Peter Fisk

Gymshark, the activewear brand created by Ben Francis has grown rapidly over recent years, largely serving a young audience, selling online direct, powered by social influence.

It started out by drop shipping bodybuilding supplements online, before branching out into designing and producing its own line of activewear on a made-to-sell basis. By 2016, Gymshark was labelled the fastest growing company in the UK – and, in 2020 was named the UK’s fastest-growing fashion brand globally, boasting an average increase in international sales of 115.7% over the previous two years. 

Today, Gymshark sells its fitness apparel direct-to-customer in almost 200 countries, and has translated its website into 13 languages to support its international growth. Though its initial birth and growth has been completed online, Gymshark opened its first ever physical store in October 2022 – almost a decade after the company was first founded. To highlight the success of the company, its flagship store is located on London’s prime shopping street – Regent Street. 

This innovative flagship store is where Gymshark effortlessly incorporates its trusty digital technologies into a physical, in-person experience – its aim is to not only sell its clothing, but also allow the community to experience the essence of Gymshark. In addition to traditional clothing rails, the store boasts a fitness studio, or ‘The Sweat Room’, the fitness answer to Apple’s ‘Genius Bar’ called ‘The Pro Bench’, a Joe & The Juice concession, and a multipurpose area known as ‘The Hub’. 

For some people, their Gymshark experience starts digitally – the latest video or recommendation on Instagram or TikTok, browsing the online store or app – for others it will start by walking into the store, exploring the Gymshark brand, and its related services. But these are not either/or, nor a linear flow. Brands like Gymshark have become immersive environments, fusing physical and digital as one, where the customer experience becomes a circular journey, where data enables great personalisation, where brands are no longer names of producers or products, but all about the customer and their community.

“Liquid CX” is all about thinking like a customer, enhancing their experience either through efficiency or added value, giving them more choice, serving them more personally, engaging them more deeply, in ways that drive relevant loyalty, and also finding new revenue streams.

Liquid CX is built on a board portfolios of physical and digital assets that can fuse together in a seamless and personal way for each customer. It goes more options for how people can interact with your brand and buy, how they want their products delivered, and what services they want to take advantage of in-store. This choice is what keeps customers loyal and allows them to choose the right journey that suits their needs in that moment.

For instance, with integrated stock management data, retailers can offer flexible fulfilment, giving customers the opportunity to click and collect, buy online pick-up in store, or buy in store deliver home – whichever methods work best for the products on sale and customer needs. This stock data also allows retailers to use stores as local hyper-fast delivery hubs and offer ‘endless aisle’ functionality, giving customers the opportunity to obtain any product they want, regardless of it being in stock in store.

In-person experiences can be elevated for customers with personalised discounts based on past or predicted purchases, and location-based push notifications. Cashier free shopping or mobile POS allow for frictionless checkout, whilst augmented reality (AR) overlays can help customers to source product information autonomously. With the right tools and data at their fingertips, store associates can deliver unforgettable in-store clienteling, giving customers instant information on products and availability without running to the stockroom, and offering advice on items that may be of interest, based on customers’ past purchases.

Liquid CX is most commonly found in fashion retail, but increasingly in food stores, music concerts, art galleries and sporting arenas too.

According to a recent McKinsey study, customers will expect hyper-personalised “liquid” experiences by 2025. Of course, with the help of data analysis and AI tools, retailers today can offer incredibly personalised experiences to their customers, both online and in-store. And the more digitalised the experiences, the more opportunities to capture and use customer data in useful ways

Some great personalisation activities are:

• Showing relevant product recommendations
• Tailored messages and targeted promotions
• Triggers based on customer behaviour
• Communicating timely at key touchpoints
• Curate content based on the customer’s specific interest

According to a 2022 IBM consumer study, 27% of all consumers say that “liquid” shopping is their primary buying method. In the case of Gen-Z, this number goes up to 36%. Knowing that Gen-Z consumers are born from 1997 onward, they hold plenty of purchasing power and will continue to do so even more.

Retail stores have yet to understand and experience all the benefits of “liquid” shopping. There are so many benefits and reasons for physical-centred stores to have an online presence (and equally digital-centred stores to be more physical):

• A more personalised shopping experience
• Better customer satisfaction and loyalty
• Greater customer reach through multiple online and offline channels
• Increased engagement and multiple touchpoints for customers to interact with your brand
• Increased foot traffic thanks to in-store pickup or returns for online purchases
• A competitive advantage among other retailers
• Better operational efficiency, reduced waste, and reduced costs

And, of course, perhaps the biggest benefit of providing “liquid” experiences as a retailer is the possibility to analyze consumer behaviour with unique sales data. Leveraging these insights you canand optimize every aspect of your store, especially things like inventory management, marketing, or customer service.

