Business Recoded 아이디어 … Peter Fisk’s interview with South Korea’s Maeil Business News 당신은 어떤 미래와혁신를 원하는가?
September 21, 2021
My new book “Business Recoded” is published this week in Korean. It’s all about having the courage to create a better future – for yourself, and your business.
South Korea is a fabulous country.
In 2019, I had the privilege to address over 5000 business leaders in Seoul’s Olympic Park, talking about the future, and the opportunities of a world of rapid change. We all know of Korean giants like Samsung and Hyundai, but there are many more fascinating businesses too. Coupang, for example, which is out-innovating Amazon in retail. But most of all Koreans are an incredible passionate, optimistic and creative nation of people.
In 2020, just before the pandemic, I met Ban Ki-moon, the Korean-born former Secretary General of the United Nations. We were both speaking at the Global Soft Power Summit. He described his pride in the “Korean Wave” – giving examples of pop-supergroup BTS and Oscar-winning movie Parasite – in transforming the reputation of his nation, and influencing people across the world.
So it’s fantastic to have yet another book published in Korean.
To celebrate, I agreed to do an interview with South Korea’s leading business newspaper, Maeil Business News. The last time we talked, in an interview 5 years ago, we explored the world of Gamechangers, about innovative strategies for growth. This time we talked about the more personal challenges of being a business leader, and the need for courage to create a better future. Here’s the interview:
First off, could you briefly tell us how the idea for your book ‘Business Recoded: Have the Courage to Create a Better Future for Yourself and Your Business’ originate? Was there a particular incident?
I started writing the book just as Covid-19 locked down the world. I was sitting at home, unable to travel, unable to work. Everyone was asking, what will happen next? For a long time we have talked about the ways in which business will change because of the rapid development of new technologies, the economic power shift west to east, and the rise of social and environmental agendas. Now I could see they were happening faster than ever – accelerated by the pandemic. Business would not return as it used to be. There would be no going back to normal.
I started writing “There will be more change in the next 10 years, than the last 250 years”. That change has now been accelerated by Covid. Most businesses are not fit for the future. For too long business leaders have kept trying to extend the old models of success, with diminishing returns. We now need to think fundamentally differently. We need to think about new ways of working, new ways of competing, and new ways of measuring success. We need to “recode” business.
You illustrated seven shifts in the book. How did you come up with the seven shifts? Do business leaders need to go through all seven shifts to growing and creating better future for the companies?
I talked to 50 business leaders across the world. I particularly focused on those companies that are shaking up markets, exploring new possibilities, and creating the future. I wanted to understand what these companies were doing, how they were changing, and what they thought were the old codes – and new codes – of business success. Many of the companies are featured in the book. In Asia, it included companies like Grab from Singapore, Haier from China, and Coupang from South Korea.
The 7 shifts emerged out of categorizing the many different changes that are happening – and started with the highest level of “why” do companies exist. The shift was from the “old” mindset of achieving market share leadership and optimising profitability to shareholders, to a “new” mindset of achieving a higher purpose has positive impact for the world, and then understanding how all stakeholders can benefit. That doesn’t necessarily mean less profit, it could actually mean more. By doing more for society, by doing more for employees and customers, companies often find that they can be more profitable and valuable over the longer term.
The other shifts then followed, from old to new mindset:
- Recode your future… from profit machine to enlightened progress
- Recode your growth … from uncertain survival to futuristic growth
- Recode your market … from marginal competition to market creating
- Recode your innovation … From technology obsession to human ingenuity
- Recode your organisation … From passive hierarchies to dynamic ecosystems
- Recode your transformation … From incremental change to sustained transformation
- Recode your leadership … From good managers to extraordinary leaders
Together these 7 shifts begin to shape a better future for your business, delivered through the 49 codes. The 49 codes make up the chapters of the book, each with specific examples, and practical tools and approaches for change.
The first shift is “recode your future.” What are the specific ways business leaders can realize what their companies’ future potential is?
