Global futurist. Innovative strategist. Bestselling author. Inspiring speaker.
Today I bought my 100th pair of Nike Pegasus running shoes. Now in its 37th design generation, the Pegasus model has come a long way, and endures at the heart of the Nike range. I’ve been running for over 40 years now, incredibly (but of course I don’t feel that old because I’m a runner!), and I’ve stayed loyal to this shoe in all that time, though its many design interpretations.
I bought my first pair of Pegasus in 1983. I actually remember the day. Living in the north east of England, I was immersed in a region of great running heritage. As a 9 year old, I had started running with a pair of Nike Wally Waffles, a kids version of the early waffle trainer, and inspired by the recently retired Brendan Foster, who had brought the Nike brand to England.
By 1983, when I was 16 and winning north of England 1500m championships myself, the global force in athletics was another Tyneside athlete, Steve Cram. 1983 was a big year for Cram, winning the World Championships 1500m, and stepping up to superstardom. Nike had latched onto Cram, like they had years earlier with Michael Jordan, creating a Cram range of clothing and shoes in his distinctive black and yellow colour scheme. And Pegasus shoes too.
Every shoe brand creates a wide range of shoes, from cheaper to expensive, with a wide range of applications (indeed in the last 12 months I have bought a pair of Pegasus Turbo for fast workouts, and Pegasus Trail for the mountains). But Pegasus has always been a mid-range shoe – you can train in, and race in – not cheap, but it’s not expensive either (actually less that half the price of Nike’s most premium shoes, like the AlphaFlys, of Kipchoge marathon fame).
These days I live in Teddington, just outside London, a town full of runners who cross paths on their daily runs in the nearby royal parks, Bushy and Richmond, and along the River Thames. It’s home to four times Olympic champion Mo Farah too, another Nike sponsored athlete. Of course, he could have any running shoe he wanted, and even gets them customised with his name and logo. But look closely, and you will see that he also most often chooses the Pegasus to churn out the miles.
I’m never quite sure when brands update a trusted model. Will the next version be as good as this one, can it be, do they really need to change it? So when Nike said the Pegasus 37 was coming soon, I quickly bought up some remaining 36’s, just in case. And now the 37 is here. I needn’t have worried, the Pegasus has evolved, but always stayed true to itself, and each version has always been a step forwards.
https://www.youtube.com/watch?v=dMx-A37yKAo
Oh, and here is how Nike remembers it’s most enduring shoe too.
Nike introduced the Pegasus, intended to be the shoe for every runner, in 1983. It was designed to be half air (similar to the winged half-horse it was named after) to represent movement, quickness and the allure of flying. In its 35 years of life, it has undergone major technology shifts and supported training efforts of countless everyday runners and even some of the world’s best distance runners. But it wasn’t always Nike’s golden running shoe:
2. NIKE, Inc. Chairman, President and CEO, Mark Parker, was part of the team credited with making the first Peg. At the time, he was the manager of advanced product designs and the director of design concepts and engineering.
3. The Pegasus was the first shoe to feature an Air Wedge, a heel-only Air unit that, according to an October 1982 Nike catalog, “improves shock absorption by 12 percent over an EVA wedge” (which it replaced). In fact, it’s why the shoe was originally called the Air Wedge Trainer.
4. A children’s model became part of the line-up in 1987.
5. Visible Air was introduced to the shoe in 1996.
6. NIKE, Inc. founder, Phil Knight, may be wearing a Pegasus (in black) right now. He’s been spotted in Peg at black-tie events, public speaking appearances and between meetings at Nike’s World Campus in Beaverton, Oregon.
7. The franchise was temporarily dropped from the line in 1997. In 1998, it was renamed the Arma, and the technology (essentially) remained in the line. It made its official return to the line in 2000 as the Air Pegasus 2000, which was designed by Air Max Plus designer Sean McDowell as part of the newly created Bowerman Series (a collection dedicated to making consistent, dependable footwear for runners by runners).
8. In 2004 and for the first time in Pegasus history, the women’s version was adapted specifically for the anatomy of the female foot. The women’s saddle was made more “curvaceous,” and the medial support was increased. It wasn’t until 2006 that it became completely gender specific. And for 2018, if offers responsive Cushlon foam specifically tuned for women for the first time.
9. It’s the first non-basketball shoe to feature Nike FlyEase.
10. The 2018 Peg takes inspiration from the Zoom Vaporfly 4%, and for the first time offers a full-length articulated Zoom Airbag. (To prove an Airbag could be curved similarly to the way the 4%’s carbon-fibre plate was, the designer heated an Airbag in his microwave then wrapped it around a beer mug).
The Business for Inclusive Growth (B4IG)coalition was launched in 2019, led by Emmanuel Faber, CEO of Danone, and supported by OECD. Today, 38 multinationals have signed the B4IG Pledge with a common goal: fighting against inequalities. B4IG’s work is focused on advancing human rights in company value chains, building inclusive workplaces and strengthening inclusion in companies business ecosystems.
Faber says to business needs to “rethink economic models, curbing the inequalities that have been rising for decades, and magnified by crisis”.
Covid-19 as a catalyst for “Inclusive Growth”
The OECD’s analyses confirm that the global health crisis comes with unprecedented financial, economic and social repercussions in the 21st century. COVID-19 is a crisis taking a toll on human lives, but it has also sparked the largest financial, economic and social crisis that many people will see in their lifetimes. With the evidence of broadening inequalities, the OECD is urging governments and businesses, in confronting the health crisis and its economic fallout, to make choices that enable individuals, families, and communities not only to regain health, but to emerge from the crisis onto solid economic and social ground. For the first time, people are looking almost equally at government (63%) and business (62%) to act, according to the 2020 Edelman Spring Trust Barometer. B4IG members are responding to this call, both through concrete actions and by calling on the public and private sectors to embrace steps towards an inclusive recovery.
€38bn euros of business support
The context of this major crisis gives B4IG even more relevance and meaning. In response, B4IG companies have dedicated over €38bn euros in relief plans or support of their employees, communities, clients and suppliers.
In cooperation with governments, banks in the B4IG coalition will support financial relief efforts for more than €35bn. Other B4IG companies committed €1.9 bn to support their ecosystem of consumers and suppliers. They spent more than €885m in donations since the start of the outbreak and provided medical protective equipment up to 120 million units.
These contributions supported actions corresponding to the coalition’s commitments and echo the priority needs identified by OECD member states to promote a people-centered response to the crisis:
Donations (funds or products): €885 million
Companies financial commitments to their ecosystem: €1.9 billion
Financial institutions funds made available in relief efforts: €35.5 billion
Units of Protective & medical equipment: 120 million units
Examples of Covid-19 initiatives
Providing essential financial assistance, loans and liquidity to vulnerable businesses, clients and suppliers. Financial institutions are very active: Goldman Sachs provided more than €460m as emergency loans to small businesses, Legal & General €297m in pension de-risking transfers. In Italy, its second domestic market, Credit Agricole rolled out a €10bn relief programme made of business loans, treasury facilities, and a moratorium on loan payments for SMEs and retail banking customers. In the food industry, €300m has been made available by Danone to support 15,000 of its small and medium business partners.
Providing direct assistance to vulnerable groups to cope with the social and economic crisis by providing food or essential goods and services. For example, Unilever is providing soap and hand sanitizer worth €50m to the COVID Action Platform of the World Economic Forum, as well as another €50m for campaigns, education and products to support handwashing through associations and partners. Sodexo continues to provide students access to food by distributing 300,000 meals a day.
Helping to overcome the health crisis by funding healthcare centers, hospitals or research institutes working to find a cure or treatment, providing emergency medical supplies and other critical health- related essentials. For example, Johnson & Johnson has announced a lead vaccine candidate for COVID- 19 and has committed to supply one billion vaccines worldwide for emergency pandemic use.
Supporting employees’ earnings and jobs through securing wages during the crisis, appropriate re- arrangements of work schedules together with relevant public interventions. For example, to help put people back to work quickly in areas of new opportunity, Accenture created a virtual B2B initiative to connect companies that urgently need people with those that have people available.
Ensuring the continuity of supply and provisions of essentials – such as water, food and energy. For example, Engie has refunded low-income families for 2 months of energy fees, reaching 600,000 households.