Perhaps the best example of a successful personalizsd shopping experience is the retail giant Sephora.

In March 2020 when the pandemic hit, Sephora closed its physical stores. But, instead of seeing it as a setback, they embraced the situation and pivoted to appointment-based personal shopping and VR demos and tutorials.

As they saw their efforts paid off, they introduced their AR fitting room and Color IQ technology that scans a customer’s skin to recommend matching foundations.

As the cherry on top, they provided free shipping, same-day delivery, and flexible in-store or curbside pickup options.

Sephora’s successful implementation of these personalized shopping experiences led to increased market share even after the pandemic’s impact diminished.

https://www.youtube.com/watch?v=RgNuwb9lpeg

This week I met Quantic Brains, a Spanish AI-based start-up which is reinventing the way content is created for books, videos and games.

I sat down with founders Manuel Lucania and Julio Covacho, chose a title for my next book, and within 10 minutes it was done. A structured narrative, extensively researched, with commentary and insight, which I could then edit and enhance, all about my specific, chosen topic.

When I normally write books – I have written 10 of them, starting with Marketing Genius, through to the most recent, Business Recoded – it takes me about 18 months at least. After 6-12 months of sitting around struggling to focus on a compelling topic, with new angles and insights, it then takes me another 6-12 months of long hours researching, typing, retyping, my 80000 words.

I found the future in Madrid.

Quantic Brains are actually more focused on video and gaming content – how to use AI to instantly create characters, imagery, special effects, music, voiceovers and much more for the visual arts.

“Our vision is that in 5 years most of the films, series, and video games will be automatically generated with none or very little human intervention. Our goal is to democratize audiovisual content creation with AI powered tools for professionals and non professionals.”

“We develop AI brains that encapsulate different sets of skills to automatize character behaviours (talk, walk, swim, fight…). Once the character is on scene, it interacts with other characters and with exclusive smart objects that can only be used by our brains (sword, piano, phone, ball).”

Maybe my next book will be available very soon …

 

Peter Drucker, the Austrian-born consultant turned academic, is often regarded as the father of modern management thinking. He also played a crucial role in the development of consulting firms McKinsey and Bain.

Although he authored 39 best-selling management books, Drucker was more motivated by working directly with business leaders, coaching and challenging them to think different, bigger and better.

Here are 15 of his wisdoms

• Whenever anything is being accomplished, it is being done by a monomaniac on a mission.
• The purpose of a business is to create a customer.
• The best way to predict the future is to create it.
• If you want something new, you have to stop doing something old.
• Knowledge is the source of wealth. Applied to tasks we already know, it becomes productivity. Applied to new jobs, it becomes innovation…
• People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.
• Innovation opportunities do not come with the tempest but with the rustling of the breeze.
• Innovation is the specific instrument of entrepreneurship that endows resources with the capacity to create wealth.
• Since we live in an age of innovation, a practical education must prepare a man for work that still needs to be created and can be clearly defined.
• Marketing and innovation make money, produce results and create wealth. Everything else is cost.
• Innovation requires us to identify changes that have already occurred systematically — and then to look at them as opportunities. It also requires that we abandon rather than defend yesterday.
• We need an entrepreneurial society where innovation and entrepreneurship are regular, steady, and continuous.
• The enterprise that does not innovate ages and declines. And in a period of rapid change such as the present, the decline will be fast.
• No other area offers more stimulation for an innovator than unexpected success.
• Effective innovations start small. They are not grandiose. They try to do one specific thing.

Drucker, born in Vienna, Austria, in 1909, passed away at 95 on November 11, 2005. He worked as a management consultant before becoming a writer and academic, focusing on the operation and leadership of modern business corporations. Drucker was interested in understanding how people interacted in ways that led to success or failure and sought to systematize his thinking to make it accessible to others. Despite being highly contrarian at the time, he gained prominence during the Japanese economic miracle, as his work led to a renewed respect for Japanese practices after WWII.

Drucker is known for coining the term “knowledge worker” and believing this type of employee was crucial for improving business results. He was influenced by economist Joseph Schumpeter, who used the phrase “creative destruction” and focused on people’s behavior rather than commodity fluctuations to understand markets and productivity. He worked as a professor, consultant, and industrial psychologist. His work on management philosophy in European companies paved the way for a more democratic approach to decision-making in American companies.

