On Change, Culture & Leadership

Earlier this month I began publishing a free newsletter on Substack the content of which has resonated greatly.

You can subscribe to the newsletter here….https://rishad.substack.com/

While the writing has covered a wide range of topics including loss, learning, love, why libraries are important and what we can learn from jazz the purpose of the newsletter is to help you see think, feel and see differently about how to grow your company, your team and yourself.

To give you a flavor of the writing and also to memorialize some of it on this blog here are thoughts on three things we all grapple with. Change. Culture and Leadership.

A. Leadership.

Over the past four decades I have observed, experienced and read about leadership.

In the end I have distilled my beliefs on leadership down to this:

Leaders acknowledge, face and communicate reality.

People follow people and not titles since titles are bestowed while leadership is earned.

The five characteristics of great leaders are capability, integrity, empathy, vulnerability and inspiration.

Reality.

A key to leadership is to solve challenges and address problems. This requires confronting issues versus looking away or hoping some form of magical thinking will make them go away.

You cannot hope to get people to follow you if they suspect you are not addressing real issues and challenges however difficult they may be.

Followership.

Without the hearts and minds of your team you are not a leader but a ruler.

Rulers leverage fear, project power and exploit insecurity.

Employees genuflect, fall in line, salute and pander to the hollow and bloated boss, while they silently seethe, plot insurrection or practice defection.

Five Characteristics.

a) Capability: To be a leader you have to be capable in your field of work or craft. You have to know your shit. You have to keep improving your skill. Doctors will not listen doctors who are not great at medicine. A creative will not respect someone whose body of work they do not admire.

b) Integrity: Can you be trusted? Are you transparent about the ingredients of your decision making. Do you look for and use real facts ?

c) Empathy: Leaders can see from other points of view and they understand that employees are people and work is but a sliver of their being. They understand and they listen. They care. They do this both for employees and for customers.

d) Vulnerability: Great leaders acknowledge mistakes. They know they do not have all the answers. This means they are open to criticism and correction and they surround themselves with skill sets that offset and balance their areas of weakness.

e) Inspiration: How do leaders face and acknowledge reality and hard truth but still get people to unite, align and take the challenges head on? They do so by recognizing that people choose with their hearts and not their minds. They inspire through a combination of personal example and storytelling.

B. Culture

It has been said that “culture eats strategy” and often when companies decay (Wells Fargo) or resurrect ( Microsoft) or have distinctly different outcomes in the same industry ( Southwest versus United Airlines) a key determinant is the culture. What it is like, how it is improving or how it is getting worse.

Once I read that the culture of an organization is revealed in how people behave when no one is looking or monitoring their behavior.

I do believe that that this is right in the fact that culture is about people. Yes it requires leaders to set, correct and support the culture but it is how they treat people and how people feel about themselves, their company and their colleagues that is the fabric of culture.

Companies with great cultures tend to have employees who feel most of the following about their jobs and companies:

Fair/ Good Compensation: If people are not paid adequately or fairly it really hard to have a good culture.

Recognition: Great cultures recognize contributors and leaders do not step into their teams video stealing credit.

Autonomy: People are trusted to deliver with limited monitoring and can access resources to do so.

Purpose: They believe in the purpose and values of the company and see the role of their company beyond that of just profit but doing good for society or community.

Growth: The company is growing, has a plan for growth or even if static, the individual is growing and teams are growing by being given opportunities to learn and build new skills.

Connectedness: People feel connected to each other and to their leadership. They feel free to speak up and share and even joke.

Today most of us are working from home for six months and it is likely that we will be doing so for at least another six months until a vaccine is available broadly.

Have been spending a lot of my time advising C level executives, one of the big challenges they are grappling with is how to ensure the mental and emotional well being of their talent who often feel disconnected, stressed for both work and life reasons as they grapple with children at home and other worries and challenges about their future.

Solving for and focusing on these six drivers of culture is one way smart leaders are working to ensure that in a distributed world the fabric of culture is not torn. They and their talent/HR leaders are planning different ways they get there but recognize it is key to ensure that each of these six seeds of culture are watered.

C. Change

Change.

Change is difficult especially for established individuals and businesses since transforming our thinking and doing into new shapes requires one to go through a regimen of pain, mistakes and unknowable twists and turns.

Why suffer sure pain for unknown gain if there is a way to avoid it ?

Therefore it is not surprising that many of us as individuals and companies take the easy way out by pontificating about “change agendas”, hiring “change agents”, announcing “re-organizations for a changed era” and issuing a flurry of press releases and re-decorating one’s digital presence with words like “platform”, “disruption”, “personalization”, “data”, “cloud” “seamless” and other buzz word bingo and mumbo jumbo.

Never works this eruption of vigorous cosmetic application and vocal vociferousness.

The only way a company transforms is if the people in the company transform.

Upgrade the people or upgrade their mindsets.