Emmanuel Faber, Danone CEO and chairman of B4IG Board “At the time we launched this coalition last August, no one could imagine we’ll be facing a situation such as the Covid-19. With this sanitary crisis comes the economic one and if we are not collectively softening its effects, an unprecedented social crisis will follow. The role of the private sector in responding to this crisis and driving an inclusive and green recovery is fundamental. But no company can face global issues alone. Collaboration has never been as critical. The members of B4IG have shown real leadership to date; I am convinced that by working together and with governments, we can go much further. We must capitalize on this moment to build the companies – and societies – of the future.”
Examples of B4IG projects in companies
Accenture – Work+People Project : A B2B project to connect companies who have experienced layoffs with thosehavingsurgingdemand. WithunemploymentsurpassingrecordhighsasaresultofCOVID-19,Accenture created People + Work Connect in just 14 business days to enable companies, at no cost, to connect directly and review their workforce needs together. The effort, geared towards both sides of the jobs equation, allows companies to rapidly share the locations and skills of their laid-off or furloughed workforces, and connect with other companies that are rapidly hiring to meet demand. At zero cost for employers to join and participate, the initiative is designed to shorten the complex, lengthy cycle of unemployment.
Designed by CHROs from Accenture, Lincoln Financial Group, ServiceNow and Verizon, People + Work Connect is powered by an analytics-driven B2B platform built by Accenture. Global and cross-industry, it pools non- confidential and aggregated workforce information by categories such as location and experience. It enables companies to see talent needs across a country, providing a city-by-city view into the demand for talent—for example, what companies that are hiring are looking for, and what types of jobs they have available and when. Employers can also dig deeper to filter by industries, the amount of job experience required, job titles and who to contact to ensure direct facilitations and smooth transitions of workforces. In the UK, our pro bono support helped migrate the entire National Health Service to Microsoft Teams—enabling virtual, real-time communications for 1.2 million healthcare professionals—in just one week.
Julie Sweet, Accenture CEO “The success of this program is the shared success of all companies who are participating and the incredible organizations and associations who are helping us rapidly scale participation. This program is about leaders who are committed to only two outcomes, putting people back to work and helping companies, and eventually governments, who need to hire people to provide the essential services on which we all rely.”
AXA – Telemedicine : Rapid access to doctors for all, everywhere, while respecting the rules of social distancing. Facing Covid19, AXA has expanded its telemedicine service to provide broader access notably in France, Belgium, Italy. Telemedecine has ensured a quick and reliable diagnosis when the emergency services in hospital were saturated and city doctors not prepared to receive highly contagious patient. AXA is also deploying this service for emerging customers (low income to mass market segments in emerging countries), who are the more vulnerable in this crisis (first to lose revenues, with difficult access to care networks and medical treatment). Often bundled with simple and affordable insurance products, the solutions include access to Covid19 symptom checker and free teleconsultation with certified doctors, to reach 1 million people. Already deployed in Indonesia, Malaysia, Mexico, The Philippines, Thailand, United Arab Emirates, similar initiatives are being prepared for India and Egypt. This is a response to covid 19 but beyond the sanitary crisis, it is a way to provide to these vulnerable populations, with difficult access to health, accurate medical information and treatment in the long term.
Thomas Buberl , AXA CEO “The covid19 crisis is exacerbating inequalities and making our collective effort within the B4IG coalition even more relevant. Inclusiveness will be essential to rebuild a more resilient and fairer post-covid economy. Customers, employees, suppliers, partners… protecting our most vulnerable stakeholders by securing access to affordable basics products and services matters more than ever when confronted to such a socio-economic shock. In particular, insurance plays a key role in providing a safety net for the communities around the world. ”
BASF – “Helping Hands” Initiative. To help overcome the pandemic, BASF has launched the “Helping Hands” initiative. At selected sites across the world, we are producing around 175,000 liters of disinfectants per week which are distributed free of charge to hospitals and other public healthcare facilities. In addition, BASF provides protective equipment and financial support. In Germany, BASF has donated more than 100 million protectivemasks to the Federal Government. All in all, BASF is committing approximately €100 million worldwide to fighting the pandemic.
Martin Brudermüller, CEO “In August 2019, we pledged to play our part in the fight for a more inclusive economy. Today, with countries and societies all around the world being confronted with unprecedented challenges, we want to play our part, too, and help fight this pandemic. We do not only ensure that our 120,000 employees work under safe conditions, we support the societies we operate in as a responsible company. We have bundled our contribution in the “Helping Hands” initiative. In addition to many local BASF activities worldwide, we donated more than 100 million protective masks to the Federal Republic of Germany. Globally, we currently produce around 175,000 liters of hand sanitizer per week free of charge for hospitals and other public healthcare facilities. For us, this is a matter of solidarity. »
Caisse des Dépôts – Supporting strategic sectors – especially those that are key in making sure we can fight off large-scale pandemics – by strengthening the resources invested in specific market funds. CDC is setting up and investing alongside major insurance companies close to €2bn, in an equity and debt investment package targeting strategic small and mid-cap companies, through the Novi-Novo-Nova funds and through new funds dedicated to the health sector.
Eric Lombard, Caisse des Dépôts Group (CDC Group) CEO : “ CDC Group is fully mobilized to support the French economy, in line with the measures taken by the government to limit as much as possible the social and economic impacts of the current health crisis. By lending support to the real economy, notably through the State-guaranteed lending scheme operated by our joint-venture with the State Bpifrance, we are taking the necessary steps to ensure that French companies come out of this crisis as unscathed as possible. Support is also needed at social level : in the early stages of the crisis, CDC provided an additional €20bn liquidity support to secure the funds of French social security organizations as they are undergoing a fall in social contributions due to the contraction of economic activities. Some of our main subsidiaries have remained active throughout the pandemic to deliver essential public services on a daily basis : mail delivery (La Poste), electricity supply (French electricity transport system operator, RTE) or local public transport (Transdev).”
Crédit Agricole SA – Engagements to society, corporates and personal customers. Credit Agricole is supporting society through €70m in donations to solidarity funds including a €20m solidarity fund for the protection of seniors, creation of a solidarity fund in Morocco and a donation to the Red Cross in Italy.
Crédit Agricole has deployed financial facilities comprising new loans (including State-Guaranteed), deferrals, moratorium and insurance, for more than €33bn, including funding in connection with public authorities including deferrals on 335,000 loans representing €3.4bn and a €10bn programme in Italy for loans and moratorium on loan payments. To personal customers there is an option to defer or shift maturities with no special attention paid to most vulnerable customers.
Credit Agricole Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A., said : « Faced with this unpredictable global health crisis, it is our responsibility to protect not only the people but also the economic and social fabric of our society. In addition to its support to the economy, Crédit Agricole has reaffirmed its societal commitment, which underpins its raison d’être: “Working every day in the interest of our customers and society”. In total, more than €70 million were donated via solidarity funds to healthcare workers, elderly people and other vulnerable populations as well as research. In support of our customers, the Group is mobilising its human and financial resources for SMEs, small businesses, farmers as well as individuals. For example, a €210-million cooperative support mechanism has been set up to help professionals facing business interruption. All of these measures demonstrate the Group’s commitment to helping society weather the crisis.”
Danone – Supporting vulnerable business ecosystem : Danone is supporting small and medium sized companies in its ecosystem that are experiencing a direct impact of the COVID-19 outbreak. Danone’s objective is to maintain strong relationships with their suppliers and help them overcome this unprecedented crisis. Danone committed to a financial support of EUR 300M , financed by its cash flow, to the 15,000 small businesses in its global ecosystem (farmers, suppliers, service providers), to the entrepreneurs of Danone Manifesto Ventures’ portfolio, and to the communities of Danone Ecosystem.
Edelman – To help companies and organizations better understand current best practices for communications, Edelman set out to learn where people were getting their information, how much they believed it, and their expectations for business. The Edelman Trust Barometer Special Report. Edelman formed a COVID-19 advisory team supporting businesses and organizations and they are also providing solutions that can help minimize the impact of COVID-19.
“This is now a moment of reckoning for business, which must deliver on the promise and viability of a stakeholder approach to capitalism,” said Richard Edelman, CEO of Edelman. “We must use the Return to Work as a moment of responsibility and implement the appropriate measures to ensure the health and safety of employees and customers, the inclusion of small business in supply chain and the retraining of workers.”