Drucker believed management was more than just a profit-chasing activity and defined it as one of the “liberal arts.” He drew lessons from history and religion in his work. He argued that businesses needed to have a greater purpose than just profit-making, with a solid dedication to society, to last through the many challenges that occur in the life cycle of a business. He presciently predicted in his book “Management: Tasks, Responsibilities, Practices” that managers of significant institutions, especially in industry, must take responsibility for the common good in modern society, or else no one else will.

Drucker was a palm reader as much as a philosopher and was known for making predictions that often came true and was criticized for occasional misjudgments. Despite this, he remained a prominent figure in management theory and philosophy. He believed the nation’s financial center would eventually shift from New York to Washington. While he was criticized for this prediction, it is now seen as accurate with the introduction of Sarbanes Oxley and Dodd-Frank regulations.

Joe Tsai was one of 17 friends who were invited to Jack Ma’s Hangzhou apartment in February 1999, an evening where they developed a plan to create a new digital platform to “revolutionise the Internet industry”.

They called it Alibaba.

Tsai gave up a Hong Kong-based private equity investment job at Investor AB, which is the main investment vehicle of Sweden’s Wallenberg family, to join Alibaba in 1999 for a monthly salary of $50.

Today, the billionaire co-founder of Alibaba, and also owner of the Brooklyn Nets, is taking over as chairman of the e-commerce giant.

His challenge is huge. Alibaba has grown over the last 20 years to become one of the world’s largest retailers. But in recent times, since Jack Ma famously fell out with the Chinese government, the business has struggled. Amid rising competition, and the Covid pandemic, Alibaba’s market value has fallen by around 70%.

As part of a radical management shake-up, the 59-year-old Tsai is replacing Daniel Zhang as chairman. Eddie Wu, another cofounder, will be taking over as CEO from Zhang when he steps down in September 2023.

Zhang will focus on leading Alibaba’s cloud computing business as the unit prepares for an IPO that may happen as early as next year, according to recent Alibaba announcements.

Jack Ma, who is still China’s seventh-richest person with a net worth of $24 billion, stepped down from Alibaba’s helm in 2019, and has spent the recent years lying low and travelling abroad after his criticism of the country’s banking system in 2020, which led to his falling out with the Chinese government, and accelerated departure from Alibaba.

Tsai, who is a longtime confidante of Ma’s, will need to fight increasingly strong competition. Born in Taiwan, he also holds a Canadian passport, and prefers a relatively hands-off management approach.

The current $230 billion company, has lost more than 70% of its value since peaking in late 2020, as Beijing’s crackdown on the entire internet industry has caused investors to reassess Alibaba’s outlook. Meanwhile, competition has been tougher than ever – in particular, the fast-growing Pinduoduo, and short video platform Douyin.

Tsai becamee Alibaba’s chief financial officer, a position he held until 2013. He then moved to an executive vice chairman role, responsible in part for the e-commerce business’ financing activities and strategic investments.

Today, Tsai still derives part of his $7.7 billion net worth from a 1.3% stake in Alibaba.

He has also built a sports and entertainment empire. Tsai took full control of the Brooklyn Nets in a $2.35 billion deal in 2019 after first acquiring a 49% stake from Russian billionaire Mikhail Prokhorov two years earlier. And his other sports franchises include ownership of the New York Liberty from the Women’s National Basketball Association, and two lacrosse teams, the San Diego Seals and Las Vegas Desert Dogs.

He holds a bachelor’s degree in economics and East Asian Studies from Yale College and a juris doctor degree from Yale Law School. His early career experience includes an associate attorney job at New York-based law firm Sullivan & Cromwell LLP, and general counsel of New York-based buyout firm Rosecliff, Inc.

Now, a significant portion of his wealth is managed through his Hong Kong-based family office Blue Pool Capital, which holds stocks, venture capital investments and his sports assets.

Shigetaka Komori, former CEO of Fujifilm, had a mantra, “never stop transforming.”

As a result, the Japanese business has created innovative solutions in a wide variety of fields, leveraged its imaging and information technology to become a global presence known for innovation in healthcare, graphic systems, optical devices, specialist materials and other high-tech areas.

In the 1960s, Fujifilm was a distant second place to Kodak in the photographic film market. But today, digitalisation has transformed how we take photos, Kodak is gone (bankrupt in 2012), and Fujifilm has shifted focus and resources into new areas.

In 2000 the film-related business accounted for 60% of Fujifilm’s sales and 70% of its operating profit but fell to less than 1% within a decade. The traditional photographic imaging business, the core of the business, was largely replaced by other types of imaging, such as for healthcare.