To gauge if you or your company are really aligning with change ask three simple questions

Incentive plans: Are people being incentivized to change or are the people who get paid the most the ones who run the established businesses, have the biggest existing revenue books, have the deepest current client relationships ? Are some of the best people being allocated to where the company will spend the rest of its life which is the future or is it folks the company does not know what to do with or those between assignments?Show me a company’s incentive structure and I can guess how they behave and if they will really change.The future does not fit in the incentive and power systems of today and yesterday.

Fear: Change is scary but the reason many people don’t change is something is they fear their management and culture even more than they fear change.Management that provides no room for error, or for speaking up or calling out the “turd on the table” will have a difficult time to get people to people to change. Without freedom to challenge and fail, there is unlikely to be any innovation but just a crowd of synchronized head-nodding, bobble-headed people who serve as mirrors to their leaders by reflecting what they believe their leaders need to hear or what will make them look good in their Managements eyes.

Investment in Training : The third key to change in addition to incentive systems and an absence of fear is a significant effort in training. If a company is to change and to upgrade its people it can do so in two ways. First it can bring in and hire talent with the skills they need and second it can upgrade the skills of the people it has.Most companies will need to do both and will require to train existing employees with new skills while training new employees to the company expertise resources and culture.

So next time you or your company speak of change ask if you have got the incentive systems, culture and training to get you to the other side of this difficult transition.

It’s not easy but even though change sucks, irrelevance is even worse.

For more like this subscribe here…https://rishad.substack.com/

The New ESG=Employees, Society, Government

ESG has been important to companies and to investors

What is ESG?

A comprehensive definition from ADEC

Environmental risks created by business activities have actual or potential negative impact on air, land, water, ecosystems, and human health. Company environmental activities considered ESG factors include managing resources and preventing pollution, reducing emissions and climate impact, and executing environmental reporting or disclosure. Environmental positive outcomes include avoiding or minimizing environmental liabilities, lowering costs and increasing profitability through energy and other efficiencies, and reducing regulatory, litigation and reputational risk.

Social risks refer to the impact that companies can have on society. They are addressed by company social activities such as promoting health and safety, encouraging labor-management relations, protecting human rights and focusing on product integrity. Social positive outcomes include increasing productivity and morale, reducing turnover and absenteeism and improving brand loyalty.

Governance risks concern the way companies are run. It addresses areas such as corporate brand independence and diversity, corporate risk management and excessive executive compensation, through company governance activities such as increasing diversity and accountability of the board, protecting shareholders and their rights, and reporting and disclosing information. Governance positive outcomes include aligning interests of share owners and management, and avoiding unpleasant financial surprises.

ESG is and will continue to be important but it covers so many areas that it often feels unfocused and is often a something that has a section in an Annual report, a check box that must be marked and though essential to a healthy business is seen as a “nice to do” or a “we have to do” versus its the competitive advantage that will drive increased customer loyalty, enhanced attraction and retention of talent and increased financial value to owners and shareholders.

Today amidst the triple crisis of health, economic and social unrest reflected in Covid-19, 40 million unemployed and Black Lives Matter a more clarified and focussed ESG should be Employees, Society and Government.

Before a company spouts about purpose, values, doing good, how about focussing on the following three questions

Employees: Is the company ensuring security for your employees by paying a wage that allows them to have disposable income after they cover living, health and student debt ? Are you providing adequate health care and and an environment that does not put their physical or mental health at risk? Does your firm have diversity across the company and do people feel safe in speaking up ? Are you investing in training ? Most importantly are employees a cost or also an asset ? Learn more about what PayPal has done in this area.

The most critical asset a company really has is its workforce. My four decades of experience and years of research for my book Restoring the Soul of Business: Staying Human in the Age of Data indicate that its employees who create the brands, the ideas, the experience that make a company and the only way a company improves and transforms itself is by growing the skills and unleashing the talents of its people.

Today employees are more stressed than ever and over the next few years companies will be made or broken based on what they do and did in 2020.

Society: We have always lived in a connected world but over the past few years we are more connected than ever due to search that allows us to connect to information, e-commerce that enables us to connect to anywhere to transact, social networks that connect us to each other and mobile phones that connect us all the time. No wonder that the key connecting companies of Google, Amazon, Facebook and Apple are four of the most valuable companies in the world.

While many of these were funded by advertising and ran AOS (Advertising Operating Systems) or IoS ( Apple) the reality is they are now Society Operating Systems and have to manage themselves and be governed as such. But increasingly due to their scale, scope and balance sheets more and more companies from Walmart to CVS to Starwood’s decisions change society. What are the implications on Society of your firms business decisions? Often the secondary effects of optimizing for business creates huge problems for society. Just look at Facebook which appears to finally recognize that they moved too slow, too selfishly, too narrowly to fix things after moving fast while breaking things?

How can your company understand both what the ill effects might be to society but as importantly what good can one do for society as Walmart unleashed its logistics often after a hurricane. Society is often the community that companies are based in or their employees live and where their customers make their life.

