Peter Fisk

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

In 578 BCE, Japan’s Prince Shotoku invited three immigrant Korean carpenters to build his country’s first Buddhist temple, Shitenno-Ji.

Buddhism was growing rapidly in Japan at the time, however the Japanese had no experience of building Buddhist temples, so they looked overseas for help. Shigemitsu Kongō was a renowned temple builder, and the royal family commissioned him to build the temple, which still stands today in Osaka.

Kongo saw an incredible opportunity. Buddhism was catching on fast, and he knew he could be kept busy for decades building temples. It turned out to be centuries. Over 14 centuries, in fact.

His construction company Kongō Gumi was founded in 578 AD, the oldest surviving company in the world.

In fact Kongō Gumi, still based in Osaka, traded as an independent firm until 2006 with the motto “Inheritance of techniques from 1,400 years ago to the future”.

It still exists today, building and maintaining Buddhist temples by hand with the Kongō family’s involvement, now as a subsidiary of construction giant Takamatsu.

In over 1400 years, that’s 40 generations of family leaders, the company was never left behind, never encountered a competitor it couldn’t match, and never made a single fatal mistake. The average modern company lasts for only 21 years. By contrast, Kongō Gumi outlasted Genghis Khan, the bubonic plague, the rise and fall of the shogunate, the industrial revolution, two world wars and Japan’s aggressive modernisation, to reach the dawn of the digital era.

It would be wrong to assume that the family firm, steeped in ancient Buddhist carpentry practices, somehow stayed still for all this time. Agility is nothing new – the ability to rapidly and effectively respond to opportunities and threats without losing the company’s coherent sense of long-term direction.

An example of this agility came during the Meiji restoration of the late 19th and early 20th centuries, when the pro-Shinto authorities cracked down heavily on Buddhist practices, threatening the company’s traditional core business. Kongō Gumi responded by diversifying into commercial and residential construction, a smart move in a country that was modernising so quickly.

When the firm’s 37th leader Huruichi Kongō committed suicide in the interwar Shōwa depression, his widow Yoshie took the helm, breaking 1,300 years of uninterrupted male leadership. Faced with extreme financial pressure, she instituted key western-influenced reforms like separating managerial from practitioner roles.

Yoshie also found an ironically lifesaving new revenue stream during the Second World War, building wooden coffins. Even in the late 20th century, the business continued to adapt when circumstances required, becoming the first to use computer-aided design and concrete in traditional wooden temple construction. It was only when the Japanese property crash of the late 1980s saddled Kongō Gumi with unsustainable debt – at a time when donations to temples were also drying up rapidly – that the company finally faced a situation it was unable to survive.

What these episodes had in common was that Kongō Gumi’s leaders recognised major threats and opportunities, understood how important they were and what changes they required, and acted swiftly and decisively in response.

https://www.youtube.com/watch?v=BO1dYcfin0c

Kongō Gumi stayed committed to traditional construction of extraordinary quality, maintaining trusted and reciprocal relationships with customers over many years, and the good name of the family – not just building temples.

For Kongō, the Meiji Restoration wasn’t a headwind, it was an existential threat. Critical thinking also allows agile firms to figure out an effective response by clarifying ideas, testing assumptions and probing weaknesses.

How much should we diversify? Should we focus our efforts here or there? What needs to be true for this plan to work, and how will we find out whether that’s the case? What happens if it doesn’t work as expected?

While it’s easy to associate the visionary reinventions of agile firms solely to visionary leadership – and Kongō was ruthless in its approach to succession, passing over eldest sons for more effective sons-in-law when required – they depend just as much on organisation-level capabilities such as these.

Doing so may not guarantee you’ll last a thousand years or more like Kongō Gumi, but it will at least give you a fighting chance of making it to the next century, through all the profound changes that will entail.

What will you be remembered for? How will you create progress in your business and society, and leave your world a better place for those who follow you?

There is a huge clock ticking deep inside a Texas mountain. It is hundreds of feet tall, and designed to tick for 10,000 years.

Every once in a while the bells chime, each time playing a melody that has never been played before, programmed not to repeat themselves over the ten millennia. It is powered the energy created through temperature fluctuations between day and night.

The clock is real, an art instillation inside a mountain in western Texas, funded by Amazon founder Jeff Bezos, and managed by the Long Now Foundation, a non-profit organisation.

Bezos contributed $42 million to the project, and hopes the clock will be the  first of many millennial clocks to be built around the world over the coming years. A second location has already been purchased at the top of a mountain in the middle of a Nevada forest.

