Rishad Tobaccowala's Blog, page 9

The Rise and Fall of Giants?

Photography by Aline Smithson

When companies like AT&T, IBM, General Electric and General Motors were the world’s leading organizations in the 20th century, it seemed as if they might always occupy their lofty positions.  Few could envision the emergence of new, dominant companies and industries.  Apple, Google, Amazon and others rose with astonishing speed to become leaders in their categories. 

Will this new era of the four shifts of power, demographics, mindsets and technology bring about a tectonic change in the corporate landscape?

Photography by Aline Smithson

A New Breed of Companies?

Will the same scenario take place in the years ahead?  As tempting as it might be to predict that we’ll have a similar changing of the guard in the future, the following graphic provides a needed corrective to this thinking, showing the most valuable companies over the last three decades (Source: GPT-4): 

The lists are surprisingly similar, with four types of companies dominating the list (technology, pharmaceuticals, energy, and financial powerhouses) and Walmart.

This is a decade, two decades and three decades after the birth of the Internet. With the exception of GE, most of the companies or their immediate competitors remain the same over two and sometimes three decades.

Some new technology companies like Apple, Nvidia and Taiwan Semiconductor make the list today, replacing a Nokia, IBM, and Intel. Why? Because Nokia failed to re-imagine phones and let Apple thrive; Intel failed to re-imagine chips, allowing Nvidia take the lead; and IBM couldn’t grasp the next generation of many things including silicon manufacturing, giving Taiwan Semiconductor an opening to dominate.

But overall, the top lists are remarkably similar by type of company with really only one new entrant, Meta, built on the relatively new social media category.

Given this historical performance, the list of leading companies a decade from now shouldn’t be that much different from the 2023 list. It’s likely that Apple, Alphabet,  Microsoft, Berkshire Hathaway, Johnson and Johnson, JP Morgan, Procter and Gamble and Walmart will remain in the top 25. Accompanied by a big Credit Card company, a chip manufacturer, and a big energy firm or two. Tesla may remain if it morphs into an energy or AI firm but otherwise it may be a one decade wonder.

They and other major corporations have been taught the need to adapt and incorporate the latest technologies and ways of working and learning—the cautionary tales of Nokia and GE have not been lost on them.

At the same time, we’re bound to see the rise of certain companies in certain industries:

AI: While Alphabet and Microsoft are well on the way to become giants of an AI age, they are likely to be joined by new players such as ByteDance, the parent of Tik Tok, Open AI and other firms being newly launched. Will Nvidia which just in the past few months has risen to being the third most valuable company linger on these lists for decades or will new open and light models from companies like France’s Mistral reduce its expected dominance?

Biotechnology: In addition to AI, it is likely that a new giant or two focused on biotech like a Moderna will emerge.

Climate Technology: As concern about climate grows, so too will the companies in the category—at least one is bound to emerge from the pack, especially if they’re able to address major concerns in a way that is innovate and effective.

Tech Enabled Disruptors: These might be a Stripe or a Snowflake or companies of the same ilk.

India: In addition it would be surprising if a decade from now if one or two companies were not from India whether it be a Reliance, a Tata or a Adani.

Photography by Aline Smithson

Companies will operate differently.

While the mix of leading corporations may not change dramatically, they will operate differently from the way they did in the past.

Fewer employees due to increased productivity: They will have fewer full-time employees because they will leverage the power of AI to do more with less and use marketplaces to utilize more part time workers to ensure flexibility and speed in a shape shifting world.

This does not mean there will be less employment since some companies while being more productive will be more profitable and fast growing. In addition significant job growth will come from a larger number of smaller companies as well as many people earning income from more than one company or gig at the same time.

They will be far more geographically distributed: As the world becomes far more multi-polar with the continued rise of India and China among others and the ability of modern technology such a spatial computing to facilitate working from anywhere.  

Employee Joy: It is likely that companies will run with a greater focus on employee joy as talent and culture will become the key differentiator as other areas become commoditized.  

In an increasingly advanced digital silicon world, almost everyone will have access to the same tools and technologies and the differentiation will come from traditional analog carbon wealth called people or humans. Leaders and companies that can attract, retain, grow and align this human capital will be the ones that will flourish.

Photography by Aline Smithson

A Whale and Plankton Eco-System of Mutual Enforcement.

