Peter Fisk’s interview with Bloomberg and McKinsey … “How to survive and thrive in crazy times”
April 15, 2020
I thought you might like to see a summary of today’s interview with Bloomberg and McKinsey on the challenges and opportunities for business leaders in the current crisis … plus here are three additional articles, with extracts from my forthcoming book Business Recoded, and more details behind the Q&A:
- How do you see the future? Future Recoded … Reimagine markets. Reimagine work. Reimagine business. Reimagine success.
- Why innovate in a downturn? Whilst everyone else is losing their heads, the companies of tomorrow are being created right now
- What are the impacts of COVID-19? What business leaders should do now, to support people and society, and secure their business future.
- The latest edition of my “Fast Leader” magazine … Happy Homeworking with Zoom, Finding more purpose, Babylon Health, Fujifilm’s anti-viral drugs
Q. Crisis feels like a scary time, when we should stop everything, save money and wait the bad times to blow over. Is a crisis more of a threat or opportunity for business?
Crisis is a time of change. Yes, you need to survive, but it is also an opportunity to thrive.
57% of the world’s leading companies were founded in a downturn – companies like Apple and Disney, Microsoft and McDonalds – when attitudes and behaviours changed, when old competitors failed because they didn’t adapt, and when the psychological constraints drove bolder innovation.
90 of the world’s 325 “unicorn” businesses, those private companies that at least were valued at over $1 billion, were founded in the last economic crisis of 2008-9. Airbnb, Dropbox, Square, and Uber. These 90 companies seized the opportunities of crisis, to create almost $500 billion of value over subsequent years.
I see three phases for business leaders to consider – survive, adapt and thrive.
- Survive: Start by surviving firstly, and most importantly, as a human challenge. Helping your employees, customers and local communities through this difficult time. Indeed, as Burberry makes protective clothing, Louis Vuitton makes hand sanitizer, Tesla makes hospital equipment we realise that business can be tremendously helpful and caring to society. It is also about surviving economically – finding ways to stay solvent, minimising costs and sustaining some revenues. This is for 0-6 months.
- Adapt: Time to move forwards, even if we are still in lockdown. In particular, understand what has changed about your world, and your customers’ world. Fundamental needs of customers have not changed – to eat, work, learn, play – but how they do it might. How can you embrace these changes, by adapting existing activities, or creating new? How can you streamline, by focusing on the most important audiences and products for your future? Now is the time to accelerate innovation. This is 6-18 months.
- Thrive: Reimagine a better future. How can you use crisis as the catalyst for reinvention, to shift your core business, to embrace the future whilst others are slow to recover? How can you harness the huge “megatrend” changes in our world – the shift from west to east markets, to ageing populations, to health and wellness, to intelligent machines, to sustainable businesses, to smarter living? Now is the time to reshape markets, and lead the future. Employees, customers, investors will all be looking for leadership out of a crisis, searching for hope and optimism. This is your moment to be that leader. This is 1-5 years.
Andy Grove, former CEO of Intel, once said “Bad companies are destroyed by crisis, good companies survive them, great companies are improved by them.”
Q. After a crisis like the current pandemic ends, in which markets do you see the best opportunities for new growth?
The potential is there now, so do not wait for the pandemic to end. Start now. A vaccine is most likely 12-18 months away. Businesses need to move forwards before then, even with constraints.
Like every market across the world, we see fundamental changes in consumer behaviours, as they are locked down at home, as they fear the economic impact. We are all familiar with these right now. From online working to online education, online health to online shopping, online gaming to online socialising. Some of these changes will stick.
The specific opportunity is to take what you already do well, and take it to places that don’t. Particularly to the growth markets of Asia. Companies like Grab, which combined home delivery with finance and data engines to know customers in Singapore better than anyone else, or Twitch which is the world’s leading platform for gamers, are poised to thrive in this crisis.
Q. What about Industry 4.0 and digital transformation, will they be accelerated or be delayed by the crisis, as companies focus on survival?
Now is the time to accelerate innovation.
However there are two important warnings. Firstly innovation is not the same as technology. Innovation is about solving problems better, most obviously by creating better solutions for customers. This requires deep insight, creativity and design, new business models and organisation models, plus technology. Secondly digital transformation is not about automating old ways of working, it is firstly about changing how you work. This demands transformation in strategies, in business models, and market models. Then applying technology to it to make it happen.
