What is innovation?

Sounds like an easy question. Or should be. But we still stumble over phrases like making ideas happen, solving problems, doing it profitably, or at least with a positive impact.

And of course its easy to resort to Apple, or more specifically, Steve Jobs. Whilst you’ve heard everything about him already, there is one moment worth recalling from that magical Stanford commencement speech he made in 2005. Whilst he talked about life, and making the most of your time, he captured the spirit of innovation in three sentences:

You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something—your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

https://www.youtube.com/watch?v=E8kHDJKdJXM

Leonardo da Vinci was a great one for making new connections. His greatest breakthroughs came from connecting the unconnected, and in particular, the insights gained by bringing different perspectives together. His expertise in anatomy helped him to create better portraits and sculptures, and also helped him make sense of mechanics and engineering. He himself defined innovation as connecting the unconnected.

Another great disruptor, Albert Einstein was often challenged for making what seemed like absurd connections. Like the connection between energy and mass. Of course, there was no existing logic which suggested such a connection, it needed to be shaped through imagination. Almost every great scientific breakthrough has come about through hypothesis and then making sense through practical demonstration.

Back in the business world, I explored innovation with Sir Richard Branson, and the culture which he seeks to create across his Virgin companies, he reached for a pencil and paper and jotted down his equation of life … A+B+C+D (Always Be Connecting the Dots). Its not about creating newness, but making sense of what you have, maybe in fragments and different places, but can be shaped in new and interesting ways.

We spend much of our time collecting dots – seeking new insights, reading more books, generating more ideas – but too little time connecting dots. This requires confidence and creativity, to think bigger and laterally.

“The magic of connecting dots is that once you learn the techniques, the dots can change but you’ll still be good at connecting them.”

Indeed we live in an incredible world with so many great sources of ideas, insights and inspirations. I spend my exploring the world’s most innovative companies, the new markets which they shape, the business models which they develop, the new experiences they deliver to customers. There are so many ideas out there.

So many dots to connect …

• Connecting ideas with different ideas to create new and unusual concepts
• Connecting diverse people to combine talents, experience and perspectives
• Connecting customers with business to gain insight and engagement
• Connecting partners with business to gain capability and reach
• Connecting customer needs and wants, to solve bigger problems
• Connecting ideas from different places, across geographies and sectors
• Connecting products and services, into richer customer experiences
• Connecting markets in new ways, to operate different and better
• Connecting business with new business models to be more profitable
• Connecting media, channels and market networks to amplify the impact
• Connecting customers with customers to build richer communities

The real skill is to see the bigger picture, the bigger space in which you can make the new connections – and then to make new connections – interesting, unusual, distinctive, better. Even if at first you question how will it work, how will it make money, don’t be disheartened. By adding more connections you will soon find ways to implement and sell your uniqueness, often in ways you never imagined.

And so innovation in every aspect of what you do.

And as I googled for more clarity (as you do), I came across this video:

It finishes with a great few lines, worth remembering for when you’re asked that question about what really is innovation:

So what is innovation?

Those other dots. The ones others miss.
And having the certainty to know that the dots you see are not only valid, but necessary if the world is to move forward.

 

Explore more from Peter Fisk about innovation:

• Introduction: Innovation. Making the best ideas happen successfully.
• Program: Business Innovation. Design Thinking to New Business Models.
• Article: Innovate your business model
• Article: Innovation by Leonardo da Vinci
• Toolkit: Innovation Diagnostic
• Toolkit: Gamechangers Creative Lab

 

Driving transformation is not easy as part of everyday business. Organisations therefore develop a range of alternative routes to creating more radical change, faster.

Spot is a dog-like robot that can climb stairs and run across rough terrains, has 360 vision, can carry  40kg loads, and endure – 20C. Handle is a robotic arm that can move boxes in a warehouse or guide surgical instruments within operations. Atlas is the world’s most dynamic humanoid robot, it can run and jump with 28 hydraulic joints.

Boston Dynamics began as a spin-off from MIT, where they developed the first robots that ran and moved like animals. The lab combines the principles of dynamic control and balance with sophisticated mechanical designs, cutting-edge electronics, and intelligent software to explore  how robotics can transform the worlds of healthcare to manufacturing.

The Chinese Academy of Sciences (CAS) in Beijing acts as the national scientific think tank that provides advice to Chinese businesses, large and small, and the government, specifically on using technologies to develop the economy and social improvement. It is the largest research organization in the world with over 60,000 researchers working in 114 institutes across China. Based on the total number of research papers published in Nature and its affiliate network, CAS ranked #1 among the world’s leading research organizations.

Silicon Valley’s PARC is an open Innovation company that has been at the heart of some of the most important technological breakthroughs. It brings together scientists, engineers, and designers focused on specific future themes. Creativity and science are core to PARC’s mission to reduce the time and risk of innovation. Teams assemble and grow organically, combining expertise and capabilities to work with start-ups and corporates.

Innovation Labs

Innovation labs have evolved from the Skunk Works which Lockheed Martin started decades ago. Moving from insular research and development roles of the past, like the secretive projects of Xerox PARC or Bell Labs, to a more open structure, with two roles:

• Develop innovative concepts and business models without the distractions, demands and expectations, and internal obstacles of most organisations – to create significant new opportunities for existing business.
• Develop new ventures, that require collaborative working and investments with external partners – be that other companies, new start-ups, and specialists – and may even lead to a new business.

An innovation lab is typically an open, collaborative space where people from different departments with outside partners, tech experts, designers, and academics, seeking to emulate the culture, speed, tech integration, and disruptiveness of a start-up, in order to develop new products, services, experiences and business models that take advantage of new business strategies and advances in technology.