Goldman Sachs – Small Business Resources – Goldman Sachs is marshalling our resources to support small businesses struggling with the economic fallout of COVID-19. As part of Goldman Sachs’ Global Small Business Stimulus Package we have committed $500 million to provide emergency loans to small businesses deployed by Community Development Financial Institutions (CDFIs), Minority Depository Institutions, and other mission- driven lenders. Goldman will also provide $25 million in grants to CDFIs and other mission-driven lenders to ensure they have the necessary capacity to underwrite and deliver loans to small businesses as soon as possible
GINGroup: Donations to support front line workers in Mexico. GINgroup made a donation in kind of surgical uniforms to the National Institute of Respiratory Diseases (INER) for one of the hospitals indicated by the Federal Government for case care by COVID-19 .
Raúl Beyruti, Gingroup CEO : “Gingroup’s most important objective is to detect, develop and retain talent. This is possible with living wages and inclusive jobs. In the face of the health, economic and social crisis, we are even more committed to achieving the most vulnerable sectors, obtaining a living wage through training and teamwork with governments and academia. Digitization will play a key role in achieving successful businesses and happy workers. We have to invest in the education of the most disadvantaged, but what we do together the world of our children we have no opportunities. The B4IG initiative is a great example of how the private sector, governments and civil society must reinvent ourselves and work together for the benefit of all. Our actions will be those that define the world that received our children. Let’s fight for an inclusive ecosystem.”
Henkel – A comprehensive global solidarity program to support employees, customers and affected communities facing the global COVID-19 pandemic. The program consists of a donation of 2 million euros to different funds and organizations, of which one million euros will be donated directly to the COVID-19 Solidarity Response Fund launched by the WHO and the United Nations Foundation. Henkel will also donate 5 million units of personal and household hygiene products globally, and has converted a production facility within just one week to produce hand disinfectants to be donated to hospitals and public institutions. Since the onset of the crisis, Henkel has addressed the situation proactively through its crisis management teams. The primary objective is to do everything possible to ensure the safety of employees, customers and business partners and to maintain operations under these challenging circumstances.
Carsten Knobel, Chief Executive Officer of Henkel. “At Henkel, we are committed to help addressing this unprecedented challenge. We stand united in our fight against the pandemic, striving to protect our employees and their jobs, serving our customers and supporting the communities in which we operate. In line with our values, we have launched a comprehensive global solidarity program. This includes financial and product donations to international and local organizations as well as specific support initiatives for our communities, customers and business partners.”
Johnson & Johnson – Partnership to develop a not-for-profit vaccine. – Johnson & Johnson has announced investigational COVID-19 vaccine candidate and preparation for vaccine production. Additionally, Johnson & Johnson Co-Founds the Pandemic Action Network alongside the Bill & Melinda Gates Foundation, to ignite a global movement to help accelerate an end to the COVID-19 pandemic and enhance our preparedness to stop future pandemics.
JPMorgan Chase has made an initial $200 million global business and philanthropic commitment to support vulnerable and underrepresented communities, existing nonprofit partners and underserved small businesses. This includes low-cost capital to help underserved small businesses and nonprofits and $50 million in philanthropic capital to help address the immediate humanitarian crisis, as well as the long-term economic challenges facing the most vulnerable people and communities.
JPMorgan Chase Chairman and CEO Jamie Dimon “This crisis is exacerbating the challenges facing the most vulnerable in society. At times like this, it is even more important that business, government and community leaders work together on solutions that help provide immediate relief to those hit hardest by the pandemic and ensure the recovery is inclusive,” said JPMorgan Chase Chairman and CEO Jamie Dimon.
Kering – The Balenciaga and Saint Laurent Houses have reorganized their workshops to produce 15,000 surgical masks a week. These are distributed to medical staff in Paris hospitals.
Keurig Dr Pepper – Keurig Dr Pepper has taken extraordinary steps to keep its employees safe and healthy, deliver for its customers and consumers and provide for its communities during this unprecedented time. The Company’s Fueling the Frontline initiative has outfitted thousands of break rooms in more than 350 hospitals with the donation of Keurig brewers and a total of over two million cups of coffee and other beverages for healthcare workers in need. The Company also recognized its own frontline employees, who continue to make, distribute and restock retail shelves, with financial incentives and enhanced benefits, as well as a free Keurig brewer and coffee as a gesture of appreciation for their dedication during this crisis. In addition, the Company enabled its office employees to gift a Keurig brewer and coffee to an essential worker of their choosing. In otherrelief efforts, Keurig Dr Pepper donated $250,000 to the National Restaurant Associations’ Employee Relief Fund to provide cash grants to U.S. restaurant workers financially impacted by the COVID-19 crisis and 5,000 meals to the Together Without Hunger campaign – a Panera, Feeding America and DKMS initiative.
L’Oréal – Supporting needs of healthcare and businesses ecosystem through operations: Production and delivery of hydro-alcoholic gels (more than 40M units) to support the needs of health authorities worldwide. The Group also offered expertise to authorities to help source medical supplies. L’Oréal is also working actively to support its suppliers, especially the hard-hit ones. In particular, the group has shortened the payment delays of 9 000 suppliers and froze the payments of 100 000 clients (hair salons, small perfume shops) until their businesses resume.
Jean-Paul Agon L’Oréal CEO “In this unprecedented context, L’Oréal’s absolute priority has been to ensure the health of its employees worldwide and maintain jobs and salaries for all L’Oréal employees worldwide. The Group has also been providing support to health authorities and has taken a large numberofsolidaritymeasuresforitscustomersandpartnerstohelp ineverypossibleway.Assuch,the multifaceted solidarity programme that we implemented all over the world included both sanitary, economic and corporate citizenship measures. In particular, the prompt turnover of 70% of our plants allowed for the production and delivery of more than 40M units of hydro-alcoholic gels; but we also shortened the payment delays of 9 000 suppliers and froze the debt of 100 000 clients; offered our expertise to authorities to help source medical supplies, and finally partnered with non-profit organizations, to help the most vulnerable members of society now more than ever. Through these actions, L’Oréal wanted to express its recognition, support and solidarity towards those who are demonstrating extraordinary courage and selflessness in their efforts to combat this pandemic.”
Mars – is providing cash and in-kind donation of $20 million to support the people, pets and communities most affected by COVID-19. This includes, a $5 million donation to support CARE for critical supplies and expertise that will be deployed in the developing world, to women, children and refugee populations; $2 million donation to the United Nation’s World Food Programme (WFP) to aid in the transport and delivery of critical supplies for all United Nations agencies as they respond to the pandemic; and $1 million donation to Humane Society International (HSI) to help cats and dogs that have been abandoned, left behind or surrendered to shelters due to their owners falling ill or no longer having the financial means to care for them.
Ricoh – Ricoh has designed new face shields with improved comfort and which offer a re-usable solution to reduce costs. They are producing more than 40,000 a week for health workers in the UK and Japan and are also supporting production in Italy, New Zealand, Guatemala and Argentina.
Jake Yamashita, President and CEO of Ricoh “ Looking at the numbers of people working from home or holding meetings remotely demonstrates how coronavirus has accelerated a shift to new ways of working. This shift is also supporting increased diversity in the workforce as many can now fulfil their roles from anywhere. Ricoh, as a digital services company, is supporting organizations of all sizes to make this transition seamless, including over 2,300 small and medium business customers for the last three months in Japan, whilst ensuring we play a positive role in society.
Schneider Electric – Tomorrow Rising Fund : A fund dedicated to emergency and longer-term reconstruction actions related to crisis recovery in the territories where Schneider Electric operates. Through initiative and dedication, Schneider Electric is working with customers, partners and its communities to mitigate the impact of the crisis on the way people live and work. The Schneider Electric Foundation, and specifically the Tomorrow Rising Fund, will respond to emergency today for affected communities all over the world, and support recovery tomorrow for education and professional training of vulnerable youth. Schneider donates time, knowledge and funds to support those most impacted as economic activity slows down. Today, 57 countries where Schneider Electric operates have contributed to these actions through 37 projects, with an impact on 265,000 people, thanks to the commitment of Schneider Electric Country Presidents and the network of the Foundation Delegates.
Jean-Pascal Tricoire, Schneider Electric CEO, “We need to learn from this crisis. About both the value of digital to bring greater resilience, and the importance of trust. We have founded the Tomorrow Rising Fund to support communities around us, business and non business, and to prepare a more resilient future with clean technology.”