Government: If there is one thing that Covid-19 has shown is that government matters. The quality of governance matters. A 4 trillion dollar ( 18 percent of GDP) healthcare system leaves 40 million uninsured, cannot get masks and PPE to folks. Even the University of Chicago wonders how to save Capitalism from the Capitalists. Government has been underfunded, demonized and lobotomized via lobbying.

Businesses must recognize that earning billions and paying peanuts in taxes eventually means no infrastructure, no public schools and much more. Running to government when things get tough but starving them when things go well is not aligned with purpose values and other high thoughts that galavant and roam free on corporate websites.

So every corporate leader, HR honcho, purpose driven person in a firm should ask?

Are we looking after our employees?

Are we thinking about society?

Are we helping government including paying taxes ?

The Employee, Society, Government focus will need to be done first in order to truly realize Environment, Social and Governance goals.

Today more and more customers care a lot about how you are looking after your employees and caring for society. If you are a senior manager go spend some time with your employees in their 20s and 30s and you will learn they truly care about purpose, values, fairness and this impacts their decision to stay or leave your company and much more.

From Patagonia to Paypal companies that do the right thing have the right results. By focussing on the story of people, society and culture they deliver the results they need for the spreadsheets.

Focus on the ball, the playing field and the player and the scoreboard will show you end up being a winner.

Rishad Tobaccowala ( @rishad ) is the author of the bestselling “Restoring the Soul of Business: Staying Human in the Age of Data” published by Harper Collins globally in January 2020. It has been described as an “operating manual” for managing people, teams and careers in the age we live in. Rishad is a sought after speaker and advisor who helps people think, feels and see differently about how to grow their companies, their teams and themselves.

The Great Re-invention

In the past month I have written and spoken a number of times on how people and companies should think about and move forward in these dystopian times of Covid-19 which I call “The New Strange”. At the request of many Clients and readers I have compiled all my thoughts and writing into one piece. Some call it a Masterclass on moving forward and others believe it has more perspectives, points of view, provocations and plans of action in half an hour of reading than many conferences and consultants provide over days. And its absolutely free ! Hope you find it useful….

In 2008/2009 we lived through the Great Recession.

One way to frame the impact of the  Covid-19 tragedy is to think about it as the start of the Great Re-invention. 

Of Business, Of Government, Of Society.

And of our ourselves.

The Impact of this crisis will be greater than the ones we have lived through including the dot.com bust, 9/11. SARS/MERS and the Great Recession, because it is a health, economic and social crisis happening to everybody in the world, at the same time, for an extended period ( 8 to 12 weeks or more).

Peoples habits change if they repeat or stop a behavior for 60 or more days.

People’s mindsets change when they go through a severe shock.

Peoples relationships change when they get the opportunity to see, feel and think in new ways.

All this is happening to all of us.

Predicting has always been a risky business and all futurists need to be humble since tomorrow will prove them often wrong. This is particularly true today given the unprecedented circumstances. In order to ground my observations I am beginning with what I believe is a key to understand and frame the way forward.

We need to 1) address fragility, 2) sculpt resilience and 3) resurrect now

1.Address Fragility

The first thing we all need to do is to address the reality of Fragility.

Human Fragility: If there was ever a doubt about the frailty of our bodies and minds and the reality that we all are carbon-based feeling filled creatures with limited life spans and parts that go wrong, Covid-19 has brought us clarity. Never have so many people been so anxious, fearful and uncertain for their futures. Even the well to do who are working from home with financial reserves are stressed. As I remind people we are not working from home. We are working under duress in homes filled with children who should be at school, worried about parents and loved ones and our jobs, while being scared out of our wits via our television and social feeds and dealing with toilet paper shortages and the grocery trip as a hazardous life risking endeavor!

Economic Fragility: Tens of millions of businesses and hundreds of millions of people all over the world have less than two or three weeks of reserves after a decade of a booming economy. Huge corporations including airlines spent all their reserves buying back their stock and would go out of business without government help. The CEO’s who believed in free enterprise and told government to back off are going hat in hand and pleading for help.

Social Fragility: In the US about 16% of the population are immigrants but over 25% of the people who are working on the front lines whether it be delivery, warehouses, drivers or nurses are immigrants. Across the US African Americans are dying at over 2X rate to the general population. The harsh downturn is impacting labor particularly gig workers, poor people and young people. The walls we put up thinking that we could live compartmentalized lives are eroding as it is becoming clear that we are all connected.

Focus on Society, Safety and Security.

As businesses and a society, we need to think, see and feel differently to ensure that we work to re-invent our world in the light of the learnings of our fragility. This is likely to mean that successful businesses and leaders will acknowledge the following in all their behaviors, product development and messaging: Society, Safety and Security:

Society: We live in a society where we are all connected as people. We have to ensure we are optimizing for society and not just for consumers or businesses.