Innovation Labs may be run in-house, or by independent companies, or venture capital funds who want to ensure that their investments are spent effectively. In-house labs run by corporates may want to bring start-ups into their fold providing resources or investment, with a motivation to learn from their specialist expertise, share in their entrepreneurial culture, or to have first option on the outcomes.

Incubators and accelerators

There are many different types of innovation labs – often known as incubators or accelerators. Incubators give birth to new start-ups and nurture their early stage development whilst accelerators enhance the ability the ability start-ups to scale-up into more significant business,  by adding more corporate structure, collaboration and more.

Of course many companies also develop innovation labs as vanity projects – colourful bean bags, lots of white boards, bikes hanging from the ceiling, a few robots sliding around, table football in the corner, you get the idea – but innovation labs can play an important role in driving more radical ideas, new cultures, and future growth.

The dedicated focus of an innovation lab has significant commercial benefits:

• Faster development of new products and new business models that solve core customer needs and drive new revenue streams.
• Protect against the threat of disruption from competitors, especially start-ups using new digital approaches.
• Be a working lab to collaborate with customers to address specific challenges and develop more customised solutions.
• Demonstrate products and capabilities to current and future customers, and business partners.

Whilst culturally, being separate from the main business has additional benefits:

• Explore the potential of new technologies separately from current solutions, enabling more creative applications.
• Build multiple innovation centres dedicated to important new categories, geographies and technologies.
• Create a collaborative working space closer to industry innovators, and new technology centres
• Shift the company culture towards greater innovation, technological integration, and collaboration internally and externally.

Inside Daimler’s Lab1886

The origins of today’s Mercedes Benz go back to Gottlieb Daimler who started out in a Stuttgart garage in 1886.Today, Daimler’s Lab1886 continues the tradition of innovation. It is a network-based initiative, where the German car maker explores new business models, through to new engine mechanics, fuel concepts and interior designs.

“Today, we are facing a lot of mega-trends like digitalisation and globalisation” says the lab’s director Susanne Hahn. “All these technological and social regulatory movements will change the automotive industry over the next 10 years significantly. We already have, within the Lab1886, a bunch of products ready for the future”.

The incubator works along the four pillars: connected, autonomous, shared and service and electric drive. The lab has locations USA, China and Germany, defining its goal as “to move faster from an idea to a product or business model”.

Employees can submit ideas based on any of the themes to the company’s internal crowdsourcing platform, with the best forwarded to the company’s “shark tank” panel of experts, and then to the incubation phase. Any of Daimler’s 300,000 employees can submit an ideas, and then work on it full-time in the lab if successful. Teams are also given coaching, co-working space, and funding to develop prototypes and pilots.

Projects are eventually either transferred into the appropriate line of business or spun off into new companies, where the employee could become the new CEO. Hahn says that the original ideator also has the potential to become the CEO of the new company.

Car2Go, a peer-to-peer car sharing platform, is one graduate of Lab1886, spun out as a separate company with 2.5 million customers. Other projects include a travel optimization app called Moovel, and external partnerships, such as a collaboration with start-up Volocopter, to explore the world of urban air taxis and vertical take-off vehicles.

(Excerpt from “Business Recoded” by Peter Fisk)

Jim Collins’ book “Good to Great” is regarded as one of the all time greats of business literature.

At the heart of his approach, built on years of research, is a map. He spent decades exploring what makes great companies perform better.  The map is the answer, and you can find a fabulous interactive version online.

Collins’ map is divided into inputs and outputs. The inputs includes all the practices that he believes that it takes to become a great company, and is divided into 4 different stages. The outputs refer to the results, or what is a great company. Here’s his map as it appears on his site:

Inputs: What does it take to build a great company?

There are four stages:

Stage 1. Disciplined People

• Reach for Level 5 Leadership. Cultivate getting the type of leaders and becoming the type of leader who leads to serve a cause and does so with humility.
• Practise First Who, Then What. Get the right people on the bus and on the right seats of the bus, and only then you figure out where to drive it.

Stage 2. Disciplined Thought

• Embrace the Genius of the And. Look for how to have purpose and profit, long-term and short-term, execution and innovation, etc.
• Confront the Brutal Facts in the context of Stockdale’s Paradox.Confront the brutal facts and retain faith that you can and will prevail in the end.
• Clarify your Hedgehog. Make a series of decisions based on what you are passionate about, what you can be the best in the world at, and what drives your economic engine.

Stage 3. Disciplined Action

• Turn the flywheel. Build momentum by making a series of good disciplined decisions and executing them well. Then you will get a click on the flywheel.
• Hit Your 20-mile Marches. Relentlessly try to hit self-imposed performance markers, not just for years but for decades.
• Fire Bullets, Then Cannonballs. First fire bullets to get empirical validation of new ideas that they will work. Then, convert them into large cannonballs to scale your ideas up.

Stage 4.  Building to last

• Practise Productive Paranoia. Understand the five stages of decline, and practise constant productive paranoia.
• Shift from being a Time-teller into being a Watch-maker. Build the right mechanisms so that the company can succeed far beyond the presence of any single leader or any single great idea.
• Preserve the Core and Stimulate Progress. Hold true to your core values, and change your practices. Hold true to your purpose, and change your strategies.
• Set Big Hairy Audacious Goals. Set BHAGs as there is a difference between merely having a goal and becoming committed to a huge, daunting challenge.

Collins also adds a 10 x multiplier: the return on luck – or what you eventually do with the luck you get whether it’s good or bad. This is the amplifier of everything else in the framework. “About 50% of great leadership is what you do with the unexpected.”

Outputs: What is a great company?