Sodexo – Employee Support Programme – Sodexo established a global Sodexo Employee Relief Program for its employees facing layoffs due to site closures. This €30 million global program is being administered locally according to the specific needs of each country and support provided will depend on various factors, including the existence of government social protection programs. It is being funded by the senior executives and the company as follows: Sodexo Chairwoman Sophie Bellon and CEO Denis Machuel waive 50% of their fixed remuneration and the top 200 Senior Executives including the CEO give up on their variable remuneration.
Unilever – Helping to protect lives and livelihoods from the Covid-19 pandemic. Unilever contributes more than €100m to continue helping people affected around the world. The company’s actions are designed to help protect the lives and livelihoods of its multiple stakeholders – including its consumers and communities, its customers and suppliers, and its workforce.
Alan Jope, Unilever CEO “The world is facing its greatest trial in decades. Unilever’s actions are guided by our multi-stakeholder model and are designed to protect lives and safeguard livelihoods. Together with other B4IG companies, we want to drive solutions that mitigate the impact of the pandemic, and also help to create a more equal and sustainable future for all.
I love this book cover … as an author, I find most business book designs incredibly disappointing, uninspired … but Jacqueline Novogratz’ new book looks beautiful. Inside, it’s got some thoughtful, inspiring ideas too. Seth Godin calls it “An urgent manifesto about what it means to stand with the poor, to see through clear eyes, and most of all, to do work worth doing.”
Covid-19 has thrown into sharp relief the gaping wounds of our times, from a broken health system to climate change and skyrocketing inequality and growing divisiveness. Our inadequate systems and institutions are slumping beneath a host of modern crises. Most urgently, moral leaders are proving a scarce commodity. In America and across the world, an anxious public is hungry for clear, conscientious guidance. The stakes are higher than ever.
But it is not the occasion for despair. She has accompanied these leaders through the process of building the skills, determination and moral imagination to successfully challenge the status quo. Around the world, Acumen has facilitated the rollout of essential services to more than 308 million low-income people, often in politically fraught environments, sometimes changing systems all together. She navigates the sociopolitical obstacles and also encourages a generation of change-makers to do what’s right, not what’s easy. Her approach is to focus on solutions, and resist the urge of falling into the traps of ideology or trite assumption.
In 2001, when Novogratz founded Acumen, few had heard of impact investing or patient capital—an investment model that emphasizes long-term gains over quick returns, funding early-stage enterprises providing low-income consumers with access to healthcare, water, housing, alternative energy, or agricultural inputs. Nineteen years later, there’s been a seismic shift in how corporate boards and other stakeholders evaluate businesses, purpose, and sustainability; and a generation of employees is pushing for a more inclusive and sustainable model of capitalism. Our existing institutions have run their course, but we have yet to reimagine new ones to replace them in an interdependent world.
In the book, she draws on stories from change-makers around the world and her own experiences to divulge the most common leadership mistakes and the mindset needed to rise above them. She wrestles with complex ethical and moral quandaries. She tackles issues ranging from identity and measuring what matters to whether markets will support businesses that reject a profit-alone mentality in favour of one centred on the health and wellbeing of humans and the planet. In these pages, she shows how today’s leaders, who often kick off their enterprises with grand ambitions and tight timetables, might navigate the historically challenging obstacles, which have stymied prior generations of investors. And for all who feel fearful in the face of our unique, pressing issues right now, there is hope.
These are difficult times. For everyone. These are times when organisations need leaders. These are the moments that the best leaders have been waiting for. This is the time for leaders to step:
Endurance
Endurance is as much about mind as muscle power.
In sports – the runner, the cyclist, the rower – there are many physiological elements at play, from core body temperature to oxygen intake, as well as other psychological factors, such as perceived effort and pain tolerance. Each of these factors are significant in the level of athletic performance humans are capable of, especially when testing the perceived limits of performance, such as setting new world records.
However nearly every athlete will attest to faster recovery if they jump into an ice bath after a competition. Yet studies show that this practice doesn’t actually decrease inflammation levels, the thing the baths are intended to reduce. However most physiologists will still say that if there’s a method that helps you recover, even if it’s purely psychological, it’s valuable to use it because sometimes belief is just as influential as science.
In “Endure” Alex Hutchinson starts by retelling the race to break 4 minutes for one mile. For years, men across the globe had raced to within a second or two of the barrier, but never quite breaking the iconic time. When Britain’s Roger Bannister finally ran 3.59.4 in 1954, Australian John Landy who had been trying to run the time for years, went on to improve Banister’s time by another second, only weeks later.
A number of important factors can help people, including business leaders, to endure more:
We always have a little more to give. Watch how athletes pace themselves so that we can give that final push at the end of a long distance event. Somehow the Olympic champion, despite enduring a punishing race, can still rise to celebrate their victory
We can endure more than we think. Athletes have a higher-than-normal pain tolerance, which leads to better performance. They learn to cope with this by training at a “threshold” pace, learning to sustain it whilst in oxygen debt, despite the pain.
Fitness enables us to perform better. Athletic performance greatly relies on oxygen intake, which is enhanced through heightened fitness. Physical fitness equally matters to the business leader, who needs a resilient body for optimal performance.
Fatigue reduces our performance. Having a tired brain can affect how much you can endure physically. A tired brain is one that doesn’t have a break, isn’t refuelled, doesn’t have variety, doesn’t keep renewing itself, or get enough sleep.
Stress stops us performing. Of the many factors, stress can be the killer. However stress comes in two forms – stress put on us, for example timescales, and stress we put on ourselves. External stress can stimulate us, internal stress we can control.
Hutchinson’s research led him to South Africa to work with Tim Noakes, the controversial sports scientist who first proposed the “central governor theory,” which argues that the brain limits performance well before the body has reached its maximum output. He also explores the research of another pioneering scientist, Samuele Marcora, who has developed a series of brain-training exercises to push that governor.
He also recalls talking to Eliud Kipchoge before his Sub 2 hour marathon attempt, when the Kenyan said he hadn’t really changed anything in his training. What then, he asked, would make the difference? “My mind will be different” replied the runner. People he says, have a curiously elastic limit to what they can achieve, driven mainly be their mental toughness.
Resilience
Resilience is our ability to bounce back from adversity. It’s what allows us to recover quickly from change or setbacks, or trauma or failure, whether at work or in life. It is the ability to maintain a sense if purpose, a positive attitude, a belief in better, throughout times of challenge. Resilience sustains progress, whilst others might give up.
Angela Duckworth calls it grit. “Grit is passion and perseverance for long-term goals” she says. She compares it not to a marathon, but to a series of sprints combined with a boxing match. In business you are not just running but also getting hit along the way. As you seek to deliver on your strategy, to make new ideas happen, to transform the business, its not just about coping with the time and effort. It’s also about overcoming many challenges.
Grit keeps you moving forward through the sting of rejection, pain of failure, and struggle with adversity. “When things knock you down, you may want to stay down and give up, but grit won’t let you quit” says Duckworth.
Most entrepreneurs have tremendous resilience, because they’ve had to fight for the business through some of the most difficult times. The search for seed funding when every VC dismissed them with a laugh or smile, the long days in a bedroom or garage trying to make the first prototype or win the first contract, the growing pains of scale-up as they have to adapt to survive and thrive. Letting go of control as investors take over, making you wealthy but taking away your baby. Most entrepreneurs know about grit.
But then so do corporate leaders. If not from starting up, but from surviving the challenges of internal politics, of learning how to engage and influence people in a positive way, of progressing as a star individual whilst keeping colleagues and teams on side. Of balancing personal ambition with collective progress. Resilience demands that we:
Have ambition: Knowing what you truly want, and are prepared to work hard and persevere in order to achieve it. Vision isn’t just a milestone, it becomes a pursuit. Whilst not everybody will know your ambition, you will, and it will keep you striving.
Have purpose: This is why you want to achieve more, it’s about what will be better when you achieve your ambition, not just for you, but your business, your family, your world. Purpose is how you contribute, what you fight for, why you get up in the morning.
Have passion: You need to love it, to be great at it. Otherwise it’s not worth the sacrifices, the long hours, and the pain. Aligning your purpose and ambition allows you to find love, for your work, your team, your business, and the world you seek to impact.