Ten thousand years is about the age of civilization, so the 10,000 Year Clock represents a future of civilization equal to its past. For Jeff Bezos it is symbolic of our need to protect and nourish our planet for the long term. He calls it his legacy, and sits alongside his $10 billion Earth Fund which he launched in 2020, as his contribution to the future.

What will you give to the future?

Legacy is one of the most motivating topics for business leaders. What will you leave behind? What is your contribution to others that follow you?

We are so wrapped up in our current world. Trying to deliver performance, trying to accelerate growth, trying to transform our business to take it to a better place, that we spare few moments to ask what would we leave behind.

Not just a memory. Not just a reputation. But a contribution to the future.

One of the most memorable books I ever read was Randy Komisar’s “The Monk and the Riddle”.

In 2003, having just taken on the role of CEO of a mid-size organisation, I wanted to give my 100 top managers some food for thought. Yes, we could develop new strategies and organisation change, but firstly I wanted them to think bigger, about the future, and what we could be, and what they themselves could be. I gave each of them a copy of the book.

It starts with a monk on a motorbike driving off into the desert, and then returning back to where he began. Asked where he has been, he answers that he has been on a journey. Sounding like a zen-like philosophy, many would give up at this point, but given that it was published by Harvard Business School, I persisted.

Komisar is a Silicon Valley technology legend and now a partner at Kleiner Perkins Caufield & Byers. He thinks you should look for more in your business career.

He reflects on the number of colleagues and friends he has known in tech start-ups who have pursued their ideas, working relentlessly, and all they think about is the exit strategy. He suggests this is not fulfilment. Yes, they might end up wealthier, but have they really achieved what they want in their lives?

“Passion and drive are not the same at all. Passion pulls you toward something you cannot resist. Drive pushes you toward something you feel compelled or obligated to do. If you know nothing about yourself, you can’t tell the difference. Once you gain a modicum of self-knowledge, you can express your passion. It’s not about jumping through someone else’s hoops. That’s drive” says Komisar.

Most people have a dream, and most often the dream is not to simply makes lots of money, but to achieve something. Achieving something is usually quantified by making a difference to the world. This might be achieved through a business route, leveraging the power of brands and consumption, finance and resources, to make a difference to the world. Or it might be in less commercial ways. However most leaders, according Komisar, defer this for a later act, to do once they’ve delivered on their initial business, once they’ve retired maybe. He calls it “the deferred life plan”. We have dreams, but we defer them for a later day.

The real passion we have for life, for achieving our life plan, shouldn’t be something we defer for another time, when we might not even be fit enough to achieve it, but be part of now. Embracing it within what we do, our job today. Leading our business to achieve both business and personal aspirations.

There is an echo of this in “The Second Mountain” by David Brook.

Brook says that every so often, we meet people who radiate energy and joy, who seem to “glow with an inner light”. Life, for these people, has often followed what we might think of as a two-mountain shape. They leave school, start a career, and they begin climbing the career mountain they thought they were meant to climb.

Their goals on this first mountain are the ones our culture endorses – to seek business success, to make your mark. But when they get to the top of that mountain, something happens. They look around and find the view unsatisfying. They realise that this wasn’t their mountain after all, and that there’s another, bigger mountain out there that really is their mountain.

And so they embark on a new journey, on their second mountain, and their life moves from self-centred to others-centred. They want the things that are truly worth wanting, not the things other people tell them to want. They embrace interdependence, not independence. The difficulty, however, is that most people only find their second mountain when they retire, and then it is often too late.

Your legacy is not what you have done, it’s what you give to the future.

How will you create a better world?

In writing my most recent book Business Recoded I explored the shifts in business, from today to tomorrow, from profit to purpose, with more meaning and impact.

This is legacy. Legacy is not creating a legend, its creating a contribution to the future.

I truly believe that business can be a platform for change in our world, but also a platform for good. And that you can achieve more in business, by doing good at the same time.

The best opportunities often arise out of seemingly unsurmountable challenges, you might call them paradoxes which seem unable to resolve contradictory goals. Apparent paradoxes, at least through our existing lens, offer business leaders new spaces to explore, new ways in which business can make a difference, by combining its huge resources for more positive impact.

Here are 15 big questions for business, and the world:

• Climate: How can economies grow, whilst also addressing climate change?

The last two decades have been the warmest on record. Whilst growth in CO₂ emissions has slowed due to efficiencies and renewables, the earth is still warming. The Paris Agreement seeks a 1.5°C cap above pre-industrial levels.