Collins is quick to remind us that “big doesn’t equal great, and great does not equal big.” He says a great company is one that achieves three specific outcomes:

• Superior results. “You win at your game” … to be a great company, it’s not enough that you have a great purpose and that you treat your customers well. You need to deliver superior results.
• Distinctive impact. “You make an indelible impact in the world that you touch” … your impact can be for example the distinctive thing that you do, or it can derive from the level of excellence you deliver.
• Lasting endurance. “You are able to do this over a very long time” … a truly great company is not dependent on a single leader or specific circumstances. They last no matter what.

Of all of Jim Collins’ concepts, for me, the flywheel is most significant.

Amazon is a great example of a business thriving on a flywheel, a circular process that is not easy to start but then builds – and builds – momentum over time, with multiplying impact. In a digital world, flywheels can have magical impact – building insight through data, building audience through referral, building profitability through customised relationships.

 

 

 

Larry Fink shocked the financial world in 2018, when he declared that his BlackRock investment firm would only invest in companies that could demonstrate that they had a meaningful purpose beyond profits.

Over the previous 30 years Fink had built BlackRock into the largest investment firm in the world, with almost $9 trillion in assets under management. However, he was always a leader who looked beyond the numbers. His letter to the CEOs of nearly every large company in America deplored the corporate culture of short-term thinking and threatened to vote out board members who did not hold management more holistically accountable. Other large investment firms have followed BlackRock’s lead.

“If the system is really going to change, pressure needs to come from the investment community,” says the Drucker Institute. “And no voice has been more important or more forceful in this regard than Larry Fink’s.”

2018 Letter to CEOs: in his most disruptive letter, that marked his shift to purposeful thinking, he wrote that a long-term perspective matters more than short-term returns:

• Expectation that companies deliver more than short term financial returns: In the current social and political context, society is increasingly looking to the private sector to provide more than short term financial returns.
• Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.
• ‘Social licence to operate’ and long term prosperity depends on making a ‘positive contribution to society’, and the absence of a long-term focus or ‘sense of purpose’ exposes companies to greater risks.
• A new model of shareholder engagement is required with clearer and fuller disclosure of strategies to deliver long-term growth reviewed at board level.

2019 Letter to CEOs: he became more specific about the relative importance of purpose and profit, saying that profit was an outcome, but purpose was the goal:

• Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders.
• Purpose is not the sole pursuit of profits but the animating force for achieving them. Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked.
• Purpose unifies management, employees, and communities. It drives ethical behavior and creates an essential check on actions that go against the best interests of stakeholders.
• Companies that fulfill their purpose and responsibilities to stakeholders reap rewards over the long-term. Companies that ignore them stumble and fail.

2020 Letter to CEOs: he called for a fundamental reshaping of finance, driven by the urgent need for governments and businesses to respond to the challenges of climate change:

• A company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders. Ultimately, purpose is the engine of long-term profitability.
• BlackRock believes that the Sustainability Accounting Standards Board (SASB) provides a clear set of standards for reporting sustainability information across a wide range of issues.
• Over time, companies and countries that do not respond to stakeholders and address sustainability risks will encounter growing skepticism from the markets, and in turn, a higher cost of capital.
• We will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.

2021 Letter to CEOs: he wrote that achieving “net zero” carbon emissions is the best way to drive investment growth, and economic recovery.

• The pandemic demonstrated the importance of ESG: reflecting on 2020, he argues that these issues – with climate change as the existential threat that affects us all – matter more than ever, revealing a 96% increase in sustainable investing in 2019
• Now, because of Covid-19, we know how fragile we are, we must act to remain under 2 degrees. He challenges all companies to achieve “net zero” by 2050. Companies who ignore this, he says, will rapidly lose investor confidence, and economic value.
• We need a single global reporting standard. He says most companies, even the best, do a poor job in accounting for carbon emissions, and demands the same standards of accounting as applied to financials. What gets measured, gets done he says.
• Social issues are rising fast, he argues. Racial and gender equality came into focus during 2020, although economic inequality is still less visible. Business, he says, holds the key to inclusive capitalism – DEI – diversity, equity, inclusion.

2022 Letter to CEOs: he addressed the power of capitalism, but also the changing nature of capitalism – from profit to purpose, shareholders to stakeholders, and more:

• Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.
• In today’s globally interconnected world, a company must create value for and be valued by its full range of stakeholders in order to deliver long-term value for its shareholders. It is through effective stakeholder capitalism that capital is efficiently allocated, companies achieve durable profitability, and value is created and sustained over the long-term.
• At the foundation of capitalism is the process of constant reinvention – how companies must continually evolve as the world around them changes or risk being replaced by new competitors.
• It’s never been more essential for CEOs to have a consistent voice, a clear purpose, a coherent strategy, and a long-term view. Your company’s purpose is its north star in this tumultuous environment.

Institutional Investor has called Fink “the Steve Jobs of the money game” for his ability to foresee a changing world, where most peers are limited in their mindsets by conventional assumptions and incremental solutions. Fink says he is ready to shake-up BlackRock and the entire industry “We need to be willing to reimagine every aspect of our company and how we manage it,” he wrote “and so should every other business”.

Every business seeks purpose.

At its heart, purpose is about describing how the world is a better place with you. Or, alernatively, to consider how the world would be a lesser place without you.

Another way to describe it is legacy.

What will you achieve, what will you leave behind, what will you be remembered for? Or, as I call it, what is your future story? Defining the future you will create, the vision you have, and the impact you will make.

In business I see many generic, forgettable statements of intent.

Purpose, vision, or is it mission? Strategic pillars, horizons, imperatives? Values, principles. It’s great to have them. But they need to matter. They need to change things. To drive choices. To create distinctiveness. To energise people. To deliver results.

Meeting the All Blacks changed me.

I live in Twickenham, often called the home of rugby. New Zealand’s famed rugby team, the All Blacks, are frequent visitors, staying at my local sports club, the Lensbury. Mixing with them, you feel something special.

They are awesome, intimidating.