Have persistence: You will sometimes fail. Few things change without challenges. Failure doesn’t define you, it refines you. If you didn’t fail, you wouldn’t learn. There is always another way. Stay confident and stay strong.
A great example of resilience is Nelson Mandela. He was sent to prison as a young firebrand who believed in taking up violent resistance when the justice system failed him in apartheid South Africa. 27 years later, he walked out of Robben Island prison advocating peace and reconciliation. During his long confinement, Mandela mastered the art of self-leadership. He took great inspiration in the poem “Invictus,” written by William Ernest Henley, which ends with the lines “I am the master of my fate. I am the captain of my soul.”
Gratitude
You could say they are two of the most magical words: thank you.
People want to know that their work is appreciated. Showing gratitude to your people is the easiest, fastest, most inexpensive way to boost performance. In “Leading with Gratitude” Adrian Gostick shows that gratitude boosts employee engagement, reduces turnover, and leads team members to express more gratitude to one another, strengthening the bonds within teams. He also shows that gratitude has benefits to you for those expressing it, and is one of the most powerful factors in predicting a person’s overall well-being, more important than money, health, and optimism.
Despite these benefits, few executives effectively utilize this simple tool. In fact, Gostick says that “people are less likely to express gratitude at work than anyplace else.” This is because of a series of a series of myths which are almost the opposite of seeking gratitude – some think that fear is the best motivator, that people get enough praise already, that they know it anyone, that there’s not time, that it sounds too paternalistic, that its better to save praise for when people really deserve it, and it can sound fake.
The best leaders look out for how people contribute and seek reasons to express their gratitude. This requires leaders to look for the good things, not just the problems; pay attention when things are going well, not be consumed by problems. It is also about recognising effort and intent, even if it doesn’t succeed, and small things that might seem trivial but are vital. It’s also about being timely, saying thank you in the moment, not at some later review point. And the leaders role modelling, also encourages others to be grateful to each other too.
We all take gratitude for granted. But it can go along way, and transform attitudes and performance. I will never forget the boss who gave me his company car for a week to drive. Or the colleague who collected an award, and immediately gave it to the youngest team member, rather than putting on their own desk. Or the leader order her team new smartphones with special team screensavers for a job well done. Gratitude doesn’t need to be about money, it could be a personal gift, a small act of kindness, or two simple words.
Gratitude is also not just at work, but in life. A business leader isn’t anything about family and friends. They are the hidden support team who give encouragement, motivation and sacrifice to help us achieve more. And it also yourself. We recognise that we need to challenge ourselves, push ourselves, lead ourselves. Maybe also, just occasionally, indulge yourself too.
Invictus
by William Ernest Henley
Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.
In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.
Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.
It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate,
I am the captain of my soul.
Most people are quite good at solving problems, but less good at defining the problem to solve.
I first met Thomas Wedell-Wedellsborg in Hong Kong whilst I was working with Time Warner. His approach is incredibly simple, so simple you might dismiss it, and he also has a rather arrogant streak, which perhaps comes with knowing that most of us are trying to solve the wrong problems. His new book What’s Your Problem? might help.
Reframing is a powerful technique that focuses on diagnosing a given problem – such as, ‘what is preventing us from making progress‘ or perhaps a problem faced by your customers – and then, crucially, challenging and reframing your initial perception of that problem.
The importance of reframing becomes clear when you look at how people tend to approach problem-solving. By nature, innovative people are often action-oriented and tend to apply brute force in the shape of trial-and-error. That is often a good approach. But the tendency to ‘jump into action’ also creates a danger that people keep trying new solutions without understanding whether they understand the problem correctly – or if they are even targeting the right problem in the first place.
The trial-and-error approach benefits tremendously from being combined with reframing; a little bit of analysis can save people a great deal of wasted effort. But it is critical to introduce the idea of reframing as early as possible, before people start falling in love with a particular type of solution.
In a survey, 85 percent of companies said they often struggle to solve the right problems. The consequences are severe: Leaders fight the wrong strategic battles. Teams spend their energy on low-impact work. Startups build products that nobody wants. Organizations implement “solutions” that somehow make things worse, not better. Everywhere you look, the waste is staggering.
As Peter Drucker pointed out, there’s nothing more dangerous than the right answer to the wrong question.
There is a way to do better. The key is reframing, a crucial, underutilized skill that you can master with the help of this book. Using real-world stories and unforgettable examples like “the slow elevator problem,” Wedell-Wedellsborg offers a simple, three-step method … “Frame, Reframe, Move Forward” … that anyone can use to start solving the right problems. Reframing is not difficult to learn. It can be used on everyday challenges and on the biggest, trickiest problems you face. In his new book, he describes how leaders at large companies, from entrepreneurs, consultants, nonprofit leaders, and many other breakthrough thinkers.
It’s time to stop barking up the wrong trees. Reframe, and growth and success will follow.
“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 mottos is that “it is just as easy to do something big as it is to do something small”, a mentality he has applied to philanthropy as well as business.
Schwarzman grew up in a successful entrepreneurial family selling curtains in Philadelphia. His father was content with the 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 went to Harvard then ended up at Lehman, 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 says, “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.”
Here are 25 rules for work and life that are woven throughout his book:
It’s as easy to do something big as it is to do something small, so reach for a fantasy worthy of your pursuit, with rewards commensurate to your effort.
The best executives are made, not born. They never stop learning. Study the people and organizations in your life that have had enormous success. They offer a free course from the real world to help you improve.
Write or call the people you admire, and ask for advice or a meeting. You never know who will be willing to meet with you. You may end up learning something important or form a connection you can leverage for the rest of your life. Meeting people early in life creates an unusual bond.
There is nothing more interesting to people than their own problems. Think about what others are dealing with, and try to come up with ideas to help them. Almost anyone, however senior or important, is receptive to good ideas provided you are thoughtful.
Every business is a closed, integrated system with a set of distinct but interrelated parts. Great managers understand how each part works on its own and in relation to all the others.
Information is the most important asset in business. The more you know, the more perspectives you have, and the more likely you are to spot patterns and anomalies before your competition. So always be open to new inputs, whether they are people, experiences, or knowledge.
When you’re young, only take a job that provides you with a steep learning curve and strong training. First jobs are foundational. Don’t take a job just because it seems prestigious.
When presenting yourself, remember that impressions matter. The whole picture has to be right. Others will be watching for all sorts of clues and cues that tell who you are. Be on time. Be authentic. Be prepared.
No one person, however smart, can solve every problem. But an army of smart people talking openly with one another will.
People in a tough spot often focus on their own problems, when the answer usually lies in fixing someone else’s.
Believe in something greater than yourself and your personal needs. It can be your company, your country, or a duty for service. Any challenge you tackle that is inspired by your beliefs and core values will be worth it, regardless of whether you succeed or fail.
Never deviate from your sense of right and wrong. Your integrity must be unquestionable. It is easy to do what’s right when you don’t have to write a check or suffer any consequences. It’s harder when you have to give something up. Always do what you say you will, and never mislead anyone for your own advantage.
Be bold. Successful entrepreneurs, managers, and individuals 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.
Never get complacent. Nothing is forever. Whether it is an individual or a business, your competition will defeat you if you are not constantly seeking ways to reinvent and improve yourself. Organizations, especially, are more fragile than you think.
Sales rarely get made on the first pitch. Just because you believe in something doesn’t mean everyone else will. You need to be able to sell your vision with conviction over and over again. Most people don’t like change, so you need to be able to convince them why they should accept it. Don’t be afraid to ask for what you want.
If you see a huge, transformative opportunity, don’t worry that no one else is pursuing it. You might be seeing something others don’t. The harder the problem is, the more limited the competition, and the greater the reward for whomever can solve it.
Success comes down to rare moments of opportunity. Be open, alert, and ready to seize them. Gather the right people and resources; then commit. If you’re not prepared to apply that kind of effort, either the opportunity isn’t as compelling as you think or you are not the right person to pursue it.
Time wounds all deals, sometimes even fatally. Often the longer you wait, the more surprises await you. In tough negotiations especially, keep everyone at the table long enough to reach an agreement.
Don’t lose money! Objectively assess the risks of every opportunity.