America is different from Europe with a rugged individualistic streak that is part of the national character but today when we see CEO’s who were capitalistic in boom times turn socialist when they run into trouble ( or as Professor Scott Galloway says they want to individualize the gains in good times for themselves but socialize the losses for everybody when things go wrong) or politicians who claimed had no money to address infrastructure or social issues but now have unlimited money will give people pause on nonsensical ideologies.

The shock of Covid-19 has revealed the fault lines of inequality (African American compared to general population, rich versus poor, urban versus suburban, baby boomer versus millennial) . These must be bridged through new legislation, better listening and enhanced leadership (one more empathetic, diverse and trustworthy) rather than rants and rages inflamed across polarized and algorithmic media which often colonize minds and rot the soul.

The days of making fun of government or causes that focus on common good are likely to pass. I anticipate a newfound appreciation of blue-collar workers and people on the front lines and would not be surprised to see increased unionization particularly among gig and warehouse workers.

Safety: This crisis has shown the most important asset is our health. It has placed a new spotlight on the importance of safety and the people who keep us safe.

Funding for some form of Universal Healthcare will become essential and new found appreciation for medical staff, first responders will remain long lasting. Too many people are too vulnerable and there will be a hunger to keep oneself and one’s family safe.

And Climate Change will be taken seriously for the first time by many deniers.

For a few months and maybe longer messaging will need to emphasize safety. Why is this conference safe? Why is this theater safe? How does our company keep you safe?

Security: A joint survey by the Financial Times and the Peter G Petersen Foundation released this morning  indicated “how widespread the pandemic’s economic impact has become, with almost as many families making more than $100,000 a year reported a hit to their income (71 per cent), as those making less than $50,000 (74 per cent). Similarly, 53 per cent of those making less than $50,000 said they would lose their pay if illness forced them to stop work, while 47 per cent of those making more than $100,000 were in the same boat.”

People all over the world at all income groups will feel far more financially insecure after Covid-19 than before it. The Millennials burdened with student debt and facing a constrained market for employment will feel particularly vulnerable and older retirees are facing lower retirement balances, zero to negative interest rates on savings and the possibility of higher inflation as 6 trillion dollars in the US flows through the system.

As businesses restart, they will have limited to no pricing power since their customers will watch their spending and will be needed to be incentivized to re-start behaviors they may have given up.

A key to driving the Great Re-invention will be to focus on society and how you are serving society while helping peoples (customers, employees, stakeholders) need for the safety of their and their families health and the need for financial security.

2. Sculpt Resilience.

In order to address the fragility that has been revealed and underscored in recent weeks, society, business and each of us will need to sculpt ourselves into more resilient forms.

A. Society

A health crisis where every single person is at risk, with impoverished people at much greater risk, combined with an economic crisis that will leave over a quarter of the US population unemployed is going to change the mindset of the United States in three ways.

1.Government matters. Governance matters: As he set off what would be four decades of deregulation, former President Ronald Reagan said to great laughter:

“The most terrifying words in the English language are I’m from the government and I’m here to help. “

Who is laughing now?

During this crisis we have seen the need for Government and importantly the difference in good versus bad governance at national, state and local levels.

Government matters. Governance matters.

It is a life and death thing.

2.Expanded Healthcare: Regardless of who gets elected in 2020 we can expect to see significant expansion of health care benefits particularly to blue collar service and gig workers.

We are likely to finally understand that in a world that will require more mobility and flexibility we have to decouple affordable and comprehensive health care from being employed. This is good for business and good for society.

3. Optimizing for society not just consumer and business: Over the past few decades whether it be the government or judicial system there has been a tendency to favor decisions which benefit consumers or business.

Consumer and business will remain key drivers of economic growth, but we will now see the importance of society stakeholders like community, environment and employees.

Make America Well Again may replace Make America Great Again.

B. Businesses

Many businesses particularly smaller ones may never recover from the shock of having to shut down for two to three months. Even, large established firms are going hat in hand for bailouts or imposing a combination of pay cuts, furloughs and mass layoff of employees to cut costs and drawing down every credit line they can to buy liquidity and time.

After going through such a near death and chastening experience business will re-invent the way they work in order to build in resilience in the following ways:

1.Re-architect to a smaller and/or different footprint: Bob Iger of Disney believes it will be very different in the future including have many fewer employees.

Companies will not bring back all the full-time employees they have furloughed even if they can afford it because they will want to create a financial buffer for the future. The University of Chicago estimates that up to 42 percent of those furloughed will not return.

Anticipate a greater use of contract versus full time employees to allow one to flex staffing to changing circumstances.

Companies will also radically re-think all their real-estate needs and slash their travel budgets recognizing that not only many meetings can be done remotely but most business travel is not an efficient use of time.

Most importantly, companies will re-think their business models or be forced to do so because this great pause will lead to a great acceleration of change with any nay-sayers either seeing the light or the first to be let go.