Perhaps the biggest change in the eco-system of companies will be the proliferation of smaller companies connected directly and indirectly to the giants.  As members of younger generations want to work independently or pursue side hustles and as technology makes this increasingly feasible, the giant corporations will become reliant on millions more small businesses and independent contractors. 

It will be the whale-and-plankton paradigm.

The debate between big and small is a false debate because the future model will need big and small working together.

There will continue to need to be the need for “old scale” which is the scale of resources, scale of size, scale of spending and scale of manufacturing in almost all industries.

To create break throughs in computing, bio-technology, transportation or many other fields one will require the investments to capital, huge pools of data and the ability to invest in R&D over years as the large pharma companies such as Merck or Pfizer, technology companies like Google and Microsoft and transportation companies such as GM and Toyota do.

It takes tens of billions of dollars to create the architecture for AI for instance.

On the other hand these large companies create the infrastructure as well as the spending power that allows thousands of other companies to feed off their investments, spending, distribution and pioneering.

This is where the new scale of networks, talent, ideas and creativity will be the differentiators.

Apple supports tens of thousands of developers who leverage the App store, Google’s You-Tube enables millions of creators, Amazon enables sellers and Microsoft provides cloud and computing services that anyone can plug into.

But it is not just the small companies that feed of the big but the big ones feed of the small both in generating income through fees (cloud services), commissions (percentage of revenue for being listed on an app store),  revenue generated ( You-Tube running advertising against creators) but also as places of innovation or talent that they can buy and scale ( Meta bought Instagram, many pharmaceutical companies buy smaller bio-tech firms)

This dance of big and small constant and continuous will continue in the future.

It will less be a rise or fall giants but the dance of an eco-system of companies and talent constantly connecting, flowing and adapting as they seek growth.

The future will be fluid and to thrive it will be key to be flexible both as an individual and a firm.

The future will be elastic .

Perfect Days.

The photographs above are a sampling of the public toilets in Tokyo.

From the New York Times:

“Perfect Days” — which was Japan’s entry to the Oscars in the international feature category, and landed a nomination — started life when its director, Wim Wenders, was approached about working on a project that would elevate the profile of Tokyo’s pristine public toilets. He proposed a narrative feature, and the film was born.

“Perfect Days” is currently in theaters in North America ( it will be available in a few weeks on major streaming platforms) and is one of the five nominees for Best International Film at the Oscars.

Koji Yakusho won the best actor award at Cannes this summer.

It is one of the best pieces of art I have experienced in that it takes you everywhere by not taking you anywhere.

This work is probably the best in decades by the legendary Wim Wenders who has the eye of a photographer and the soul of forever. We see him here working at peak form combining with Kojue Yakusho one of the finest actors ever to make every scene, every gesture (much of the movie is silent or only has a soundtrack) feel so fresh that it is shocking how the ordinary becomes the extra-ordinary.

It is movie where nothing seems to happen in that the movie repeats the ritual of every day in the life of a toilet cleaner living by himself.

He gets up. Brushes his teeth. Gets dressed. Gets a coffee from a vending machine. Gets into his truck. Cleans toilets. Has the same lunch at a park where he takes a photograph. Cleans toilets. Goes to a public bath to wash himself. Goes to dinner at the same place. Reads a book. Goes to sleep.

Again and again.

On weekends the work is replaced by laundry, a book store and a dinner at a bar.

It is Zen.

As a movie.

If you take two minutes to watch this official trailer it encapsulates the rhythm and mood of the film.

What makes the movie remarkable despite what may be the absence of a plot, special effects, or fast action is that the viewer begins to sense that this is unlike anything they have seen and we become aware that every day is special in its own way even if it seems like every other day.

Its about learning to see. About the movement of trees. The play of light. The rustle of wind and the connection between humans that do not need words. It is so differently paced that it will take your breath away.

It is about being increasingly sensitive to a finer shade of differences.

A judicious surrender to the force of opposing tendencies.

A secular grace of intense feeling.

It reminds us to see around us and to live deeply in the moment. To find happiness in the crevices of every day versus looking for it elsewhere at another time.

"Repetition as such, if you live it as repetition, you become the victim of it. If you manage to live it in the moment, as if you've never done it before, it becomes a whole different thing".

"Next time is next time. Now is now”.

It is also about the loss that comes from the digital world as we see the main character use an analog camera, chemical film, a flip phone, cassette tapes and paperback books in hyper modern Tokyo.