Make decisions when you are ready, not under pressure. Others will always push you to make a decision for their own purposes, internal politics, or some other external need. But you can almost always say, “I think I need a little more time to think about this. I’ll get back to you.” This tactic is very effective at defusing even the most difficult and uncomfortable situations.
Worrying is an active, liberating activity. If channeled appropriately, it allows you to articulate the downside in any situation and drives you to take action to avoid it.
Failure is the best teacher in an organization. Talk about failures openly and objectively. Analyze what went wrong. You will learn new rules for decision making and organizational behavior. If evaluated well, failures have the potential to change the course of any organization and make it more successful in the future.
Hire 10s whenever you can. They are proactive about sensing problems, designing solutions, and taking a business in new directions. They also attract and hire other 10s. You can always build something around a 10.
Be there for the people you know to be good, even when everyone else is walking away. Anyone can end up in a tough situation. A random act of kindness in someone’s time of need can change the course of a life and create an unexpected friendship or loyalty.
Everyone has dreams. Do what you can to help others achieve theirs.
From Malcolm Gladwell’s introduction (he’s a running fan too, and can still run a 5 minute mile) to Eliud Kipchoge seeking to break two hours in Monza (and subsequently did in Vienna), it uses the anecdotes and scientific facts of endurance sports, and can be applied just as easily to leadership in business.
Endurance as a human phenomenon involving far more than just muscle power.
There are actually many physiological elements at play, from core body temperature to oxygen intake, as well as other psychological factors, such as perceived effort and pain tolerance. Each of these factors are significant in the level of athletic performance humans are capable of, especially in terms of setting new world records in sports like marathon running, cross-country skiing, and other feats of endurance.
Nearly every athlete will attest to faster recovery if they bathe in ice after a competition. However, studies show that this practice doesn’t actually decrease inflammation levels, the thing the baths are intended to reduce. The thing is though, if there’s a method that helps you recover, even if it’s purely psychological, it’s valuable to use it because sometimes belief is just as influential as science.
Sub-2 hour marathons, and the last minute of a mile
Most people can conjure up a vivid scene of a marathon runner crossing the finish line only to collapse to the ground, visibly shaking, covered in sweat, and barely able to function. When you witness these scenes, it’s easy to ask yourself, “How did they make it over the line? What kept them from collapsing a few minutes earlier?”
These are questions that the author, Alex Hutchinson, asked himself, ever since his grad-student days when he ran for the Canadian national team. Since then, Hutchinson has become an expert on endurance sports and has been able to discover how it is that human beings are able to push their bodies to the limit, climb to the top of the highest mountains, and cross those seemingly insurmountable boundaries of pain and effort.
Along the way, Hutchinson has unearthed intriguing scientific facts concerning just how far we’ve come in understanding the biology of endurance, especially as it pertains to the brain. Recent research has shown that the mind actually plays a very large instinctual role in sending signals to the body about when to pace itself and, on the contrary, when to shut down. As Hutchinson has discovered, something that might seen incredibly uncomplicated, such as running or riding a bike, in fact, is a fascinatingly complex process.
Endure Key Idea #1: Testing the true limits of human endurance can result in fatal consequences.
British explorer Henry Worsley liked to push himself beyond the normal boundaries of human endurance. One of these boundary-pushing expeditions started in late 2015 when Worsley attempted to walk across Antarctica alone. Although he did travel very far on this expedition, the journey started to take a serious toll on his body after 56 days. On the night of the 56th day, he was hit with painful indigestion, which prevented him from getting any sleep. This meant that the following day, Worsley tried to rest, but he still had 200 miles still to go, and he couldn’t afford to take too much time off. At midnight, with the polar sun still beating down upon him, he resumed his journey, the leg he was on involving climbing up the Titan Dome – a mountain of ice that peaked at 3,100 meters above sea level. Every step of the way, Worsley faced strong headwinds which drove sheets of snow against him as he struggled to breathe in the thinning air. After 16 hours, Worsley had to stop for another break. Just in case he had to call for help during this solo journey, Worsley carried a satellite phone on him at all times. This was something of a double-edged sword: while the phone could save his life, it also gave him a bit of a security blanket in that he felt so safe being able to contact people that he was pushing his body past its limit. At this point, he’d already lost 48 pounds in bodyweight. Remarkably, even in the dire situation he was in, Worsley would last more than another week before he finally decided to use the phone to call his rescue team. By this point, he’d walked for 70 days and was just 30 miles away from his goal. The following day, his rescue team picked Worsley up and and flew him to a hospital in Punta Arenas, Chile, where he was quickly diagnosed with dehydration and exhaustion. However, that wasn’t the worst of it — the doctors also found signs of bacterial peritonitis, an abdominal infection that would require immediate surgery. Things quickly took a turn for the worse. Due to the weakened state of his body, Worsley was unable to fight the infection, and on January 24, 2016, his organs shut down, leading to his death. This tragedy raised some important questions about the ethical and practical limits of expeditions that would require such intense boundary-pushing. However, plenty of humans have safely returned from unbelievable destinations like this, and in the book summaries ahead, we’ll look at the human body’s limitations, and why some feats are possible, while others simply aren’t.
Endure Key Idea #2: Out of instinct, we pace ourselves so that we can give that final push in a long distance run.
While the author was working on his PhD, he ran on the Canadian national team for middle- and long-distance races for. Eventually, he realized that at the end of each race, he would run faster, even though that wasn’t part of his strategy. He then wondered whether this was everyone’s experience with running. In 2006, researchers Tim Noakes and Michael Lambert published a study that followed the world’s greatest long-distance runners. Their findings showed a consistent pattern: while the runners would start off fast, the best ones would end up decreasing in speed during the middle of the race, only to accelerate again before finishing. This happened consistently, even though one might assume that their energy would be depleted by the end of the race. A casual observer would probably see this is a strategic decision by the runners, but it’s likely an evolutionary response in our brain. Sports scientist Dominic Micklewright of the University of Essex wanted to learn more about our ability to pace ourselves, wondering whether it was an instinct that develops at a particular time in our lives. Micklewright’s curiosity was inspired by Swiss psychologist Jean Piaget, whose studies were based on how childhood development is made up of distinct behavioral phases. So, in 2012, while working with children from age five to 14, Micklewright had the goal of figuring out when exactly it is that we develop the ability to pace ourselves. He noticed that children ages eleven and under would sprint at the start and get slower and slower as the race went on, whereas children eleven and olderwould pace themselves the same way the world-record holders did, by slowing down in the middle of the race and finishing with a sprint. According to both Micklewright and fellow sports scientist Tim Noakes, this pacing pattern is not a strategy, but is actually an instinct engrained in the human brain. They draw parallels to our time as hunter-gatherers, and believe that it developed so that we could run long distances during a hunt while conserving energy, in case we needed to finish the hunt with a final burst of speed.
Endure Key Idea #3: Having a tired brain can affect how much you can endure physically.
In 2013, Samuele Marcora traveled over six and a half thousand miles by motorcycle. This journey was between London and Beijing, a test of his endurance that doubled as a continuation of his long-term study of the mental component of physical effort. His trip from the UK to China reinforced Marcora’s belief that the mind is a big component when it comes to how much human beings can endure. In other words, fatigue isn’t just a physiological experience. Prior to this, in 2009, Marcora conducted a study by having half of a group play a mentally challenging computer game for 90 minutes. The other half of the group were tasked with watching a pleasant 90-minute documentary, such as The History of Ferrari. At the end of these tasks, all participants were then asked to exercise on a stationary bicycle until they reached exhaustion. The participants who’d just watched television lasted, on average, 15.1 percent longer than those who’d played the computer game. The groups were physiologically similar to each other, so the results suggested that it was the mental fatigue of the complex computer game that caused the participants who’d played it to become exhausted sooner. This study also displays proof for the theory that says that perceived effort is a significant factor in endurance. People have been studying perceived effort since the 1960s, when Swedish psychologist, Gunnar Borg began his study and measure of this quality. Borg came up with a scale that went from six to twenty: six being the least perceived effort a person can display, and twenty being the most. What Borg found forced a complete reconsideration of what science understood of endurance at the time. Up until this point the body was treated like any other machine, meaning that it would continue functioning as long as the mechanics (in this case, the muscles) were operational. From this mechanistic view, exhaustion can only come from physical effort. Marcora’s model took Borg’s findings a step further: he states that an athlete’s total exhaustion is the combination of both muscle fatigue, which creates the initial feeling of mounting effort, and the person having reached their maximum threshold of perceived effort. The point where these two things intersect is where all effort must cease for that person. It makes a big difference to consider perceived effort, since it has to do with a lot of different mental factors, such as how motivated a person is and any subliminal messages they may be picking up on.