They stand tall as people, not just physically or famously, but with confidence and passion, and together. On the pitch, they are fearless and fabulous. From the moment of their Haka, their traditional Maori salute, they are different, and better.

In my new book “Business Recoded“, I tell their story – as inspiration for your own future story.

One person who knows them particularly well is James Kerr, who has spent much of his life as a business coach learning from the All Blacks and applying their magic to organisations.

Finding legacy is a great way to find more purpose, and to tell your future story.

Richie McCaw, the former captain of New Zealand’s “All Blacks”, is regarded by many as the greatest rugby player of all time.

His teams won a remarkable 89% of their 110 matches in which he was their leader, including two world cups. He even played through one World Cup final with a broken foot, knowing that he was a key component of the team. Whilst he recognises that the team is always more than any individual, he also believed that a leader defines a team, brings together and creates great individuals.

After lifting the World Cup in 2015, McCaw said “We come from a small Pacific island, a nation of only 4.5 million, but with a winning mindset. At the start of each game, when we lock together in our traditional Maori haka, we know that we are invincible”.

Create your “Kapa o Pango”

The All Blacks have a bold and unwavering ambition to win, working on a 4-year cycle with a common team, and setting mini goals along the way to retain sharpness and evaluate progress. They search out the best players who bring each technical specialism, but equally who will work best together, whilst also retaining a search for new talent and skills.

Being part of the team is everything, with a sacred induction, and commitment to the higher purpose.

As a team they constantly evaluate, challenge and stretch, themselves, whilst searching the world of sport and beyond for new ideas, ways to improve physiological fitness, mental agility or technical skills. Like most sports, whilst they have a coach to guide them and captain to lead them out, their approach once in the game is that every one of them is a leader, all equal, all responsible, all heroes when they win.

In “Legacy” Kerr describes some of their team beliefs

• “A collection of talented individuals without personal discipline will ultimately and inevitably fail.”
• “Character triumphs over talent.”
• “A sense of inclusion means individuals are more willing to give themselves to a common cause.”
• “The first stage of learning is silence, the second stage is listening.”
• “High-performing teams promote a culture of honesty, authenticity and safe conflict.”
• “If we’re going to lead a life, if we’re going to lead anything, we should surely know where we are going, and why.”
• “Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.”

Richie McCaw talks about some of the distinctive beliefs which the team has embraced. These include many concepts from Maori culture, such as the “Kapa o Pango” which is the name of the haka, the traditional dance performed by the team before every match, and reflects the diversity of the nation’s Polynesian origins.  Such rituals become important in bonding the team, but also in creating its identity to others.

Another Maori concepts is “whanau” which means “follow the spearhead” inspired by a flock of birds flying in formation which is  typically 70% more efficient than flying solo.  And finally “whakapapa” which means leave a great legacy, or translated more directly,  plant trees you’ll never see by being a good ancestor.

Finding more purpose

So why does your business exist?

Purpose defines what the business contributes to the world, or equally, why the world would be a lesser place if the business did not exist.

Purpose creates an enduring cause which the business is willing to fight for. For some this might be an urgent call to action, for others it might be a more personal inspiration. Saving then planet, or achieving your potential, with Nike, or seeking happiness, with Coca Cola.

Tesla exists to “accelerate the world’s transition to sustainable energy”, Starbucks to “inspire the human spirit”, Dove to “help the next generation of women realise their potential”, Microsoft to “empower people to achieve more”, and Swarovski to “add sparkle to people’s everyday lives.”

Purpose creates a richer sense of meaning in your business, inspiring employees to raise their game, to transform and grow themselves and the organisation. It encourages a strategic focus, to rise above the distractions of today, to align on bigger goals and to innovate more radically. Productivity and performance typically follow.

It is a cause shared internally and externally, that investors want to be part of, partners want to align with, and customers want to promote through their consumption and loyalty.

Purpose goes far beyond the old mission and vision statements, which were largely internal mantras, about how good the company wanted to be – “the best”, “the industry leader”, “to maximise performance”. Purpose is much more altruistic and inclusive. It is about what the inside does for the outside world. It sits above other ambitions, and should probably replace them, as an inspiring, single-minded intent.

If purpose is “why we exist?”, then mission is more about “what do we do?” and vision is “where are we going?”. Or as Ashley Grice the CEO of Brighthouse says “When you go to bed at night and you are worried about something, that is generally your mission. But when you wake up in the morning and you are excited about something, that’s your purpose?”

The power of storytelling

As a business leader you are a storyteller.

Not of fictional stories that go between truths, but stories of the future, stories of where the business is headed, and what it will be like. Stories that engage people in understanding those simplistic purpose statements in profound, human and inspiring ways.

Steve Jobs was a master of storytelling. In 2001 as the technology world was still in shock from the crash of the dotcom boom, Jobs mounted the stage for Apple’s annual meeting. He was in his prime. His new iMac computers had been a success, the company had been transformed under his renewed leadership.

Jobs talked about his passion for music. How music inspires him, and every one of us. It marks the great moments, it defines moments in our lives, it can change our worlds. The Beatles. Dylan and more. By now, it felt like Apple could be a music business. And then from his jeans pocket, he pulled out a small white device, and held it up.

“A thousand songs in your pocket” he said with a huge grin.

As a business leader you need a story.

What’s your future story?

Purpose statements, business strategies and brand slogans are not enough.

We need something more human and personal. A story can resonate with people today and explain how tomorrow can be better. A story can bring a future vision to life, inviting people to imagine it with you, exploring its benefits. A story evolves, and shows a path from where we are, to where we could be. A story is more memorable and can be retold from person to person. People seek hope and want reasons to believe in better.

Elon Musk doesn’t quite have the drama or fluency of Jobs, but he has become one of the best future storytellers of today’s business world.