And the music is extra-ordinary…here is the soundtrack:

To get as sense of the art, craft, excellence and attention to detail and feeling spend a little time at the official website (scroll around and click on index). It is one of the best online experiences that will inspire every artist, creative, marketer, designer, agency, brand…anyone.

Click here or here: https://www.perfectdays-movie.jp/en/ or right click on the image below to begin the experience

If you have ever wondered about the creative process one could do no better than watch the video below on Wim Wenders revealing how a movie about toilets led to an actor led to a character led to Zen which led to Leonard Cohen which led to the music selection…

Creativity is connecting dots in new ways that surprise (critical for humans in an AI age)

Here are some fragments from reviews of the movie

NPR:

Dealing with life's limitations is the theme of Perfect Days, the latest movie by Wim Wenders , the venerable German director for whom Ozu has long been an idol. Shot entirely in Tokyo — in Japanese — this elegant, sentimental fable is Wenders' best fiction feature in decades. Although it flirts with glibness, Perfect Days asks questions about how to live in the face of need, loneliness and disappointment.

We twice hear the song "House of the Rising Sun," the old folk tune lamenting a life ruined by time spent in a house of ill repute. Yet the movie itself is no lament. Wenders once dreamed of being a priest, and here he nudges us toward transcendence. Constantly showing us daybreak over Tokyo, he reminds us that the true house of the rising sun is the world. But rather than bemoan the ways that the world is dark and disappointing, the film suggests that we find and appreciate the transient beauty around us. This may not make our days perfect, but it will make them better.

Time:

The idea, maybe, is that in seeking a comfortable closure—to a song, to a movie, to a random day—we’re looking for the wrong thing. That’s what Perfect Days, its title borrowed from one of the most beautiful songs Lou Reed ever wrote, is about. We seek meaning in everyday life, not realizing that life every day is the meaning.

Try to see it.

You will come away different.

Future-Proofing Ourselves

Image by GPT-4

Earlier this month:

“Meta Platforms Inc. tripled its profit and posted sharply higher revenue in the final quarter of 2023, boosted by a rebound in digital advertising as well cost cutting and layoffs in what CEO Mark Zuckerberg called the “year of efficiency.””

Meta increased revenue by over 25 percent from year ago with nearly 25% fewer employees.

In the first six weeks of this year according to layoffs.fyi 157 tech companies have laid of 39,608 employees a rate faster than anytime in the last few years.

In the much smaller media content sector the rate of job losses is the highest it has been with at least 8,000 job cuts made in the UK, the US and Canada last year, include 300 jobs lost in the collapse of news startup the Messenger; 70 at Business Insider; about 30 at Time; 115 at the Los Angeles Times; about 50 to 100 people at NBC News; and 12 at Condé Nast’s Pitchfork.

Three forces are fusing and re-sculpting employment and the workplace. 1) Technology. 2) Unbundled and Distributed work. 3) Just in time global marketplaces.

A board room that is not planning on how to leverage some combination of the exponential productivity power of AI, the ability to hire talent anywhere due to unbundled distributed work, and the availability of global marketplaces for just in time resources from talent to technology to re-imagine, re-think and re-invent their business will soon lose their board seats or control of their company.

Why would anyone run a company in 2024 the way they ran it in 2019? If one launched a firm today would it look like the firm of 2019?

As the cost of knowledge goes to zero and it becomes clear that AI is significantly under-hyped every knowledge workers job will change before the end of 2024.

The rate and impact of change of new workplaces, new markets and new tech feeding off each other will drive greater change much faster than seen in decades.

This is not the time to wish for the best, keep our head down, hope that we can retire before the tsunami hits or wait for our company or boss to help transform us.

Delegating our future to anybody else is not a good strategy.

Starting right now we must invest time and resources to hone, sculpt and architect the six key skills will be essential in the future to complement machines, co-exist with change, and ensure continuous re-invention.

Three of these have to do with individual competence (Cognition, Creativity, Curiosity) and three how we connect with each other and the world outside our minds including new AI agents. (Collaborate, Communicate, Convince).

Image by GPT-4

Cognition

Cognition is simply learning to think and keeping our mental operating system and skills constantly upgraded.

It is no longer good enough just to be up to date.

We need to be up to tomorrow.

This requires deliberate practice and sustained work. Improved cognition is achievable.

