Peter Fisk

In an exclusive extract from my forthcoming book Business Recoded, meet one of the most inspiring business leaders, shaking up today’s world. He embraces the opportunities of relentless change, the power of disruptive technologies, and the courage to create a better future in his own vision. In the book, I explore the stories of many of the world’s most fascinating leaders right now, and develop 49 codes that help you redefine the future of your business, and yourself.

The Leadership Code of Evan Spiegel

Evan Spiegel sits in his loft-sized office, taking up the top floor of Snap Inc’s head office in Santa Monica. On the beach outside, young people chat and surf, sunbath and play. Inside, his Snapchat platform enables those same teens and young twenty-somethings to stay connected day and night. Spiegel is one of the them, still in his twenties, but also a multi-billionaire tech entrepreneur founder of Fast Company’s “world’s most innovative company” of 2020.

A little like his hero Steve Jobs, Spiegel studied design at art college, followed by an internship at Red Bull, which taught him much about consumer culture. At Stanford he launched a start-up with classmate Bobby Murphy, initially called Picaboo, which evolved into Snapchat in 2011. He dropped out of college when the app reached 1 million daily users a year later. In 2014 Mark Zuckerberg offered him $2 billion for the business, which he turned down, instead choosing an IPO in 2017, which valued the business at $30 billion.

Then everything went wrong. Spiegel rapidly grew his team to thousands, putting himself at the heart of all technology development, yet Snapchat was haemorrhaging users, losing 5 million in 2018, and losing most of his senior team. The stock price dived by 90% and most people thought it was all over.  However, Spiegel wasn’t finished, knowing that he needed to fix his business, and his internal workstyle. With Murphy he reimagined the app around what consumers liked. He invested heavily in Augmented Reality (AR) tools, and also added crazy rabbit ears to photos, which might sound like a gimmick, but were loved by his young audience.

Apple and Alphabet see the future of the smartphone eventually migrated to some form of headset device, but Snap is focused on its cheap and fun Spectacles, cool designs with built in AR cameras.

The team drove for new types of content, developing a Netflix-style platformfor short 5 minute movies with teen-specific content, and a second app called Bitmoji which allows users to make Simpsons-like caricatures of themselves, and then placing your avatar into animated movies alongside your friends, in Bitmoji TV.

What emerged was a very human approach to technology. While many older audiences might trivialise those rabbit ears, Spiegel knew they could make his technology business cool, desirable and incredibly human.

In recent months, Snap has responded to the Covid-19 lockdown by providing new types of support to users, including a teen-focused mental health app “Here for you” with videos on how to cope with stress and anxiety, and how to support others. Last month Spiegel also formed a partnership with Headspace, creating a series of “mini” meditation apps.

Here’s what happened at Snap’s recent virtual Partner Summit 2020:

https://www.youtube.com/watch?v=l7cd65DdP2w

Making technology “more human” will be a key step to progress in forthcoming years. This could be like Pokémon Go embracing augmented reality in gaming or using gaming itself to transform activities such as shopping, like Alibaba’s gamified incentives to attract shoppers its 11:11 Shopping Festival, or Kahoot making education more fun.

© Extracts from Peter Fisk’s forthcoming book Business Recoded

I first met Avon’s new CEO, Angela Cretu, during a customer-centricity masterclass I was delivering in Budapest a decade ago. As we talked about the primacy of the consumer, and how to create better propositions for them, she was adamant that in her business it was the network of self-employed sales representatives who were most important, and the proposition to them.

For years, Avon has stood out for its distinctive business model. It’s network-based model of peer to peer sales has thrived, selling to friends and neighbours within local communities, inspired by Avon’s support in “empowering women” to achieve independence, success and personal wealth. It also thrives on representatives recruiting their own local teams of representatives, with those at the top of “pyramids” able to potentially make millions.

However all of that changed with Covid-19. For years, despite declining sales and increasing competition from a new breed of direct and community-based beauty brands like Glossier and Beauty Pie, Avon had resisted a shift to digital. As competitors embraced natural ingredients and new business models, Avon clung to its old model of success.

Cretu, a 45 year old Romanian who has been with Avon for 22 years, took on the top job after the company was acquired by Brazil’s Natura for $2 billion last year, (Avon rejected offers of $10 billion back in 2012). The Sao Paulo-based company, led by Roberto Marques, has also acquired Body Shop and Aesop in recent times, restyling itself as Natura & Co.

Within weeks of starting her new role, one of Avon’s few growth markets, China, was locked down. Other key markets like Spain and Italy quickly followed. Cretu’s first response was to her 5 million self-employed sales representatives, providing masks and safety guidance. But the business was in deep trouble, unless it changed quickly.

“It was a wake-up call to our business” she says, “Everybody came together in ways I could never have dreamt of. This spirit has accelerated the appetite for people to change and adopt new ways to work almost overnight”.

A new digital sales platform was rolled out within 8 weeks, giving representatives new digital tools to build their own websites within the Avon ecosystem, migrate their contact databases, and establish new forms of relationships with consumers. Avon reconfigured its logistics to offer deliveries direct to consumers, once ordered through representatives.

“We have learnt that we have to stop acting in a hierarchical corporate way and start acting like a network of professionals, empowering one another, making fast decisions” she says.

Image: Angela Cretu

Many companies have pledged to reduce their carbon emissions, often using offset-type tactics to alleviate their guilt, and sometimes going further to the point of neutrality, where they leave the world no worse than before they started. This is nothing new. Al Gore’s An Inconvenient Truth woke us up to the challenge a decade ago, yet we have still not responded as we all need to.

Microsoft stepped up earlier this year, to go further, and committed not just to reduce its emissions, but to go “carbon negative”, wiping out all the carbon the company and its suppliers have emitted since its founding in 1975. Since then, Microsoft has released a series of announcements updating its progress.

This is a big deal, as Vox Magazine described: “The company is setting new standards, especially in the discipline and transparency it is applying to the effort, and to bring other companies, both suppliers and competitors, along with it, using shared metrics and data. There is more it could do, of course, but its more than most, and will make a real impact.”

3 types of carbon emissions

The carbon emissions of a company (or person, city, or country) can be divided into three types:

• Scope 1 emissions come directly from resources the business owns or controls, like furnaces or delivery vehicles.
• Scope 2 emissions come from the power plants that generate the electricity the business uses.
• Scope 3 emissions are indirect, “embedded” in the materials and services the business uses, representing the emissions of the full supply chain (eg business travel, carbon emissions embedded in every plane ticket.)

In the early days of corporate climate engagement, companies typically measured and reduced only their direct energy emissions (scope 1 and 2). But in the past several years, in part thanks to the example set by companies like Dow, Unilever, Apple, and Microsoft, measuring and taking responsibility for scope 3 emissions has become the new norm.

This is significant, because for most companies, including Microsoft, scope 3 emissions are substantially larger than scope 1 and 2 combined.