His businesses are founded on future ideas, building for future possibilities. They start with an inspiring purpose, be it SpaceX’s desire to sustain life through a new civilisation beyond Earth, or Tesla’s drive to accelerate the shift to clean energy.

SpaceX might have created a satellite launch business that is around 10 times cheaper than NASA, but he uses this capability to tell a far bigger story. They are just practice runs, for a much greater mission to Mars. Who can forget the dramatic moment when he landed his returning Falcon 9 spacecraft back on an incredibly small platform in the middle of the ocean? Or when the much more powerful Falcon Heavy launched a (Tesla) car into perpetual orbit playing David Bowie’s “Life on Mars”?

Musk writes his Master Plan for his businesses, publishing them on his blog, and updating them every so often. His style is informal but informative, visionary but practical, combining scientific logic and technical facts. In 2006 he wrote his initial Master Plan for Tesla:

• Create a low volume car, which would necessarily be expensive
• Use that money to develop a medium volume car at a lower price
• Usethat money to create an affordable, high volume car
• While doing above, also provide zero emission electric power generation options

In 2016 he continued his future story, with Master Plan “Part Deux”:

• Create stunning solar roofs with seamlessly integrated battery storage
• Expand the electric vehicle product line to address all major segments
• Develop a self-driving capability that is ten times safer than manual
• Enable your car to make money for you when you aren’t using it

Musk can appear quite humble, quite nervous, when he speaks in public, but his bold ideas portray a great confidence.

When he first talked about the Hyperloop, he explained the concept relative to what we already knew, the magnetic levitating Bullet trains that speed between Tokyo and Osaka, and then went further. Imagine if it was in a frictionless tube, at 750 mph, taking 12 minutes from downturn San Francisco to Los Angeles. And then he showed us the video simulation. It almost felt real. We believed in the possibility, and how it would be better.

Strategies are stories. Brands are stories. Business cases are stories. Project plans are stories. When people say “tell me your story” they are rarely asking about where do you, or your company, come from; more likely they are interested in where you are going.

Pixar and the hero’s journey

“Storytelling is the greatest technology that humans have ever created” said Pixar’s former chief creative officer Jon Lesseter, in my book “Creative Genius”.  He said storytelling involves a deep understanding of human emotions, motivations, and psychology in order to truly move an audience.

Luckily, storytelling is something we all do naturally, starting at a very young age. But there’s a difference between good storytelling and great storytelling. Great stories start with human experiences, feelings that people can relate to. They have structure and process, typically taking a character on a journey. They have moments of joy and despair, surprise and unexpected, appealing to our deepest emotions.

They are brought to life in words and pictures, polished in a movie or told one to one. But they are also incredibly simple and focused. Pixar’s former story artist, Emma Coates, defined 22 rules of storytelling are as relevant to business and its leaders as to Buzz Lightyear and his millions of followers.

Pixar always starts with a character, one who you admire, who want to achieve something great, typically overcoming adversity, usually making the world better in some way. Or to fill in the blanks, “Once upon a time there was ___. Every day, ___. One day ___. Because of that, ___. Because of that, ___. Until finally ___.”

 That “adventure” type of narrative reflects a popular structure which we can see in many stories from “The Wizard of Oz” to “Star Wars”. The Hero’s Journey concept comes from Joseph Campbell’s book “The Hero with A Thousand Faces” which tells how the character, the hero, faces a crisis, achieves a great victory and comes home transformed.  Campbell describes 17 stages in the journey, over three “acts” – departure, initiation, and return.

The future story of your business

For business, the “hero” is most typically the customer.

The future story for a business leader describes how we help the customer to overcome the challenges of today.  The purpose reflects a positive cause, how good triumphs over evil, how the customer lives a better life.

Whilst stories might seem simple, they require thought. Framing is key to the initial stage, the context and way in which the challenge is presented. Equally important are some of the small details.  A story is about emotions, hopes and dreams, love and friendship, fear and euphoria. It is about resonating with people.

There are many ways to tell the story. Some organisations turn to thought leadership, developing reports on the future of their industry, or maybe a letter to all stakeholders, like Larry Fink sends each year. Elon Musk is particularly fond of visuals and videos, creating sci-fi-like movies that simulate his visions. These might evolve in to “We imagine” type of concept advertising, like Microsoft famously did, in portraying the future of work, or education, or travel. Another way is to create a manifesto, like companies such as Patagonia and Lululemon have done.

The best way to tell your story, however, is to stand up and talk. Authentically, personally and naturally. And be ready wherever you go to tell your “future story” in ways that inspire people to believe, to want to be part of that future, and to join you on the journey.

Excerpts from “Business Recoded“ by Peter Fisk

In late 2019 the Business Roundtable  declared the end of the Shareholder Value Era.

Heather McGowan, in her article for Forbes, articulates her belief that the pandemic has shifted us into a new age: the human capital era; and explains how we got here.

Her key points include

• we have treated humans as a cost to contain rather than as the main generator of value (90% of S&P enterprise value is now generated from human capital)
• we have under invested in humans halting social mobility (in 1950 you had a 90% chance of doing better than your parents, by 1980 that dropped to 50%)
• racism is not only immoral, it is expensive (costing $16 trillion over the past 20 years)
• income inequality depresses growth (perhaps as much as 1% of GDP), and much more.

Business education from the 1980s to late 2019 preached that business existed to return profits to shareholders and investors at all costs. Many of those “costs” were humans which was reasonable in the 1970s as most human work was in contribution to production of physical asssets.

Recent data from Aon shows that in 1975 tangible, physical assets comprised 84% of enterprise value on the S&P 500, while only 17% of that value was intangible, notably human capital.

By 2020, these categories had flipped and intangible assets comprised 90% of all value. Missing this shift not only created income inequality, it also squandered human and economic potential. While the stock market soared, our actual return on assets declined by 75% since 1965, according to research by Deloitte’s John Hagel.