“Whilst Kodak tried to survive in a declining market, Fujifilm looked to new futures” says Komori, when contrasting how the two companies responded to market change.

Imaging rapidly evolved into digital information, and a vast range of new businesses emerged in areas from medical system to pharmaceuticals, regenerative medicine to cosmetics, flat panel displays to graphic systems.

As an example, Fujifilm’s cosmetics business started in 2006 with the launch of its Astalift skin-care products, which then extended into make-up, and from them into other types of medical and wellbeing solutions. Whilst camera film and cosmetics might seem unrelated, camera film happened to be the same thickness (around 0.2 mm) as human hair. Collagen was used in its film to retain the material qualities, such as moisture and elasticity, over time. This expertise in manufacturing collagen is also fundamental to making skincare products.

Fujifilm introduced medical diagnostic imaging systems using its digital camera technology, which then gave it a platform for doing fundamental research into new medicines. Drug development is increasingly built on informatics, such as genetic analysis, fields in which Fujifilm could combine its expertise, giving it an advantage over traditional pharma companies.

Look at many of the other long-surviving companies around the world, and they have evolved into something very different from how they started.

Amazon started with a vision to be the world’s largest online bookstore, and then evolved into an everything store, then into a diverse portfolio of businesses and services, including physical stores like Amazon Fresh and Amazon Style.

Even more remarkable are the companies that started out as state-owned utilities then evolved into commercial innovators. Nokia started at Finnish forestry. Orsted started as Danish power stations. DSM started as Dutch coalmines.

Infinite and invincible

In his book “The Infinite Game”, Simon Sinek explore how businesses can achieve long-lasting success, a relentless approach to transformation and growth, and sustained long-term value.
 
“In finite games, like football or chess, the players are known, the rules are fixed, and the endpoint is clear. The winners and losers are easily identified” he says. “In infinite games, like business or politics or life itself, the players come and go, the rules are changeable, and there is no defined endpoint. There are no winners or losers in an infinite game; there is only ahead and behind.”

Many businesses struggle because their business has a finite, or fixed, mindset. They set themselves an internal goal to be the best at something, or to launch a specific product, and they end up being a slave to it. Such narrowly-defined, sales-targeted, product-centric businesses find it difficult to break out of their current approach. They only know how to do more of the same with diminishing returns. Sales stagnate, momentum is lost, innovation slows, energy dips, and they lag behind.

Leaders with an infinite, or growth, mindset – not just in terms of experimenting to find new ways forwards, but in terms of their whole approach to strategy and innovation – do much better. They are purpose-driven, growth targeted, customer-centric. This builds direction and alignment, momentum and energy. These factors drive them naturally to keep evolving, to adapt and innovate, to move with a changing world. They even create a rhythm of change ahead of the market, and so can shape the world to their advantage.

Building a growth portfolio

Alex Osterwalder and Yves Pigneur famously created the business model canvas, a one-page diagram in which to capture the essential components of any business model, and crucially to explore the connections and trade-offs which exist between different choices. However, they increasingly found that the best companies develop a series, or portfolio of business models, which can serve them over time.

Their more recent book is “The Invincible Company” because companies who build a growth portfolio are sustained over time, not just in mindset, but also by a whole series of great ideas, innovations and business models that ensure its success today, and into the future.

Invincible companies manage a dynamic portfolio of established and emerging businesses – to protect established business models from disruption as long as possible, while simultaneously cultivating the business models of tomorrow. They need to “exploit” the present, and “explore” the future

• Exploit the present requires leaders to manage and improve the existing businesses, focusing on their profitability, and their risk of disruption by new competitors, new technology, new markets, or regulatory changes.
• Explore the future requires leaders to also search for new areas of growth, evaluating the potential profitability of new ideas which is drive by size and scalability, and also the risk associated with innovation, and how to make new ideas more certain.

To remain relevant and prosperous companies need to develop truly “ambidextrous” organisational structures which can create the future, whilst also delivering today. Innovation becomes just as important as delivery, but requires a distinctive culture, distinctive skills and metrics in order to be explorers of the future.

Leading for relentless growth

Leaders, themselves, need to be ambidextrous – to be the delivers of today, and also the creators of tomorrow.

Komori’s success has not come through creating one business, but a sequence of business concepts which keep building off each other. This sequence might take the form of leveraging distinctive capabilities with various applications into different sectors like Alphabet has done, or it might be about taking more businesses to the same audience as Apple, or it might be a series of ways of working within the same sector as Microsoft.