Most companies are limited in their future potential, because of the way in which they look ahead. They look through the narrow lens of their current business – their current sector, their current business models, their current audiences. Indeed most companies view their strategies for growth, by doing more of the same – faster, cheaper, better.
Look at a company like Hyundai. It largely sees the future through the lens of vehicle production. However it is slowly waking up to the reality of a future where cars will be electric and self-driven, where people will not own cars but rent them, where mobility solutions will converge, and we will see cars like local, personalised trains, available on demand. Who will succeed in this future? Probably the mobility network providers who we most trust to provide an efficient integrated service of travel.
Therefore companies can increase their “future potential” by changing their perspective. By jumping to the future, then working backwards. By seeing the world from a customer’s perspective, not dominated by existing products. By “reframing” their marketspace, in a new or bigger way. Hyundai are not a car company, but a mobility company. Samsung is not an electronics company, but an entertainment company. Now where are the best opportunities for the future?
Once leaders realize their company’s future potential, what are the practical steps they can take to achieving the potential and bringing out performance(positive financial results)? If there is an example of a business leader that took the steps, could you share the story?
Lei Jun is the founder of Chinese electronics company Xiaomi. He initially sought to be a business that competed with Apple and Samsung – making phones and tablets for the Chinese market. By changing his perspective he realised that content was far more important than hardware. He realised that people maybe buy one device every two years, but they buy and use content every day. Content in many forms – news, entertainment, gaming, social media, retail etc. Now Lei Jun is one of the largest investors in the movie industry, with a particular focus on creating Chinese entertainment for his local consumers.
The second shift is “recode your growth.” One of the ways to doing so is to ride with the megatrends. Of the five megatrends you pointed out in the book, which do you think business leaders should be the most alert of in the current crisis? Has the COVID-19 crisis brought out new megatrends as well?
These 5 megatrends are still the most significant pathways to the future, and a useful checklist for any business leader exploring their future strategy.
All five megatrends have been accelerated by Covid-19. The shift from young to old, particularly in providing healthcare. The shift from west to east, particularly in the rise of Asian businesses like Alibaba and PingAn. The shift from towns to cities, particularly in emerging markets in search of jobs and support.
However most significant have been the huge acceleration in shift to technologies – the digitalization of our lives, from education to work, from retail to entertainment. Many online retailers say they saw 10 years of change in 3 months. However this has not just been in shopping online, but also the convergence of shopping and entertainment. Look at Sea in Singapore, or Pinduoduo in China, the gamification and socialization of retail.
The other shift, towards a huge awareness of the fragility of our planet and society, has also been hugely increased by Covid-19. We have seen the impacts of extreme weather on the environment, but we have also seen the impacts of pandemic on society. Inequality of wealth, inequality of access to services. This is why we have seen such as growth in interest in companies having a greater purpose, and stakeholder capitalism.
One of the megatrends is the fast growth of Asia. In the book you mentioned that “The E7 will be larger than the G7 by 2030 and double their size by 2050). For clarification, do you mean that the GDP of E7 countries in total will double the amount that of G7 by 2050? If yes, what will be the drivers of the growth? Also, could you share the source for this data?
This was initially discussed by the World Economic Forum back in 2010. And yes, we are rapidly seeing a new world order, with the E7 growing far faster than the old G7. The general principle still holds true, although the definition of E7 – or the top emerging nations – has changed a little, for example Brazil becoming less successful.
The drivers of this growth? Population is one – predominantly in emerging markets. And in broad terms, the rise in personal incomes and living standards. As education has improved, so has business success – better standards of production, innovation and growth. The best ideas in business now largely come from emerging markets, not the developed markets. The G7 is largely stagnant, fading giants, trying to work out what to do next. The E7 are ambitious and energized, the new giants, plating a new game.
Next comes ‘recode your market.’ As you mentioned in the book, the terms market and industry has been overlapped. How do you define ‘market’? When you say ‘recode your market,’ what do you exactly mean?