 

Can capitalism be made to work for all of us – and to improve rather than destroy the state of the planet?

Stakeholder capitalism proposes that corporations should serve the interests of all their stakeholders, and not just shareholders. Stakeholders can include investors, owners, employees, vendors, customers, and the general public at large. The focus is on long-term value creation, not merely enhancing shareholder value.

In this set of 5 discussions, the World Economic Forum bring together experts, hosted by Peter Vanham and Natalie Pierce, to dive into some of the main problems with global capitalism and ask expert guests if there are better ways of doing things – from the way we measure economic success, to addressing crippling inequalities and climate catastrophe.

Beyond GDP: Measuring What Matters

The whole world looks at gross domestic product to gauge economic success. It’s a simple, single number that makes comparisons over time and between countries easy. But it does not reflect people’s incomes and fails to include anything that does not have an easily calculated monetary value, such as the natural environment. How can we measure our economies in a way that does not encourage environmental destruction, that gives a better indication to how real people are doing, and perhaps even looks beyond monetary wealth to include things such as personal well-being and even happiness? This episode of Stakeholder Capitalism asks, how can we go beyond GDP?

How Trade Unions Lift Worker Wages

The decline of incomes for the bottom 50% of Americans has coincided with a fall in union membership. This episode looks at how those two facts might be linked and looks to Denmark where union representation is welcomed by employers.

 

Planet vs. Profit: Can Growth be Green?

While the value of big tech companies has soared, what problems has that created? A lack of market competition and the impact that has on economies; data protection concerns; falling public trust. Is big tech too big, and what should be done?

Tech for Good: Promise & Peril

While the value of big tech companies has soared, what problems has that created? A lack of market competition and the impact that has on economies; data protection concerns; falling public trust. Is big tech too big, and what should be done?

Stakeholder Capitalism at Work

How can the idea of ‘stakeholder capitalism’ work in the real world?

 

Publicis Health, with illustrations by Visual Capitalist consider “6 Forces Transforming the Future of Healthcare”

Disruptive technologies are advancing healthcare at an extraordinary pace. By 2020, there will be 50 billion devices connected to the internet, and many of these devices will be tracking the health data of individuals. This will empower consumers in an exciting way, but it will also fundamentally shift how healthcare companies work and interact with their customers.

The smartphone boom has changed the consumer experience in practically every industry, and it is now cascading into the healthcare market:

• Commoditized: 76% of consumers expect pharma/healthcare providers to provide services that help them manage their health.
• Connected: 59% of consumers expect their healthcare customer services to be as good as Amazon’s.
• Quantified: 76% of consumers expect pharma/healthcare to understand their individual needs.

In other words, the traditional healthcare model no longer aligns with the consumer mindset.

The Six Forces

Publicis Health identified six transformative forces that healthcare companies must address to gain a competitive edge:

1. Data Activation
Data reveals truths. A robust data strategy fundamentally shifts how company manages their brands.

2. Workflow-Empowered Solutions
The patient experience will be at the center of a seamlessly connected workflow of information, with integrated electronic health records (EHR) that document more than just visits to the doctor. The proliferation of EHR opens new opportunities to service healthcare professionals and patients.

3. Content Strategy
Consumers want their healthcare information and insights delivered in a personalized, engaging, accessible, and dynamic format.

4. Intelligence Services
Consumers want the healthcare industry to “find, know, and help” them, using past behaviors and AI to anticipate their current and future needs.

5. Clinical Trial Recruitment
Finding the right patients remains a major challenge for pharma. New technologies and patient engagement strategies are greatly reducing the time and inefficiencies of clinical trial recruitment.

6. Sales Model Transformation
As AI takes hold and directs more automated Rx decisions, it will be more than just about relationships but also about relevant skills to make use of the new tools, while preserving the need for human touch.

 

 

 

2022 will be a year of dramatic innovation.

Schumpeter, the Austrian economist, articulated the nature of economic cycles, that every downturn is followed by a new era-defining upturn. Changing attitudes and entrepreneurial mindsets drive industrial revolutions and accelerated innovation. 57% of the Fortune 500 were founded during a downturn, 92% of patents are filed during or just after a downturn.

2022 is one of these moments. The shake-up of a global pandemic has led to a shake-out of markets, where consumers drive new agendas, businesses embrace new models, and new leaders rise up. This is the year when the global economy will surpass $100 trillion for the first time, growing by 4% globally, an average that hides dramatic and dynamic changes.

With more change in the next 10 years than in the last 250 years, looking ahead is not easy, in a world where stable and incremental progress have given way to complexity and uncertainty. Yet a future perspective is what every stakeholder seeks – a way forwards, new opportunities to grow, a better world. We need leaders to see and shape this future, and help us get there.

So what’s your future potential?

Now, more than ever, your potential as a business, and a leader, is defined by how you see your future – your boldness of vision, diversity of perspective, thoughtfulness of choice. How will you make sense of change? How will we seize the new opportunities before others? How do we connect to drive innovation and transformation? And how will progress deliver purposeful impact and profitable growth?

Here are a few clues to succeeding in the year ahead:

January 2022: Accelerating change

• Probable: GM’s Mary Barra kicks off the Consumer Electronic Show 2022 in Las Vegas, as a mobility revolution gathers speed. Her multi-billion dollar investment in Cruise autonomous driving technology has transformed GM, as it seeks to compete in a new world order. This year’s CES also includes the Indy Autonomous Challenges for EV racing cars with a $1 million prize.
• Possible: Tesla’s share price falls dramatically. While Musk says Tesla is an energy rather than mobility company, there are now over 120 brands competing in the EV market. Investors look to others, including the world’s largest, BYD, and fastest growing, Nio. At the start of 2022, Peter Rawlinson’s Lucid had a market capitalisation per car sold of $5 million, Tesla $2.3m, and Rivian $1.2m; compared to Toyota $120k and BMW $30k.