Endure Key Idea #4: Athletes have a higher-than-normal pain tolerance, which leads to better performance.
Veteran cyclist Jens Voigt has worn the Tour de France yellow jersey twice, symbolizing that he’d taken the lead in the famous race. However, he is also known for his love of physical suffering, which, as he puts it, is just a weakness to overcome. While this view might sound extreme, there are many athletes who would agree. It’s also important to note that it may just be an athlete’s willingness to suffer physically that leads to the fact that athletes simply have a higher pain threshold than the average person. One of the first studies of athletes’ perception of pain was conducted in 1981 by psychologist Karel Gijsbers, who compared the pain tolerance of elite swimmers to that of amateur swimmers. Dr. Gijsbers measured their pain by using a blood-pressure monitor to stop the blood circulation in the participant’s arm. While this was happening, the participants were told to clench and open their fist once per second. Gijsbers was able to mark their pain threshold as the moment when they first reported pain, the maximum tolerance being the instant they asked to stop. While the pain tolerance of all participants was similar, the elite swimmers could continue contracting fists for far longer than the amateur ones. On average, the hobbyists could make 89 fists while the athletes could make 132. Now the question is, why can athletes endure so much more pain? Subsequent studies by Dr. Gijsbers suggest that it is due to training. By testing athletes throughout their swim season, Gijsbers was able to find that overall, the pain tolerance was at its highest when their training was at its peak, which was during the month of June. This isn’t the only proof of this: a related study from Oxford Brookes University shows that increased pain tolerance is correlated with increased athletic performance. It was even evident that athletes who trained with short sections of high intensity, and therefore high pain, progressed more than those who trained for longer periods of less intensity. Therefore, the more pain tolerance an athlete endures during training, the more benefits they’ll experience in their performance. However, an ability to tolerate pain is only one factor of good athletic performance, as we’ll discover in the next book summary.
Endure Key Idea #5: Athletic performance greatly relies on oxygen intake.
All athletes can attest that a good coach is one of the best things for their performance, and if there’s one piece of advice that every coach will give, it’s to breathe, breathe, breathe. Breathing is essential to anyone’s athletic performance, as oxygen intake has a direct influence on an athlete’s abilities. During training, athletes can measure their maximum oxygen intake through what is known as VO2max, which stands for volume, oxygen, maximum. Basically, the more oxygen a person is able to take in, and therefore circulate through their body, the better they’ll perform – especially in endurance sports like marathon running. It wasn’t by chance that Norway’s Bjorn Daehlie not only won multiple cross-country skiing awards in the 1990s, but also held the record for the highest VO2max ever measured. Daehlie topped out at 96 milliliters of oxygen per kilogram of body mass per minute. The average human capacity is 35 ml/kg/min, so this is a massive, record breaking amount. Of course, VO2max isn’t the only indicator of athletic performance. Another Norwegian athlete, Oskar Svendsen, beat Daehlie’s record with a VO2max of 97.5 ml/kg/min. However, because Svendsen was a cyclist, he retired early after a spotty career. The ability to intake oxygen is also the reason why athletes perform better at lower altitudes. At lower elevations, there is simply more oxygen available. Canberra University in Australia is located at an elevation of 577 meters above sea level. According to the school’s own study, this elevation significantly reduced the VO2max levels, causing the school’s runners to produce slower run times. Conversely, when runners experience an oxygen-rich atmosphere, they’re more likely to beat their own personal best and set new world records. Scientist Yannis Pitsiladis came up with the idea to host a marathon at the Dead Sea, 400 meters below sea level. His theory is that holding the event at such a low elevation could be the solution to having a runner finally overcome the challenge of finishing the race in less than two hours.
Endure Key Idea #6: Endurance is also affected by a person’s core body temperature.
Heat stroke is one of the most dangerous risky situations that athletes can find themselves in. It has shown how deadly it really is to both professionals and amateurs alike. Avoiding heat stroke is a huge reason athletes pay close attention to the overall temperature of their bodies, also known as their core temperature. But there is another link between heat and athleticism, which is that core body temperature actually influences an athlete’s endurance. More specifically, an athlete’s core body temperature is a good indicator of how much more they’ll be able to endure. The link between temperature and performance was the basis for a 1999 study by Copenhagen University’s José Gonzalez-Alonso. He closely studied seven athletes who he told to exercise on a stationary bike until they reached a point of exhaustion. Prior to exercising in this way, the athletes bathed for 30 minutes in water that was either 36, 37, or 38 degrees Celsius. In the end, the cyclists with a 36-degree core temperature lasted twice as long as those with a 38-degree core temperature. Overall, the study showed that every participant called it quits when their core temperature reached between 40.0 and 40.3 degrees. This exact study had a great influence on the 2004 Olympics in Athens, during which, coaches used cooling basins before a competition to bring down their athlete’s core temperature. Since then, research in this area has questioned which area affects core temperature the most: the brain or the stomach? In the 2008 Olympics, certain athletes were drinking ice slushies before competing, adhering to the fact that melting ice in the stomach has been found to lower core temperature by as much as 0.7 degrees Celsius. Doing this also seemed to give athletes the ability to push their core temperature slightly higher before they reached a point of exhaustion – around one-third of a degree more. What is the reasoning behind this? It’s believed that when athletes compete after drinking the ice slushy, the body is the first part to warm up, but the whole system won’t actually reach exhaustion until the brain reaches that critical temperature. The data behind this, though, is still inconclusive. It’s very possible that the temperature sensors in the stomach are the main influencer for the brain when it comes to shutdown, and drinking the slushy delays this signal. At the time of writing, neither hypothesis has yet been confirmed.
Endure Key Idea #7: Another way to improve athletic performance is through mindfulness and lowering stress levels.
Based on evidence already stated, we know that the mind plays a bigger role in physical endurance than sports scientists believed in previous generations. However, in the East, the power of the mind has always been seen as the center of athletic performance, especially in sports such as martial arts. It’s only in recent years that Western cultures have begun looking to Eastern influence of mindfulness for insights into achieving higher levels of endurance. We normally define mindfulness as giving all of our attention to any given action, and we can credit its introduction to Western training programs to German neuroscientist Martin Paulus. Dr. Paulus was especially interested in the influence mindfulness might have on soldiers. Dr. Paulus brought into Western lexicon the mindfulness concept of Zen Buddhism, as taught by Jon Kabat-Zinn, who developed a structured eight-week program aimed to lower stress levels. His belief was that lowering stress would keep soldiers calmer during stressful situations. A 2016 study involved Dr. Paulus testing his results on soldiers near San Diego, California. The soldiers involved in this study had their brain activity monitored via an MRI machine. While the soldiers were in the MRI machine, the oxygen levels given to the soldiers were altered in different ways, at times making it difficult to breathe. The results of this showed that the soldiers who had not had mindfulness training were more likely to panic when their oxygen levels decreased, which then led to a peak of activity in the stress-related insular cortexregion of the brain. Then, after spending eight weeks in mindfulness training, the soldiers did not show stress during this situation and their insular cortex remained stable. Because of this, there is hope for soldiers to cope better with stressors in the field through cultivating mindfulness. On top of that, there is already plenty of proof that mindfulness is effective when it comes to reducing symptoms of post-traumatic stress disorder. Dr. Paulus has worked to develop a special mindfulness program tailored to athletes. This has an emphasis on embracing pain, concentration, and self-compassion. The results of these mindfulness programs haven’t yet been measured, but the US Olympic BMX Team have reported improvements in their performance since starting the program. Their racing times have improved, and the athletes have reported a feeling of deeper consciousness and connection to their bodies during activities. Summary Pt 8: The insular and motor cortices are the areas of the brain that are the closest related to endurance. Everyone’s experienced feeling exhausted. However, not many people are aware of what the precise process is which causes us to hit a certain point that leads to a full-body shutdown. For decades, scientists have been studying exhaustion as a purely physically response, however, neuropsychologist Kai Lutz was the first to think that exhaustion might be something that comes from within the brain. He found that the regions of the brain that first recognize exhaustion are the insular cortex and then the motor cortex. Dr. Lutz discovered this through using EEG scans, or electroencephalography, which is a technique that tracks the brain’s electrical wave patterns. He studied cyclists pedaling at high speeds until they hit the wall of exhaustion around the 40-minute mark. Dr. Lutz observed that shortly before the cyclists gave up, the insular cortex was activated. The insular cortex is located at the center of the cerebral cortex and the brain itself. Right after it is activated, it was clear that a signal was then sent to the motor cortex, which is in charge of muscle control, resulting in the athletes calling it quits soon afterward. Since these are the two areas that anticipate the collapse of muscles from exhaustion, it is fair to call these two cortices the brain’s endurance center. However, it still isn’t quite clear how much control we can have over these areas of the brain. Dr. Lutz has found that we might be able to control and suppress the sensitivity of the neurons in the insular cortex, which would allow you to delay the message to the motor cortex and therefore, the muscles. This was tested in 2015 by another neurophysiologist: Alexandre Okano of the University of Rio Grande. In Dr. Okano’s study, he hooked cyclists up to electrodes that would directly activate the insular cortex via transcranial direct-current stimulation. After 20 minutes of this stimulation, the cyclists improved their racing times by around 4 percent before reaching exhaustion. Another theory is that continually stimulating the neurons of the motor cortex would effectively block the signal from the insular cortex. This might sound like a promising theory, but it hasn’t yet been proven successful. The practice of transcranial direct-current stimulation is still in its rudimentary stages. Scientists studying this are thus far unable to deliver this stimulation with pinpoint accuracy. By targeting the motor cortex with this stimulation, other parts of the brain are affected, including the insular cortex. Nevertheless, it’s been shown through these studies that progress has been made toward understanding human endurance, although there is still a long way to go before we have complete control.