Amazon is a good example of a company that intentionally manages a diverse portfolio of existing and promising new business models. The company continues to produce growth with its existing businesses (online retail, AWS, logistics), whilst also developing a portfolio of potential future growth engines that may become big profit generators one day (Alexa, Echo, Dash Button, Prime Air, Amazon Fresh, etc).

Long-term sustained growth is built on a portfolio of short and long-term innovative business models. Such “invincible” companies can better allocate capital and resources at each stage of development. A culture and process that drives a continuous flow of new ideas and innovation is much more likely to sustain your business in turbulent times and uncertain futures.

© Peter Fisk 2023. Excerpt from his book Business Recoded.

Every market is uncertain. Every business leader needs to lead in a blur of change.

Volatile, dynamic environments bring new challenges to decision-making. Executives still yearn after stable environments, where the future is predictable, and data about past years can be used to evaluate future choices. No longer.

At the same time we have more data than ever before – customer insight, financial analysis, operational performance – but its largely all backwards looking. Yes, we can look for patterns and build projections, but they are based on future assumptions. Not easy. And trying to get even more specific, to build a business case, for example a discounted cashflow analysis, to demonstrate profits over future years is even harder.

In a data intensive world, executives don’t like to be intuitive. They feel naked.

While huge amounts of data, particularly driven by the realtime tracking of digital platforms and devices, allow us to be much more granular in our short-term behaviours, to optimise the present, to personalise to customers, it actually hinders our confidence, to look forwards, to imagine, to be strategic.

The Information-Action Paradox

Innosight, the consulting firm led by Scott Antony, describe this paradox particularly as leaders face the need to change. They see digitalisation, disruption and discontinuities ahead, but they feel incapable of action.

On one hand, they need convincing data to make the case that transformation is necessary and to show that their companies are about to find themselves on “burning platforms” –when there are limited options to change. But by the time public data about trends and market shifts is convincing, the window of opportunity has shrunk, if not disappeared.

So how can leaders avoid ending up on a burning platform then? The key is to act before compelling data is widely available, a challenge that is complicated by the lack of information in periods of uncertainty.

In a new article “Persuade your company to change before it’s too late“, Scott introduces a simple conceptual model to help companies map out where they stand when it comes to their knowledge and their ability to act. They call it the “information-action paradox.”

Of course there is a powerful role for data in business. First because today’s markets and activities are fast and fragmented, with data enabling focus and optimisation. And the increasingly powerful AI platforms enable futures to be anticipated, although only based on what they know so far.

We still need human beings to lead, with vision and imagination.

Tools to Lead in an Uncertain World

Scenario planning is complex and easy. Infinite possibilities can create a rich diversity of possibilities and options, but also confusion and chaos. The challenge is not to predict the future, but to be prepared for it.

It’s a great approach to use with boards and executive teams to build a rich conversation around future possibilities, future alternatives, future choices.

My first experience of scenario development was with Royal Dutch Shell, the oil business, which started using the technique in 1971, to understand the implications of oil shocks, and as we reach peak oil, the ways in which the world can shift to renewable energy. Shell’s process is complex, although produces fascinating stories of possible futures.

A simpler approach, to stretch thinking and debate possibilities, can be achieved as a team within a few hours, largely using the insights and ideas in participants heads, rather than requiring huge amount of prepared data. The collaborative process, the rich discussion, the strategic stretch, is what matters. I use these steps

• Future drivers: Consider the potential drivers of change that will shape the future of your broader industry, and the world of your customers. You could use megatrends as a stimulus, or develop your own drivers based around possible social, technological, economic, environmental and political (STEEP) changes.
• Critical uncertainties: Select a number of particularly interesting drivers and describe extreme opposite ways in which they might play out (polarities). For example, will retail shift primarily online with home deliveries, or into a rich social experiences on the high street? Consider the extremes, even if a balance seems likely.
• Plausible scenarios: Bring together some of the most interesting polarities. Most simply do this be creating 2×2 boxes built on any two polarities. For example, the retail shift, alongside economic boom or recession, or strong or weak sustainability focus. Each quadrant of each 2×2 is a mini scenario. Repeat, and discuss.
• Strategic implications: With a large number of mini scenarios from the group, bring them together in a rich picture of possible futures, sharing and discussing as you progress. Evaluate as a team the potential timeframes and certainties. How do they cluster? Which are most risky, and most rewarding? Which do we like most?

With a better understanding of possible futures, you can start to future-proof your business against the worst scenarios, but also choose the futures which you would like to create.

How did Collins end up as Chief Strategy Officer of Wieden+Kennedy?

