 From Palo Alto, California, it's theCUBE, covering the conference board's sixth annual Innovation Masterclass. Hey, welcome back, everybody. Jeff Frick here with theCUBE. We're at the Innovation Master Club at Xerox Park. Put on by the conference board, a relatively small event, but a really, a lot of high caliber individuals giving really great presentations. And we're excited for our next guest. He kicked the whole thing off this morning with, we could go for hours. We won't go for hours, we'll go about 10 minutes. With Peter Coffey, he's a VP of strategic research for Salesforce, been there a long time, that you're a media guy before that for many, many years, so Peter, great to see you. It's good to be with you, thanks. So you talked about so many things, so many things in your opening statement, and I have a ton of notes, but let's just jump into it. I think one of the big things is, the future happens faster than we expected. We as humans have a real hard time with exponential growth, we're just not built that way, but that's the way things move. And so, how do you, as a business person, kind of deal with that reality? Because that is, you're never gonna be ready for when it comes. Well, it's not just humans as individuals, but the institutions and processes we've built, if you look at the process of getting a college degree, it's really seriously misaligned as the timeframe of change by the time you're a senior, half of the subject matter in your field may be new since your freshman year. And conversely, four years after you've graduated, perhaps a third of what you were taught will no longer be considered to be current information. Someone at Motorola once said, a batch process, no matter how much you accelerate it, doesn't become a continuous flow process. You have to rethink what does a continuous flow look like? And that's a useful conversation to have getting back to your opening actual question. When we're talking with customers, we say, what are your assumptions, your unvoiced assumptions about the manner in which you have succession of technology, succession of product, and so on? Can we try to visualize what it would look like if that were a continuous process and not a project process? And many of our partners will tell us that their most difficult conversations with their customers are about getting away from a project mentality, a succession of big bang changes into a process in which transformation is a way of life and not a bold initiative that will take a big sigh of relief and congratulate yourself on having transformed. No, dude, you've gotten your running shoes tied, now you can begin to run, but now the hard part begins. And the sun comes up tomorrow and you start to run again. You talked on big shifts come on new abundance and use horsepower. A George Gilder's phrase. Errors are punctuated by a dramatic change from a scarcity to an abundance. So for example, horsepower or bandwidth or intelligence. So now we're coming into the era of massive big data. We are asymptotically approaching free compute, free storage, and free networking. So how do you get business leaders to kind of rethink in an era where they have basically infinite resources and it always goes back, so what would you build then? Because we're heading that way even if we're not there today. A Jedi mind trick that I often use with them is to say, let's not talk about the next couple of quarters. I want you to imagine the next winter Olympics when they light a torch four years from now. I want you to try to visualize the world. You're pretty sure you'll be living in four years from now and work backwards from that and say, well, you know, if we all agree that within four years that's gonna get done, well, there are some implications about things that we should be doing now and some things that we should stop doing now if we know that four years from now the world is gonna look like this and it helps free your mind from the pressures of incremental improvement and meeting next quarterly goals and instead saying, you know, that's not gonna be a thing in four years and we should stop getting better at doing something that's simply not going to be relevant in that short of a time. So hard though, right? Innovator's dilemma, I mean, that's the classic conundrum especially if it's something that you have paying customers and you're driving, you know, great revenue too. It's hard to face the music that that may not be so important down the path. The willingness to acknowledge that someone will disrupt you so it might as well be you. So you might as well disrupt yourself. The conversation was had with IBM back in the days of the IBM PC that they thought that that might be, you know, a quarter of a million machines that they would sell, but whatever you do don't touch the bread and butter of the 3270 terminal business, right? And they did not ultimately succeed in visualizing the impact of what they had done. Ironically, because they didn't think it was that important, they opened all the technology and so things like Microsoft becoming what it is and the fact that the BIOS was open and allowed the compatibles industry like Compaq to emerge was a side effect of IBM failing to realize how big of a door they were opening for the world. You can start off a spin-off operation at Salesforce. We have a product line called Essentials which is specifically tasked with create versions of Salesforce that are packaged and priced and supported in a way that's suitable to that small business and that way you can kind of uncouple from that Clayton Christensen innovators dilemma thing by acknowledging it's a separate piece of the business, it's going to be measured differently, rewarded differently and it's going to convey itself maybe even through a genuinely different brand. This is an example that was used once with Disney which when it decided it wanted to get away from family and children's entertainment and start making movies aimed at more adult audiences, fine, they created the Touchstone brand so that they could do that without getting in the way of or maybe even polluting a brand that they'd spent so much time building. So branding is important. A brand is a set of promises and if you want to make different promises to different people, well have a different brand. So different, I'm shifting gears because you touched on so many great things. A really popular thing that's going on now is the conversion of products to services and repackaging your product as a service. And you talked about the Don't Taze Me Bro story which has so many elements of fun and interesting but I thought the best part of it though was now they took it to the next step and we're only a stone store away from Tesla. A lot of innovation but I think one of the most kind of not reported on benefits of really these connected devices and a feedback loop back to the manufacturers to how people are actually using these things, checking in from home, being able to do these updates and you talked about how the Taser company now is doing all the services. It's not even a service. It's not a different product. There are three aspects to this, that's awesome. Taking a product and selling it at a subscription price does not turn it into a service even though some people will say, well see now we're moving to a services model. If you're still delivering a product in a lumpy change it every couple of years away you haven't really achieved that transformation. So you have to go back into more of a sense of look at the expectation people have of the apps on their smartphones. They just get better all the time that the update process