Remaining Relevant.
The issue everywhere.
The one that lingers in the air.
After the pretenses are stripped bare.
That every manager and business share:
Is how does my business remain relevant?
Are our business models up to snuff?
Do our partners and suppliers have the right stuff?
Will the business hold when things get rough?
Why is managing talent so tough?
How do we as leaders remain relevant?
How will AI change my job?
What challenges will it lob?
Will it of my livelihood rob?
The pace of change why does it makes me sob?
How do I in an AI age remain relevant?
The answers are slowly starting to emerge.
This is not the time to sing a dirge.
Instead towards this new world we must surge.
And some old ways of thinking we need to purge.
Maybe re-inventing, re-learning, re-thinking are the ways to remain relevant?
It is a time to invest big and dare.
A time to realize that AI while key will be a commodity and not rare.
AI while essential unlikely to differentiate from competition when buyers compare.
Rather how does one optimize the AI and HI (Human Inspiration) pair?
Maybe embracing tech alone may not be enough to remain relevant?
Embracing the tech is a key.
It is however but the entry fee.
The difficulty is how to adapt our current ships to sail in this new sea.
How to ensure the machine complements and does not replace me.
From the noisy confusion we must find fusion to remain relevant!
What is important is that every one of us must seize the day.
Take the time and even invest to learn from part of our pay.
Do not only depend only on the employer to equip you for the future way.
The more up to tomorrow you are the more in your job you will be able to stay.
Do not delegate the task to others of you remaining relevant!
The age of de-bossification is on the way.
Do not just manage, monitor, delegate or measure your talent will say.
They ask what have you created, built, made or who have you mentored today?
Inspire and help them grow and only then they will stay.
Adapt and grow as a leader is the way to remaining relevant.
The future despite the screeching headlines is bright.
Seize the day and all will be right.
To twist and transform ourselves into new shapes is the fight.
From the dark we will emerge into the light.
Only when we transform do we and our company remain relevant.
Driving Changes; 8 Learnings.
1. Change Sucks: While many folks’ prattle on how "change is good" and should be embraced, the reality is that change means doing new and different things and trading in the comfortable, the tried and true and what one knows for months or years of stumbling, inventing things on the fly and looking quite incompetent. Let’s be honest with folks who we would like to help change and acknowledge that it is difficult.But while change does suck, irrelevance is even worse.
2. People are analog: As much as the world is going digital, people remain analog. We have emotion and we make decisions that are not entirely rational. We care about how we are perceived; we love our turf, and we fear uncertainty. Unless one can understand the human needs and concerns when one is looking to deliver change it can get very difficult.
3. Incentives are critical: As Stephen Levy the author of Freakonomics makes clear, to understand someone’s behavior it is critical to understand their incentives. We behave like we are paid to behave. So, whenever anybody wants a key to to drive change, they should start with changing incentives. So many industries continue to reward and provide incentives for the status quo while churning out press releases about change. Change only happens if it makes economic and career sense.
4. Fear must be reduced. Because change is associated with fresh and new things it is also associated with a higher degree of failure. Cultures that penalize failure find themselves ossified to the past. The big difference between Silicon Valley and Japan is their perspectives on failure. In Silicon Valley failure is a badge worn proudly while in Japan it often leads to suicide due to loss of face. There are no second chances in Japan and multiple chances in Silicon Valley. If a company had a high fear level (do people whisper? are folks afraid of the boss?) than the change I recommend to folks is to quit and find a better place.
5. Culture must be paid attention to. Every company has its culture. Some are strong and some weak but often successful companies have very strong cultures. This culture has often been the reason for the company’s success but sometimes may be its weakness in the future. Changing or attacking a company's culture is very intricate and requires both the patience and the precision of a surgeon. Eliminating some key parts of a Company's culture without understanding its importance or role it serves can not only be detrimental to change but also cause the change agent to be tossed out. The best change agents are experts at understanding company cultures.
6. Tell all the Truth but tell it Slant. This advice is from the poet Emily Dickinson. She goes on to say, " the truth must dazzle gradually, or every man be blind...". Full frontal attacks, hysterical statements about "dead business models" and other melodrama may make good blog copy or conference panel grist but rarely is effective in getting large successful firms to navigate change. The facts must be stated without personal attacks or offering choices that must be made at gunpoint or under fear. Let the facts speak for themselves. Let the reality dawn and rise versus going from darkness to high noon.
7. Bring Data, Facts and Examples. Once a company gets emotionally ready to change, it still needs a lot of facts and examples and here one must be ready to interrogate the company's legacy metrics of success. For instance, most content companies are under the mistaken belief that their content is valuable and can be monetized when the truth is that access to content and new ways of monetizing content is really the future. Data and examples that illustrate this gets the attention of the money folks and the strategic leadership of a firm whose support is key to drive change.