2. Re-think supply chains: For the past decade off shoring and just in time supply chains have driven great speed and financial returns. The recent crisis has shown that the most efficient chain is the not the most resilient one and companies will now balance efficiency with resilience. They will carry more inventory and ensure multiple supply chains.

Wendy’s cannot afford to ask “Where is the Beef” or our supply of N-95 masks dependent on a moody China.

3. Hybrid versus Pure breed: There is really “no digital “only or direct to consumer only. Majority of businesses will be a mix of analog and digital, direct to consumer and retail channel firms, full time and contractor businesses. For resilience you need optionality. To thrive one needs diversity of models.

Restaurants will be dining in, drive through, pick up and delivery. Conferences will be real and virtual. Being mono-maniacal will simply be being a maniac.

4. Strong Balance Sheets will be cool again: With major well-run Unicorns like Airbnb forced to borrow money at double digit rates of interest while eliminating nearly a quarter of their work force signal implies that lesser Unicorns dreams will pop.

We will speak of “Pop”corns and not just Unicorns. The Soft Bank Vision fund will be revealed to be the Soft Bank Delusion Fund.

5. A New Set of Companies and Wealth Creation Opportunities will arise: In the debris of the Great Recession companies like Airbnb and Uber were forged as was Square, and technologies such as Blockchain and much more. One will see new companies being founded that are built using the current technologies and changed expectations of people.

Whenever there is a mindset shift as there is now and new technologies ( 5g, Machine Learning, Cloud and Voice) there are new industries and opportunities.

C. Individuals/Employees

Over a four-decade career I have seen a lot of changes and adapted to a lot of changes. Some of my distilled advice as 10 Career Lessons remains my most popular blog post and remains even more relevant today.

Like never before I believe every individual must recognize that a part of the Great Re-invention it is imperative to spend time rethinking their own careers. Let’s utilize this down time to begin to up skill in ways that will allow for resilience in times where there will be fewer and different full-time jobs.

1.Upgrade Your Mental Operating System: Spend at least a few hours a day learning new skills when you have the time and there is a world of free resources and training. And when the world returns never stop learning. Whatever you are good at will likely erode in market value unless you replenish yourself.

One of the keys is to also ensure that you become “virtual certified” and can work in a world of distributed work forces. We will get back to offices but less than before both in numbers and the time we spend there. Here is how to ensure that you are seen as capable, trustworthy, empathetic, vulnerable and inspiring will be so key to your career.

2. Build a Brand: In a world where full time jobs are going to be fewer at least for a while you need to make sure that you have developed networks and a brand so that you retain optionality.

A recession is not just a time where smart brands who continue to market gain market share, but it is where you can stand out. This is not the time to go into hiding or expect that when you return things will be the same.

3. Face the reality that you are likely to have little pricing power and may need to cut your own costs: When the economy opens up most businesses will find limited demand from customers combined with millions of people looking for work. This will be true at least for a year or two if not more. Those temporary pay cuts may not be temporary and the big bonuses of the past may remain memories as companies husband resources and face cost conscious customers.

You must find ways to cut your cost base wherever you can so that may build your reserves. This will also allow you to afford your next career which may have you start at lower level in growth industry, join one of the new next-generation startups which will pay you a lower base but lots of options or finally follow the career you wanted but did not do because it did not pay big bucks.

No longer should you price yourself out of your dreams because of your cost structure. Could it be that you should be doing something else? Could Plan B or “one day I will” be really Plan A?

4. Change sucks but irrelevance is worse: While today is traumatic in both human and financial and career loss and the path forward will be uncertain and sometimes difficult, we are likely to come out as a better people and society.

Every day you see this with the way people are stepping up and helping their neighbors and finding new ways and approaches to cope.

Humans adapt. Humans invent.

Humans are resilient.

And you are human.

3. Resurrect Now!

As firms re-emerge from the shutdown and begin to return to what Bill Gates calls semi-normal and I believe will be a New Strange world (google images of workplaces, malls and schools in South Korea to get a glimpse of our future) , it will not be business as usual, since people, industry and society will all be different.

In an era of constrained growth, companies and individuals will all be addressing fragility, by looking for safety and security. They will be working to sculpt resilience by re-thinking their size and scale, incorporating optionality into the way they design their work force and supply chains, while also strengthening their balance sheets.

As I work with a range of companies and their senior management, I am helping guide their transition from managing the shock of the shut down to the new landscape they will find themselves operating in.

It is absolutely critical that business use the next four to six weeks as they await the shutdown to end to get ready by asking themselves three questions:

1.What will my Customer/Consumer be like: How will the behavior and expectations of my customer/consumer be different? What will they be doing more and doing less?

For every industry and product category it will different, but I would expect that most firms should begin with an expectation that a)their customers will be more value driven due to reduced purchasing power combined with a need to enhance their future financial security and b) they will be ultra-sensitive about health and safety

For these financial and health reasons people are likely to move to a semi-quarantined state for at least six months to a year, as they travel less, go out less and work more from home.