But one must work at it and many of us are so swamped with keeping up with our daily workload that we do not invest in growing our skills and expertise. This proves to eventually lead to irrelevance as the needs for yesterday’s skill sets erode and one has not replaced them with a new set of skills for the future.

If we cannot upgrade our mental operating systems we will become less relevant.

Start using and leveraging Microsoft Co-Pilot or Gemini Advanced or the Open AI set of tools. Buy the paid version since they are six months ahead of the free version and far superior. The increased productivity and time savings will be multiples of the fifty or sixty dollars a month one might spend to subscribe to multiple resources and free up the time we all claim we do not have.

Also begin thinking of operating like a Company of One by combining skills, reputation and collaboration that your existing company would want to hire or partner with.

The more you have options the longer you will stay in a company you love. Maximize career optionality to ensure long term career in one place. Read how to become a company of one.

And here is a step by step way to learn how to learn and to unlearn.

Image by GPT-4

Creativity

Creativity is connecting dots in new ways, looking beyond the obvious and this skill will be key as AI powered computers, data crunch and co-relate faster than we ever will.

To be human is to be creative.

Creativity is at its heart the way we deal with a world of change by adapting, evolving, and re-inventing.

We need to learn and feed this inside us. The future will be about data driven storytelling and not just data or storytelling and the ability to leverage modern machines and algorithms to unleash connection and meaning will depend on creativity.

This requires every one of us whether we are creative or not to start using the latest tools that will turbocharge creativity. If you wish to see what is possible spend a few minutes looking at how you can create video with text in seconds without having any coding or video or traditional creative skills here:

If you were impressed great. If not wait six weeks and it will be twice as good. That is the rate of advancement we are witnessing.

Image by GPT-4

Curiosity

Curiosity is simply being alive to possibilities, questioning the status quo and asking what if? Today the key competitor or opportunity in any category comes from outside it.

Curiosity may have killed the cat, but the lack of curiosity killed the careers of many people. When boundaries between industries shift and our minds are like champagne corks swelling and no longer fitting into the past the key is not to accept but question the status quo.

AI co-relates and connect dots and look back but rarely anticipates forward and what is next. Humans ask why? As well as why not?

By constantly upgrading our cognition, expressing our creativity and feeding our curiosity we seize tomorrow versus fearing tomorrow.

The 3C’s of Connecting

Being cognitively up to date, creative, and curious will not be enough since we are living in a connected world where eco-systems, teams and linkages are how ideas are born, value created, and long-term careers forged. For these we need to hone and build and train for three other skills which are collaboration, communication and convincing.

The parts of our job that are built around collecting and arranging information and data, or monitoring, allocating and distilling is rapidly going to be done either by machines or someone in a market far away but the ability to work with people, write and present and be a world class sales person taking the data and new resources to build new stories will remain relevant.

The machines and the markets will not be the differentiator it is how we work with them, present and convince others will.

Image by GPT-4

Collaboration

Collaboration is key to work in a world where API’s (Application Protocol Interfaces) are not just about handshakes between software/hardware but between individuals with different skills, teams in different countries, partners, suppliers and much more.

As the world re-imagines and re-configures itself we need to be like Lego pieces and learn to fit and connect and combine with others to transform ourselves and our companies.

Collaboration with others and machines which we will learn to complement is a way to ensure that EQ and HI (Human Inspiration) will add value to the IQ and AI of digital agents and algorithms.

Image by GPT-4

Communication

Get better at writing. Enhance presentation and speaking skills.

It may be so old school but watch the people who succeed, and they are good at communication.

Combine the roots of old traditions of writing and speaking and human engagement with the new methods of AI and cloud marketplaces.

Learn to provide points of view not just data, provocation versus the both sides information dump that AI is engineered for, perspectives that combine past and future and math and magic.

Great communication skills will be the differentiator versus chat bots and virtual presences.

But communication is not a one-way street and as important as it to write, speak and present it is as critical to be able to listen, to hear and to understand what others are saying with an open mind and a sense of empathy.

Empathy and looking for the unsaid and unexpressed is what the machines cannot do.

Image by GPT-4

Convincing.Every one of us is a salesperson regardless of what we believe our title is. This is true even if we do not sell anything at work. We must convince colleagues of our points of view.

We all must learn to convince and learn to sell.

Humans choose with their hearts and use numbers to justify what we do.