Some of the provocative ideas emerging from the book include

• Identity is more important than value propositions. Launching the campaign that moved the Brooklyn Nets from New Jersey to Brooklyn suggested that identity is more important than value propositions.
• You don’t “build” community, you “facilitate” community. Working with Beyoncé taught him that you don’t “build” community, you “facilitate” community.
• When people feel seen, they also feel heard. Launching the Real Tone technology for Google’s Pixel 6 taught him that when people feel seen, they also feel heard.
• If you have an idea and it’s logical but people don’t get it, then you’re probably on to something even if people make you feel like you’re wrong. He talked about his own past as a songwriter, growing up listening to hip hop, and how that has inspired the phraseology he has used in marketing. In fact, “that’s a bar” is how he refers to a clear, evocative phrase that people can register quickly, like the “1,000 songs in your pocket” description of the iPod that Apple used during its launch.
• The most powerful skill you can have is the ability to communicate—clearly and evocatively. He learned that the most powerful skill you can have is the ability to communicate – clearly and evocatively – during his time at Apple where Suwanjindar would question even his most basic statements to see if he could make them clearer.

“Culture is a meaning-making system. Culture is the way by which we make meaning. While the brand may intend to mean one thing, it doesn’t necessarily align to what it means in the minds of people. The brand may say, “We think we’re cool. We’re hip. We see the world this way.” People go, “No, we don’t see you that way,” and therefore, is a great incongruence. It’s not enough for us to have a desired meaning. We have to understand what we mean in the eyes of people, and then use our marketing communication to close the gap.”

Fast Company’s Most Innovative Companies ranking for 2023 is just out.

As always its a great curation of interesting stories from some of the world’s most inspiring, innovative companies shaking up fast-changing markets. While some rankings prefer to judge on factors like R&D spend, Fast Company’s analysis gives far more insights into the changing world, and also within over 50 sectors. It’s analysis is largely qualitative, a little US biased too, but sill interesting.

OpenAI is just one example of how advances in AI is reshaping every market, from drug discovery (DeepMind) to office work (Canva) to security (Robust Intelligence).

Healthcare is being made more equitable, for women (Maven Clinic), children (Hazel Health), and lower-income patients (Cityblock Health), by companies that are tailoring their offerings to communities that have traditionally been poorly served.

Iconic brands are changing how they communicate with fans, giving more power to creators and connecting with the culture (McDonald’s, Tiffany & Co.), while the entire world of restaurants and consumer packaged goods is being remade with content at its core (MrBeast).

Running shoes disruptors (Hoka and On) both make it into the top 20, shaking up a market traditionally dominated by Nike, Asics and others. Swiss brand On is particularly innovative, witness their Cyclon subscription-based shoe which you can send back and get a new pair anytime you want. Sustainable too.

On Earth, the soil is being fortified (Regrow Ag), the victims of climate disasters can now get a mobile grid to weather the disruption (Sesame Solar), and one of the world’s most influential brands, Patagonia, has made the planet its sole shareholder (Holdfast Collective).

Meanwhile, in space, public and private entities alike (NASA, Axiom Space) are advancing what’s possible in orbit.

Every year BCG also releases their Most Innovative Companies ranking.

Despite global economic uncertainty, innovation rose as a top corporate priority in 2023, with 79% of companies ranking it among their top three goals. The top areas of innovation emphasis are new products and exploring adjacent business models. Cost is a key driver for 62% of respondents and a top reason for innovation. Companies remain bullish on their innovation prospects: 42% expect to significantly increase spending this year, 16 percentage points over the last economic downturn in 2009.

Based on a survey of over 1,000 innovation executives polled in Dec. 2022 and Jan. 2023, BCG assessed a company’s performance on four dimensions:

• Global mindshare: the number of votes received from all global innovation executives
• Industry peer view: the number of votes received from executives in a company’s own industry
• Industry disruption: the Diversity Index (Herfindahl-Hirschman) of votes across industries
• Value creation: total shareholder return, including share buybacks, over the 3-year period from Jan. 2020 through Dec. 2022.

Apple is considered by BCG’s ranking as the most innovative company in the world in 2023. In fact, Apple has been top ranked every year since 2005 with the exception of 2019. Samsung, which spent over $17 billion (9% of annual sales) on R&D in 2021, making the South Korean conglomerate one of the world’s largest spenders on innovation. Samsung was also granted 6,300 U.S. patents in 2022, the most out of any company.

Bosch, the German engineering and technology company has a global R&D organization of 84,800 employees across 130 locations. Bosch has also maintained R&D spending (as a share of sales) at between 7.6% and 8.2% from 2018 through 2021.