8. Inspirational Leadership is key: At some stage the numbers can be supportive, fear can be reduced, people’s incentives aligned, and the cultural issues addressed but that alone is not enough. At some stage there is a jump into a void that must take place. It is here that the leadership of a company must stand up and inspire. People follow people and not power point.
Davos 2024 = Davos 2017?
Here are my key takeaways from Davos…
The key themes were AI, China showing up in force and worries about it, the breakdown of trust, the need for business transformation, an increasingly polarized world with rising nationalism. These topics and concerns overwhelmed the more recent disruptions caused by the Russian/Ukraine and Middle-East troubles.
If you have been reading summaries of Davos 2024 that just concluded , you probably are familiar with these points.
But here is the zinger…my write-up below was written 7 years ago which was the second last time I was there in person! (Here is the link to the original post.)
This suggests that a) real trends are long lasting , b) change happens much more slowly than the headlines suggest since it takes time for organizations and people to transform and c) all of us should focus more on the signal than be distracted by the noise.
The key drivers remain the same and every one of us should align ourselves and our firms with these underlying challenges and opportunities.
The 2017 Write-Up from Davos.
Over four days there are over 400 sessions on the official World Economic Forum Annual Summit program. In addition, there are a multitude of breakfasts, lunches and dinners with speakers and panels. And then the myriad conversations one shares with some of the 3000 plus delegates. No person can truly summarize the event since one only gets to experience a sliver of what is possible.
Keeping this reality in mind, here are some of the key themes and takeaways from my perspective.
1. Middle Class Driven Populism is and will be the driving force in Western Politics: A combination of a) liberal governments who moved money to the less well to do b) de-regulation and weakening of unions which drove money to owners of capital and c) globalization which moved opportunities to Asian and Southern hemispheres all coming at the time of minuscule economic growth has left the Middle Class in most nations in the West wondering who is on their side? According to the Edelman Trust barometer 53% of people globally do not believe the system is working for them.
Globalization overall has been dramatically good for the world, helping lift a billion people out of poverty, reducing prices, and bringing new opportunities. This is true overall, but for individuals who do not have the right skills or find their job outsourced this is a calamity. As a result, huge swaths of the voting public in the US, UK, France, and other countries are voting against globalization and for national interests first.
The World Economic Forum’s goal is to “improve the state of the world” but individuals do not live in the broad world but in a particular area or country and many things that improve the overall world, hurt countries and localities and it is this oversight that has made people question globalization and the supposedly stateless “Davos Man.”
For the next few years, we can anticipate at best a modified form of globalization where the impact on the middle class and local economies will be the first filter that both politicians and business leaders will be forced to contend with. Donald Trump’s “America First” mantra will be repeated in many other places where elections are held as the middle-class revolt against what they believe is a system rigged against them.
2. Artificial Intelligence (Cognitive Computing) has arrived and will add to the disruption and create a huge need for skill training:
The concept of AI has been around for over 50 years, but it is only now with the advent of deep learning made possible by huge amounts of data, cloud based computing and low-cost storage that pattern, image and voice recognition has reached a point where their capability is growing exponentially.
If you use Google Translate you will find that in the last few months, it has advanced more than it did since it was launched years ago due to AI. From Amazon Echo to Watson Cognitive Computing, AI is the new frontier of technology, and it will drive a huge increase in automation which will impact jobs as much as off shoring did.
This reality caused every AI conversation in Davos to constantly focus on the impact on jobs. IBM’s CEO recently published an internal manifesto on AI which focused on terms such as purpose and transparency and noted her belief that IBM wants to augment versus replace jobs. For instance, IBM Watson today which has been trained on 18 million documents helps doctors make better decisions for Cancer patients because only a machine can imbibe the 8000 new papers being published daily in Oncology.
Major questions arise on AI, where the machine learns on data, as to who trained the machine and what data was used. Just like you and I come out differently depending on what our experiences have been an AI machine will reason differently depending on how it was trained!
Can an AI machine make a blue-collar worker now do white collar work by helping them up-skill? Or will they lose their jobs? Will an AI trained person be a “new collar” worker? Long before driverless cars, it is these reasoning/seeing/speaking computers that all of us will have to be contended with.
Therefore, even after attempting to keeping the immigrants out and putting up barriers to trade, we will find that computing progress will challenge employment and will require a major investment in skill development to keep people working. Education will be critical but a new type of hands-on skill versus four-year college will be required.
3. As the world gets increasingly connected, we are also sometimes getting more disconnected: Today over 3 billion people relate to over 1.5 billion people on Facebook alone. But oddly a combination of people seeking out people like themselves, algorithms that maximize engagement by showing us things we agree with has left us disconnected from ideas, individuals and initiatives that do not “fit” our lives. Thus, we float in our little bubbles, warm in our soapy self-loving embrace, while occasionally flaming and pricking other bubbles that float by which are not aligned with our way of thinking.
This lack of connection and trust was seen in Edelman’s Trust Barometer where trust levels for business, leaders and the media were at all-time lows. People now look to friends and family and people like themselves for news, opinion and expertise. We can make fun of some of our “post-truth” politicians but if we spend our time in our own self-reinforcing chambers are we not also “post-fact” or “post-truth”?
And it is here where I found the folks at Davos were behaving with trepidation and uncertainty. For instance, given the huge concentration of wealth or revenue in a sliver of companies and people (10 percent of the companies drive 80 percent of profits, 8 people have the same wealth as the bottom 3.5 billion, and technology is actually making more wealth go to fewer people with in many tech industries one company taking it all) there was very little real discussion on any painful steps that would be needed to be taken to ensure that those left behind and angry do not explode. No talk of new regulations or laws. No talk of taxes. No talk of re-distribution. Apparently providing training (with no details of even how this was to be done) and some light self-regulation will be enough.
The reason that at Davos there was uncertainty because the folks know that society is changing in ways where an unmitigated quest of globalization, improving the state of the world at the expense of the state of a country and pursuing stockholder return/wealth creation alone, no longer resonates or will be accepted.
It is the reason many companies are leading with the “Responsible and Responsive” focus ensuring that in addition to CSR activities they truly help people’s lives get better. The soft edges of a companies will become competitive edges.
4. China Rises: For the first time at Davos the President of China participated. In a 30-minute talk President Xi built a case for globalization and for being protective of the environment. Without mentioning the US or Donald Trump he worked to show that China was ready to take the mantle of world leader due to its openness and solidity.
In many other panels various Chinese leaders from Jack Ma of Alibaba and more spoke of how they would be enabling jobs, importing goods as they moved to a consumer driven society, focus on soft power through entertainment and much more. There is a clear belief and feeling among the Chinese that this is now their time as EU grapples with its self-identity and Brexit and the US figures out Trump. Disengaging from the world currently is not really an option.
While there are lots of challenges that China itself grapples with from its heated leveraged real estate market, environmental issues, capital/talent flight and the role of the Communist Party, it feels stronger than ever before because maybe the West seems more confused than ever before.
5.Companies are going to have to change their behavior and their structure: Companies are struggling to integrate the short-term reality of markets looking for results and the need to invest for the long term to remain relevant and re-invent themselves. Most CEOs are smart enough to know that they have to find a balance between these two extremes but worry that they are more biased towards the short and rather the long term and therefore are likely seeding their own self-disruption. The markets almost seem to look at established firms as cash cows that they need to milk while moving their grass (green dollars) to newer firms that have been designed for the mobile connected world.
Bain Consulting put out a study noting that in an age of Amazon Web Services and other platforms companies will quickly have to decide are they platform companies? Outsourcings specialists? Product companies? or Service companies? Being all things to all people will no longer work. Focus on one and connect to the others to deliver the solution.
Bain Consulting also re-iterated something everybody in business knows which is that the next generation of talent is not looking to climb a hierarchy but are looking for purpose, impact, experience, and skills and do not want to be managed but inspired.
Finally, speed is a competitive advantage and therefore companies are going to have to be decisive with the yes and no and then decentralized with empowered teams to make things happen.
Organizations and leaders need to re-imagine themselves in this connected age.
Net, we need to go from being controlling, centralized, short term-oriented managers to empowering, federated, long term inspirers.
6. Trust: If there is one overall theme from this Davos it is trust. How to get it? How to keep it? How to regain it?
There has been a breakdown in trust with all four institutions (Government, Business, NGO and the Media) seeing simultaneous declines according to Edelman tracking
Can our politicians be trusted to look after the people who vote for them, or will they look after the people who pay for their campaigns? Will our business leaders think beyond short term profits and global domination and think of the communities they work in and invest in keeping their people relevant and make long term decisions? Can the platforms like Facebook that run black box algorithms and refuse to share their data be trusted with the news and connections and results they show us? Can we really believe that Artificial Intelligence will not come to replace us and the IBM, Amazon, Microsoft, Tencent, Alibaba, Google, Apple and Uber that are driving our future in this area can be trusted with this?
This Davos was clearly one filled with uncertainty and change more than ever before. The themes that I took away (again one person’s perspective based on what I was exposed to) may make one feel pessimistic but we need to keep in mind that the World is better off today than ever before but many people have been left behind and we need to re-think the coming age with inspirational thought, deep feeling and generous sharing of perspectives and the views of different groups as we build an even better future.
7. Implications for Business and Marketing: If there is one theme that business and marketers should focus on is how to be seen as a trusted brand or company. In todays connected world being authentic, purpose driven and transparent is key to gain trust not only among purchasers but also current and potential employees. Thus, companies need to have significant programs externally to ensure they are helping communities, that they are careful about where they source from, that they look at things beyond the bottom line and their Brands are aligned with the greater good. In addition, as employees become the key ambassadors for Brands and the talent wars heat up it will be key to constantly communicate, train, and connect with employees making plans and senior management accessible.
The AI world will impact marketing in a big way. We already saw at CES that Amazon’s Alexa voice operating system was being incorporated into many products and services from Refrigerators to cars. Voice based search will change the way we manage search. And importantly AI bots will augment CRM. These are all scalable today and AI will be a key platform for marketing. At the same time the augmented capability of AI to up-skill and do things faster than humans will require companies to both up-skill their own people and to consider what jobs should be primarily done by machines. The economic competition and price pressures all companies face will not disappear, and AI is one way to increase productivity.
Finally, given the emphasis on data, business really needs to interrogate whether their data programs are as valid and relevant as they can be. Can a company’s data be a bubble of delusion as they frame things through their brand or their category versus what people want and feel in an age of AI are they truly utilizing the correct co-relations and algorithms. Most importantly we often choose with our hearts and then use numbers to justify what we just did. In such a world marketer should never forget the emotion and the feeling that makes us human which often overrides logic and rationale.
Strategic Myopia.
Photography by Linde Waidhofer
Strategy is “Future Competitive Advantage”.
This definition works both at the level of the firm and at the level of the individual.
What will the future look like?
How will the marketplace change with evolving customer needs and expectations?
Who will the competition be not just now but in the future?
Relative to these future needs and competitors what advantage will we or our firms provide?
It is simple way to understand and apply strategy. Here is the process laid out on one page on how every firm and individual can apply strategy including some key questions and approaches: Strategy.
But so many get strategy wrong.
Photography by Linde Waidhofer
Four Strategic Mistakes.
In a piece called Four Strategic Mistakes one set of these mistakes are discussed.
These are:
Mistake 1: Strategies that limit one’s competitive set or category definition by the companies one currently competes with. (Many key opportunities and threats come from outside the way we currently define a competitive set or our categories.)
Mistake 2: Strategies built by extrapolating today’s realities into tomorrow. (Like scale matters or population will keep growing or interest rates will always remain low.)
Mistake 3: Strategies focused on technology trends. (Today it is AI! AI! AI!)
Mistake 4: Strategies that do not incorporate talent dynamics. (People will eat strategy for breakfast, lunch, and dinner.)
More details on these mistakes and how to fix or avoid them are here: Four Strategic Mistakes.
There is however one overwhelming reason that so many companies and individuals really make a mess of strategy.
Photography by Linde Waidhofer
Strategic Myopia!
Strategic myopia is some combination of short-sightedness, long-sightedness or being blind to reality.
Blind to Reality: How many times have we all experiences where our firms or our customers seem to exist in a fairy land disengaged from reality.
Nobody calls out the “turd on the table” because either we do not want to acknowledge the pain that we are on the wrong track or somebody is terrifying or being terrified. Everyone pretends that the brown moist thing in the middle of the table is a brownie when it is a piece of waste.
The problem will solve itself. The issue will dissolve. It is just a short-term hiccup.
But we all know that the issue is real but to confront it means taking on challenges that will be hard to resolve including:
a) we no longer have relevant products or services (AOL as the Internet became more popular.)
b) our marketplace has changed with competitors who have different economics (any traditional media company.)
c) our leaders and even ourselves have outdated skill sets and mindsets. Therefore, unless we learn new things and unlearn old things, we are growing irrelevant (too many senior people especially those who use fear and power to rule.)
Every one of us want to look away and hope we do not have to deal with the challenges. The smart companies and leaders twist themselves into new shapes realizing that transformation is about people.
Short-sightedness: This is a focus on the short term. Results must be delivered this quarter or this year. Either because the urgent crowds out the important, or there are mis-aligned incentives, or short tenures or a focus on the scoreboard of a stock price (even though in reality markets punish companies for not preparing for the future.)