“At Microsoft, we expect to emit 16 million metric tons of carbon this year,” president Brad Smith wrote in a January blog post. “Of this total, about 100,000 are scope 1 emissions and about 4 million are scope 2 emissions. The remaining 12 million tons all fall into scope 3. Given the wide range of scope 3 activities, this higher percentage of the total is probably typical for most organizations.”

Microsoft as a sustainability leader

Microsoft announced it has completed the largest-ever test running data center servers on hydrogen fuel cells, which can be powered by zero-carbon hydrogen generated from renewable energy. Currently, even if they run entirely on renewables, data centres have diesel generators on site for long-term backup in case of an outage. With 160 data centers worldwide and multiple generators per data center, that adds up to a lot of diesel generators. The company has pledged to phase them all out by 2030. That’s why it is testing fuel cells as backup power.

This is just one of a string of climate initiatives that go back almost a decade. The company has been 100 percent carbon neutral, through the purchase of carbon offsets, since 2012. In 2013, it implemented an internal carbon tax on the scope 1 and 2 emissions of all divisions, with the revenue going toward sustainability improvements. It created a business unit focused on climate solutions, which produces things like AI for Earth. It recently succeeded in buying enough renewable energy to account for all US domestic operations.

Microsoft’s latest sustainability report recounts all these efforts and more, including substantial efficiency upgrades at its campuses. In 2016, it won a climate leadership award from EPA.

“We’ve seen them as a leader since 2013,” says Nicolette Bartlett, climate change director at the Carbon Disclosure Project (CDP), a global clearinghouse of corporate sustainability data. The CDP has a scorecard, which takes into account hundreds of sustainability and transparency metrics, and Microsoft has consistently gotten an A. “It really matters to them,” Bartlett says.

In recent years, thanks to the IPCC report and pressure from investors and employees, concern over climate change has risen to the highest levels of the company. Josh Henretig, who spent 12 years on the company’s global sustainability team, rising to senior director before leaving in February, says he witnessed the shift from his team pushing to his team being pulled. “We started to almost stumble under the full weight and examination that the executive team imposed on us around the question: What’s really required?” he says.

“At this stage,” says Verena Radulovic, director of corporate engagement at the Center for Climate and Energy Solutions, “Microsoft has enough experience with reducing its own emissions, and support from its leadership to keep doing so, that it is able to take its climate commitment to a more ambitious level.”

Towards “carbon negative: by 2030

In January 2020, Microsoft made a startling announcement: Not only will it reduce its scope 1, 2, and 3 emissions by 55 percent, it will continue beyond that and go carbon negative, drawing down more carbon than it emits, by 2030. By 2050, it will draw down enough carbon to account for all the company’s emissions since its founding in 1975. “It set a new bar for what is considered climate leadership,” says Radulovic.

This represents a radical acceleration of Microsoft’s carbon reduction efforts:

Brad Smith, the company’s president, was backed by CFO Amy Hood and CEO Satya Nadella, who together laid out a set of principles that would guide the company’s approach:

1. Grounding in science and math
2. Taking responsibility for our carbon footprint
3. Investing for new carbon reduction and removal technology
4. Empowering customers around the world
5. Ensuring effective transparency
6. Using our voice on carbon-related public policy issues
7. Enlisting our employees

Nos. 1 and 2 are about proper measurement, scope 1-3 emissions, and historical emissions. “While we at Microsoft have worked hard to be ‘carbon neutral’ since 2012,” Smith writes, “our recent work has led us to conclude that this is an area where we’re far better served by humility than pride.”

“We had some very heartwarming, but also uncomfortable, conversations,” says Henretig.

Through these discussions, the company concluded that voluntary offsets are insufficient. It is now moving to a model where it directly contracts with renewable projects through power purchase agreements, (PPAs) — it is aiming to hit net zero for its scope 1 and 2 emissions by 2025 — and will compensate for what it can’t directly reduce with negative emissions.

In this area, especially, Microsoft is showing real leadership.

As for No. 3, the company announced it will establish an investment fund that will target early-stage clean energy technologies, aiming to spend $1 billion over the next four years.

Some critics have argued that the venture capital model, built around big bets with potentially big returns, is a narrow way to approach the needs of the energy sector. Just recently, for instance, the International Energy Agency argued that crucial early-stage technologies need enabling infrastructure to continue developing.

“I think it’s a missed opportunity,” says consultant and former corporate social responsibility (CSR) executive Lindsay Baker. “There are opportunities to invest in infrastructure and other types of projects that have a market rate of return, more in line with just getting your money back — I would really like to see corporations making more of those kinds of investments.”

Baker also notes that there are “plenty of opportunities for charitable giving that will help move the needle on climate,” including in lab-stage research or companies still in product development. A company like Microsoft, with well over $100 billion in the bank, could put some money toward these other areas as well, or at least divert a portion of its $1 billion to them.

Nonetheless, a billion dollars in VC money is nothing to sneeze at. Nor is the signal Microsoft has sent to other companies by committing to a goal it admits it does not yet have the technology to achieve. It says going carbon negative will require “negative emission technologies (NET) potentially including afforestation and reforestation, soil carbon sequestration, bioenergy with carbon capture and storage (BECCS), and direct air capture (DAC).”

Some of those technologies don’t exist at meaningful scale yet, and Microsoft is making a concerted effort to accelerate them. Especially if it can inspire other companies to make similar investments — Amazon announced a $2 billion climate fund in June — the spillover effects will help boost the entire sector.

“While much of Microsoft’s focus is on technologies that will help it reduce its own footprint,” says Radulovic, “the hope and vision is that these technologies will scale and others can use them.”

No. 4 is about products and services Microsoft will design that will enable its clients to reduce their own emissions. We will return to No. 4 in a bit, since some of the biggest controversies reside here.

No. 5, transparency, is another area where the company is showing leadership. Every year, Microsoft will publish a sustainability report, breaking down its emissions and progress against its goals. It has had its targets verified by the Science Based Targets Initiative as being in line with a pathway to limiting temperature rise to 1.5°C. In reporting its emissions, it is following the World Resources Institute’s Greenhouse Gas Protocol. And it is sharing its data with the CDP. In short, it is modeling best practices in transparency.

MSFT

The practical steps to get started

Microsoft chief environmental officer Lucas Joppa published an update on Microsoft’s progress:

First, Microsoft is joining with nine other large companies — A.P. Moller-Maersk, Danone, Mercedes-Benz, AG, Natura & Co, Nike, Starbucks, Unilever, and Wipro, along with the Environmental Defense Fund — in Transform to Net Zero, “a cross-sector initiative to accelerate the transition to a net zero global economy.” It will run on much the same principles that Microsoft laid out for itself, including science-based measurement and transparency, with a commitment to knowledge sharing and norm-setting.

“When you look at the reach of these initial eight companies, as well as the supply and value chains of those companies, you start to get a pretty big market share,” says Jenn Crider, senior director of communications at Microsoft. It will exert a pull on other companies to use “a common and standardized approach to the math, the language, and the accounting,” she says.