McDonald’s is considered by BCG as the “restaurant industry frontrunner in technology innovation and investment”. It recently acquired Apprente, a startup that develops voice-based technologies, and Dynamic Yield, a firm specializing in creating customizable online experiences.The burger brand aims to leverage these technologies to improve ordering times and offer customers better choices.

Visual Capitalist has produced a simplified view of the BCG rankings:

Tinker Hatfield joined Nike in 1981, having started out as a pole vaulter and then trained as an architect, and rapidly became its lead shoe designer. He realised that his architectural skills could be applied to shoes, and is credited with designing the “cross-trainer” as a multi-sport shoe when he realised people at his Oregon gym brought various shoes with them for different activities.

He first made a name for himself, working alongside basketball legend Michael Jordan to create the Air Jordan boots that set Nike on a path to global brand success. In 1987, Hatfield designed the Nike Air Max running shoe after visiting the Centre Georges Pompidou high famously included a window in the shoe’s midsole to see the air cushion.

At 67 he is now Nike’s Vice President for Design and Special Projects, and overseas Nike’s Innovation Kitchen. A profile of Hatfield in “1 Granary” magazine, said “to make an impact, whether it’s in science, poetry or design, you need out of the box thinking. Unexpected ideas. The type of epiphanies that extend beyond the traditional confinement of your field. People who can produce them are rare, but once they find their creative outlet, true magic happens.”

Creative fusions

Out of all the creative techniques which you will come across, the one that I have found that most powerful is the ability to connect two unconnected ideas. Like the Medici’s of years gone by, it is about bringing unfamiliar ideas, situations, talents, challenges, and solutions together. I am also driven by the ancient Chinese wisdom of yin and yang, the opposing forces which always seek each other, and when they come together, they form something of beauty and harmony.

In The Ascent of Man Jacob Bronowski claims that “a genius is a person who has two great ideas” and the ability to get them to fit together. Consider Ravi Shanker bringing together the music of India and Europe, Paul Klee combining the influences of cubism and primitive art, or Salvador Dali combining scientific perspective with random visualisation.

One of the easiest ways to think more creatively in business is to apply existing ideas from outside your market. Look at what is happening in other sectors, in other countries, in other companies, and creatively explore how you can apply these to your business. The great thing about these ideas is that they are already tested, they can be produced, and people buy them, albeit in a different context. The challenge therefore is to find the relevant “parallels” and to apply the lessons in new and relevant ways.

The simplest but most provocative questions are ones like “How could we create the iPhone of our industry” which encourages people to think of the whole business model by which devices and content, distributors and customers work together and make money. It might actually deliver an idea for digitalising the basic products into components, renegotiating relationships with suppliers for exclusive content, and letting customers select and combine them like iTunes, or it might be about creating the most aesthetically pleasing.

Fusion might also be about more radical crossovers. Whilst it is many years since I studied particle physics, I still use some of the simple ideas in my innovation projects with clients. Understanding atomic structures is a model for thinking differently about how products and services work together. Applying the characteristics of astrophysics gives me a categorisation tool for managing portfolios. Or I might apply my love of running. Imagine applying the discipline of track athletics to the entertainment industry, to create more drama in games and shows, or seeking to replicate the breakthrough of Nike’s Air sole to new types of bottles for chilled beer.

The most creative people in your business, don’t have that talent by birth but through different experiences. We sometimes call them border-crossers, people who bring with them insights and expertise from completely different fields. The musician who works in the design team might seem an odd-ball, but could be the source of most creativity. The astrophysicist in your creativity workshop might seem like she has her head in the clouds, but is probably capable of some of the best cross-over thinking, and most distinctive ideas.

Inspired by nature

The Mercedes-Benz Vision AVTR was launched at the 2020 Consumer Electronics Show, as a futuristic concept for mobility. Its radical appearance, like a translucent liquid blurring into its environment, was described as “a new interaction between human, machine and nature” by fusing its exterior, interior and user experience. It’s 4 wheel drive, allowing each wheel to work independently allows a crab like motion, including sideways, powered by graphene-based organic fuel cells, eliminating all metals, and carbon impacts.

James Cameron, the director of Avatar, the movie which explores how humans would coexist along other natural, and mixed life forms, said “When I look at this beautiful car, I see the physical manifestation of the velocity of an emotional, spiritual idea”.

Biomimicry is the imitation of animals and plants, the models and systems of nature, to inspire new ways to solve complex human problems.