Markets are blurring incredibly rapidly – the old boundaries and definitions of sectors are increasingly redundant, and many – perhaps most – companies now work in multiple sectors, and their solutions are combinations of multiple products and services.
I love the story of PingAn, which is the world’s second largest insurance company. They have a huge technological platform, and customer base of billions of people in China. How could they grow? Well by thinking outside of their old “market” definition. Jessica Tan tells how as COO, she developed PingAn’s new healthcare business, and now Good Doctor is the world’s largest healthcare platform offering online and physical services to over one billion consumers.
The best examples are probably the “Super-apps” that have emerged across the world, as online single-point to reach many different services – companies like WeChat from China, Jio in India, Grab in Singapore, GoJek in Malaysia, Line in Japan, Rappi in Colombia. Most either started as messaging platforms, taxi services, or online retail delivery services. Now they are also platforms for gaming, movies, healthcare, and most significantly financial services. Once they have a payments engine, or bank, they can become the core of almost every type of transaction you make. What sector are they in? Everything!
One of the ways business leaders can recode the market is by setting the market space. You argue that ‘a customer-centric mindset is the best way to setting market space.’ Could you elaborate on this? Also, how can business leaders change their mindset to a customer-centric mindset?
You can define your market any way you want, there are no rules, or limits!
Both in terms of what type of business you are in – transport can easily become mobility – and equally geographically. Increasingly, there are more commonalities between consumers across nations, than within a nation. Young people have more similarities with other young people in other countries, than with old people in their same country. Therefore why think in treating each geographical country differently, when you could develop different propositions by multi-national segments.
Taking a customer-centric mindset to define your marketspace is one of the most useful ways to reframe your market.
Take a pharmaceutical company – you could equally call it a healthcare company, which would give you the additional space to offer non-drug type of products and services, or you could even call it a “wellbeing” company, which would give you even more space to innovate and serve customers in areas such as nutrition and fitness. A drug company could become a sports company!
Or think about insurance. Most people inside insurance companies are obsessed about financials, about risks. When I take out car insurance, I actually want peace of mind, to enjoy driving. Therefore insurance companies, like Sompo in Japan for example, are no focusing on developing car driving services that enhance the driving experience. If these can also reduce the risk – for example, by encouraging safer driving – then they can directly benefit the core business, while also adding new revenue streams.
The fourth shift is ‘recode your innovation.’ Innovation starts with questions. In the book you explained Professor Hal Gregersen’s ‘Question Burst.’ Do you know any company that has implemented the ‘Question Burst’ method in its quest to recoding innovation?
I have worked with Microsoft over the last few years, helping them to strategically and culturally change their approach to the market. In the most simple terms this has involved a shift from product-thinking to customer-thinking. In the past they were an organisation of salespeople selling billions of software licenses – Windows 365 to individuals, cloud computing to corporations.
Now, to grow further, and to add more value to their customers, they are focusing on understanding and solving customers problems. How can the software help their customers to do more? How can the Windows user be more effective at what they do? How can a small company in a small town become a global player, with the help of a cloud-based digital platform? The focus on problems, and exploring what the real problem is, is key to this.
Perhaps the most common ways companies recode their innovation is by developing new business models. Is there any new business model that you have recently learned about that impressed you?
Do you think remote work will continue to grow? If yes, how can business leaders recode their organization as remote work expands? How can teamwork be created in the remote work environment?
Yes. But not in isolation from the real world. We will see almost every company moving to some form of hybrid working model. I actually prefer to call this a liquid model, because people will learn to move more fluidly between physical and digital modes. The same in education, the same in retail, the same in healthcare, etc.
Many organisations across the world have already stated that for many employees, they will continue to work 2-3 days/week at home. But this is more than home/office thinking. It is also about a more flexible, personalised lifestyle – something which young people particularly want. It will also drive a change in work contracts – we will see more flexible contracts, less permanent employees, more part-time, or short contract workers, maybe working for many companies at the same time.
Similarly, teamwork is not simply about being in the same place, or managers have sight of their people. In many cases, during Covid-19, team effectiveness actually increased, by people in different places – functions, or countries, or even companies – being able to easily join online meetings or workshops, and be involved in projects quickly and easily. Once we get used to the technology, and the ways of staying in touch socially too, then remote working will be an extremely positive force. But we are still human, and there are also times when it is better – and good for us – to be together physically!
When of the big areas I explore in the book is the rise of “extreme teaming”. This is largely about building teams that are more diverse, and more self-managed. Bringing together different types of people – age, gender, experience, attitude – drives greater creativity in teams. But also letting those teams have the power to define their roles, to manage their own progress, gives ownership and improved performance. Google and Netflix are great examples of this, as is Haier with its “rendanheyi” organisation model.
For companies to recode their transformations, ‘pivoting’ is essential. How can business leaders know how to pivot the business and when is the right time to doing so?
Innovation is a constant in business today, and so is transformation. Companies are constantly evolving. They therefore need to become much more “ambidexterous” – the ability to deliver for today, and create tomorrow, at the same time. One practical strategic way to do this is to develop a dual portfolio approach – a portfolio of innovations and businesses which will succeed in today’s world (to meet the needs of current customers, outperform current competitors, and generate profitability over 1-3 years), and also a portfolio to succeed in tomorrow’s world (future customers, competitors).
By working with two portfolios, business leaders can increasingly shift from today to tomorrow’s world. The “pivot” if you like, is the moment when the core business shifts from the old to the new. Take the earlier example of Hyundai, the today portfolio is about manufacturing better cars, the tomorrow portfolio about future mobility networks. The pivot comes when the core of Hyundai is no longer a car maker, but a mobility operator. Leaders need to judge when is the right time to make that shift.
Lastly comes “recode your leadership.” One of the ways to recode one’s leadership is to developing one’s own leadership style. What are the basic steps leaders take to developing their own leadership style?
I did a huge research study with IE Business School in preparation for writing the book about what are the changing characteristics of the most effective business leaders. I call this the new leadership DNA – and in particular it defines the critical role of leaders in creating better futures, making change happen, and delivering positive impact.
However there are many ways to be a leader. It is certainly not about standing at the top of the building and shouting commands! When we look at many of the leaders in the book – Anne Wojcicji at 23andMe or Jeff Bezos at Amazon, Piyush Gupta at DBS or Zhang Ruimin at Haier – they are all different. Yes they have incredible vision, they bring together great teams, they are problem solvers, and they have enormous courage to step up and make the future happen – but they are all different.
The biggest challenge in developing yourself as a business leader is in being authentic. And finding ways in which you can make your personal strengths work for you, and for others. There is no simple or single leadership model to follow. And indeed, leaders will need to behave in different ways at different moments. This is a real skill. But the leaders who can do this in an authentic way, will be more trusted by others, and will be more effective in themselves.
The book was written published before the COVID-19 pandemic began. Apart from the 7 shifts you illustrated in the book, are there any additional shift that should be included in order for business leaders to creating and delivering a better future amidst the current crisis?
The biggest shift now is to create a better future. As every company emerges from Covid-19, it is not about getting back to normal, but about imagining better. Now is the moment when business leaders need the imagination and courage to step up, to think different, and to accelerate the changes that are necessary and possible.
What is the most important insight you want readers to take away from ‘Business Recoded: Have the Courage to Create a Better Future for Yourself and Your Business’?
The pandemic has given us this unique opportunity to hit the “reset” button. It has given us a reason to let go of many of the old ways of doing business, and it has demonstrated why new ways are urgently needed. Now is the moment when investors, employees and customers, are seeking and supporting leaders who are brave and bold. Now is the time to have the courage to step up, to create a better future.
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