Humans are stories. Stories are data with a soul.

Convincing is often a soup of facts and stories.

By investing and combining the Six C’s ( Cognition, Curiosity, Creativity, Collaboration, Communication, Convincing) each of us can thrive in the new future and help our companies and customers grow.

These skills will never grow old or out of date and will ensure that we can embrace the future, adapt ourselves and organizations to whatever comes and complement others and machines in ways that are synergistic

Images by GPT-4

Ghar.

Earlier this week I spent some time at an extra-ordinary place in the city of Pune, India which is about 100 miles from Bombay ( Mumbai).

It is called Ghar which in Hindi means house or home.

It is a seven floor building in an area surrounded by various Indian Army facilities and it serves three purposes which enforce each other

An Orphanage: It provides shelter, food, education and love for 40 orphan girls.

A place for Disabled Women: 9 partially paralyzed women are provided housing and rehab.

An elder age home: 19 retired people are provided a place to live.

This way three generations live in one home with the orphans surrounded not just by teachers and administrators but a true family. They have “grand parents” and provide help and comfort to the disabled women who would be their mothers age while the elderly have ready made “grand children” and the voice and commotion of the young.

I spent some time with Colonel Mickie Uberoi who along with a few other retired officers of the Indian Army pooled their resources and raised funds to create this amazing space. The six minute video below is very much worth a watch:

A Culture of Excellence with a Growth Mindset.

The army officers wanted to ensure that the orphans were raised in a culture of excellence.

They just did not want the orphans to have a place to live but a way to boost them for their entire life with a combination of education, mentoring, getting used to a good quality of living and exposure to the very best experiences available in Pune.

Each one of the girls are told that their goal should be to have an impact on society and find ways to help others.

It begins with early education in the orphanage imparted by great teachers and then placement in the best schools including army schools that the match the ability of each girl. Each girl is encouraged and supported to be world class. When they return from school further tuition is provided in the evenings to ensure the girls do not fall behind.

Tennis table training and basketball and other sports are also made available and the girls are often invited by surrounding institutions to see parades, shows and as many activities to expand their horizons.

The quest for excellence can be seen in the space which while filled with the sound of laughter and learning is intensely clean with a gym, a meditation room, a garden and a rooftop terrace.

To ensure a sense of self and not subservience but respect they are asked to refer to their elders as aunty or uncle but not “sir” or “madam”.

Freedom within a Framework.

When we saw the youngest girls we first thought they were boys (see above) but were corrected.

The administrators have discovered that some of the girls with long hair had issues with lice so everyone has a short haircut till they get a little older. This way no one feels different but they can also look at the older girls with longer hair and know the hair they have lost is coming back.

When they are in the orphanage they all have a uniform of jeans and long sleeve shirts but each girl also gets to select their own wardrobe for special events and for when they leave the facilities to go to events or outings.

Each girl decides what she would like to study and what sport she would like to play and then they are provided with a disciplined course to achieve their goals.

It is a wonderful way to have a process and rules for everybody but then many things are personalized for each person.

A Canvas for Generosity.

Ghar has become a canvas for people in Pune to paint with their generosity.

The joy that comes from giving and helping others is enabled by the scaffolding of volunteer opportunities that it provides.

Services: Doctors and Dentists are not just available on call for the residents of Ghar but many have fixed hours where they come in every week or month and staff the medical rooms.

Materials: The picture above shows a small section of the indoor but airy playground. Different individuals give and maintain their gifts whether it be bicycles, slides or basketballs.

Experiences: Tickets to events or invitations to things like parades or fireworks are provided for some or all of the inhabitants to they are exposed to a wide range of experiences ( and get to wear their going out clothes).

The fact that every one can help in their own limited way from spending an hour providing free medical care or funding a basketball ensures that limited time or resources should not stand in the way of people who might want to help.

Future Forward Thinking

The retired Army trustees believe that the orphans they are housing today will be the ones to keep Ghar running after they have aged out or passed away.

The belief is that as the girls graduate and go out into the world this place will still be their home since it where they grew up. It will not just be their roots where they will re-connect with others they grew up with but the hope is that they will fund, run and maintain it for the next generation of orphans.

Everyone is reminded that this is not a home they are staying in but it is their home that they have to keep going because helping a single person makes a big difference.

Or as the Ghar slogan reminds us:

“Helping one person may not change the whole world, but it can change one person’s whole world”

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

Mind-Shi(f)t.