Second, Microsoft debuted a sustainability calculator that will help its cloud clients calculate and reduce their carbon footprint. Third, it pledged to be completely free of diesel fuel and diesel generators by 2030. Fourth, it raised its internal carbon tax and broadened it to encompass scope 3 emissions. Fifth, it updated its Supplier Code of Conduct to require suppliers to calculate and report their full emissions.

Sixth and perhaps most intriguingly, it has issued a request for proposals (RFP) seeking, for this fiscal year, a million metric tons of “carbon removal from a range of nature- and technology-based solutions that are net negative and verified to a high degree of scientific integrity.” It recognizes that these technologies are not fully developed, acknowledges that it will make mistakes, and says it is explicitly “using this RFP to harvest and share best available science and market intelligence on carbon removal,” to make things easier for other companies that want to follow suit.

“Someday, CO2 removal will be fully commoditized,” says Julio Friedmann, a carbon researcher at the Center for Global Energy Policy at Columbia University, who has helped advise Microsoft on its RFP. “These actions help put us on that course.”

Carbon Engineering

Seventh, Microsoft announced the first investment from its $1 billion Climate Innovation Fund: $50 million will go to Energy Impact Partners, “a leading venture capital firm focused on decarbonized, decentralized energy industry transition that shares learnings among partners and facilitates collaboration.”

Eighth and finally, the company is taking action on environmental justice, partnering with renewables developer Sol Systems on 500 megawatts of distributed solar energy projects “in under-resourced communities, working with local leaders and prioritizing minority and women-owned businesses.” Given that the average residential rooftop solar system is a bit over 5 kW and commercial solar rooftop systems around 100 kW, that’s a lot of solar projects, representing the “single largest renewable energy portfolio investment Microsoft has ever made.”

Alongside those projects, the company will provide $50 million in “community-led grants and investments that support educational programs, job and career training, habitat restoration and programs that support access to clean energy and energy efficiency.”

Read more at Vox Magazine

It was not a time for focusing on profits. It was a time for looking after people. As the Covid-19 pandemic swept across the world, locking down cities and nations, economies quickly felt one of the most dramatic shocks of recent times, and its far from over. Many jumped to protect employees, and then using their assets to support society. Louis Vuitton’s perfume gave way to hand sanitiser, Burberry’s production lines converted to protective clothing.

Yet at the same time, other companies thrived. Pharma companies quickly swung into the search for vaccines, while technology companies ramped up their support to home workers, home educators, and remote living. Online retailers too quickly became essential parts of our lives, as we switched to digital lives, unlikely to return to old behaviours. Eric Yuan’s Zoom online platform became a favourite, while new entrants like China’s Pinduoduo turbo boosted their growth.

So who did best?

A recent analysis of 6 month (Jan to June 2020) growth in market capitalisation, by Financial Times, reveals some obvious but also interesting insights. Not least is the staggering growth of the leading companies:

1. Amazon. Market cap added = $401.1bn

Amazon anticipates it could spend $4bn to keep its logistics running during the coronavirus crisis.

As world leaders ordered their citizens indoors, Amazon became the emergency port of call for those desperate to stock up on vital household goods — a rush that led the company to temporarily shut its warehouses to “non-essential” products. Record revenues followed, but also soaring costs. Chief executive Jeff Bezos warned as much as $4bn could be spent on virus mitigation, such as testing labs and thermal cameras — potentially pushing Amazon into its first quarterly loss since 2015. Still, the accelerated shift to online shopping and the increased importance of its cloud computing business in the remote work era drove Amazon’s stock to all-time highs.

2. Microsoft. Market cap added = $269.9bn

75m people used the Teams communication app in a single day in April, up from 20m in late 2019.

Microsoft’s shift to the cloud under Satya Nadella has left it well-placed for a world where large numbers of people are working remotely. The Teams communication app has become a way for workers to stay in touch. The Azure cloud computing platform has become a more critical part of the digital backbone for many companies. Microsoft even has a way to satisfy the personal: a record 90m players turned to the Xbox Live gaming service in April.

3. Apple. Market cap added = $219.1bn

The iPhone maker managed to rake in $58.3bn in revenue in the March quarter, despite closing all of its retail stores.

While all of Apple’s 500 stores around the world were forced to close, revenues in the opening quarter were resilient thanks to robust online sales. Apple managed to release a new iPhone, iMac and MacBook Air, drawing more users into an ever-expanding ecosystem of wearables and services. Apple executives predicted sales of some items would even accelerate, as millions of consumers working from home would opt to upgrade their electronics. Investors crowned Apple the first $1.5tn company.

https://www.youtube.com/watch?v=4An0ndagZsQ

4. Tesla. Market cap added = $108.4bn

402 miles: the range of Tesla’s latest Model S, underscoring its technological lead.

The clear technology leader for battery-powered cars, Tesla is outpacing legacy competitors as they struggle to retool factories and perfect software. Meanwhile, chief executive Elon Musk is promising to upend the entire model of car ownership with fleets of self-driving robotaxis that would charge by the mile. Still, even Mr Musk said on Twitter, on May 1, that the “Tesla stock price is too high”. Since then it has climbed even higher.

5. Tencent. Market cap added = $93bn

Online gaming revenues rose 31 per cent in the first quarter.

Chinese people isolated at home turned to Tencent’s virtual worlds. In its hit games such as Honor of Kings, users shelled out for new weapons and outfits. Tencent’s video subscriber numbers swelled to 112m, its music streamers jumped to 43m and monthly users of its social media app WeChat — indispensable for buying noodles and verifying users’ health during the coronavirus period — hit 1.2bn. In a global spending spree, Tencent has exploited falling valuations: it recently acquired Norwegian game developer Funcom, took a stake in German developer Yager, and poured capital into an array of fintech start-ups.

6. Facebook. Market cap added = $85.7bn

39 per cent — the rise in advertising impressions at Facebook in the first quarter of the year.

Knocks to Facebook’s advertising business during the pandemic have been offset by its 2.6bn entertainment-starved users spending more time on the platform. Small business advertisers slashed their marketing budgets. But Facebook’s engagement levels exploded, increasing its advertising impressions. The company has launched new video chat and livestream features, as well as an ecommerce play to rival Amazon, known as Facebook Shops. However, its content moderation capabilities have been stretched by coronavirus-related misinformation and conspiracy theories. Chief executive Mark Zuckerberg has come under fire from employees for failing to flag incendiary or misleading statements from US President Donald Trump.

7. Nvidia. Market cap added = $83.3bn

Hours spent playing games on Nvidia’s platforms jumped 50 per cent during lockdowns.

Nvidia’s graphics chips have become a mainstay of gaming machines and machine learning systems, insulating the company from the worst of the downturn. Sales of gaming chips were dented by the closure of internet cafés in China, while the automotive industry, a big customer, has experienced a collapse in sales. But Nvidia’s business has been helped by the growing importance of ecommerce in selling new graphics cards, along with a shift towards online gaming. It has also been riding a boom in demand for data centre chips from big internet companies, as AI becomes a more important component of their services and overall digital activity jumps.

8. Alphabet. Market cap added = $68.1bn

Even as advertising collapsed at the end of March, YouTube’s revenue was still growing nearly 10 per cent.

Given that online advertising went into sharp decline as the crisis unfolded, early signs suggest Alphabet has shown surprising resilience. Sectors such as travel and local services may have dried up, but in other areas Google — which supplies virtually all Alphabet’s revenue — has reported that demand is holding up better than expected. Search advertising appeared to stabilise early in the crisis, after touching bottom in late March. The Google cloud computing platform, Meet video app and Play app store have benefited from the shift of work and entertainment online.

9. PayPal. Market cap added = $65.4bn

7.4m — net new users in April.

The pioneer of online payments has found increased relevance in the real-world pandemic, rolling out new capabilities for merchants to handle contactless payments in physical stores. PayPal facilitated the transfer of more than $1bn in federal loans as part of the US Small Business Administration’s Paycheck Protection Program. Its money transfer app Venmo was popular, pre-coronavirus, for friends settling dinner bills. Now, the company says, it is witnessing larger, cross-generational transfers — such as socially-distanced withdrawals from the Bank of Mum and Dad — and increased usage for paying for goods and services that might otherwise have been paid for with cash.

10. T-Mobile. Market cap added = $59.7bn

T-Mobile added 452,000 postpaid phone subscribers in the first quarter.

The US wireless company benefited from the twin forces of lockdowns, which made people more dependent on their phones for connection, and the closing of its long-awaited merger with rival Sprint. The deal made T-Mobile the third-largest player in the US telecoms market, trailing AT&T and Verizon, and is expected to give the big phone companies more pricing power.

11. Pinduoduo. Market cap added = $55.2bn

Shoppers on its platform increased to 628m.

The ecommerce group benefited as hundreds of millions of Chinese turned to shopping from their smartphones rather than going to malls. As demand rose for its ultra-cheap goods, the total value of transactions over its platform soared and revenues were up 44 per cent in the first quarter. Its annual shopper count is fast approaching the 726m who shop with its chief rival Alibaba.

12. Netflix. Market cap added = $55.1bn

183m global subscribers by the end of Q1, a 23 per cent jump from a year earlier.

Netflix added twice as many subscribers as it had forecast in the first three months of the year, as the largest paid streaming service entertained global lockdown audiences with shows such as Tiger King, La Casa de Papel and Love is Blind. The biggest boost came from Europe, the Middle East and Africa, where it signed up nearly 7m subscribers in the first quarter. The company is enjoying a “perfect storm”, said Michael Nathanson, analyst at MoffettNathanson. “The longer the current situation lasts, the bigger the benefit to Netflix.”

13. Meituan Dianping. Market cap added = $53.6bn

Food delivery orders had bounced back to 90 per cent of their pre-pandemic level by mid-May.

China’s “everything app” was hit hard by the country’s lockdown, which closed many of the restaurants it partnered with to deliver meals — its largest chunk of business — as it swung to a loss in the first quarter. But by May, executives were upbeat as food delivery and travel booking recovered. Analysts said that high-end restaurants, which were afraid of “cannibalisation” and “bad user experience”, had no choice but to turn to the platform for deliveries. Its average ticket price climbed 14 per cent in the first quarter and many riders began delivering to set spots in apartment buildings, saving them time and improving their efficiency.

14. Shopify. Market cap added = $51.4bn

62 per cent more new Shopify stores were created from March 13 to April 24 than the previous six weeks as locked-down retailers rushed online.

Canadian company Shopify overtook eBay to become the second-biggest ecommerce group after Amazon by US market share last year, processing $61bn worth of merchandise globally. The pandemic accelerated shopping’s shift online, with Shopify among the prime beneficiaries — doubling its valuation since the start of 2020. Start-ups such as Allbirds shoes and global groups including Heinz are among hundreds of thousands of brands using its software and services to sell directly to customers — cutting out middlemen such as Amazon.

15. Zoom Video. Market cap added = $47.9bn

Zoom video calls reached 300m participants a day in April.

The video conferencing company has come to symbolise the work-from-home boom of 2020, making its fake digital backdrops a cultural touchstone of the coronavirus crisis. Opening its business-focused app to a wide group of non-paying consumers and educational institutions brought challenges, but also helped turn Zoom into a household name. Wider usage brought attention to its security lapses and while some prominent companies warned their staff not to use it, the controversy did little to hurt business. By the end of April, the number of medium and larger companies using Zoom was up more than three-fold from a year before, while revenue soared 169 per cent.

Others, further down the top 100 list, include:

19. AbbVie. Market cap added = $37.7bn

Received approval for its $63bn deal for Allergan, the maker of Botox.

20. Kweichow Moutai. Market cap added = $35.5bn

Maker of China’s best-known distilled spirit, with profit margin above 90%.

22. Alibaba Group. Market cap added = $32.8bn

Alibaba’s cloud unit grew 57%, but sales stagnated for Tmall and Taobao marketplaces

26. Roche. Market cap added = $27.1bn

One of the diagnostics “Big 4”, has benefited from antibody tests for coronavirus

32. Novo Nordisk. Market cap added = $19.8bn

Net profit in the first quarter was $1.74bn. One of the world’s largest insulin producers.

37. Mercado Libre. Market cap added = $18bn

Sales on the Latin American ecommerce platform surged 76% in April.

51. Nestlé. Market cap added = $14.2bn

Nestlé’s petcare division boasted 13.9 per cent organic growth in the first quarter.

75. Hermès. Market cap added = $10.6bn

$2.7m of sales were made in a single day at a Hermès store in Guangzhou when it reopened

77. Spotify. Market cap added = $10.3bn

130m global subscribers by the end of Q1, up 31 per cent from a year ago.

85. TAL Education. Market cap added = $9.4bn

4.6m students were signed up in February, a 57 per cent year-on-year rise.

92. Just Eat Takeaway. Market cap added = $8.9bn

Having merged with rival Takeaway, it will now pay $7.3bn buy US rival Grubhub

95. L’Oréal. Market cap added = $8.7bn

The world’s biggest cosmetics company saw online sales jump 53% in the first quarter.

96. Snap. Market cap added = $8.6bn

Source: Financial Times

Image: Unsplash

The future might seem incredibly uncertain right now. It’s only human to be fearful and even initially paralysed to the point of inaction. But for leaders it needs to be more.

Andy Grove, former CEO of Intel, once said “Bad companies are destroyed by crisis, good companies survive them, great companies are improved by them.”

Change drives new attitudes and behaviours, new ideas and solutions. If we see innovations take off rapidly in good times, when there is no need to change, imagine how the right ideas can grow when there really is a burning platform.

57% of companies were founded in a downturn

A study by the Kauffman Foundation found more than half of the companies on the Fortune 500 list – 57% to be precise – were launched during a recession or bear market.

That means it’s likely that right now, amidst apparent economic chaos, some of tomorrow’s best companies are just getting their start. All of these companies started during the midst of recessions, seizing the opportunity of changing attitudes and behaviours, as other battled to survive:

• Disney … Walt Disney Productions launched their first animated cartoons in the depth of the 1929 Great Depression, bringing a smile to people in tough times
• Burger King … started as Insta-Burger in California, using a new machine called an Insta-broiler to cook meat faster and cheaper as post-war America struggled in 1953
• Microsoft … Bill Gates and Steve Wozniak launched their first software in the downturn of 1975 as companies sought efficiency through collaboration and speed.
• CNN … Ted Turner launched the world’s first 24 hour news channel in 1980 as USA plunged into a double-dip recession, and people had an urgent hunger for fast news.
• Apple … In 2001 Steve Jobs launched the iPod amidst the debris of the dotcom bubble bursting all around, reviving the fortunes of Apple which started in 1975’s downturn.

These companies typically jumped on moments of change, as moments to start anew. Not with the same old businesses as before, but with new concepts and new business models. Where it offered something at a much cheaper price, or faster and easier, or a latent opportunity just waiting for some airtime.

Innovators in downturns outperformed others by 14% over next decade

The companies that grew the most during the 2008 crisis were those that invested in innovation.

Some time ago, Harvard Business School’s Nitin Nohria joined forces with its business administration professor Ranjay Gulati looked into the financials of more than 4,700 public companies over three global recessions: 1980, 1990, and the 2000 bust.

Their results were brutal. 80% of companies endured a painful recovery, with only 9% of the sample group improving their performance and outdoing rivals in their industry.

So which companies make up this 9%? Were they the organizations increasing their innovation investments, as with the study of the 2008 financial crisis? Not necessarily. According to Gulati and Nohria, “Businesses that boldly invest more than their rivals during a recession don’t always fare well either. They enjoy only a 26% chance of becoming leaders after a downturn. And companies that were growth leaders coming into a recession often can’t retain their momentum; about 85% are toppled during bad times.”

So if investing in innovation during a downturn isn’t the key to success, what is?

Harvard Business School came to the same conclusion we did. The secret is striking the right balance between defense and offense. Successful companies are those that cut costs to survive while simultaneously investing in future growth.

Survive and thrive: defensive and offensive strategies

Nobody enters a recession knowing what’s going to happen, even less so when there’s a pandemic involved. The best you can do as a leader is to set up a portfolio of activities designed to improve efficiency and take advantage of opportunities. You’ll need closed feedback loops to move with agility.

When it comes to reducing expenditure, the research suggested that it’s better to work on improving operational efficiency rather than opting to fire staff, which can lead to dips in morale, problems scaling up, and additional costs down the line when rehiring.

The best defensive strategies, based on previous crises, include:

• Re-configure your supply chain to cut out the middleman
• Change how your teams are organized and give them more decision-making power
• Set targets with a special emphasis on cutting costs
• Research what new entrants in your competitive arena are doing and what you can learn from them. By now, you should be looking at competition beyond your industry. If that’s not the case, do it now!
• Co-create solutions with your partners to improve efficiency
• Use capacity from underperforming units to help other parts of the business

To go on the offense, you basically want to do two things. Firstly, change as customer needs do. To achieve that, you’ll need to empower and protect your service design, user experience, and customer research teams.

Secondly, use the insights your team gathers to host a massive opposite thinking exercise – this will enable you to spot non-obvious opportunities.

The best offensive strategies, based on previous crises, include:

• Taking advantage of depressed prices to expand in new markets and increase your asset base.
• Increasing investments in R&D and marketing to put yourself at an advantage when the crisis is over. The resources saved by improving operational efficiency (as we mentioned earlier) and the extra capacity you have lying around should help you finance much of this expenditure.
• If you must prioritize projects, focus on exploring business model innovations rather than shiny new technologies. Statistically, an ingenious business model is more likely to give you a competitive advantage as it will be harder to copy.
• Again, I can never stress it enough, stay closely connected to changes in consumer behavior and their needs. Use customer insights to guide your investments and strategies.

A wicked problem is a problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize. It refers to an idea or problem that cannot be fixed, where there is no single solution to the problem; and “wicked” denotes resistance to resolution, rather than evil. Another definition is “a problem whose social complexity means that it has no determinable stopping point”. Because of complex interdependencies, the effort to solve one aspect of a wicked problem may reveal or create other problems.

The phrase was introduced in 1967 by Horst Rittel and C. West Churchman in the context of problems of social policy. They contrasted “wicked” problems with relatively “tame”, soluble problems in maths or puzzles. They described it as a problem whose solution requires a great number of people to change their mindsets and behaviour is likely to be a wicked problem. Many examples come from the areas of public planning and policy, including climate change, natural hazards, healthcare, the AIDS epidemic, pandemic influenza, international drug trafficking, nuclear weapons, waste and social injustice.

Wicked problems are typically said to have 10 properties:

• There is no definitive formulation of a wicked problem.
• Wicked problems have no stopping rule.
• Solutions to wicked problems are not true or false, but good or bad.
• There is no immediate and no ultimate test of a solution to a wicked problem.
• Every solution to a wicked problem is a “one-shot” operation; because there is no opportunity to learn by trial and error, every attempt counts significantly.
• Wicked problems do not have an exhaustively describable set of potential solutions, nor is there a well-described set of permissible operations that may be incorporated into the plan.
• Every wicked problem is essentially unique.
• Every wicked problem can be considered to be a symptom of another problem.
• The existence of a discrepancy representing a wicked problem can be explained in numerous ways.
• The planner has no right to be wrong.

The Wicked Seven

Christian Sarker, working with my old 89 year old friend Philip Kotler, the marketing guru, recently built on the language, with their “seven wicked problems “. They felt that one of the main reasons that wicked problems aren’t being addressed is because when we try to solve them individually, the boundaries we draw to frame the problem are reductive – they reduce and diminish the scope of the true underlying causes. So they chose to look at the second problems as one. They included corruption as a wicked problem, because it turns out to be a primary reason why things don’t change for the better.

Sarker says “As the world faces a growing number of existential challenges, our governments and institutions are failing us precisely at the moment we need them most. What if we could come together to work on identifying and developing public, common-good solutions to the world’s most urgent wicked problems?”

“It’s time to re-design society by tackling the Wicked 7. What might that look like?”

• Climate Collapse: the interlinked global crisis of weather-related events from heat waves, forest fires, flooding, hurricanes, ecosystem degradation, and species extinction.
• Inequality: economic inequality is a way to measure social and gender inequality. The growing gap between the 1% and the rest of the population creates an unequal and unjust society.
• Extremism: the growing intolerance and hate fueled by identity-based groups that create social unrest and commit acts of terror.
• War: includes militarism, the culture of war, armies, arms, industries, policies, plans, propaganda, prejudices, and rationalizations that lead to lethal group conflict.
• Corruption: the dishonest conduct by those in power or those seeking to influence them using fraud and bribery.  Corruption creates a system that governs not for the many, but for the few.
• Health and Livelihood: the worldwide challenge of public wellbeing – economic and physical health. Includes the economy, the future of work, employment, education, and the new skills and capabilities required to “make a living.”
• Population & Migration: the domestic and global population growth leads to increased conflicts over water, energy, food, open space, transportation, and schooling.  Carrying capacity, the number of people, other living organisms, or crops that a region can support without environmental degradation – becomes a key metric for local and national wellbeing.   Also includes the growing problem of refugees and asylum seekers, mainly from the “Global South.”

Sarker has brought together a broad community to view the Wicked 7 Project as “a design project to save humanity from itself.”

Wicked Problems and Virtuous Solutions

The team argues that if any lesson has emerged from this Covid-19 pandemic, it is that we must address the urgent systemic problems of the world now Why? Because Covid-19 is just tip of an iceberg, the ecosystem of wicked problems will not wait.

They started with a belief that wicked problems have virtuous solutions.

Their approach was to apply design-thinking to model wicked problems using a collaborative, open-source methodology, and continuously iterate on design models to create a public repository of “virtuous solutions” for the Common Good.

What if we could model a wicked problem and use the model as a “digital twin,” allowing us to simulate alternatives and outcomes?

They sought to create a safe space for a diversity of perspectives. Identify alternatives to the current paradigm at local, national, and global levels – bottom up, top down, and even from the middle.

With the seven wicked problems they sought to map out the cause and effects of the various dimensions of the problem, and maybe using this systems approach to identify seven virtuous solutions as well.

Sidenote: traditional systems diagrams show both positive and negative effects, and are notoriously difficult to comprehend. This approach, inspired by Leonard Schlesinger’s Breaking the Cycle of Failure in Services uses a simpler hypothesis-driven process: model the wicked map, followed by the virtuous map. Then, challenge the assumptions.

To create the wicked and virtuous “digital twin” maps, they introduced an open-source Wicked7 toolkit which includes a wicked problem discovery tool, and a mapping template.

These maps will be public and open-source, enabling us to collectively work on improving them – based on evidence and reason, continuously checking in with “reality.”

Covid-19 as a Wicked Problem

One way to map a wicked problem is to start with the observable facts and asking a series of “why?” questions to get closer to the root cause, and mapping out the cause and effects.

Using data from endcoronavirus.org we can start to understand which countries have addressed the pandemic most successfully, and then consider what they actually did, differently from others.

It quickly becomes apparent that countries that did best – like New Zealand, Taiwan, and Germany – have some common features, including a properly funded health system, technological edge, decisive leadership, and a strong commitment to building public trust. Many also have women leaders who acted swiftly and decisively, with testing and contact tracing protocols across the entire country.

In contrast, worth performing countries were plagued by delay, absence of public trust, misinformation, and incoherent prevention and mitigation protocols. Male authoritarian political figures like Bolsonaro, Trump, Putin, and also Johnson, all fared badly. Weak and fragmented public-health infrastructure also played a role. Most sought to blame others and external factors – like China – for their ineptitude.

This evolved into two divergent maps – the “cycle of failure” and the “cycle of success”.

 

 

 

 

 

 

 

 

 

 

Resources

The Wicked7 team has also brought together a great range of resources to explore further:

• Design Unbound: Designing for Emergence in a White Water World: Designing for Emergence – Volume 1 and Volume 2 by Ann M. Pendleton-Jullian and John Seely Brown
• The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy by Katherine Gehl and Michael Porter
• Green Swans: The Coming Boom In Regenerative Capitalism by John Elkington
• The Healing Organization: Awakening the Conscience of Business to Help Save the World by Raj Sisodia and Michael Gelb
• Capital and Ideology by Thomas Piketty
• Rebalancing Society: Radical Renewal Beyond Left, Right, and Center by Henry Mintzberg
• The System: Who Rigged It, How We Fix It by Robert Reich
• Capitalism at the Crossroads: Next Generation Business Strategies for a Post-Crisis World by Stuart Hart
• Out of Poverty: What Works When Traditional Approaches Fail by Paul Polak
• Good Economics for Hard Times by Abhijit Banerjee and Esther Duflo
• The Value of Everything: Making and Taking in the Global Economy by Mariana Mazzucato
• The Hidden Wealth of Nations: The Scourge of Tax Havens by Gabriel Zucman
• The Circular Economy: A Wealth of Flows by Ken Webster
• Creating a World Without Poverty: Social Business and the Future of Capitalism by Muhammad Yunus
• The Narrow Corridor: States, Societies, and the Fate of Liberty by Daron Acemoglu and James A. Robinson
• How Democracies Die by Steven Levitsky , Daniel Ziblatt
• Advancing the Common Good: Strategies for Businesses, Governments, and Nonprofits by Philip Kotler
• Confronting Capitalism: Real Solutions for a Troubled Economic System by Philip Kotler
• Grassroots Innovation: Minds On The Margin Are Not Marginal Minds by Anil Gupta
• Touching the Jaguar: Transforming Fear into Action to Change Your Life and the World by John Perkins
• Small Arcs of Larger Circles: Framing through other patterns by Nora Bateson
• Plunder of the Commons: A Manifesto for Sharing Public Wealth by Guy Standing
• Prosperity without Growth: Foundations for the Economy of Tomorrow by Tim Jackson
• The Metamorphosis of the World: How Climate Change is Transforming Our Concept of the World by Ulrich Beck
• What’s Your Problem?: To Solve Your Toughest Problems, Change the Problems You Solve by  Thomas Wedell-Wedellsborg
• Don’t Be Evil: How Big Tech Betrayed Its Founding Principles — and All of Us by Rana Foroohar
• The Business Plan for Peace: Building a World Without War by Scilla Elworthy
• Viking Economics: How the Scandinavians Got It Right-and How We Can, Too by George Lakey
• The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google by Scott Galloway
• The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez and Gabriel Zucman
• Seven Steps to Leading a Gender-Balanced Business by Avivah Wittenberg-Cox
• The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives by Peter Diamandis
• Presence: An Exploration of Profound Change in People, Organizations, and Society by Peter M. Senge, C. Otto Scharmer, et al.
• The Fifth Discipline: The Art & Practice of The Learning Organization by Peter M. Senge
• Systems Thinking For Social Change: A Practical Guide to Solving Complex Problems, Avoiding Unintended Consequences, and Achieving Lasting Results by David Peter Stroh
• What’s Next, Gen X?: Keeping Up, Moving Ahead, and Getting the Career You Want by Tammy Erickson
• Only Humans Need Apply: Winners and Losers in the Age of Smart Machines by Tom Davenport and Julia Kirby
• The New Human Rights Movement: Reinventing the Economy to End Oppression by Peter Joseph
• The End of Protest: A New Playbook for Revolution by Micah White
• How Soon is Now: From Personal Initiation to Global Transformation by Daniel Pinchbeck
• The Globotics Upheaval: Globalization, Robotics, and the Future of Work by Richard Baldwin
• Jobs to be Done: Theory to Practice by Anthony Ulwick
• Innovation: The Five Disciplines for Creating What Customers Want by Curt Carlson
• Just Start: Take Action, Embrace Uncertainty, Create the Future by  Leonard A. Schlesinger, et al.
• Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming by Paul Hawken
• Niche Down: How To Become Legendary By Being Different by Christopher Lochhead
• The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon
• The Race for What’s Left: The Global Scramble for the World’s Last Resources by Michael Klare
• The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power by Shoshana Zuboff
• Brand Activism: From Purpose to Action by Christian Sarkar and Philip Kotler

Other websites

• Sustainable Prosperity (EU Policy Database)
• P2P Foundation
• Drawdown
• TED COUNTDOWN
• The Systems Thinker
• J-PAL (MIT)
• The Evolution Institute
• Commons Transition
• Commons Network
• The International Bateson Institute
• Eudaimonia & Co
• Pachamama Alliance
• FIXCapitalism.com
• ActivistBrands.com
• www.germinfo.org (Covid-19)
• Worldometer’s Country dashboard (Covid-19)
• John Hopkins’ visual dashboard (Covid-19)

Image: Unsplash

IMD’s annual World Competitiveness Ranking is now in its 32nd year, and showcases a wealth of data on the performance of national economies around the world.

In 2020, Singapore has again ranked top, followed this year by Denmark, Switzerland, the Netherlands and Hong Kong.

Small countries, particularly in times of economic challenge, seem to be the best places to do business.  Arturo Bris from IMD’s World Competitiveness Centre says, “the benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness. In part these may be fed by the fact it is easy to find social consensus.”

Singapore

Factors behind Singapore’s success are its strong economic performance which stems from robust international trade and investment, employment and labor market measures. Stable performances in both its education system and technological infrastructure – telecom, internet bandwidth speed and high-tech exports – also play key roles.

Denmark

The Danes rose from 6th to 2nd place due to a strong economy, labour market, and health and education systems. In addition, the country performs very well in international investment and productivity, and topped Europe in business efficiency. Denmark had a good pandemic too, led in a collaborative way by female PM, Mette Frederiksen.

Switzerland

The Swiss, better known for efficiency, have been gradually edging up too, from 5 to 4 and now 3rd place. Robust international trade fuels its strong economic performance, whilst its scientific infrastructure and health and education systems show consistently strong displays.

Comparing the top three markets, it seems that they have many similarities – partly driven by the small size – although they offer differ somewhat in their democratic structures, and the influence of social priorities.

The comparison graph below shows how Singapore clearly leads in terms of International Trade and Investment, partly due to its geographical positioning within there relatively booming Asian markets, but also because of the government-backed investment funds like Tamasek. Denmark, however lags well behind on tax policy, largely due to its social priorities, and its lack of international trade. Generally, however all three leaders gain their rank through consistency across many factors.

Other countries

For the second year, the USA failed to fight back having been toppled from its number one spot last year by Singapore, and coming in at 10^th (3^rd in 2019). Trade wars have damaged both China and the USA’s economies, reversing their positive growth trajectories. China this year dropped to 20^th position from 14^th last year.

While Hong Kong came 5^th, this is a far cry from 2^nd which it enjoyed last year. The decline can be attributed to a decline in its economic performance, social turmoil in Hong Kong as well as the rub-on effect of the Chinese economy. However, the 2020 rankings do not pick up on events in from the last couple of months.

The UAE also falls from 5^th to 9^th. The Middle East struggled as a region, reflecting the oil crisis.

Norway made this year’s top ten, at 7^th, having been 11^th last year. This is partly due to a wider pattern in the region: all the Nordic economies experienced a noteworthy improvement in business efficiency. In fact, they all made the top ten in this measure.

The UK climbed from 23^rd to 19^th, while France (32^nd) slightly lost its 2019 foothold on 31^st. One interpretation is that Brexit may have created the sentiment of a business-friendly environment in the making. The UK ranked 20^th on the business efficiency measure, compared to 31^st least year.

Canada moved up to 8^th from 13^th.  This rise is centered around improvements in measures related to its labor market and in the openness of its society. It led the North American sub-region.

In Latin America, a distrust of institutions may be reflected by minimal changes. Chile (38^th) remains the highest-ranked country in the sub-region and Venezuela the lowest.

Sustainability becomes ever more important

This year, new criteria were added to reflect the importance of achieving the UN Sustainable Development Goals. The criteria provide a perception of where the economy stands with respect to different sustainable goals that need to be satisfied in 10 years, such as education and the environment, inclusion and empowerment, ageing and health. Indeed, an important component of the competitiveness study is to align the criteria employed with the important challenges and concerns of the world economy.

This is a key reason why Denmark has performed so well. In the recent ranking of  World’s Most Sustainable Companies 2020 by Corporate Knights, three Danish companies featured in the world’s top 10. Orsted, the energy company that has transformed from “black to green” in a decade tops the chart, while fellow Danes Christian Hansen and Novozymes follow in 2nd and 7th.

The Danish focus on sustainability is exemplified by the Copenhagen Letter, a manifesto launched in 2017 calling for technology to put humans ahead of business, or better still to do business, and make the world better at the same time.

In an exclusive extract from my forthcoming book Business Recoded, meet one of the most inspiring business leaders, shaking up today’s world. He embraces the opportunities of relentless change, the power of disruptive technologies, and the courage to create a better future in his own vision. In the book, I explore the stories of many of the world’s most fascinating leaders right now, and develop 49 codes that help you redefine the future of your business, and yourself.

The Leadership Code of Wang Xing

Meituan Dianping is a Chinese delivery business which Fast Company ranked as “the world’s most innovative company” last year.

Despite a series of early setbacks, Wang Xing, a 39-year-old Chinese tech entrepreneur has built what is now considered as the leading on-demand services platform, with a huge fleet of bikes that will deliver anything anywhere anytime in China.

Born in Fujian Province in 1979, Wang was the son of a wealthy businessman and factory owner. As a child, Wang was an avid reader and excelled at school, graduating from Beijing’s Tsinghua University in 2001, and going on to study for a PhD in Delaware, USA. However watching the speed at which Chinese markets were changing, and despite having almost completed his doctorate, he headed back to Beijing to enter the world of business.

Wang became known as “the copycat” because of his habit for creating Chinese versions of successful Western businesses. His initial Facebook-like social network for students did not take off, until he launched Xiaonei in 2005, which swiftly accumulated tens of thousands of users. However, lack of additional funding led him to sell it for $2 million a year later (Renren, its acquirer went on to float it for $740m).

He kept trying, launching a Twitter-like network called Fanfou, which translates as to “have you eaten”. Within two years, it had accumulated millions of users, but was shut down by the government for highlighting political issues.

In 2010 he and his wife Guo Wanhuai launched a Groupon-inspired group-buying platform Meituan. Backed by internet giant Tencent, it quickly expanded to become China’s (and the world’s) largest food delivery company.

Since then the “online to offline” platform has expanded rapidly to over 3000 Chinese cities, and after merging with Dianping in 2015, Wang’s business now brings together TripAdvisor-style restaurant reviews and hotel bookings, bike sharing, cinema tickets, deliveries of all types, and ride-hailing services.

Yoga classes. Movie tickets. Haircuts. Hot pots. Babysitting. Coupons. The business has grown into a tech giant that resembles an combination of many different apps – imagine Yelp listings of local business, OpenTable reservations, Booking flights and accommodation, home repairs, wedding planning. And Uber-style delivery.

Beyond a vast “last mile” delivery network, Wang realised that he had something even more valuable, a huge database of the new, rapidly growing, Chinese middle class. A recent McKinsey study suggested that 76% of China’s urban population will enter the middle income bracket by 2022, with household earning between $9,000 and $34,000.

Despite his personal wealth, estimated to be around $13.5 billion, Wang has earned a new nickname in China, as the “poet entrepreneur”. His many Fanfou blog posts portray a solitary figure, with a particular fondness for Haruki Murakami’s “Norwegian Wood”, along with classic Chinese poems and literature.

© Peter Fisk 2020. Business Recoded will be published in late 2020.

As lockdown shifts to downturn, we have seen how many companies have adapted to new low-touch, socially-distant norms. Cafes and restaurants have developed thriving street-food and delivery businesses, cinemas and theatres have become drive-in experiences, students study online together, contactless payment has finally replaced cash.

In sport, Norway created the “Impossible Games” with athletes from Europe and Africa competing synchronously by video-link in different locations. In business, Apple hosted its annual developer conference (WWDC20) virtually, with impressive online keynotes, animations and interactions, shared by more people than ever. London Fashion Week did likewise.

Fundamentally, we are seeing a rapid shift to what I call “liquid” business models.

In chemistry, you will remember, a “liquid” state exists between a solid and a gas – between a structured and unstructured state. In the business world, between a physical and digital world.

“Liquid” means that we can fuse together the best of physical and digital formats, devices and channels, and also give consumers much more choice in how it is constructed. Liquid businesses are more accessible and agile, responsive and personal.

These “liquid” attributes permeate both the inside and outside of business – shaping the new ways in which we work – how we communicate, collaborate and learn – and the new ways in which we compete – sell, create, manufacture, and support customers.

“Liquid” is a much better word than hybrid, or multi/omni-channel, or physigital, as I’ve even heard the combination of digital and physical called. (Plus, I haven’t heard “liquid” applied to business, or business models, before, so I’m claiming it right here!)

The pandemic has seen rapid adoption of new technologies, and more significantly a shift to “digital me” with elevated Maslow-style human needs of belonging and connectedness. New formats emerge, responding to the new consumer, fusing the best of digital and physical:

• Liquid Health… the fluid combination of digital technologies like Babylon Health and Good Doctor, providing smartphone consultations, AI-enabled diagnostics, robotic surgery, together with empathetic care.
• Liquid Work… the fluid combination of more distributed yet collaborative working from anywhere, more flexible jobs and employment, more diverse and talented teams, creative people augmented by tech.
• Liquid Production… the fluid combination of made remotely and on demand, embracing 3D printing to print what we like as we need it, the shift from fragile slow supply chains to dynamic personal ecosystems.
• Liquid Retail… the fluid combination of digital consumers, with physical delivery – dark kitchens of Deliveroo delivering restaurant meals to our home, luxury brands selling direct, from Tiffany & Co. diamonds to Amazon’s Common Threads.
• Liquid Mobility … the fluid combination of multi-modal transport, as we shift to electric and autonomous cars, we shift from ownership to subscription, enabling a choice of transport modes, as we become more local.
• Liquid Learning… the fluid combination of distance and physical learning experiences, for children to executives, lifelong learning becoming the norm with flexible qualifications, topped up over time, relevant and applied.

Here are some examples:

https://www.youtube.com/watch?time_continue=24&v=CMD6B8h6Pzg&feature=emb_logo

Babylon Health … Ali Parsa’s “liquid healthcare” app uses AI to diagnose your problem, leading to a smartphone consultation, connected to a network of pharmacies, and specialist doctors and hospitals if needed.

Babylon, based in London, now employs over 750 doctors, scientists, engineers and data analysts. They offer a subscription-based service to individuals wanting faster, on-demand health advice. A deal with the UK’s NHS to create a version of Babylon’s service called “GP at Hand” has dramatically scaled-up the service, with similar partnerships internationally. For the NHS it creates a fast, more personal service to patients, directly on your smartphone, and relieves the pressure on physical resources.

Parsa sees Babylon as “the biggest doctor’s brain in the world”, and loves to show how his AI-based analytics can more effectively diagnose patients’ needs than a real person. His real ambition is to create personal and predictive healthcare, using a range of wearable sensors that can monitor individual health, and take action before it’s ever needed.

Icon … the US tech start-up’s “liquid construction” approach enables architects to turn visions for new homes into reality within 24 hours using industrial-scale 3D printing.

In southern Mexico, 50 homeless families have just moved into a 3D-printed housing community, their homes each built in 24 hours, and at a cost of around $4000, by a massive 3D-printer made by Icon. The 15m long printer squirts out layers of Lavacrete, a customised mix of resilient, fluid-like cement, guided by the architect’s digital design, and also includes plumbing and electrical wiring.

Jason Ballard, CEO of Icon, says that the fast construction is ideal for disaster recovery, after earthquakes or hurricanes, but also to improve the standard of housing across the world. Icon is partnering with New Story, a non-profit seeking affordable housing in emerging countries. In Mexico, they are building homes for some of the poorest residents in a rural area near the city of Nacajuca. The homes will be donated to families who are currently living in makeshift shacks that flood every time there’s heavy rain.

Singularity Sushi … Japan’s “liquid restaurant” requires you to order and submit a DNA test in advance of your restaurant visit, at which the chef prepares you personalised sushi to match your nutritional needs and tastes.

“Hyper-personalisation will become common for future foods. Based on DNA, urine and intestinal tests, people will each have individual health IDs,” said the founder. “This identity is analysed, and nutritional matching is performed to match nourishment needs with biometrics, thus the person is automatically provided with the optical diet.”

Once a reservation is booked, the restaurant will send guests a health-test kit to return approximately two weeks prior to the date of the meal. Working in partnership with two health-technology companies, they will use the results of these tests to create a unique health ID for each visitor.

1. A world with clean air

2. Half the violent crime

3. Empowering 8 billion minds with mobile tech

5. A fair and democratic gig economy

6. Peace in the Middle Easy

7. Cities where you can walk anywhere

8. Clean electricity dominates energy

9. Virtual reality for mental health

10. Circular economy is the economy

12. Streets made for people not cars

13. No more preventable suffering

14. Technology for our ageing populations

15. Economies beyond GDP

16. Old age care starts young

18. More intelligent social policies

19. A new kind of capitalism

20. Cutting poverty in half with tech

21. Hyper transparency beats corruption

22. Space tech drives Earth security

23. Fun and functional cities

24. Precision medicines for everyone

25. Moon water fuels space travel

26. Digital tech closes gender and wealth gap

27. Buildings in tune with environment

28. Harnessing tech for good

29. New economy for nature

30. Work together to narrow the digital divide