired in a little bit of a standard stalemate on 4G that put it behind a bit. Now, it sees 5G as almost a greenfield opportunity to leap ahead and do it from scratch. There’s a lot of push there. People are tying 5G to other emerging technologies that are viewed as strategic. In addition to IoT, AI systems, whether they’re run in the cloud or even if they’re run at the edge, they’ll still be pushing a lot of data back and forth. The more 5G is associated with these other emerging technologies, it may become more strategic for these countries to push ahead and make it a priority.

Siggelkow: 5G is one set of technologies for data transmission. Are there other technologies out there? I’ve heard about LoRa and other things. Is there more to it than just 5G?

Snyder: Well, there are two philosophies. You almost see it in the U.S. carriers taking different approaches. Some of the carriers have been very aggressive on 5G, saying, “This is very strategic.” 4G doesn’t support the IoT vision or some of these new real-time cases. Other carriers are saying, “We can do everything we need with 4G with a few additions. We can do something called network slicing to take slices of the network and allow it to have light protocols that support all these new devices connecting while we still support today.”

There’s a little bit of a battle in the marketplace, and this happened with 4G as well. Some carriers were much more aggressive, some weren’t. You’ll see that play out. Verizon is deploying 5G right now in a bunch of U.S. markets, but they’re mostly doing it to the home.

“A lot of times, people perceive culture as just values, but culture is also how the company acts and the way it performs things like innovation.” – Scott Snyder

Siggelkow: That’s a little of the technology side, but as we were saying, technology is one thing, and we’ve got a lot of PhDs working hard on making that technology work. Bringing that technology into a company is a whole different story. We’ll probably peel the onion as we go along, but what are the first things that come to mind when thinking about the management challenges that arise when it comes to incorporating these new technologies into companies?

Snyder: This is one of the things we talk about in an upcoming book that I’m working on called Goliath’s Revenge, which is about how established companies act like disruptors or startups. You’ve studied this quite a bit. There are plenty of impediments. The first has to do with culture. A lot of times, people perceive culture as just values, but culture is also how the company acts and the way it performs things like innovation.

One of the things we see as a major impediment we talk about in the book is creating a bimodal innovation model, one that empowers employees to innovate around today’s business and lowers the friction around that. If they have a good idea to improve and bring sales intelligence to a conversation, they could move on that, whether to a technology solution or process solution, and have a process to get that into the market very fast.

While incubating these “big-I” initiatives, the things that need air cover or protection tend to drive tension with the current business if you don’t do both. We’ve seen many digital labs fail because companies rushed in to say, “Let’s go do something big and breakthrough,” and all that did was create a bunch of haves and have-nots. The people laboring away in the core business say, “Who are those cool kids over there working on the fun stuff while we’re working on the core business and we have no tools to innovate?”

It starts at the ground level. If you create that culture of innovation where it’s in the muscle of the company, then you build the ability to withstand some of those disruptive swings. People get it more. They feel like they’re all in power, they’re all swimming in the same direction.

About Our Guest

Scott Snyder is a recognized thought leader in technology and innovation. He has more than 25 years of experience in business leadership, strategic planning and technology management for Fortune 500 companies and startup ventures. Scott is currently a Partner at Heidrick Consulting, helping global companies accelerate Digital Transformation and Innovation. Prior to Heidrick, Scott was the Chief Technology and Innovation Officer at Safeguard Scientifics (NYSE:SFE), which provides capital and relevant expertise to fuel the growth of technology-driven businesses in healthcare, financial services and digital media. Prior to Safeguard, Scott was President and Chief Strategy Officer at Mobiquity Inc., a leader in delivering innovative mobile and digital solutions for enterprises, where he continues to be Chairman of Mobiquity’s Advisory Board. Scott has held executive positions with several Fortune 500 companies including GE, Martin Marietta, and Lockheed Martin, has been the CEO of a leading strategic planning firm, Decision Strategies International, and has also started business ventures in software including OmniChoice, a CRM/Analytics applications provider. He also serves on the Board of Directors for Fulton Financial Corporation (FFC).

Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.

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