Mid-Journey 6.0

“When the facts change, I change my mind-what do you do sir”

- Attributed to John Maynard Keynes

“My aim is not to be consistent with my previous statements on a given question, but to be consistent with truth as it may present itself to me at a given moment. The result has been that I have grown from truth to truth.”

- Mahatma Gandhi

“A sign of intellect is the ability to change your mind in the face of new facts. A mark of wisdom is refusing to let the fear of admitting you were wrong stop you from getting it right. The joy of learning something new eventually exceeds the pain of unlearning something old.”

- Adam Grant

A combination of four shifts 1) technological shifts driven by the twin and inter connected forces of AI and Bio-technology, 2) demographic shifts of declining populations ( outside of Africa), and aging populations, 3) power shifts from scale to small (outside of a few cases), management to labor and west to east and 4) boundary shifts in a world where work has become distributed and media and customer behavior have become omni-channel and funnel fusing, individuals and businesses who can shape shift are likely to succeed.

The challenge we will all face is to a) be open to other points of view, b) to be informed by facts, data, reality, and trusted sources and c) how to emphasize quality over quantity, complexity versus caricature and nuance over screed.

These challenges are being turbo-charged by AI, social media like Tik-Tok which is the source for “news” for under 34 year olds, and algorithms optimized to re-enforce our viewpoints and perspectives.

All of this further accelerated by the heat of a 2024 election season in a polarized landscape.

How can we be open to mind-shifts if we are on the receiving end of rivers of mind-shit?

How to to have the wisdom and the calm of the sage and not find our-selves locked into cages of rage?

It is the failure to change our minds and our way of being that lead to defeat.

Self-Defeat.

A case can be made that most successful individuals, institutions and nations are rarely defeated by others but find ways to defeat or weaken themselves to enable their own withering and dissolving.

In almost every case the same four indicators have been flashing for a while, but no one was paying attention.

The four symptoms of SDD (Self-Defeating Disease) are:

Incestuous thinking: A smaller and smaller group of decision makers with similar backgrounds and long tenure in the same place.

 Cult replacing Culture: A cult either around a leader, a “way”, a fashionable financial market meme (“everything as a service”, “data driven everything”, “streaming is the only way”, or some other weird dogmas parroted and echoed by a fawning press chasing page views, trending stories and personalities).

Fear:  Fear of speaking up, fear of change, fear of opposing the leader or “the way”!

Overreach: Letting recent success and fawning make one lose perspective that much success is driven by luck and trends that can turn and therefore overreaching too far or moving too soon. They tend to defeat them-selves though some combination of complacency, over-reach and haughtiness.

Surrounded by supplicants, sycophants, synchronous thinkers with handlers, gate-keepers, people who powder puff their noses they often have a belief it is they versus the position they inhabit is the source of power.

They are incapable of mind-shifts.

How to ensure Mind-Shift.

Diversity of Thinking: Diversity of backgrounds and thinking particularly in leadership teams are critical. If everybody thinks the same way, it can be dangerous. Disagreement and challenging points of view is what boards, external perspectives and independently successful people bring to a company or to a person.

Building a case for the opposite: Whenever a key decision needs to be made a team or individual should be charged with building a case for the exact opposite of what you as an individual, a leader or board are considering. This provides two benefits. First it allows one to make sure that group think does not disconnect us from reality since there is a reminder that we may be wrong. Second it helps us correct gaps in the thinking of our original recommendation. It is like stress testing our proposition.

A blank piece of paper approach: Many times, individuals and companies find themselves in self-defeating positions because of a way of doing, a historic momentum, legacy costs, or structures and fixating on current category dynamics. What if one was to launch a company or initiative with a blank sheet of paper with only three constraints. A legal one (whatever one does has to be legal), technological (it must be possible today) and economic (some breakeven or other financial constraint) what would one do to anticipate or meet a customer need?

The future comes from the slime and not the heavens: There are many benefits of being a leader, working at a very successful company and being on the top of the world. Everybody wants to meet with you or think you are cool because of the fame and reputation of your company. The press fawns and friends’ gush. It gives us all a great rush. Important that we do not get too high on our fumes and begin to believe our flatulence smells like Chanel 5.

Pay attention to those who may not have title and those over whom you might not have power but who bring thoughts that startle, question and provoke a certain uneasiness.