An early example was the study of birds to enable human flight. Although never successful in creating a “flying machine”, Leonardo da Vinci, who trained as an anatomist was fascinated by the flight of birds, inspiring his designs for mechanical flight. Centuries later, the Wright Brothers succeeded in human flight, apparently inspired by racing pigeons.

Otto Schmitt developed the concept of “biomimetics” in the 1950s, studying the nerves in squid  to engineer a device that replicated the biological system of nerve propagation. A decade later, Jack Steele coined the term “bionics” as “the science of systems which have some function copied from nature”.

Examples of innovations in today’s world inspired by nature include

• Bullet Train inspired by the kingfisher: the world’s fastest train enabled by a nose cone that imitates the bird’s long beak, reducing noise and increasing speed
• Gecko climbing shoes inspired by geckos: mimics the tiny hairs on a geckos toes which allows it to climb up vertical surface, creating an adhesive force.
• Cylus backpacks inspired by armadillos: the rigid yet flexible structure takes its cues from the scaled mammal using a series of recycled rubber inner tubes.
• Mariek Ratsma shoes inspired by bird skulls: copying the hollow and exceptionally light bone structure to create strong, lightweight shoes.
• Kau prosthetics inspired by tentacles: a highly flexible and controllable replacement arm using a curling motion at its tip to grip objects.

“When we look at what is truly sustainable, the only real model that has worked over long periods of time is the natural world” says James Cameron

Inspired by parallel markets

Lewis Hamilton’s Mercedes Formula One car has a steering wheel more like a games console.

It might look like an Xbox controller on steroids, but it is designed like this for a reason: all the critical controls need to be within reach of Hamilton’s thumbs so he doesn’t have to move his hand from the custom grips while taking a corner. Those at the bottom of the wheel are for when he’s on a straight. However it is not just the layout, materials are made as light and thin as possible, helping to reduce the overall wait of the car.

To manufacture, the wheel costs around $50,000.

On a similar theme, McDonalds has reengineering its Drive-Thru concept with the help of F1 motor racing teams who design the pit stop environments and processes for absolute speed. Every hundredth of a second, whilst changing tyres and refuelling can make the difference between winning or losing a race. McDonalds even takes its Drive Thru service staff to live F1 events so that they can witness the spectacle of the pit stop crew.

Learning directly from other markets – retail from transport, finance from healthcare, fashion from entertainment – has the advantage that many of the ideas are already proven to work in other environments, and familiar to consumers. Whilst it might be a radical innovation in your own sector, you can embrace it with more confidence and speed.

Here are some examples of innovations inspired by other sectors:

• Yo Sushi! restaurants inspired by baggage systems: the winding airport systems were the inspiration for delivering food on a table-top carousel.
• Dyson vacuum cleaners inspired by sawmills: Dyson took inspiration from a sawmill for is cyclone system of collecting dust without needing a bag
• McLaren baby strollers inspired by aircraft wheels: the hydraulic landing gear of aircraft was the inspiration for the foldable mechanism.
• Philips light bulbs inspired by mobile phones: “pay as you go” payment models inspired Philips to offer LED light bulbs, charging only when used.
• Hilti power tools inspired by car leasing: the manufacturer was inspired by the car leasing model to offer tools, service and repairs, for one monthly fee.

 “Parallel” markets are typically contexts which have some similarity to your own – maybe dealing with long queues, or needing to personalise service – where you need a fresh solution. It might even be from your own sector, but a solution found in different geographies, or parts of the market. There is nothing wrong with “copying” an idea, provided it isn’t illegal, although it may require some adapting before applying it.

© Peter Fisk 2023.

Excerpt from “Business Recoded” by Peter Fisk

Cement production is responsible for about 8% of global carbon dioxide emissions and 5.5% of total global greenhouse gas emissions.

Brimstone was founded by two scientists who grew up halfway around the world from each other, bonded in Beijing where they traveled to talk toilets and are now aiming to solve that massive cement problem.

Co-founders Cody Finke and Hugo Leandri overlapped while doing graduate work at the California Institute of Technology in 2017, where they were both working on wastewater treatment. But the pair really bonded when they both attended the Reinvented Toilet Expo in Beijing in 2018.

In 2022 Bill Gates’ climate finance firm, Breakthrough Energy Ventures, and DCVC, a Silicon Valley venture capital firm, announced a $55 million funding round in Brimstone, saying “We need to recognise that cement is a massive problem for climate and that nobody has figured out how to address it at scale without dramatically increasing costs or moving away from the regulated materials that the construction industry knows and loves.”

A new process to make ordinary cement