• Resources: How can population growth and resources be brought into balance?

Global population will grow to 9.8 billion by 2050. If all are to be fed, then food production will have to increase by over 50%, while urban residential areas are expected to triple in size by 2030.

• Technology: How can new technologies, like AI and robotics, work for everyone?

51% of the world is now connected to the Internet. About two-thirds of the people in the world have a mobile phone. The continued development and proliferation of smart phone apps are AI systems in the palm of many hands around the world.

• Women: How can the changing status of women help improve society?

Empowerment of women has been a key driver of social change over the past century. Gender equity is guaranteed by the constitution of 84% of the world’s nations, while “the international women’s bill of rights” is agreed by almost all.

• Disease: How can the threat and impact of new diseases, like Covid-19, be reduced?

Global health continues to improve, life expectancy at birth increased globally from 46 years in 1950 to 67 years in 2010 and 71.5 years in 2015. Total deaths from infectious disease fell from 25% in 1998 to 16% in 2015.

• Energy: How can our growing energy demands by met efficiently and responsibly?

In China is the biggest producer of solar energy, and its investing huge amounts in other water and wind power too. Meanwhile, a billion people (15% of the world) do not have access to electricity.

• Water: How can everyone on the planet have sufficient clean water?

Over 90% of the world now has access to improved drinking water, up from 76% in 1990. That is an improvement for 2.3 billion people in less than 20 years. However, that still leaves almost a billion people without access.

• Conflict: How can shared values and security reduce conflicts and terrorism?

The vast majority of the world is living in peace, however, the nature of warfare and security has morphed today into transnational and local terrorism, international intervention into civil wars, cyber and information warfare.

• Crime: How can organised crime be stopped from becoming more powerful?

Organised crime accounts for over $3 trillion per year, which is twice all military annual budgets combined. It is estimated the value of black market trade in 50 categories from 91 countries is $1.8 trillion.

• Democracy: How can genuine democracy emerge from authoritarian regimes?

105 countries are experiencing a net decline in freedom, according to Freedom House think tank, while 61 are improving in net freedom, 67 countries declined in political rights and civil liberties, whilst 36 registered gains.

• Inequality: How can economies reduce the gap between rich and poor?

Extreme poverty fell from 51% in 1981 to 13% in 2012 and less than 10% today,mostly due to income growth in China and India. However the wealth gap is increasing, 1% have more than 99%, 8 billionaires have more than 3.6 billion people.

• Education: How can we better educate humanity to address global challenges?

Alphabet and others seek everyone on the planet connected to the Internet. The price of laptops and smart phones continues to fall, and IoT with data analytics gives real-time precision intelligence. However, successfully applying all these resources to develop wisdom, not just more information, is a huge challenge.

• Progress: How can tech breakthroughs accelerate to address our big challenges?

IBM’s Watson already diagnoses cancer better than doctors, Organova can 3D print human organs including new hearts, robots learn to walk faster than toddlers, and AlphaGo outsmarts the smartest humans.  In 2020 China had 40% of all robots in the world, up from 27% in 2015.

• Ethics: How can ethical considerations by incorporated into global decisions?

Decisions are increasingly made by AI, who’s ethics are shaped by algorithms without conscience or control. Ethics are also influenced by manipulated information, by “fake news”, and political exaggeration, that can distort perceptions, leading us to wonder what is the truth, and who can we trust.

• Foresight: How can we make better future decisions with so much uncertainty?

Although the most significant of the world’s challenges and solutions are global in nature, global foresight and decision making systems are rarely employed, leaving the world’s best brains disconnected. Global governance systems are not keeping up with growing global interdependence.

These are not questions just for the United Nations, or governments or intellectual think tanks. These are questions for you, business leaders who have the power and platforms to make a real difference. So what could you do?

Letter to the future

What would you write in a letter to your grandchildren?

Talking to Richard Branson about his life seemed like an endless tail of intrepid adventures. We talked about his successes in music and airlines, and his passions for hot air ballooning and kitesurfing. He said he was much more interested in the future than the past, He became particularly animated when we got onto space, the potential for anyone to become an astronaut within his own lifetime. And the future potential of technologies to allow us to do amazing things, that are also better for humanity.