Too many executives align the way they allocate their time with the way they allocate their budgets. Most companies allocate 90% or 95% of their budget on the coming year but that does not mean senior executives should allocate their time that way. The smart ones allocate a quarter of their time to tomorrow, delegating some parts of managing today to their teams. The future cannot be delegated to an innovation group or a futures group (both of which may be important as focal points) but needs a lot of time and commitment of senior management since only they have the expertise to make hard calls, see the patterns and most importantly by doing so signal to the company that the future is important.
Long-sightedness: A form of myopia is long-sightedness which is not being able to see things clearly that are near.
We all have heard the refrains of “this will not happen till I retire”, or “this will happen many years from now so we will worry about it later” only to realize later that 1) change often scales exponentially and what looks like a gradual slope suddenly goes vertical and 2) it takes time for organizations to change (often years) and so waiting is not a form of maximizing strategic options but kicking the ball down the road.
Companies and individuals who wait limit the ability to a) be an early mover and gain competitive advantage with partnerships or pricing and, b) limit the downsides of making mistakes before something has scaled and can truly hurt the organization.
Photography by Linde Waidhofer
Corrective Lenses.
The good news is that strategic myopia can be corrected.
Here are some ways that do not allocate huge budgets or need organizational re-designs.
a) Annual Re-Think: Once a year senior executives should challenge the key assumptions of their strategy. Three key questions to ask are:
Are our customers adding new types of firms or going to other firms for new capabilities?
What are our key competitive advantages that we believe we have and are they truly advantages today or are they anchors that hold us back?
If we were to start our company today with all our assets and no constraints except law and science, given everything we know what would our company look like?
You will be surprised how different the future may look after these exercises.
b) Look outside for inspiration and cautionary tales: Most companies are too focused on their categories and competitors and therefore get defensive if someone says they do not get it or miss that the challenge is not from their existing competitive set. By asking external partners, going on road-trips, and attending conferences to learn with a focus on the following questions:
What are examples of companies that re-invented themselves and created great economic value (Domino’s Pizza, Microsoft, Abercrombie and Fitch, New York Times) and what can we learn from them.
What companies tried to re-invent themselves and failed and why?
What companies failed to change and dwindled away (many newspapers and other print media companies, Blackberry.)
Great strategies are often only seen at a distance (away from one’s category) just like great architecture can only be often appreciated from a distance.
Strategy will grow more and more important as the rate of change and transformation speeds up.
To thrive one must understand strategy, avoid common mistakes and most importantly not be myopic.
Learnings: Life.
Life is a journey through reality and time in search of meaning and joy.
Life.
Life is defined by change, chance, and choice.
Every day we change and the world around us changes.
Much of what happens is life is due to chance. The people we meet. The timing of things. Whom we are born to and where we are born.
Amidst the change and chance, it is the choices we make that determines the quality and substance of a life.
Journey.
The journey we take is in part the journey we make.
Roads diverge and much is determined by which we travel by.
Often, we trip and fall, or we end up at dead ends.
To go on we repair.
We re-imagine.
We practice resurrection.
Reality.
While life without imagination is impoverished and small, we cannot escape reality.
Science matters. Gravity does not care if we believe in it or tweet otherwise.
Facts are stubborn things. Data has a way of breaking in. Karma strikes back.
Darwin was right.
The drums of reality beat in the marrow of our blood.
Let us bring imagination to it but aligning with reality is key to a fulfilling life.
Time.
Time is the only asset.
The meaning of life is that it ends.
Life is often about making memories and focusing on what matters most.
Because what is here today will be gone tomorrow.
Extracting the extra-ordinary from the ordinary and finding poetry in every crevice gives grace to a day.
Meaning.
Meaning is often a combination of identity, connection, and mission / purpose.
Identity is about who we are, what we do and how we fit in our skin.
To be okay with solitude if necessary.
To march to a beat of our own rhythm. To listen and learn from others but not to live in other people’s minds or always be needing their validation.
To both be seen but not be defined by how one is seen.
Connection is key for while we may each be unique and sometimes crave solitude, humans have thrived through belonging and connectedness. Being part of groups, causes, families, cultures, and tribes.
Much of the gusto of life and the go of it comes from mission and purpose. Causes bigger than us and outside us. People to nurture and care for. Goals to be achieved. Things to be built. Work to be created. Spirituality.
Joy.
Success is having the freedom to spend time in the ways that give one joy.
Joy is deeper and broader than and often can exist in the absence of happiness.
Joyous people often combine gratitude, generosity, humility, and learning with a deep sense of connectedness and awareness.
Life is a journey through reality and time in search of meaning and joy.
Photography by Rishad Tobaccowala