2. How can I get my company to learn from and accept the new reality?

Leaders face and adapt to reality versus living in a world of magical thinking.

Every business has been shocked, and this has revealed internal fault lines and hopefully also some strengths which exposed a number of new threats and possibly opportunities.

Major new realities will include:

a) Accelerated digitization of business and expansion of remote everything: Covid-19 has transformed more businesses than any strategist, chief digital or chief transformation officer. Every old school resistor has been zoomed into the future.

b) Growth Reversal: Many growth industries (hospitality and travel) will experience depression economics as tens of thousands of restaurants close, airlines grow smaller, hotel room become dorm rooms.

c) Schizophrenia of Size: We will find “smaller is beautiful” as industries like puffed up and bloated universities get reality punched in their theoretical faces. Many will be forced to stop being pseudo sport franchises, building developers and luxury brands with unlimited pricing power to get back to focus on teaching and research.

There will be widespread amputation of company appendages as a combination of strategic focus and financial flexibility result in harsh surgical action and sale/burial of body parts.

On the other hand “Bigger is wonderful” will also emerge, as the large well capitalized businesses such as Amazon, Walmart and Costco in retail, Google, Facebook, Microsoft and Adobe will grow even bigger buying the sawed off parts up for sale or entering new arenas as they smell blood in the water. They will use their scale and reputation to deliver the value pricing and safety signaling people are looking for.

Very few businesses will be spared in the eddies and crashing waves ahead and over the next month you and your team in order to stay afloat and navigate the seas need to do a two-part audit:

a. Shock/Resilience: This is a look inside the business.

What broke or almost failed and what can we do about it. As importantly what worked and why?

b Threat/Opportunity: This is a look outside the business.

Given that consumers and customers are going to be different what parts of our business is threatened and could there are new opportunities and unmet needs we can work on?

When doing these exercises please be real. Call out the turd on the table.

3. How can we leverage fresh sheet thinking: How would we re-start if we had a fresh sheet of paper?

So now that your team has envisioned the future consumer/customer and looked inside and outside of the business to do an audit of shock, resilience, opportunity and threats, what are you going to do?

The biggest mistake individuals or businesses can make is continuing with the status quo.

Every time there is a significant economic shock like the Great Recession, new business is born in the bonfire of the old structures. Remember that Dollar Shave Club, Uber, Airbnb and many more were born in midst of and right after 2007-2009 period.

The reason I call this era The Great Re-invention is that we have a health, financial and society crisis occurring at the same time all over the world. People are being forced to start or stop doing things for 60 to 90 days. As a result, new behaviors will start, and old behaviors may no longer return.

Imagine and invent without limitations except these three reality checks. 1. Whatever you do has to be legal. 2. Whatever you do has to be scientifically and technically possible today and 3. Whatever you do has to break even within three years.

I would then imagine your re-invention keeping in mind:

a.  You are not behind your competitor but your customer. Too many companies focus on benchmarking against their competitors but beating other pathetic people does not leave you any less pathetic. When customer/consumer behavior changes this focus on what competitors do is all wrong.

b. Your competitors have changed: Either because new categories have been created or a new type of competitor has arrived. Just as when the auto companies were ogling each other Tesla, Uber and AI re-wrote the rules of the category or as Gillette and Schick were out blading and out price increasing each other, new competitors such as Dollar Shave Club and Harrys emerged.

c. Your talent needs to be incentivized, trained and aligned differently: There are only two ways to transform your company. Upgrade the people or get better/new people.

If you want your people to behave differently in this new world you will have to incentivize them differently. While people like to be informed via your press release, videos or mantras on transformation, they are most eager to understand what it means to them. Go check out Fishbowl and Glassdoor to get a look at what is on their mind and sometimes get a kick in the gut.

Put your best people against tomorrows opportunities versus todays biggest businesses.

Incentivize behavior and not just outcomes.

Invest in training. Skills are learned and not immaculately born.

Look in the mirror dear leader. We might be part of the problem.

d. The Future Does Not Fit in the Containers of the past:

Why are you organized the way you are if you are re-thinking your category, your competitors and your talent?

If you started today would you have all the people and parts that make your company. Competitors who are starting today do not have these legacy structures weighing them down.

There is a dawning of a new era.

Many opportunities and positive changes will occur after the period of shock. Use this time to get revitalized and re-invent.

Resurrect Now!

The 4P’s:Perspectives, Points of View, Provocations and Plans of Action

I believe that data is as important as electricity. No business or leader can survive without it.

But just as no company differentiates itself through its use of electricity, data alone will rarely differentiate a company or leader.

Almost everybody (with a few exceptions like Amazon, Facebook, Google) has access to pretty much the same data. When I see businesses hyperventilating about their “data lakes”, I feel sorry for what they will dredge up in this pool of increasingly outdated, irrelevant, commoditized sludge they massage and rub into gooey gibberish.

What story do you extract, weave and tell from the spreadsheet of numerics, the files of facts and the streams of notifications that cascade, glitter and dance on your screens ?