Most companies have automated processes, but they haven’t really transformed themselves, or their markets. Now is the time to step up. Business transformation, enabled by digital technologies. Of all the technologies, AI will be most significant – massively accelerating the speed at which machines can work, and delivering more personal, predictive and positive solutions. Genetic analysis enabling proactive healthcare treatments before you need them, and personalised medicines when you do. However new technologies are incredibly expensive and risky, so it is much better to work in partnership with technology companies, to share risk and reward, but also to share creativity and create innovatively new fused concepts.
As I said, sectors such as healthcare, education, shopping and education are likely to see lasting change, and fundamental shifts towards putting digital platforms at their core. Companies in these sectors are doing well. Instacart is recruiting 300,000 new employees in USA, going from a small shopping app to the nation’s leading grocer in 6 weeks. Zoom, developed by Eric Yuan to be simpler than other videoconferencing platforms has become our favourite tool for work and socialising, and has seen its market value triple since January to over $35 billion.
In healthcare, 95% of doctor consultations are now done by smartphone, compared to 5% just a few months ago. In Singapore and South Korea we see the benefits of real-time AI-enabled health tracking and remote diagnostics. This is not only fast and easy for patients, but efficient for doctors too. Old habits are quickly forgotten, privacy issues are rapidly overcome, competitors work together. Good Doctor is now the world’s largest health platform, serving over 1 billion Chinese people. Google and Apple are working together on new diagnostic apps.
In education, online learning has become the norm in many countries with huge distances to travel. Online lessons, accompanied by peer-to-peer learning between children has been the norm in countries from Finland to South Africa. Not only does this enable more children to access high quality education in any part of the world, but it is also better. Children quickly learn to learn in new ways – from each other, learning to think rather than just acquire knowledge, learning to empathise, explain and apply ideas rather than know them.
Q. When we look back in years to come, will there be a more fundamental restructuring of economies that began during this crisis?
We will recover from this crisis. However we will likely see an 18-36 month downturn because of the enormous disruption to economies, and the time waiting for a vaccine until we can live and work normally again. Some businesses will fail, but life will get back to more normality.
However the new normal for business, is unlikely to be stable, predictable growth. Markets and consumers will evolve. And we will continue to experience more turbulence, more shocks, including more pandemics. The world is simply more dynamic than ever before.
What I believe will change is the relationship between business and society.
I have a new book coming out later this year which is called “Business Recoded”, defining 49 new codes for business success.
In many ways, I believe we are seeing the dawn of a new capitalism.
We have been heading for some form of crisis for a while. There are 4 fundamental forces of change that are colliding, and driving us to rethink:
- The rapid growth of technologies, has transformed how we live and work, but also brought fear and distrust, of global connectedness, privacy and control
- The environmental crisis, from global warming to declining biodiversity, has strained the relationship between industrial growth and natural resources.
- The shift to Asia, where 60% of the world, including 95% of the world’s under 25s now live, will be the predominant driver of consumer market growth
- Business and society are increasingly out of sync, a growing inequality of wealth, and lack of empathy and support to society.
Businesses need to rediscover their purpose, why it exists.
“Purpose” defines what the business contributes to the world, or equally, why the world would be a lesser place if the business did not exist.
Purpose creates an enduring cause which the business is willing to fight for. For some this might be an urgent call to action, for others it might be a more personal inspiration. Saving the planet with Patagonia, or achieving your potential, with Nike, or seeking happiness, with Coca Cola.
Tesla exists to “accelerate the world’s transition to sustainable energy”, Starbucks to “inspire the human spirit”, Dove to “help the next generation of women realise their potential”, Microsoft to “empower people to achieve more”, and Swarovski to “add sparkle to people’s everyday lives.”
So what does that mean for Tesla? Well it means they reframe their space around energy rather than cars, and a diverse portfolio that includes a new generation of battery technology for everything from small devices to smart cities, and new products like their solar-energy tiles. They then use new business models to accelerate the shift, future proofing cars with more adaptive software updates ready for a self-driving future, Powerwalls to overcome consumer fears of not being able to charge, a range of cars to access more consumers, a subscription model to make it easier, direct sales model to engage directly with their consumers, and fully robotic factories to build cars in a pandemic. Not surprisingly they are the only car manufacturer still making money in today’s crisis.
Finding a higher purpose, defining the positive contribution which business makes to the world is not just about doing good. It also creates a new strategic frame for your business – it inspires employees and customers, investors and society. It gives you more clarity of direction to make smarter choices and explore new possibilities, it brings people together with a common ambition, and it gives you a cause to keep fighting for in times of incredible change.
There was a great quote in the Wall Street Journal last week saying “In the fight against Covid-19 though we might look forward in doom, one day we will look backward in awe.”