He told me that he wanted to write a letter to his grandchildren, Artie, Etta and Eva-Deia, about his hopes for them and their future. He recently published his letter on his blog, from which here is an extract:

“You are at the very start of life, it is an incredible gift and it is there for the taking. It will deliver highs and lows, trials and tribulations, failures and triumphs. But by living it to the full, by always trying to do the right thing and by never losing that sense of adventure which you now posses with such abundance, it will indeed be wonderful.”

 “My golden rule in life is to have fun. Life is not a dress rehearsal, so don’t waste your precious time doing things that don’t light your fire. Do what you enjoy, and enjoy what you do. Trust me; great things will follow.”

“Don’t let your head always rule your heart. Life’s more fun when you say yes – so dream big and say yes to your heart’s desires. Dreaming is one of our greatest gifts – so look at the world with wide-eyed enthusiasm, and believe you are more powerful than the problems that confront you.”

“Never betray your dreams for the sake of fitting in. Instead be passionate about them. Passion will help you stay the course, and inspire others to believe in you and your dreams too.”

“Remember to treat others like you would like to be treated. Always be nice, always be caring. Give people the benefit of the doubt. And don’t hesitate to give out second chances. It’s incredible how much people lift and rise to the challenge when you believe in them and trust them.”

“Be open with everyone around you, especially your parents. They will always be there for you, willing to share in your adventures, support your decisions and love you unreservedly.”

“Above all, love and know that you are loved. Love always, Your grand-dude.”

Tech is the shiny new thing.

In most executive teams, AI is talked about in hushed tones. We all know it matters, not entirely how. Marketers will arrive with grand plans for their brand metaverses, or super-apps, while chatbots and more apps are seen as the answer to customer service woes. Add in a few ventures, and we can change the world.

Tech is certainly a driving force of change. But beware of the shiny new thing!

Most innovation in recent years has come by thinking differently, in particular by reengineering business models in response to changing customer agendas, or new emerging segments. Think about the low-cost airlines, in many cases trumping the full service giants. Love or hate it, Ryanair is now the most valuable airline in the world.

The latest tech is exciting.  But do customers really want it? Is it too soon? What’s the real problem to solve?

The Innovator’s Dilemma by the late, great, Harvard Business School professor Clayton Christensen, is one of the classic business books of our time. He wrote the bestselling text in 1997, but it it is still valuable today.

The book explains how successful companies that dominate their industries fail in the face of disruptive innovation. It’s a message of caution for leadership teams at these companies, but also a message of encouragement for competitors venturing against these goliaths.

Here’s a great 4 min video which summarises the book.

First, it distinguishes between sustaining and disruptive innovation. Then, it discusses why it’s difficult for most companies to adopt disruptive technologies. And finally, it considers what does it all mean for both large companies and startups.

In all of this, there is one important term that needs to be clarified. Christensen famously coined the word “disruption” which deserves some prior explanation due to its overuse in the media.

Here is an excerpt from the book to hopefully clear things up:

“Most new technologies foster improved product performance. I call these sustaining technologies. Some sustaining technologies can be discontinuous or radical in character, while others are of an incremental nature.

What all sustaining technologies have in common is that they improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued.

Most technological advances in a given industry are sustaining in character. An important finding revealed in this book is that rarely have even the most radically difficult sustaining technologies precipitated the failure of leading firms.

Occasionally, however, disruptive technologies emerge: technologies that result in worse product performance, at least in the near-term. Ironically, in each of the instances studied in this book, it was disruptive technology that precipitated the leading firms’ failure.

Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use. There are many examples in addition to the personal desktop computer and discount retailing examples cited above. Small off-road motorcycles introduced in North America and Europe by Honda, Kawasaki, and Yamaha were disruptive technologies relative to the powerful, over-the-road cycles made by Harley-Davidson and BMW. Transistors were disruptive technologies relative to vacuum tubes. Health maintenance organizations were disruptive technologies to conventional health insurers. In the near future, “internet appliances” may become disruptive technologies to suppliers of personal computer hardware and software.”

It’s also important to understand the difference between radical sustained innovation and disruptive innovation as explained above. Often, the media will be quick to incorrectly dub a case of sustained innovation as being disruptive. The key difference is that the value network of a disruptive technology is distinct to the market offering at the time.

The innovator’s dilemma is that in every company there is a disincentive to go after new markets. Competent managers in established companies are faced with the question: “Should we make better products to make better profits or make worse profits for people that are not our customers that eat into our own margins?”. Paradoxically, this will doom companies in the long run.

Evidence shows that the longevity of companies is decreasing as the pace of technological advances increases.

Here’s Clay Christensen in 2016, (he sadly died in 2020), taking his ideas further: