Companies that integrate creativity, analytics, and purpose are delivering more than double revenue growth, claims McKinsey in an interesting thought leadership focus on marketers and other growth champions.

Their research, captured in “The Growth Triple Play” suggests that:

  • Only 7 percent of companies are delivering on the growth triple play by unifying creativity, analytics, and purpose. They are driving average revenue growth of 2.3 times versus peers from 2018–19 (which increased to 2.7 times versus peers from 2019–20).
  • In the period 2018–19, companies using just one of the capabilities—either creativity, analytics, or purpose—saw an average growth rate of more than 6 percent. Adding a second component saw growth rates climb to more than 7 percent. For those that employed the full triple play, growth rates climbed to more than 12 percent.
  • CMO’s have a once-in-a-generation opportunity to lead growth, as 78 percent of CEOs are now banking on CMOs and marketing leaders to drive growth.

Reading in more detail, McKinsey’s team suggests that the historic shifts brought on by the pandemic have fundamentally changed the role of marketing leadership and the chief marketing officer (CMO) with 78 percent of CEOs now banking on marketing leaders to drive growth.

Based on research covering how 860 executives across the globe are prioritising investments and capabilities that help accelerate growth, the report identifies three elements – creativity, analytics, and purpose – that constitute a “growth triple play” providing at least two times the growth of peers who don’t invest in all three in tandem.

Companies that use the three elements of the growth triple play together – creativity, analytics, and purpose – achieve dramatically higher average growth rates ; 2.3 times compared to companies that don’t use any of the three elements. The results were even more dramatic during the pandemic, when the impact of using the full triple play boosted growth rates by 2.7 times.

The cumulative impact is striking. In 2018–19, companies that used any one of the capabilities – whether creativity or analytics or purpose – saw an average growth rate of more than 6 percent, for companies that added a second component, growth rates climbed by another 15 percent to more than 7 percent, and for those that employed the full triple play, growth rates shot up by 67 percent to more than 12 percent.

Only 7 percent of companies, however, have been able to use all three elements successfully in combination.

Each element of the triple play is critical.

Creativity is part of the origin story of marketing. It’s in the breakthrough ideas that have always underpinned bold, imaginative campaigns. The last revolution in marketing was all about the fusion of creativity and data analytics. What’s new today is partly the addition of purpose, the statement of a goal higher than just ringing up the next transaction.

When the CEO of Santander stood up and asked employees “How can Paypal have become 4 times more valuable than our bank?” there was an embarrassed silence. Paypal is now almost 3 times more valuable than HSBC, as valuable as Bank of America, and outperforms most investment banks too. Visa is much bigger, twice as valuable as Paypal.

What’s the future of banking, insurance and money?

In a world of rapid and relentless innovation, most financial services have become the laggards of change. While Tesla transforms mobility, Impossible reimagines food, and NextEra ignites clean energy, most of the large financial service companies have stayed wedded to their old world, either believing that their markets are impermeable to change, with either arrogance, or ignorance.

Of course there are disruptors who grab the headlines. Cryptocurrencies lead the way – the drama of Bitcoin and many other emerging models that are yet to prove sustainable. More generally, fintech has focused on the so-called neobanks – the mobile-centric start-up banks and related money management services, who are largely automating old practices in a slightly more consumer-centric way.

Yet for the large companies – retail and corporate banks like Bank of America, HSBC, Santander – nothing much has changed. Same in investment banking – JP Morgan, Credit Suisse, Goldman Sachs do what they’ve always done – and same in insurance. Of course there are sparks of ideas, but they are usually imitative, or derivative.

Yet there are some incredibly interesting and innovative companies in the financial world.

Next Generation Innovators

Consider Brazil’s Nubank, for example, which has just attracted $500m investment by Warren Buffett – or Sweden’s Klarna, reinventing advance payments online. In South Korea, Hena Bank is exploring a new loyalty network model, as is Ant Financial with its brilliant Ant Forest in China. Akbank in Turkey is playing with robots and Alior is innovating with business. And then there is the long list of neobanks – Atom, N26, Revolut, Starling, Varo, and many more.

Here’s a great summary from CB Insights on how start-ups are disrupting, and in many ways “unbundling” the conventional activities of a bank:

CB says “Tech companies are chipping away at the traditional bank’s market share. For example, stock trading app Robinhood’s commission-free approach to investing has forced incumbents to follow suit, while products like Venmo and Cash App have disrupted peer-to-peer payments”

Startups are using consumer payments products like money transfers and peer-to-peer payments to chip away at banks’ payments market share.

International money transfers and remittances are expensive to complete, and they make up a massive market: Remittances are worth an estimated $743B

  • Remitly and TransferWise are digital platforms that facilitate international money transfers. TransferWise is valued at $5B, as of July 2020.

Products enabling peer-to-peer payments are also targeting the traditional bank’s hold on payments systems.

  • Venmo, owned by PayPal, and Cash App, owned by Square, offer P2P payments as their primary offerings. However, both brands have expanded to additional products, such as Venmo’s credit card and Cash App’s stock investing offering.

Investment banking services are more difficult to unbundle, given significant regulatory restrictions for the industry. However, some startups are enabling the digitization of traditional banks or are providing auxiliary services directly to banking clients like institutional investors.

Though equity research services used to be offered for free to clients as part of a bundle with trading services, regulations like the EU’s MiFID II now require that banks must charge for research directly. This has provided an opportunity for other research providers to gain market share among banking clients.

  • Sentieo and Koyfin aim to help with investment decisions by providing data and equity coverage for a variety of assets, from stocks to currencies to fixed income.

Companies in the asset management arena are assisting with or replacing traditional asset management divisions by providing software and services for businesses, institutional investors, and more.

  • Companies like Fount and Liqid are digital asset managers with robo-advising capabilities. Liqid has raised a total of $44M in disclosed equity funding.
  • Addepar is a platform that helps financial advisors leverage data and customizable reports to communicate portfolio performance. Valued at $594M, Addepar most recently raised a $117M Series E round in November 2020.
  • Ethic is a digital asset manager that helps institutions create custom sustainable investment portfolios.

Sales and trading operations within banks can be lucrative. Now, alternative brokerage platforms and software that provide access to stock market information and stock brokerage are gaining traction, potentially eating into bank revenues.

  • For example, Trumid is an online trading platform providing corporate bond market professionals with direct access to liquidity. Trumid raised a $200M Series E round in July 2020 at a $1B valuation.

Consumer deposits and savings are the bread and butter of any traditional bank, and Bank of America is no exception. The company is the second-largest lender in the US based on assets, and it made $3.3B in net income on deposits in the first 3 quarters of 2020. This makes the sector an attractive target for fintech companies.

  • There is no shortage of startups aiming to grab deposit market share from traditional banks. Companies like Chime, Monzo, N26, Revolut, Varo Money, Current, and Dave all offer digital banking services to consumers.
  • Other companies focus on savings accounts. Goldman Sachs’ Marcus offers savings accounts and personal loans — a departure for the investment bank, which did not have a consumer arm until recently.
And a broader summary, also from CB Insights, of the many different types of disruptive start-ups attracting attention and investment right now:

Yesterday we hosted a Headspring Lab for financial services, where Financial Times columnist Michael Skapinker joined me to talk about the transforming world of financial services, the challenges and opportunities.

Here is my summary of the discussion:

Context of change – driven by the disruption of markets, by new technologies, new audiences, new entrants, new business models, new agenda – and accelerated by pandemic. Neobanks are just a start, digital is just an enabler of more profound opportunities for change. In general FS has lagged behind in exploring transformation beyond automation. As Jane Fraser, new CEO of Citigroup says, now is the time for FS leaders to embrace 4Cs – context, curiosity, creativity and courage.

Customer as your future guide – not just to understand and serve them, but as your guide to uncertain futures and new opportunities, like DBS – reframing your business around customers eg from car insurance to driving better – is more valuable and engaging to the customer, but also opens new revenue streams for business growth. Superapps like Grab and Jio are incredibly customer-centric, using thei4 customer intimacy and insight, embracing FS in a way that integrates with everyday life.

Sustainability as opportunity –  moving on from CSR as compliance, or ESG as governance – to harnessing business as a platform for positive change. Social issues, even more than environmental ones, engage customers emotionally – access, inclusion, equality, locality, and more. Unlocking the assets and interactions of FS to change behaviours, and solve big problems, as a competitive advantage. Examples from Aspiration to Lemonade, Nubank and Greenwood.

Unlocking the talent inside – the pandemic has driven radical behaviour change, and desire for new ways of working; young people already wanted to do more meaningful work; the old ideas of work life balance are being challenged. How to align business and personal purpose, how to find your “ikigai”, how to find work that enhances life. Like Microsoft’s Satya Nadella says, rethink organisations as platforms for talent, enabling people to unleash their ideas, rather than seeking to fit them to the needs of the organisation.

The opportunity of finance – most FS conversations focus around fintech, the disruption of start ups and the need to catch up. More powerful brands and customer integrators can all embrace finance, particularly if FS remains largely a utility inert to change. Yes, start ups from N26 to Robinhood challenge, but their are big opportunities for FS too. PingAn, China’s largest insurer, for example, asked how it could leverage its customer base and digital platform to be more. Today it has created  Good Doctor, serving a billion subscribers, embracing the power of humans and technology, a digital and physical model, and the world largest and most innovative healthcare business.

Read more in the section FutureBank together with a range of interesting case studies.

Every market has been shaken-up by the seismic shifts in consumer behaviour, global economics and emergent technology. How we live, work and learn, shop and socialise. The Covid pandemic has simply accelerated this transformation, maybe by 10 years in just 12 months.

Markets are blurred, borderless and hybrid – physical and digital, but also fusing geographies and sectors. Retail is socialised, sports are gamified, transport is integrated as mobility, and every company is a technology company. Payments are digital, entertainment is on demand, fashion is sampled virtually, healthcare is recast on an app as wellbeing.

Customers have new agendas, from social and environmental, to who they trust and how they are influenced. The exponential power of networks transforms the old rules of business, from the way people connect in new communities, to how organisations connect as global ecosystems. Speed and agility, innovation and change are relentless. Disruption, and opportunity, are everywhere.

Airbnb has redefined travel as a platform, Babylon has reinvented healthcare with AI, and Coursera has refocused education for all. Gaming brands like Fortnite are the social spaces for GenZ and launchpads for music, while super-apps like Grab and Jio puts every type of service into your hands. Indeed, Haier will soon give away its fridges and washing machines, in order to manage your life.

Leading beyond technology

“Digital transformation” is one of the most popular yet misunderstood terms in business. While new technologies, from AI-driven apps to market-creating platforms, predictive analytics and realtime marketing, are enablers of transformation, it is about much more. It is business transformation – strategic, innovative, human and relentless – and personal, or leadership, transformation too.

82% of companies recognise the need for digital leaders, according to MIT research, yet only 40% say that they are developing them. While most entrepreneurs are born digital, more established organisations and their leaders can be digital too – look at Disney or Lego, Fujifilm or GM, Nestle or Rio Tinto. Such organisations have the scale and power to create even more impact digitally.

Digital is really about a mindset. Digital leaders see their business in a new context, unlocking new opportunities for innovation and growth. Brands become part of larger marketspaces, redefined by customer context and aspiration, rather than product. Audiences, channels, solutions and value are reframed and redefined. Mikkeller’s craft beer to fitness, or Lululemon’s yoga beer for women.

Digital leaders embrace the new intelligence, speed and capabilities available to engage in new ways – from decision making to fast development, smarter logistical networks, personal and collaborative brand engagement. At the core of this are new business models – reimagining how the organisation works, internally and externally, with new services, new revenue streams, and new ways to win.

Building a future mindset

How do you build a future mindset, one that is a digital mindset, a growth mindset? You start from the future back, inspired by a world of dramatic change. Insights from across sectors spark new ideas and opportunities for what you might do. Investment banks exploring the new business models in pharma or energy, insurance companies inspired by healthcare and entertainment.

Having the courage and catalysts to open up your mindspace, creates a new marketspace of opportunities to explore. Facilitated application of insights and ideas, enables leaders to map out the challenges and potential roadmaps ahead, for business and themselves. We use sketch maps to shape a “book of dreams” that becomes a foundation to go deeper, and for practical action.

Digital leaders recognise that digital means context and culture, creativity and capability – from Amazon’s Jeff Bezos saying “it’s always day one” to Emily Weiss’ blog that became the world’s fastest growing beauty business, Wang Xing at Meituan knowing China’s customers best, to Fujifilm’s Shigetaka Komori with his “never step” innovation cycle.

While the pandemic was a time of shake-up, in markets and emotionally for everyone, it can also become a springboard to more radical transformation. We will probably see more change in the next 10 years than the last 250 years.

Now is the moment to reimagine the road ahead, to reenergise your organisation and market, and for leaders to step up with the courage to create a better future.

Across the world, markets are being dramatically shaken-up.

There’s a new order in almost every sector, not just because of technological innovation, but also because of the seismic shift in power towards Asia, a new generation of young people with different value, the critical issues facing us all environmentally and  socially. And then there was the disruption of a global pandemic, which challenged the resilience of everyone, but also accelerated consumer change, in some cases decades of change in a year.

Now the future is different. Social attitudes and digital behaviours have been transformed – how we work, learn, shop, and socialise. Working from home, we loved the new flexibility of schedule and end of commuting, but struggled to unplug, says Mintel. Online retail grew more in 8 weeks than the last 10 years, telemedicine went from 2% to 98% of all initial health appointments in 15 days. Disney+ achieved the market growth in 5 months, which took Netflix 7 years.

Across the world we see the rise of incredible new companies, and the odd comeback of older companies reimagined too.  Some of the scale is mind boggling. If we consider market value, for example, as a measure of the scale and confidence in a company’s future, then the disruptors become clearer

  • Tesla soared to 10x it’s pre-Covid value during 2020, more valuable that the rest of the world’s top 10 makers combined. But also look at China’s luxury EV maker Nio, now worth more than the likes of BMW.
  • Visa is now the world’s most valuable financial services company, more valuable than the largest banks like JP Morgan and ICBC. Even Paypal is now 2x the size of Citigroup, and of HSBC, and 7x bigger than Barclays.
  • Exxon Mobil was eclipsed by its clean energy young upstart Next Era last year, while the world’s most sustainable companies like Orsted and Schneider now outperform the likes of BP  and Shell.
  • Kweichou Moutai, the Chinese firewater-like drinks brand, is now more valuable than giants of the western corporate world like Coca Cola, or P&G, or Nestle, and 3x larger than Diageo.

In the UK, where there is still a Brexit-inspired, rose-glass view of the world, they still think that their local heroes are global leaders, but get surprised when they don’t even figure in the world’s top 100 brands.

  • Amazon is now 95x more valuable than Tesco, one of the UK’s leading retailers. Tesco is still seen as a market leader by many, even when the delivery vans of Amazon circle its antiquated stores.
  • Microsoft is now 35x more valuable than Vodafone, which was once hailed as a visionary tech (or at lest telecoms) business, but has lost its way through arrogance and myopia.

A new generation of British innovators

So what is left for a flagging nation like the UK, with stagnant growth and nationalistic politics, has it lost its place in the world’s marketplaces, as a source of leadership and innovation? Not quite.

ARM

ARM, currently owned by Softbank but looking to move to Nvidia, depending on approval, provides cloud services and internet of things solutions. ARM’s business model has served it well, by focusing on reference designs for semiconductors as they proliferated in types and lifecycles, staying flexible with the agile manufacturing of a global ecosystem of partners.

Astra Zeneca

Also based in Cambridge, the British-Swedish pharma business has been one of the leaders of the race to find a Covid vaccine, working in partnership with Oxford University. It has a portfolio of products for major diseases in areas including oncology, cardiovascular, gastrointestinal, infection, neuroscience, respiratory, and inflammation

Babylon

Ali Parsa created the digital healthcare business in 2013, offering an AI-enabled smart-phone based health service to its call centres where it centrally brings together many different experts for rapid patient response. It works with nations across the world developing telemedicine approaches, including GP at Hand initiative in the UK.

BenevolentAI

The London based tech firm unites technology with human intelligence to re-engineer drug discovery and deliver life-changing medicines. The technology empowers scientists to decipher the vast and complex code underlying human biology, find new ways to treat disease and personalise medicines to patients.

Cazoo

Alex Chesterman is seeking to transform the way people buy their next car. He realised that whilst people love their cars, they don’t always like the process of buying and selling them. So he created a totally new way, providing transparency, convenience and peace of mind.

Deepmind

Founded in London in 2010, now part of Google, it aims to build advanced AI to expand our knowledge and find new answers. By solving this one thing, it believes it could help people solve thousands of problems – to diagnose eye diseases as effectively as the world’s top doctors, to save 30% of the energy used to keep data centres cool, and to predict the complex 3D shapes of proteins.

Headspace

Andy Puddicombe is a former Buddhist monk with a degree in circus art. He created Headspring with one mission in mind: to improve the health and happiness of the world. Reaching more than 65 million users in 190 countries, it was one of the first meditation apps in the world and remains a leader in mindfulness and mental training.

Hopin

Johnny Boufarhat created the first all-in-one live online events platform where attendees can learn, interact, and connect with people from anywhere in the world. Hopin events are known for their full conference capabilities: stages, networking, breakout sessions, sponsors, tickets, and analytics. It’s all online—everyone can attend at no cost to the planet

Lucid Motors

Peter Rawlinson is a British car engineer who made his name at Tesla, and then set to create his own business. Based in California, Lucid calls itself the new generation of EV. Its relentless focus on innovation, luxury, and sustainability drives us into a reality where you no longer have to choose between doing great things, doing the right thing, and doing everything with the highest regard for efficiency and design.

Mediatonic

Mediatonic, founded in 2005 by friends Dave Bailey and Paul Croft is a games developer with over 300 developers across London, Brighton, Madrid and Leamington Spa and is now part of Epic Games. Best known for Fall Guys: Ultimate Knockout, it delights in creating games that are joyful, inclusive and approachable; and love the weird, the surprising, and the wonderful.

Pangaia

A fashion brand, which describes itself as a materials science company bringing breakthrough innovations and patents into the world through lifestyle products. They say their products should be beautiful whether they are made from next generation bio-materials or recycled fibres; woven with smart technology, made with as many sustainable and recyclable elements as possible.

Rio Tinto

As pioneers in mining and metals, they produce materials essential to human progress: iron ore for steel. Aluminium for cars and smartphones. Copper for wind turbines, electric cars and the pipes that bring water to our home. Borates that help crops grow, titanium for paint – and diamonds that celebrate the best things in life. During Covid, they saw a remarkable shift to using AI and digital technologies, including drones and robots throughout their mining operations.

 

 

 

Back in 1998, in a paper entitled “The Anatomy of a Large-Scale Hypertextual Web Search Engine,” Google founders Larry Page and Sergey Brin presented their prototype (initially calling it BackRub), with full text and hyperlink database of at least 24 million pages.

In a paragraph on the opportunity to drive advertising revenues, they explained: “We expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.”

While their assumption would last for a couple of years, by 2004, at the time of Google’s IPO, they wrote: “Advertising is our principal source of revenue, and the ads we provide are relevant and useful rather than intrusive and annoying.”

Advertising is still the primary source of Google’s revenues, and the most effective and scalable revenue machine of the digital era.

Google’s business model has evolved over time, an architecture for its commercial success. Page and Brin initially assumed that advertising-based search engines would never become a great consumer product. Yet, by testing and adapting over time, they have found their sweet spot.

Business models are your living platform for business evolution, and revolution. Business models keep moving as customers change, competitors challenge, and companies grow. Indeed they lie at the heart of innovation.

https://www.youtube.com/watch?v=szbC4mZiVdQ

Business model innovation is the architectural secret behind many of the most innovative start-ups of the last decade.

Way back in 1959, Xerox created breakthrough copying machines, but they were too expensive for many companies to buy. Their advance was not the machine, but the way people paid for it – leasing the product, then paying per copy for its use, with the price descending over time.

Gillette similarly innovated their business model, selling low-priced razors to fit regular high-priced blades. 50 years later Nespresso adopted the same model.

How can you reach new audiences, changing the payment model, adding new services, using your assets in different ways, maybe licensing the manufacturing to partners, or sales to franchisees?

Business model innovation reconfigures the architecture of your business, transforms your proposition, and can massively boost your performance. Technology companies in particular, from Airbnb to Boeing, Coursera to Deliveroo, have thrived by thinking beyond the product, and fundamentally reinventing the way in which they do business.

Innovating the whole business

In Ten Types of Innovation Larry Keeley defines the most important types of innovation found across any business. Many organisations don’t just innovate in one area, but combine many of the types together.

  • Profit Model: How you make money (eg Fortnite)
  • Network: How you connect with others to create value (eg Huawei)
  • Structure: How to organise and align your talent and assets (eg Netflix)
  • Process: How you use signature or superior methods to do your work (eg Inditex)
  • Product: How you develop distinguishing features and functionality (eg Corning)
  • Product System: How you create complementary products and services (eg Apple)
  • Service: How you support and amplify the value of your offerings (eg Zappos)
  • Channel: How you deliver your offerings to customers and users (eg 3DHubs)
  • Brand: How you represent your offerings and business (eg Burberry)
  • Customer Experience: How you foster compelling interactions (eg Peloton)

Which ones matter most? Keeley analysed the innovation activities of over 1000 large companies over a 10-year period. He found, perhaps not surprisingly, that almost 90% of all time and resource went into product innovation.  However, when he evaluated the business impact, measured by economic value, he found that the innovations that made the most difference were network, then profit model, then customer engagement.

We waste too much time and resource focused on product innovations that deliver solutions that are largely incremental, quickly copied and offer little financial return. We spend far too little on what makes a difference, innovating how the business works.

Defining the business model

Business models explain how organisations work – how they create value for customers, and in doing so, how they create value for all other stakeholders. They can map the current business, or explore options for the future.

The approach originates from mapping “value networks” in the 1990s, understanding the systems across business and its partners through which value (both financial and non-financial) is created and exchanged – by who, how and for whom. I remember working with Pugh Roberts to create a multi-million dollar dynamic model for Mastercard which showed varying any one driver – such as interest rates, or branding – affected everything else. And thereby being able to test new ideas and optimise the model.

Business models represent the dynamic system through which a business creates and captures value, and how this can be changed or optimised. They are a configuration of the building blocks of business, and their creative reconfiguration can be a significant innovation.

Business models became fundamental to business strategy, driven by them, but also driving their content. Hambrick and Fredrickson’s Strategy Diamond is all about aligning the organisation, achieving an economic logic between strategic choices. They help to align the business, matching the right strategies for outside and inside, using the proposition as the fulcrum, and profitability as the measure of success.

Business models can often appear very mechanical, lacking emotion and easy to imitate. In 2001 Patrick Staehler, seeking to explain the new breed of digital businesses, created a business model “map” driven by the value proposition, enabled by the value architecture, creating economic value and sustained by cultural values. The last point here is most interesting, in that it captured the distinctive personality of a business, its leadership styles and ways of doing business. This is much harder to copy, and also sustains the other aspects.

Innovating the business model

New business models are the most effective way to transform organisations, to innovate the whole way in which the business works. Inspired by a new generation of businesses – Airbnb to Uber, Dollar Shave Club to Netflix – we see dramatically new business models in every market, particularly drive by collaborative ecosystems, data engines, network effects, and new payment models.

Airbnb makes money by helping you to make money out of your spare room, connecting host and guest, then taking a small fee from each. Nespresso makes great coffee, selling discounted machines, and then getting you to sign up to an everlasting and incredibly profitable direct revenue steam of coffee pods.

What if your business started leasing rather than selling, became part of the sharing economy? What if you facilitated an exchange between buyers and sellers and took a cut? How about moving to a subscription model, or a freemium model, or a referral model, or an advertising model?

We used to just think that a business simply made things, and sold them. Now it is much more complicated. Or rather, there are many more innovative ways to achieve success. Some have been around for ever, like franchising and licensing, luxury or discounter, family or not-for-profit, barter or and pay per use models, whilst others have been enabled through digital platforms.

There is an infinite number of potential business models which you could creatively develop, however some of the most common formats, applicable to almost every type of business, include:

  • Advertising-based models: services are free to users, whilst advertisers pay to engage with the audience attracted, eg Google, Facebook
  • Razor-and-blades models: the facilitating item, like a razor, is sold cheaply, then accessories, like blades, at a premium, eg HP, Nespresso
  • Added-value models: the facilitating item, like an iPad, is sold at a premium, then accessories, like apps, sold cheaply, eg Apple
  • One-for-one models: the company donates a product to a charity, or person in need, for every product sold, eg Toms, Warby Parker
  • Cashflow models: high volumes are generated at low margins, payments received quickly from customers, paid slowly to suppliers, eg Amazon, Dell
  • Platform-based models: brings buyers and suppliers together, typically charging both of them to connect and transact, eg Airbnb, Uber
  • Subscription-based models: charging a regular, eg monthy, fee for unlimited use of a product or service eg Netflix, Zipcar
  • Freemium models: these encourage trial or a basic level of usage free, but charge for additional or premium options, eg Spotify, Fortnight
  • Direct to consumer models: products which in the past would have been sold through intermediaries, are sold direct, eg Allbirds, Casper

Alex Osterwalder’s Business Model Canvas emerged as the most common template on which to map a business model. He popularised the approach so much so that his supersized canvas now features in workshops throughout the world, always with an array of multi coloured sticky notes as teams debate the best combination of solutions for each box. Whilst the canvas lacks the sophistication of value driver analysis and dynamic modelling, it is about testing hypothesise in each aspect, and how they could work together, and that respect works as a thinking model.

Business models have become a practical tool for rethinking the whole business, seeing the connections and then innovating the business. In fact they offer a great platform to facilitate new strategy and innovation thinking. That’s why I’ve created the Business Innovation Program, which combines design thinking, new business models and strategic implementation – a great way to engage your team, to think about new ways to grow, and to create the future, practically.

As part of the Business Recoded project, and my new book, I profile 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 Tobi Lütke 

Shopify is taking the world’s retailers online. As the world locked down amidst pandemic, stores great and small lost their entire footfall. Overnight, many turned to the Canadian tech company for the tools that allowed them to relaunch, not just with a virtual store, but with the marketing, warehousing, payment and distribution infrastructure too. A small town store could instantly transform itself into a global player.

Shopify now supports over 1.6 million websites in 175 countries, and handled over $120 billion in sales during 2020. Its own revenue grew 86% to $2.9 billion over the last 12 months, and its market capitalisation from $46 to $137 billion in one year, making it Canada’s most valuable company.

40 year old Tobias Lütke grew up in Koblenz, Germany, and started writing code when he was 11 on his Schneider (aka Amstrad) computer. Dropping out of school at 16, he found an apprenticeship with Siemens. His boss was a guy named Jürgen Starr who Lütke idolised. “He was a long-haired, 50-something, grizzled rocker who came to work on his BMW motorcycle and wasn’t wearing a suit like he was supposed to” says Lütke. He immediately gravitated to him and his little group of rebels. “Jürgen was a master teacher. With him, I had 10 years of career development every year”.

Lütke met his wife Fiona in Canada on a snowboarding trip, and in 2002 moved to Ottawa to be with her. Without a degree, he couldn’t get a work permit, but could start a company, so launched an online snowboard shop,Snowdevil, with the financial support of Fiona’s parents (still his largest shareholders, and now billionaires). He struggled to find software to build his site, particularly one that went beyond a catalogue grid, and focused on the stories of snowboarding enthusiasts. Eventually he taught himself to code in Ruby, an open source language, and launched in 10 weeks. He soon started to get more enquiries about his site than his snowboards, people wanting to license his software.

In 2006, Snowdevil was relaunched as Shopify, licensing Lütke’s online store software, and also creating an API (application programming interface) platform that enabled other developers to offer additional tools through the Shopify app. In 2008 he headed to San Francisco at the invitation of several investors, although wasn’t sure he needed money as most of the programming was done by himself. Investors wanted him to move to Silicon Valley, but he refused, saying location is irrelevant to a modern business. However when the global financial crisis struck, he struggled to pay his small team turning to his father-in-law for support again. The silver lining came with a huge growth in customers during the downturn, as many people turned to starting up their own businesses.

In 2010, he launched a Build-a-Business competition, using his own toolkits, with significant cash prizes, and Richard Branson and Eric Ries as mentors. The business grew rapidly, partly by acquiring other software design businesses, and focusing on improving systems for everything from payments to flash sales, warehousing to distribution. In 2015, a year after finally moving out of his parent-in-law’s home, Shopify went public. It also became Amazon’s recommended partner for its Amazon Webstore merchants, while also developing new digital tools for physical stores too.

In 2018 Shopify opened its first physical space in LA, offering workshops and support to small businesses that use Shopify tools. In particular, it has retained a retail vision far beyond transactions, investing in creative studios to help retailers to develop new types of content, from blogs and movies to gamification including esports, and also to embrace social platforms like Instagram and TikTok. Shopify Balance enables farmers, craftsmen and small retailers to manage every aspect of their business online, from their smartphone.

Despite his success, and $9.8 billion net worth, Lütke still shares the passion of Shopify’s entrepreneurs, and is even said to have his own secret Shopify-built store, selling socks.

Recent years have seen a rapid shift in our ways of working.

Online working, obviously – but also more flexible to fit with your life, more collaborative across geographic borders, more access to resources and new work tools like Miro, more multi-tasking, less commuting, more empowered, less formality, more deep work.

The big experiment of Covid-19 lockdowns also brought frustrations – the lack of socialisation, of a team home, the intensity of being “always on”, the seeming lack of purpose and importance given of business given else was happening in the world, and then going back traditional organisations seemed too rigid and hierarchical, and “the great resignation” followed.

Now, as companies look beyond the pandemic, many are deciding whether to bring employees back to offices or allow them to stay at home. But that’s not really the point, it’s not just about where to work.

The future of work is a much bigger question – the search for meaning, the shift towards organic organisations, working in partnerships and ecosystems, rewards beyond money, portfolio working as a norm, finding new ways to engage young people, harnessing digital tools for efficiency, and humanity for imagination.

  • Facebook’s Mark Zuckerberg predicted 50% of his people could be working remotely within 5-10 years, but added “people living outside major cities may be asked to take a pay cut”.
  • Twitter’s Jack Dorsey made headlines when he announced his employees “can now work from home forever” … and then added “if they are doing work suitable to do at home”.
  • Microsoft’s Satya Nadella, however, said the lack of division between private life and work life meant “it sometimes feels like you are sleeping at work”.

The disruption, and experiment, has allowed companies and individuals to reimagine how we work.

Haier, the world leader in home appliances, is a ecosystem of 10,000 micro-enteprises, highly innovative and incentivised. Google did a huge study into what made teams effective, Haufe, the German electronics engineer, has a bi-annual employee vote to agree the CEO, Buurtzorg empowers people to work how they judge best to achieve team goals.

Teal organisations, hybrid models, B corporations, extreme teams, psychological safety, meta jobs, soft skills, project centric, GenZ engagement, new work contracts, portfolio working, employee democracy, human-tech augmentation, and much more.

  • Basetis, a Spanish IT consulting company offering software and digital solutions.
  • Chorus, an Australian care organization providing services to support community well-being.
  • Codewave, an Indian digital transformation company building custom software.
  • Dectris, a Swiss company making high-tech X-ray detectors for science and medicine.
  • EPPO, a Brazilian waste management company focused on sustainability and efficient waste solution.
  • HR-ON, a Danish HR software company offering recruitment tools.
  • Latro, a Turkish chemical company focused on innovative solutions in the chemical industry.
  • Mindera a global software engineering company.
  • Semco, one of the pioneers in this, a Brazilian manufacturing company
  • Smartive, a Swiss web development agency based in Zurich
  • TiER1 Performance a US consulting firm improving workplace performance.
  • Vertica, Danish e-commerce consulting firm, based in Aarhus

I call it “Work Recoded”:

During the height of the pandemic,  42% of US employees and 46% of UK employees were doing some work from home, according to Stanford University and the UK’s Office of National Statistics. Obviously in some sectors, such as healthcare, retail and logistics, people continued to work physically, therefore the number of desk-based workers almost all worked remotely.

A Willis Towers Watson survey of US employers found that they expected 22% of staff to continue working from home after the pandemic, up from just 7% in 2019. About 55% of employers said they expected staff to work from home at least one day a week after the pandemic, a PwC survey found. And more than 80% of employees said they supported that idea.

Brynn Harrington, who is Facebook’s vice president of People Growth, says some workers have been “really thriving” at home and will be keen to continue doing so. “For example, parents who are closer to their children and are happy to cut their commute time and optimise their work day, they’re thrilled to work from home,” she said.

But home working is not great for everyone. “We also have people juggling care giving responsibilities, we have people living in small apartments with roommates, those people desperately want to get back into offices, and we’re working really hard to do that, as soon as it’s safe to open our offices.”

Starting with the bigger picture – the future of work

However we should also see these challenges, and choices, in the context of a bigger picture. “The future of work” was already a huge question before Covid ever hit. Digitally-enabled transformation of every market and organisation demands that business thinks, adds value and works in new ways. Fast and connected, automated or augmented, collaborative ecosystems and empowered teams, gig workers and multi careers, more flexible, more hybrid, more human.

The World Economic Forum’s Future of Work agenda, updated annually, creates a strong vision of a rapidly changing world of work, most significantly driven by the fourth industrial revolution, the challenge of technology, but also the imperative for human ingenuity. My new book Business Recoded builds on this, connecting it with other ideas such as Laloux’s reimagined organisations, Haier’s “rendanheyi” devolved structure, and Google Aristotle’s safe and extreme teaming:

  • Future-proofed organisations – simple, flat and agile structures – connecting people and partners
  • Align new technologies and skills – augmenting and enabling people to add more beyond process and machine
  • Work portfolios – everyone is a project worker, internally or gig-working, lifelong learning and evolving
  • Doing meaningful work – more purposeful, more responsible, more valued outcomes, particularly for GenZ
  • Human-centric leadership – organisations as platforms to enable people to achieve their potential

The pandemic’s disruption has accelerated this shift. Without choice, we all found ourselves experimenting with new environments, new tools, new ways of working. Some of it we loved, some of it we didn’t. But it gave us a glimpse of what’s possible, and some of it will inevitably stick.

Deloitte’s Global Human Capital Trends report for 2021 focuses on the shrift from surviving to thriving, both in the sense of surviving the pandemic and thriving as we emerge, but also a more general complacency in business, to choose stability over change.  It highlights 5 big trends:

  • Designing work for wellbeing (and the end of the work/life balance or separation)
  • Unleashing human potential (beyond skills, enabling new mindsets and freedoms)
  • Building superteams (power of teams, and using tech to augment the humanity)
  • Adaptive strategies (embracing uncertainty, to make better decisions, with agility)
  • Rearchitecting organisations (enterprise-wide mindset, more fluid, connected and human)

One of the most insightful analysis of what is happening comes from Microsoft, and while they clearly have a Teams-centred tech view of of the digital workspace, they are also an organisation of 166,000 people across the world. Over the last two years I have seen at first hand how they are rapidly embracing a new work style, physical and virtual, not just where, but why and how their people approach work.

Microsoft’s Hybrid Work report has key messages including “leaders are out of touch … productivity masks exhaustion … GenZ most at risk … authenticity drives well-being … innovation in danger … talent is everywhere”.

Creating the hybrid post-pandemic workspace

Different organisations are responding differently – partly because they have different types of tasks and cultures – but qually depending on how enlightened they are, or at least their leaders. NTT’s workplace intelligence report found that 31% of companies are implementing additional creative thinking spaces, while 30% will provide more meeting places and 27% will reduce individual desk space.

Turning the office into a digitally enabled, collaboration-first environment will be critical to enabling a hybrid workforce. As companies seek to create a safe, collaborative, and efficient space for their employees, common features include:

  • Smart meeting rooms: spaces that enable employees to easily collaborate with their remote colleagues, often include video-conferencing capabilities, smart whiteboards (eg Miro), mobile-friendly office management applications, and virtual collaboration hardware such as 360-degree cameras.
  • Portable work kit: network technology will need to evolve to support employees constantly on the move between the home and office and third spaces (clients, coffee shops, virtual hubs), meaning a new focus on what tools are needed to support a mobile, connected and productive workforce.
  • Touchdown space: beyond hot desk, a shared space to plug in and work, eg second monitors widely accessible in those desk spaces  can enable employees to move to and from the office while maintaining equal levels of productivity, to work open plan on large tables to encourage informal collaboration and socialising.
  • Activity zones: huddle rooms for one-on-one meetings, phone booths for calls, larger conference spaces and separate, project enclaves to build virtual teams, movable desks and even walls, to create more activity-based spaces while balancing the need for privacy.
  • Local hubs:  rethinking real estate, some companies are choosing to invest in smaller co-working spaces that are closer to employees, such as local hubs within WeWork or Regus centres. Done strategically, this setup can generate sizable cost reductions while fostering a strong sense of community and providing employees with the option to work in different settings.

As companies begin to formulate and test hybrid operating models, continued investment and careful strategic planning are necessary to maintain effectiveness and resilience.

So what are companies actually doing so far?

Microsoft with 160,000 employees is fully embracing a hybrid working future, giving employees personal choice in where, when and how to work. Microsoft said some roles will continue to require an in-person presence, such as those needing access to hardware, the firm added. But many staff will also be able to work from home part-time, without needing formal approval from their managers.

However Satya Nadella said physical workspaces still matter, even for the most tech-enabled business: “We believe in the value of bringing people together in the workplace. Having facilities around the globe enriches our culture with new ideas, fresh perspectives and unique local viewpoints that help us continue learning from each other. From innovation labs to briefing centers, being near our customers and having more touchpoints helps us better understand customer and partner needs, adding value to the great work we’re doing together.”

Facebook is planning to start its return to in-person work in May, after over a year of working remotely due to the COVID-19 pandemic, according to Bloomberg. Facebook CEO Mark Zuckerberg announced remote work plans near the start of the pandemic that promised around half of his employees could work remotely in the next five to 10 years, but until then, in-person work, at least in a limited capacity, is in the company’s immediate future.

Uber is hoping to get back to in-person work even sooner. The ride-sharing company announced that it’ll reopen its Mission Bay, San Francisco headquarters on March 29th, with a limited 20 percent capacity, according to Reuters. Uber plans to follow similar COVID-19 restrictions as Facebook, requiring face coverings, regular cleanings, and asking employees with sick family members to stay home. Prior to this reopening plan, Uber was letting its office employees work from home until mid-September 2021.

Twitter took a big step and made working from home indefinitely an option for all employees at the start of the pandemic. The company doesn’t have a set date for when it will reopen its offices, however, but “it will be gradual, office-by-office, and at a 20 percent capacity to start,” a Twitter spokesperson tells The Verge.

Google’s plans are less certain, and the company didn’t immediately respond to a request for comment from The Verge, but in 2020, it said employees would be able to work from home until September 2021 and that it would explore requiring employees only to work three days a week in-person.

Spotify starts by describing the principles for working, and then how they plan to change:

  • Work isn’t something you come to the office for, it’s something you do
  • Effectiveness can’t be measured by the number of hours people spend in an office – instead, giving people the freedom to choose where they work will boost effectiveness
  • Giving our people more flexibility will support better work-life balance and help tap into new talent pools while keeping our existing band members
  • Operating as a distributed organisation will produce better and more efficient ways of working through more intentional use of communication and collaboration practices, processes and tools.

Spotify defines its  new hybrid work model:

  • My Work Mode – employees will be able to work full time from home, from the office, or a combination of the two. The exact mix of home and office work mode is a decision each employee and their manager make together.
  • Location choices – more flexibility when it comes to what country and city each employee works from (with some limitations to address time zone difficulties, and regional entity laws in the initial rollout of this program). Here, our employees have the same “My Work Mode” flexibility, and if someone chooses a location that is not near a Spotify office, we will support them with a co-working space membership if they want to work from an office.

IBM was a pioneer in the work-from-home revolution before it largely abandoned the policy in 2017, but the company is pivoting again with a new system of remote working, with 80% of the workforce working at least three days a week in the office. “I would imagine that we will get rid of tens of millions,” CEO Arvind Krishna told Bloomberg, referring to square feet of office space. “Are we going to go toward zero, absolutely not. Will we have over half of what we had, most likely.”

IBM employees took it upon themselves to define good ways of working remotely during the pandemic. They created a “work-from-home pledge” that specified company norms such as how to communicate and treat each other while working remotely. This grassroots initiative was ultimately supported by Krishna, which provided a strong signal to the rest of the organization about accepted remote-work norms.

However “When people are remote, I worry about what their career trajectory is going to be,” says Krishna. “If they want to become a people manager, if they want to get increasing responsibilities, or if they want to build a culture within their teams, how are we going to do that remotely?” he asked.

Goldman Sachs’ CEO David Solomon made clear he saw working from home during the pandemic as an “aberration” saying young employees at the investment bank needed direct contact and mentorship that you could only get in the office. “I do think for a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us. And it’s not a new normal. It’s an aberration that we’re going to correct as soon as possible.”

PwC say employees will be able to work from home a couple of days a week and start as early or late as you like. This summer you can knock off early on Fridays too.  Following the pandemic the accountancy giant is offering its staff much more control over their working pattern. PwC chairman Kevin Ellis said he hoped this would make flexible working “the norm rather than the exception”. “We want our people to feel trusted and empowered,” Mr Ellis said. PwC call their approach “The Deal“, built on two-way flexibility, to meet the needs of clients and employees and the company, and to achieve climate goals. It includes:

  • an ‘Empowered day’ – which gives our workforce more freedom to decide the most effective working pattern on any given day – for example, an earlier start and finish time
  • flexibility to continue working from home as part of blended working, with an expectation that people will  spend an average of 40-60% of their time co-located with colleagues, either in offices or at client sites
  • a reduced working day on a Friday, with the assumption the majority of our people will finish at lunchtime having condensed their working week

Siemens, the largest industrial manufacturing company in Europe, announced that its employees may work from wherever they want for two or three days a week. Siemens has around 385,000 employees in more than 200 countries. The work-anywhere— several days a week—decision was due to a global staff survey, in which employees desired greater flexibility in their approach to work. Roland Busch, the deputy CEO and labor director of Siemens, wrote in a tweet, “#Covid19 gives us a chance to reshape our world and reimagine work. To empower @Siemens employees to perform their best, our #newnormal working model will offer 2-3 days mobile working.” The press release highlights

  • Mobile working two to three days a week as worldwide standard
  • Managing Board approves new model for working independently of fixed locations
  • Model based on transformation of leadership and corporate culture
  • Siemens among first large companies to adjust working models permanently

Amazon issued a statement to employees  saying: “Our plan is to return to an office-centric culture as our baseline. We believe it enables us to invent, collaborate, and learn together most effectively.” Not exactly a ringing endorsement of the new work-from-home age, then. Part of the hesitancy is that although many employees want more flexibility, it’s still not at all clear what kind of model works for the companies.

 

“What it Takes” is the memoir of Steve Schwarzman, cofounder and CEO of Blackstone, one of the world’s largest investment firms.

He talks about why leaders need clarity of purpose, to dare to think big, and realise the profound impact of AI. One of his favourite sayings is that “it is just as easy to do something big as it is to do something small”.

Schwarzman grew up in an entrepreneurial family selling curtains in Philadelphia. His father was content with owning one store, but Steve was not. He had more ambition. At high school he wanted to bring the best bands to play. At college he started a dance society to meet more girls. He joined Lehman as a trainee, where he learned about finance and discovered his real strength. In 1985 he co-founded Blackstone with friend Pete Peterson, and grew it to hold over $500 billion in assets under management.

He believes that leaders in today’s complex and uncertain world need clarity of purpose, to dare to think big, and realise the profound impact of AI, saying “it is just as easy to do something big as it is to do something small”.

He believes that successful leaders must have the confidence and courage to act when the moment seems right. They accept risk when others are cautious and take action when everyone else is frozen, but they do so smartly. This trait is the mark of a leader. “To be successful you have to put yourself in situations you have no right being in. You shake your head at your stupidity, but eventually it gives you what you want.”

Having courage

Courage, according to my dictionary, is the choice to confront agony, pain, danger, uncertainty” and includes moral courage, “the ability to act rightly in the face of popular opposition”. Creating the future take courage.

Courageous leadership is what every employee hopes for and what every company needs. A courageous leader guides their people, empowers them by example, gives everyone confidence to do their jobs to the best of their ability.

Do you dare to create the future? The answer might seem obvious, but it means letting go of today, of what has worked over time, and what may still be delivering fairly good results.  Of course, there are ways to mitigate risks, and to do both, but it is typically a leap forward.

Courageous leaders have a strong belief in themselves, and whilst the future may still seem uncertain, you need to believe in the choices you make. Yet if they succeed, they leave a legacy of progress, which is far more satisfying than just maintaining the status quo.

Courage comes in many forms. It starts from inside, asking yourself if you are courageous enough. It requires you to put yourself out there, to be comfortable with being uncomfortable, grasping difficult issues, confronting things directly, grasping the “elephant in the room”, and seeking higher standards

Whilst courage requires boldness and energy, it also demands empathy and humility. Listening carefully to others, revealing your vulnerabilities, saying you don’t know if you don’t, delegating and giving credit to others, standing behind people in moments of failure, admitting mistakes and changing direction when needed.

Consider the three types of courage required of leaders in the workplace:

  • “Courage to try” … which is the courage to take the first step. If you are doing something for the first time, it takes courage. It requires energy to overcome inertia, bravery to beat shyness, guts to give it a go. You might fail, you might get it wrong, or you might do something completely incredible
  • “Courage to trust” … which is required to relinquish control. As a leader, you will need this courage in order to delegate to your employees, to give over control to staff, and to show your team that you trust them. It not only shows people that you trust them, but also that they can trust you not to micromanage their work;
  • “Courage to tell” … which is needed to speak up, openly and with conviction, about your beliefs and ideas. It is about being assertive, confident, and caring. It’s not about sitting there, biting your tongue, or agreeing to disagree, it’s about speaking the truth, saying what needs to be said, stepping up.

Courageous leaders set the stage for others to follow, to accelerate progress.

Vulnerability and confidence

Courage is about leaders having the confidence to stand naked in front of their people, and to declare that they all need to do better, says Brene Brown in “Dare to Lead.”

Brown says that the biggest barrier to being a courageous leader is not fear. Everyone is afraid of change, complexity and uncertainty. The question is how we address fear – do we put up our shields in defence, or do we step forwards to tackle it?

She says that, for many leaders, their defensiveness limits their courage. They become more concerned about image than action, about being right, than making things better.

Brown describes four ways in which we can grow our courage

  • Being vulnerable: having the courage to take part even if we can’t control the outcome, opening ourselves up to people, taking on difficult conversations.
  • Living values: standing up for what we believe in, whether it be expressing a strong opinion on a controversial topic, or following through with actions.
  • Trusting people: being the first to trust others, having the vulnerability and courage to have well-judged faith in people, and they will then reciprocate.
  • Rising up: how we respond to fear or failure, when things don’t go according to plan, using our “growth mindset” to rise up to do better.

Whilst you need to step up to look beyond, you need to step forwards to take action.

Yet the future fills many of us with trepidation. It’s the unknown, and we don’t like not knowing. 54% of CEOs said that the uncertainty was their single greatest obstacle to creating the future, in a recent survey by EY, while IBM found only 41% of organisations believed they had the leaders to execute business strategy in today’s uncertain world.

Embracing uncertainty

We need to embrace uncertainty, and the opportunities it offers. We have grown to depend on precise knowledge, and detailed analytics based on the past. We prefer to make decisions based on certainty, to minimise risks and to maximise efficiency. When we are faced with incomplete information, high uncertain and therefore much higher risk, it is easy to feel paralysed. What can you do?

  • Jump in: without embracing a challenge, you will never understand it, so better to start somewhere, to get started, to make sense of the situation. Actually the biggest part of making decisions, is understanding the problem.
  • Accept you don’t know: you’re unlikely to have all the data, so start to explore the options and consequences of taking them, evaluate them the best you can within the context of what you are trying to achieve.
  • Make the best choice you can: no decision will be perfect, because there are no right answers, and many decisions will have both upsides and downsides. 60% confidence that it is the right choice is good, 80% confidence is great.

The CEO Genome is a research project by Elena Botelho and Kim Powell, seeking to understand the common attributes of leaders. They found that much of what people assume to be the route to leadership, is actually wrong in today’s world.

Whilst we might think of leaders as the most ambitious in our team, over 70% of CEOs never had designs on the top job until much later in their careers. And whilst an elite education used to get you places, only 7% of leaders went to top-tier universities, 8% didn’t seek any higher education at all.

Most leaders have had to overcome some form of adversity in their journey, which may not create a “perfect” resume, but does equip them better to lead in the real world. Adversity in upbringing, adversity in previous jobs, adversity in their personal life. These are the moments that flex are muscles, but more importantly our minds. They are the moments that give us hunger, and determination, and courage.

Dare to be more

Leadership demands confidence and conviction. As a leader you suddenly have a constant stream of decisions coming at you, some strategic, many tactical. Whilst delegation is an essential tool, for many questions, the buck stops with you. You need to be decisive. You need to be reliable. You need to be adaptive. And you need to be bold.

Whilst many leaders can speak eloquently, can engage with their people, say all the right things about the need to focus on customers, to believe in people, and to drive profitable growth, the courageous leader is able to do much more. They have:

  • Courage to inspire people to reach for new levels
  • Courage to challenge the status quo
  • Courage to take big decisions despite many unknowns
  • Courage to innovate in areas or ways not done before
  • Courage to act rapidly and decisively
  • Courage to initiate difficult conversations
  • Courage to take blame, to listen to everyone
  • Courage to be open, honest and admit mistakes
  • Courage to give credit where it is due

Leaders can always take the path of least resistance, they can maintain the status quo and not rock the boat, they can avoid addressing the real problems and instead seek temporary solutions, they can seek only small changes and avoid strategic risks, they can play politics and blame others, and seek to see out their term with the promise of a good pension. Or they can realise that in a world of relentless change, this will simply lead to quiet stagnation, to gradual decline, for themselves and their organisations.