February 2022: Chinese revolution

• Probable: China introduces its new digital yuan, one of the first sovereign digital currencies, just in time for the Chinese New Year, when “lai see” red envelopes traditionally change hands. The e-CNY wallet app will be showcased during this month’s Winter Olympics being held in Beijing (the first city to host summer and winter games), but faces stiff competition from Alipay and WeChat.
• Possible: Good Doctor, already the world’s largest digital healthcare platform, developed by China’s Ping An, the world’s second largest insurance business, enters global markets offering low price healthcare via videophone and local kiosks. Huge advances are being seen in every aspect of medicine, from remote diagnostics to cancer therapies based on mRNA techniques that advanced as Covid vaccines.

March 2022: Resource constraints

• Probable: Germany closes its last nuclear power stations, haunted by safety concerns, leaving new chancellor Olaf Scholtz and his green colleagues increasingly dependent on natural gas from Russia. Meanwhile France commits to build a new generation of nuclear plants, recognising it as one of the cleanest and most reliable sources of energy, but considering a rebrand as “elemental energy”.
• Possible: Energy prices continue to soar across the world, as does the price and demand for other raw materials, most spectacularly lithium and copper for electric vehicle batteries, largely sourced from Australia and Latin America. Energy drives sharp rises in logistics and manufacturing costs, exasperated by continued supply chain chaos, leading to sharp rises in everything from food to vehicles, and significant inflation.

April 2022: Metaverse hype

• Probable: Gaming platforms like Roblox have become the new shopping malls, but also the space where GenZ connects. BTS recently held the world’s largest music concert in Fortnite’s “Party Space“, Gucci launched pop-up stores with limited edition real products, Nikeland hosts virtual sporting events, and Tinder this month launches “Single Town” as a new meta dating space, where avatars dress their best and meet without consequence.
• Possible: Facebook‘s transformation into Meta Platforms looks increasingly faddish. Maybe Zuckerberg forgot that his reimagined internet as an immersive world requires a VR headset in most cases. Apple sold 40 times more AirPods than Meta sold Oculus headsets in 2021, and has a much richer metaverse-potential with the evolution of its AppStore, plus the imminent launch of its intelligent eyewear, iGlass.

May 2022: Digital normality

• Probable: The ABBA Voyage global tour kicks off in a specially-made venue at London’s Olympic Park, with the Swedish pop group appearing as holograms, selling out physical venues. Tickets start at $100, to be part of an entirely virtual experience, created by George Lucas‘ Industrial Light and Magic. 70 year olds Anni-frida and Agnitha, Benny and Bjorn, must be sitting at home in the their (now separate) saunas laughing.
• Possible: The phrase “digital“ is seen as increasingly redundant. 85% of consumers now believe they “live in a digital world”, and don’t see a divide between physical and virtual. “Hybrid” or “liquid” or “omni”-experiences are now their expectations everywhere. At the same time, the phrase “digital transformation” in business is equally meaningless. The challenge is not to automate towards sameness, but to transform to better.

June 2022: Exponential markets

• Probable: India is now the world’s most populous nation with 1.5 billion citizens. While its fast growth rival, China, has often been seen as a decade ahead in development, India is rising faster. As the Indian tech diaspora – led by Satya Nadella, Sundar Pichai and Parag Agrawal – set global standards, local businesses like Mukesh Ambani’s super-app Jio Platforms are transforming Indian markets and daily lives.
• Possible: Stripe, the payment business founded by two Irish brothers, Patrick and John Collison, is the world’s biggest IPO of 2022. At the start of the year it was valued at $95 billion, and now worth over $200 billion. It builds APIs that web developers can use to integrate payment processing into their websites and mobile applications. Other IPOs this year include Brewdog, Instacart, and Starlink.

July 2022: Changing lifestyles

• Probable: Le Tour de France adds a new format this year with “Le Tour Femmes“, an 8-stage cycle race for women, sponsored by Zwift, the online cycling platform which created virtual tours during the pandemic, and continues to enable anyone to participate in the elite race from their homes. Similarly La Liga, Spain’s premier soccer league, is partnering with Dapper Labs to enable anyone to participate in its games.
• Possible: As the Covid-19 pandemic finally subsides, 10% of companies continue with a remote working approach, 20% have demanded all employees return to offices, while 70% have continued to operate with a hybrid model. Those demanding a physical return have seen the largest voluntary exits, as companies have grappled with new EVPs to attract talent, changing lifestyle aspirations, particularly of younger people.

August 2022: African entrepreneurs

• Probable: Kenya‘s Konza Technology City is just one of the vibrant start-up hubs across Africa’s “silicon savannah“. In the same way M-Pesa ingeniously transformed the way people transfer money, other simple or frugal innovations by African entrepreneurs are disrupting agriculture, education, healthcare, and more. Aerobotics to Flutterwave, Sokowatch and Sunculture are great examples.
• Possible: Lego‘s 90th anniversary is marked with fans voting for a return of its basic building blocks, which were a particular hit with adults during months of pandemic lockdown. “Creative play“, as the brand’s name translates, has taken on a bigger meaning, with Lego seeking to build creative spaces and design schools, encouraging human collaboration  in an increasingly remote and digital world.

September 2022: Space-age living

• Probable: China launches its new Tiangong (translated as “Heavenly Palace”) space station, with a warning to Elon Musk and others to take more responsibility for Earth’s orbit which is increasingly crowded with mini satellites. It will be continuously manned by 3 astronauts with a focus on scientific research, and considerably smaller than the ISS which was launched in 1998 and will be retired in 2024.
• Possible: Lunar Gateway is another new space station launched by NASA in partnership with Canada, Europe and Japan. It will orbit the moon, therefore the first in deep space, and focus on creating a permanent human base on the moon’s surface, which in itself is seen as a key staging post in eventual travel to Mars and beyond. SpaceX, with its $2.9 billion NASA contract, will provide transportation on its new Starship rocket.