is low burden, low complexity, low risk and you have to achieve that same fluidity of continuous improvements. So that's one of the differences. You can't just take the thing you sell, bill for it on a monthly subscription and think that you've achieved that transition. The thing that the folks who were once Taser and now are acts on, of which Taser is a sub-brand, they managed to elevate their view from the device in a police officer's hand to the process of which that device is a part, which is the incident that begins is concluded, results in a report, maybe results in a criminal prosecution and they broaden the scope of the acts on services package to the point that now it is selling the proposition of increased peace officer productivity rather than merely the piece of hardware that's part of that. So being able to zoom out and really see the environment in which your product is used. And this relates to you had another idea which is that people are saying you got to think outside your box. It doesn't help if you get outside your box but all of the people with whom you might wanna collaborate are all still inside their boxes. And so you may actually have to invest in the transformation and interface development of partners or maybe even competitors and isn't that a wild idea? Elon Musk at Tesla open sourced a lot of their technology with a specific goal of growing that whole ecosystem of charging stations and other things that Tesla could be a greater success. And the content that I once made is it doesn't help if you're a perfect drop of artisanal oil in a world of water. You have to make the world capable of interacting with you and supporting you if you really want to grow or else you're an oddity, you're Betamax which might have been technically superior but by failing to really build the ecosystem around it wound up losing big time to VHS for a while. I may have to explain to all of your viewers under the age of 30 what VHS and Betamax even made. I was telling you the whole Panasonic factory optimization story which is a whole other piece of that puzzle so that's good. So I'm gonna shift gears again. You have to look at a big perspective and you have to be prepared to forget that your excellence is your product and start thinking of that as just the kernel of what needs to be your real proposition which is the need you meet, the pain you address, the process of which you become an inseparable part instead of a substitutable chunk of hardware. Well and I think too it's embracing the ongoing relationship as part of the process versus selling something to your distribution and off it goes, you have to check and you build another one. We've got whole industries where there's been a waterfall model, automobiles were a particular example where manufacturers wholesaled cars to distributors who gave them with a small markup to dealers who owned the buyer or customer and dealers would be very hostile to manufacturers trying to get involved in that relationship but now because of the connected vehicles the manufacturer may know things about the manner of use of the vehicle and about the preliminary engagement of the prospective buyer with the manufacturer's website and so improving that relationship from a feudal model or a waterfall model into a collaborative model is really necessary if all these great digital aspects are to have any value. Right, right and as a distribution of information that disaggregate level of knowledge is no longer the case, right? Well it's scary how easy it is to do it wrong. IDC just did a study about the use and retail banking of technology like apps and websites which that industry was congratulating itself on adopting in ways that reduce the costs of things like bank office hours and yet JD Power has found that the result is that customers no longer see differentiation among banks are less loyal, more easily seduced by $50 to open a new bank account with direct deposit and so innovation's a vector and if you aim it at cost reduction you'll get one set of results. If you aim it at customer satisfaction improvement you'll innovate differently and ultimately I think much more successfully. Right, right. So we're almost out of time, Peter. I want to go down one more path with you which I love. You talked a lot about visualization, you brought up some old maps and really talked about context, right? In the right context this particular visualization is a value and there's a lot of conversation about visualization especially with big data and something I've been looking for and maybe you've got an answer is is there a visualization of a billion data point data set that I can actually look at the visualization and see something and see the insight because most of the ones we see that are examples they're very beautiful and there's a lot of compound shapes going on but to actually pinpoint an actionable something out of that moray, oftentimes I don't see it. I wonder if you have any good examples that you've seen out there where you can actually use visualization to drive insight from a really, really big data set. Well, if a big data exercise produces a table of numbers then someone's going to have to apply an awful lot of understanding to know which numbers look odd but a billion points to use your initial question. Well, what is that? That's in a way that's 1000 by 1000 by 1000. We look at 1000 by 1002 dimensional screens all the time visualizing a three dimensional 1000 by 1000 cube is something we could do and if there is use of color, use of motion superposition of one over another with highlighting of what's changed what people need most is for their attention to be drawn to what's changing or what's out of a range. And so it's tremendously important that people who are presenting the output of a big data exercise go beyond the high resolution snapshot, if you will and construct at least some sense of AB back in the ancient days of astronomy they had a thing called a blank camera which would put two pictures side by side simply let you flip back and forth between the images and the human eye would turn out to be amazingly good there could be thousands of stars in that picture the one dot that's moving and represents some new object or some new or the one dot that suddenly appears the human brain is very good at doing that and there's a misperception that the human eye is just a camera the eye does a lot of pre-processing before it ever sends stuff to the brain and understanding what human vision does it impressed the heck out of me the first time I had a consultation on the big data program at a university where the faculty waiting to meet with me turned out to be from the schools of computer science mathematics business and visual arts and having people with a sense of visual understanding and human perception in the room is going to be that critical link between having data and having understanding of opportunity threat or change and that's really where it has to go and so if you just ask yourself how can I add an element of color or motion or something else that the human eye and brain have millennia of evolution to get good at detecting do that and you will produce something that changes behavior and doesn't just give people facts right right well Peter thank you for taking a few minutes we could go on and on and on happy to do chapters two, three and four anytime you like with the new tower and the new tower downtown any old time thanks so much thanks for stopping by my pleasure he's Peter I'm Jeff you're watching theCUBE we're at the master innovation class at Xerox Park put on by the conference board thanks for watching