Now is the time

Now is the time for leaders to step up – to have the courage to reimagine the future, to drive change and transformation, to take their organisations to a new place. As we emerge from the pandemic, there is no going back to where we were. We need to find a new place, a better place, and shape the future to our advantage.

Now is the time for leaders need to dare to be more – to be bold, brave and brilliant.

© Peter Fisk 2021

The pandemic pivot to digital, in some cases a decade of change in just 12 months, is perhaps most obvious in the rise of a new generation of integrated, mobile-centric service businesses known as “super-apps”. One of the most popular is WeChat, particularly in China where everyday life centres around the single app.

In recent months, there’s been a huge development in functionality and popularity of these super-apps. WeChat evolved from a social media platform into much more. GoJekand Grab both evolved from taxis to deliveries and payments. China’s Meituan started in food deliveries, and then mushroomed. As did Colombia’s Rappi. There is Line in Japan, Sea in Singapore, Bolt from Estonia, and Jio’s phenomenal free phone-driven growth in India.

Super-apps are sometimes likened to the Lord of the Rings’ mythical “one ring to rule them all”. They create more value for business by offering more ways to engage with existing customers, more often, more profitably. Customers can easily move from food orders to fashion, utility bills to movie tickets, taxis to games, in one click. No need to enter new passwords or payment details. As a result, there are huge efficiencies in customer acquisitions, technology infrastructures, and management. Investors love them too.

 

WeChat … from Chinese social media to mobile payments, launched by Tencent in 2011, and with 1 billion monthly users by 2018. It includes a diversity of messaging and video conferencing services, video games and photo sharing. User activity is tracked by the government, who also use it for government services, public information and social “credits” (or fines).

Gojek … launched in Indonesia as a motorbike taxi and delivery service in 2009 (“Ojek” means motorbike taxi), then rapidly spread into over 20 services and across nearby countries. GoRide, GoShop. GoPay. But also GoMed (healthcare), GoTix (tickets), GoClean (cleaning), GoGlam (hairstylist), GoAuto (car repairs), Go Bills (utilities), and even GoMassage.

Rappi … the Colombian super-app, has spread to over 200 Latin American cities over the last 5 years. It has a similar diverse range of services, some of the most popular being cash deliveries (from ATM to home) and dog walking. Also in demand during the pandemic have been RappiMall and RappiEntertainment, including live music and sports.

The term “super-app” was coined by Mike Lazaridis, the founder of RIM (Research in Motion, the Canadian company behind the Blackberry). In 2010, Blackberry was the market leader in smartphones, with a 42% global share. At the Mobile World Congress 2010 he introduced Super Apps, describing them as integrated, contextual, and seamless “apps that once you start using, you wonder how you ever lived without them”.

Key to this integration is the payments engine, which most have developed themselves, and in many cases that has meant essentially becoming banks too. Alipay, now evolved into Ant, is a powerful example. Indeed, Piyush Gupta, CEO of Singapore’s DBS bank recently said that payment platforms like GrabPay are their biggest challenges.

This also starts to explain why many tech platforms in more developed markets, like Europe and North America, have not evolved into super-apps. There is more established competition, delivery networks and payment services. Amazon, Google, Facebook, Microsoft offer diverse content, but not the same range of transactional services like deliveries, transport, and utilities, as many of these rising stars of the developing world.

What are the best ideas for business leaders to drive growth?

It’s been a difficult time. Growth has certainly not been the first word on most executive minds over recent months, as the impact of the pandemic have challenged every business, every industry, every part of the world.

However it has also been a time of incredible shake-up, shaking out those companies who were living on borrowed time (like Hertz who just didn’t evolve, or WeWork’s failed business model), and waking up those struggling to survive in a changing world.

Other companies have done remarkably well, accelerating innovation and growth, as consumers and industry structures have adapted and evolved (Tesla is the poster child with 690% market value growth last year, but many others too, digital platforms like Amazon and Pinduoduo, but also those that work with them, like Adyen and Visa).

So what are the best ideas for growth?

Each year I spend time looking for what is new, what matters and what works. I’m looking for practical tools that make a difference. They might come from thinkers, as typically collated by the like of Thinkers50 and Strategy-Business, but might equally come from practitioners, the most innovative companies around the world. I’m focused on the ideas that have impact, not just the intellectual concepts or personalities. Ideas that help you grow.

Here are the top 10 ideas:

Reimagining Capitalism … The drive for a more enlightened approach has been coming for sometime – stakeholder capitalism, shared value, purpose and profit – now really is the time to redefine why we do business, and what’s the real goal. Rebecca Henderson, born in London but now based in Boston, has a huge passion for this topic, and a great new book.

New Power … The shifts in power are obvious in some ways – look at the economic growth of Asian markets in recent years, or the influence of social media on consumer decision making – but in other ways are more subtle. Crowd power and collaboration are transforming how we invest, how we innovate, and the impact we have. Heimans and Tims show us how.

Managing Complexity … Sensemaking has become a crucial part of growth, understanding the complexity of growth drivers, and how new opportunities will really emerge. Clearfield and Tilcsik do a great job showing how everything is connected, but so do the likes of Kotler and Sarkar with their Wicked 7 project to address the world’s biggest problems.

Seeing around Corners … S curves are a simple representation, prompting much discussion about how markets evolve and businesses grow. Finding the inflection points enables us to know when new opportunities take offer. Look to outlying consumers, changing behaviours, market disruptors and parallel markets, to find the signals of change.

Self-tuning strategies … This could do the likes of McKinsey out of business, yet by harnessing the power of data, there’s no reason why a company can’t actively manage growth strategies themselves, and adapt them every day rather than once a year. Ming Zeng pioneered this approach at Alibaba, then wrote the book about it.

More is not better … Most businesses are obsessed about size, look at how many companies will drive revenue growth at any cost, and look to market share as the key metric. Ultimately they realise that such volume-based growth is limited and up squeezing more and more costs out of business. By growth, we mean profitable and sustainable growth.

Growth Portfolios … there are lots of useful ideas from Osterwalder and team, but the most valuable is probably the idea of thinking about innovation and growth in terms of portfolios – to exploit today, and explore tomorrow. Complex and uncertain markets mean we need more ideas, more options, more eggs in our basket. To survive, and also thrive over time.

Future Faster … I often say that we will see more change in the next 10 years than the last 250 years. Diamandis would suggest we will see 1000 times more growth in that time. His passion is for the unlocking of exponential technologies. We’re all familiar with exponentials, but the key to driving them is the multiplying impact of using network-effects and his 6Ds.

Pivot to the Future … At some point you need to make the shift, from old to new world (like IBM most famously did, from computers to consulting). Pivots are becoming more common, in every kind of business, not just something start-ups do as they search for a meaningful business. When do you jump to new markets, develop new business, and shift your core?

Rocket Science ... Ok, this is fun in some ways but Ozan Varol takes his ideas as a scientist (creating the Mars Rover vehicle) and applying it to business. It brings together lots of the established ideas, from questions and lean thinking to moonshots and experimentation, to accelerate your mind to bigger opportunities in your “explore” portfolio.

These are the first 10 ideas in my overall framework, 50 Best Ideas for Business Leaders. These form an inspiring keynote session, or practical workshop for you and your teams. The ideas are constantly updated and published each year.

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