In the past four months the entire world is struggling with the impact of Covid-19. By March every country in the world had access to the same data. What differentiated one countries response compared to another country was a) how they read the data, b) the quality of the leadership of the country, c) the unique history or geography of the country and d) the trust in government.

Korea, Germany, New Zealand revered science and expertise, had trustworthy and transparent leaders, and either had a unique history or geography that made fast response or containment possible.

US, UK and Brazil leadership refuse to accept reality, were blow hards and were polarized to a point that no one knew who or what to trust.

It was not the data that made the difference. It was the people, the history, the geography, the culture, the emotion.

If you want to lead please lead and do not hide behind numbers and say crap like things are too uncertain.

Life is uncertain..

If things were certain, a machine could do your job. So be glad the future cannot be lived forward with only backward looking databases.

What do you bring to the data when you bring the data to your bosses or to meetings?

What matters is not the data but the perspectives, points of view, provocations and plan of action you bring to the data.

Here for example is a perspective, point of view, provocation and plan of action regarding Covid-19

Perspective: The Great Re-Invention: Many people have called what we are all coping with the Great Acceleration ( things that might occur three years from now will happen in 3 months), the Great Pause, or The Great Recession 2.0. There are comparisons to SARS/MERS, 9/11 and the 2008/2009 Financial Meltdown. I believe that this is far greater in impact than anything else in the past five decades because a) this is a health, financial and social crisis all at the same time. while the others were one or two but not all three, 2) this is happening to every country in the world and 3) when people start or stop doing something for 60 or more days they form new habits. I believe that society, business and individual mindsets will literally be re-invented in the next 18 months which is how long it will take at the fastest for a vaccine to be both created and be widely distributed.

Point of View: The New Strange:The term “New Normal” is an oxymoron. It is also completely wrong. If you wish to take a peek at the future google “schools in south korea” or ” malls in china” or ” restaurants post covid-19″ or take a visual tour on Instagram of airports post Covid-19. Its a dystopian, science fiction filled landscape. Nothing normal. Very strange. Till a widely distributed vaccine strange will be the new normal.

Provocation: Labor gains at the expense of Capital. The cost of labor ( particularly blue collar and front line labor) is going to rise significantly as companies will have to prove that they are looking after their employees, society and government. (The new ESG is Employees, Society and Government and not Environment, Sustainability and Governance). They will do this through a) better health care and life benefits, b) much higher wages than $15 an hour in the US, c) payment of higher taxes either due to increased taxes or shaming/curtailing of tax avoidance. Talent and consumers will often judge a leader and a firm by how they look after their employees including diversity. The cost of supply chains will also rise as resilience, diversification from china and other factors besides cost will matter. To offset this expect massive reduction in real estate costs and elimination of half or more of travel budgets.

Plan of Action: “Starting” Not “Re-Starting”: The biggest mistake companies are making is believing they are going back to restart their businesses. There are three reasons why this is not true.

First and most important consumer and customer behavior and expectations are very different than December 2019. People and society is fragile. They are looking for safety, security and value.

Second your employees and work place have changed. You may have fewer employees. Many of them after the last four months are different people with different mindsets and are looking at their work and leaders with new eyes.

Third, your category and competitive set may have changed. After the Great Recession was over because of new mindsets as well as new technologies (social and mobile) a plethora of new companies were formed. GM and Ford were no longer each others key threats but Uber and Tesla were. Gillette and Schick’s ultra expensive over-engineered blades were now facing Harry’s and Dollar Shave Club. Post Covid-19 a different consumer mindset combined with scaled new technologies ( 5g, Voice, Cloud and Machine Learning) means you better think again . Start again not Re-start. What new needs and behaviors from consumers? What new competitors? What new products or services and ways of working?

As you move forward I suggest that you expose yourself to lots of valid data and differing points of view. Next add value to your company and to your career by providing a perspective, a point of view, a provocation and/or a plan of action on everything you have imbibed versus just reporting facts and process.

If you do you will forever grow and succeed.

If not you will be automated away.

Rishad Tobaccowala ( @rishad ) is the author of the bestselling “Restoring the Soul of Business: Staying Human in the Age of Data” published by Harper Collins globally in January 2020. It has been described as an “operating manual” for managing people, teams and careers in the age we live in. Rishad is a sought after speaker and advisor who helps people think, feels and see differently about how to grow their companies, their teams and themselves.

The Great Re-Invention: Resurrect Now!

As firms re-emerge from the shutdown and begin to return to a semi-normal world, it will not be business as usual, since people, industry and society will all be different.

In an era of constrained growth, companies and individuals will all be addressing fragility, by looking for safety and security. They will be working to sculpt resilience by re-thinking their size and scale, incorporating optionality into the way they design their work force and supply chains, while also strengthening their balance sheets.

As I work with a range of companies and their senior management, I am helping guide their transition from managing the shock of the shut down to the new landscape they will find themselves operating in.