October 2022: Sustainable impacts

• Probable: Brazil’s elections are a moment of hope for the Amazon. The country is home to 60% of the vast rainforest which has gone from carbon sink to a carbon source over the last decade. Deforestation has soared by over 40% since populist president Bolsonaro took office in 2019 and removed restrictions on illegal logging, mining, cattle-ranching and land-grabbing.
• Possible: As the climate crisis becomes more acute, and sustainability shifts from compliance to core business, there is a recognition that collaborative actions are key to driving real change – public-private partnerships and cross-industry collaborations. The Sustainable Aviation Buyers Alliance, the Clean Energy Demand Initiative, and the Lowering Emissions by Accelerating Forest Finance are examples.

November 2022: Arabic ambitions

• Probable: Jeddah Tower becomes the world’s tallest building, surpassing regional rival UAE’s Burj Khalifa, and a physical manifestation of KSA’s Vision 2030 to move away from a dependence on oil, and towards a modern state. Neom, its futuristic city being constructed near the Red Sea, is another example. Meanwhile, Abu Dhabi unveils the world’s largest solar power plant with 3.2 million solar panels.
• Possible: FIFA’s World Cup kicks off in Qatar this month, the first time the soccer tournament has been held in an Arab nation, a Muslim nation, or a winter month. $220 billion has been lavished on facilities and infrastructure, seen as a transformational catalyst for the nation and its reputation on the world stage. 32 countries will compete for the trophy, with England beating Brazil 3:1 in the final.

December 2022: Visionary leaders

• Probable: CEO tenure is at a record low, an average of 6.9 years for the world’s largest companies, but with 30% of leaders lasting less than 2 years. Being a CEO used to be easy, managing the status quo, to maximise profit. Today, it is a more complex challenge – with dynamic markets, diverse stakeholders, unclear choices, and high expectations. In my new book, future orientation is now their most critical attribute, driven by curiosity and courage.
• Possible: Last year, the “great resignation” stole business headlines as employees, galvanised by Covid-induced remote working, left their jobs in search of more balanced lifestyles. Now, the “great restructuring” is underway as organisations reimagine workspaces and structures, employment contracts and practices. The 4 day week, working from anywhere, portfolio of jobs, fusing work and life, is becoming the normal.

In a world of such rapid change, what will you do?

Seeking to progress by doing what you’ve always done is unlikely to succeed. Insights and ideas fuel new thinking, new actions that move us forwards. We need leaders who have the courage and vision to create better futures, for themselves, for their organisations and our world.

2022 is a time of huge change, and huge opportunity.

What will you do in 2022?

Here are some of the best trend reports for 2022:

• IBM “Building persistence, resilience and purpose“
• Instagram “Trend Report 2022“
• Fjord “Trends 2022: The new fabric of life“
• Foresight Factory: Trending 2022
• Salzman “22 for 2022: Measuring up what we thought we knew”
• Gartner “12 Strategic Technology Trends for 2022“
• GWI “Consumer Trends 2022: Pursuit of purpose” 
• Mintel “Global Consumer Trends 2022: Ethical control”  
• WGSN “Future Consumer 2022: Dawn of the connected decade”
• Deloitte “Tech Trends 2022: Engineer your tech forward future“
• Deloitte Global Marketing Trends 2022: Thriving through customer centricity“

Financial Times‘ things to look out for:

• Energy … The theme in the energy world in 2021 was the recovery in demand for oil, natural gas and electricity from lows earlier in the pandemic. In 2022, we will find out if supplies can keep up with now surging demand, or whether more price inflation is inevitable.
• Pharma … Next year will be a new test for the pharmaceutical industry’s favourite four-letter acronym: mRNA, which stands for messenger ribonucleic acid. The Covid-19 vaccines proved the mRNA pioneers right: it is a rapid adaptable technology that can create highly effective vaccines.
• Tech … Web3 is a technology in search of a breakout application. The name applies to a collection of blockchain-based technologies that support a more decentralised version of the web — one where users, rather than giant tech companies, would be in control.
• Travel … Travel will be more expensive. Many airlines, particularly low-cost carriers, have been keeping fares low to stimulate demand during the pandemic. But when people can finally travel easily again, executives will want to repair battered balance sheets.
• Private Equity … The return of the private equity initial public offering. A handful of US behemoths — Blackstone, KKR, Carlyle, Apollo and Ares — went public between 2007 and 2014 but received a lukewarm reception from investors in the early years.

IBM‘s business trends focus on 5 points

Fjord Trends, now part of Accenture, focuses on consumer behaviour change

It builds on the rapid shift in attitudes and behaviours over two years of pandemic as people have initially been forced, and then wanted, to explore new directions. This has forced everyone to reevaluate all types of relationships – with friends and family, work and leisure, brands and institutions, society and environment.

We to Me … “We’ve seen a fundamental shift in how people think about their sense of agency over their lives, supported by the continued rise of the side-hustle economy. Technology has made it less risky to seek out new income streams—and many are going for it. This rise of a “me over we” mentality has profound implications for organizations in how they lead their employees, and how they nurture relationships with their consumer-creators.”

Less is More … “Scarcity of raw materials, a shortage of workers, strained distribution channels and even new austerity laws are shaking abundance thinking built on availability, convenience, and speed. For those who have taken abundance for granted, this is a powerful demonstration of what a future with supply shortages would feel like. Now is the time to learn from this—by designing for scarcity thinking and making business nature positive.”