A wave of innovation and decentralization is sweeping across the world, challenging the traditional role of law, lawyers and law schools. Central themes from an Incredibly energizing and enabling course co-taught with @erikpmvermeulen at @USTLawMN “Disruptive Innovation – Why Lawyers Matter” include in order of priority: #innovation, #innovators, #platform, #entrepreneur, #bigdata, #blockchain, #smartcontracts, #machinelearning, #ArtificialIntelligence, #InternetOfThings, #sharingeconomy, #legaltech, #regulation, #regulate, #corpgov, #governance, #legal.
Future Companies and Governance
What should companies do to be successful in the future? What kind of structures, practices and processes will best equip a firm to reinvent itself and its products? How can firms transform themselves into 21st century companies? The Answer: Firms should adopt a decentralized and open model of innovation, value creation and growth. Ecosystems and platforms are the new normal. Companies that understand “how to organize now for success tomorrow” (@erikpmvermeulen) will win. Such companies understand the power of the ecosystem and platforms. These companies appreciate that governance is not only about disclosure and achieving sustainable long-term investment and growth but about engaging in an open dialogue, open “personalized” communication with all the stakeholders (not just customers or shareholders).
20th century companies:
- profit driven
- closed networks
- job security
21st century companies are better and embrace new values to innovate and stay relevant:
– – mission driven
– – flat hierarchies
– – inclusive
– – fluid
– – open communication
– – millennials
– – best idea wins
– – decentralized
– – crowd-culture
– – platform-enabling
– – create ecosystems for continuous innovation
We use Under Armour as an example of a 21st century company that is embracing the “platform economy”. Its connected fitness platform and open platform of innovation (ideahouse.ua.com) are examples. The Brand House shows that Under Armour lives its values: Act like a global citizen, Think like an entrepreneur, Create like an innovator, Perform like a teammate.
When and how should regulators regulate disruptive innovation? Will technology replace regulators, regulations, and lawyers? A possible answer: A need for flexible and inclusive processes exists that involves startups, established companies, regulators, experts and the public. Innovations and regulatory responses must be tested in a “live” environment. To a certain extent, this regulatory approach is recently adopted in the financial industry with the introduction of “regulatory sandboxes”. Dynamic regulatory processes (@wulfkaal) can play a central role in the new world of innovation. Regulators will have to offer more guidance on how to “organize for innovation.”
The lawyers and law firms of the future distinguish themselves by embracing legal tech, join one or more of the emerging legal platforms (e.g. www.digitorney.de) and legal communities and operate as a bridge between the diverse range of actors (accountants, designers, ML engineers etc.) that must now work together in dealing with challenges of the sharing economy. During the course, we show that the development of new platforms and ecosystems, blockchain technology, smart contracts, internet of things, big data, machine learning, and artificial intelligence plays a central role in the future of law and cannot be ignored.
Key takeaways of the “Disruptive Innovation – Why Lawyers Matter” course include the recognition that blockchain technology and smart contracts will change the way we live, work and learn. Blockchain-based smart contracts will help scale and accelerate the sharing economy and enable the development of Internet of Things applications. These applications will disrupt the business of law, but will also lead to enormous opportunities for legal professionals. They will have to rethink “legal concepts” in the areas of property law, corporate law, contract law, etc.
The purpose of this course is for students to gain an understanding of the exponential rate of disruptive innovation in a broad array of industries, the effect on corporations, the possible approaches for regulating such innovation, and the role of lawyers in this context.
The course examines the exponential rate of disruptive innovation affecting multiple industries. Students will learn about concrete real-life and data-driven examples of disruptive innovation and the short- and long-term effects of this innovation, including the emergence of flat corporate hierarchies to foster innovation and ensure the best ideas prevail in corporations struggling to stay relevant, open communication, and inclusivity. The course will examine innovation driven business cycles and highlight examples pertaining to corporations that failed to institute relevant changes to remain relevant in the face of disruptive innovation (Kodak, Nokia, among others). We will also examine how and why certain corporations (Amazon, Google, Tesla, Under Armour, among others) continue to thrive and what changes they instituted, allowing them to capitalize on disruptive innovation. More specifically, we will examine the emergence of “Dinosaurs” (companies that find themselves in a process of slow and terminal decline); “Unicorns” (large companies that remain private in order to avoid the stifling effects of post-IPO regulation); and “Governance Renegades” (public companies that adopt unconventional corporate structures in order to retain the pre-IPO-start-up-feel).
Given these governance changes and new structures imposed by disruptive innovation, the course examines the role of attorneys in this rapidly evolving environment. Students will learn about the legal relevance of the evolution of business strategy, technology, and the application and evolution of artificial intelligence in businesses. Based on the understanding of challenges and opportunities presented by disruptive innovation, students will develop the ability to discern their own possible value proposition in the disruption of businesses in various industries. The course will evaluate the different skills that allow students to remain relevant including soft skills, psychology, and the ability to understand business cycles and technology. The course emphasizes the importance of student skills at the intersection between law, business, psychology, and technology.