It is absolutely critical that business use the next four to six weeks as they await the shut down to end to get ready by asking themselves three questions:

1.What will my Customer/Consumer be like: How will the behavior and expectations of my customer/consumer be different ? What will they be doing more and doing less ?

For every industry and product category it will different, but I would expect that most firms should begin with an expectation that a)their customers will be more value driven due to reduced purchasing power combined with a need to enhance their future financial security and b) they will be ultra-sensitive about health and safety

For these financial and health reasons people are likely to move to a semi-quarantined state for at least six months to a year, as they travel less, go out less and work more from home.

2. How can I get my company to learn from and accept the new reality?

Leaders face and adapt to reality versus living in a world of magical thinking.

Every business has been shocked and this has revealed internal fault lines and hopefully also some strengths which exposed a number of new threats and possibly opportunities.

Major new realities will include:

a) Accelerated digitization of business and expansion of remote everything: Covid-19 has transformed more businesses than any strategist, chief digital or chief transformation officer. Every old school resistor has been zoomed into the future.

b) Growth Reversal: Many growth industries ( hospitality and travel) will experience depression economics as tens of thousands of restaurants close, airlines grow smaller, hotel room become dorm rooms.

c) Schizophrenia of Size: We will find “smaller is beautiful” as industries like puffed up and bloated universities get reality punched in their theoretical faces. Many will be forced to stop being pseudo sport franchises, building developers and luxury brands with unlimited pricing power to get back to focus on teaching and research.

There will be wide spread amputation of company appendages as a combination of strategic focus and financial flexibility result in harsh surgical action and sale/burial of body parts.

On the other hand “Bigger is wonderful” will also emerge, as the large well capitalized businesses such as Amazon, Walmart and Costco in retail, Google, Facebook, Microsoft and Adobe will grow even bigger buying the sawed off parts up for sale or entering new arenas as they smell blood in the water. They will use their scale and reputation to deliver the value pricing and safety signaling people are looking for.

Very few businesses will be spared in the eddies and crashing waves ahead and over the next month you and your team in order to stay afloat and navigate the seas need to do a two part audit:

a. Shock/Resilience: This is a look inside the business.

What broke or almost failed and what can we do about it. As importantly what worked and why?

b Threat/Opportunity: This is a look outside the business.

Given that consumers and customers are going to be different what parts of our business is threatened and could there are new opportunities and unmet needs we can work on ?

When doing these exercises please be real. Call out the turd on the table.

3. How can we leverage fresh sheet thinking: How would we re-start if we had a fresh sheet of paper?

So now that your team has envisioned the future consumer/customer and looked inside and outside of the business to do an audit of shock, resilience, opportunity and threats, what are you going to do?

The biggest mistake individuals or businesses can make is continuing with the status quo.

Every time there is a significant economic shock like the Great Recession, new business are born in the bonfire of the old structures. Remember that Dollar Shave Club, Uber, Airbnb and many more were born in midst of and right after 2007-2009 period.

The reason I call this era The Great Re-invention is that we have a health, financial and society crisis occurring at the same time all over the world. People are being forced to start or stop doing things for 60 to 90 days. As a result new behaviors will start and old behaviors may no longer return.

Imagine and invent without limitations except these three reality checks. 1. What ever you do has to be legal. 2. Whatever you do has to be scientifically and technically possible today and 3. What ever you do has to break even within three years.

I would then imagine your re-invention keeping in mind:

a.You are not behind your competitor but your customer. Too many companies focus on benchmarking against their competitors but beating other pathetic people does not leave you any less pathetic. When customer/consumer behavior changes this focus on what competitors do is all wrong.

b.Your competitors have changed: Either because new categories have been created or a new type of competitor has arrived. Just as when the auto companies were ogling each other Tesla, Uber and AI re-wrote the rules of the category or as Gillette and Schick were out blading and out price increasing each other, new competitors such as Dollar Shave Club and Harrys emerged.

c. Your talent needs to be incentivized, trained and aligned differently: There are only two ways to transform your company. Upgrade the people or get better/new people.

If you want your people to behave differently in this new world you will have to incentivize them differently. While people like to be informed via your press release, videos or mantras on transformation, they are most eager to understand what it means to them.Go check out Fishbowl and Glassdoor to get a look at what is on their mind and sometimes get a kick in the gut.

Put your best people against tomorrows opportunities versus todays biggest businesses.

Incentivize behavior and not just outcomes.

Invest in training. Skills are learned and not immaculately born.

Look in the mirror dear leader. We might be part of the problem.

d. The Future Does Not Fit in the Containers of the past:

Why are you organized the way you are if you are re-thinking your category, your competitors and your talent?

If you started today would you have all the people and parts that make your company. Competitors who are starting today do not have these legacy structures weighing them down.

There is a dawning of a new era.

Many opportunities and positive changes will occur after the period of shock. Use this time to get revitalized and re-invent.

Resurrect Now!