Extract of a Q&A with Alex Hutchinson in The Verge
Once, we believed that the body was a machine, and the secret to optimal performance came from the muscles, the lungs, the heart. Then, we were told that it’s all in our head, and we just need to push through the pain. The truth is that “the brain and the body are fundamentally intertwined,” writes Alex Hutchinson, a fitness journalist (with a doctorate in physics) who competed for the Canadian national team as a runner. To understand the limits of the human body, you have to consider them together.
In the eight years he worked on the book, he traveled to labs all over the world and spoke to hundreds of athletes and scientists about how the mind and body influence each other and the role that each plays in the “mystery of endurance.”
The book is about the limits of the human body and the role that the brain plays. In the first part, you trace the intellectual history of these attitudes toward endurance, from the notion that the body is just a machine to the “it’s all in the mind” saying we hear a lot today. Can you go over that with us?
Yes, though of course my attempt to trace the intellectual history streamlines and makes simpler things than they really were. In the 1920s, the Nobel Prize-winning physiologist A.V. Hill wrote all these ideas for Scientific American, talking about how the human body is just a machine, and if we could learn the parts and measure the outputs, we can really confidently predict the outer limits of human performance. And he introduced the concept of VO2 max[maximal oxygen consumption], which you hear a lot in exercise science. No one really thought VO2 max was the be-all and end-all, but the philosophical underpinning was that if we could know everything about how the body works, we could understand what the limits were.
That was the dominant 20th century paradigm. In the ‘90s, though, a guy named Tim Noakes gave some very controversial lectures saying, you got it all wrong, the brain is what determines human performance. I’d say the last 10 or 15 years, there’s been lots of talk about the role that the brain plays, and that’s where the interesting debates are now.
The caveat I’d add is that even A.V. Hill knew that the brain mattered, but this is how we’ve evolved from a focus on the muscles to a focus on the brain — to the point where we hear that it’s all in your head. But actually, all this time, there’s been a parallel stream saying “it’s all in your head,” and that’s positive psychology, which isn’t really within the realm of science. So now we’re looking at the scientific underpinnings of claims that sounded a little silly — like the idea that changing your internal monologue can really do something.
I think everyone can understand why and how the body limits us. What are some studies that stood out to you that showed how the mind does the same?
One of the most eye-opening experiments to me was done by Samuele Marcora using subliminal images. He had cyclists do a test to exhaustion, and on the screen in front of them, he flashed pictures of either smiling faces or frowning faces. These were flashed 16 milliseconds at a time. That’s like a tenth of the length of a blink, so the cyclists were totally unaware that there were any images. It wasn’t like a placebo effect or something to do with self-confidence. They weren’t even aware of this manipulation.
The ones who saw the smiling faces lasted 12 percent longer on the ride than with the frowning faces. These sorts of experiments are really controversial right now with the replication crisis, so I don’t want to overstate the significance. But if these results stand up, they’re a really nice demonstration of the complicated ways that the brain’s interpretation of the body signals is maybe more important than the body signals themselves.
Seeing smiles helps us create a sense of ease. You see someone smiling, it makes us feel more comfortable and somehow that bleeds into the idea that your panting breath and your aching legs aren’t quite as bad as they might otherwise seem.
What else interested you from talking to so many scientists?
Another line of research that I’ve found really interesting — but also a little bit worrying — is electrical brain stimulation, which basically amounts to taking a nine-volt battery, attaching a couple of wires to it, connecting to your head, and running a very weak current through your brain to change the excitability of the neurons. If you put the electrodes in the right place, you can enhance endurance.
It’s been around for three or four years, with conflicting results, though it seems to be getting more repeatable now. What seems to be happening is that you’re altering your perception of effort. You’re not changing your lactate levels or your heart rate, just changing how your brain interprets those signals.
So, for our readers who aren’t closely following the science, are there certain concepts and theories that are key to understanding how the brain might influence endurance?
There’s lots of debate about exactly how the brain controls endurance, but there are two key concepts that are dueling right now. One is that, fundamentally, your brain is just trying to protect you, and it does this by trying to anticipate what’s going to happen. So if you go running on a hot day, you go slower, not because your core temperature is at a dangerous zone, but because your brain is worried that it’s going to reach a dangerous zone and you’re going to overheat and cause damage. Fundamentally, all of these warnings and perceptions and feelings of discomfort are designed to save you from your own worst decision-making. And that requires your brain to be smart and anticipating the future. This comes out of Tim Noakes’ work, and he called this the theory of the brain as “central governor.”
The other main sort of tenet out there is from Samuele Marcora. He says, there’s no prediction of the future, there’s no really subconscious protective circuitry. Fundamentally, all endurance is is the balance between how hard it feels and how hard you’re willing to make it feel, between perceived effort and motivation. So everything that’s going on in your body — your core temperature, your oxygen levels dropping — all of that is important only insofar as it makes exercise feel harder to you, and at a certain point, it’ll reach the maximum you’re willing to tolerate and you’re willing to slow down or stop. That’s a conceptually simpler approach that doesn’t require any sort of anticipatory prediction of your future state. It’s just “this is harder than I’m willing to work.”
What surprised you the most?
One of the biggest surprises came when I was looking into limits of hydration and heat. Alberto Salazar, one of the greatest American marathoners, very famously almost died a few times after races. People always say it was because he didn’t drink enough, and I was looking back at debates in medical journals in the 1980s. After the 1982 Boston Marathon, the so-called “duel in the sun,” his body temperature was something like 88 degrees Fahrenheit [instead of our normal 98.6 degrees Fahrenheit]. Everyone had assumed he didn’t drink enough and he got heat stroke, but the link between hydration and heat stroke was different than expected when you look into the details of these famous collapses.
Generally, I came at this from the perspective of running, and that involved thinking broadly. In running, you breathe hard and you think that oxygen is a limiting factor, so I also looked into these free divers to see how long you can go without oxygen. The record for holding your breath is almost 12 minutes! From a physiological perspective, when I hold my breath I reach a point where I physically can’t anymore because my breathing muscles are contracting. It turns out that that’s not because I’m out of oxygen, it’s because my carbon dioxide levels are too high and are triggering a warning system in me. But these guys are able to ignore that warning system and just keep holding their breath until they’re literally out of oxygen.
To what extent do people’s bodies and genetic gifts give them an advantage? Take the free divers, for example. How much does it help that they probably have bigger lungs?
The lungs probably helped in some respect, but it’s not fundamentally the key limiting factor. If you want to be a world record-holder, you need to check a hundred different boxes. You need to have psychological and physiological and morphological characteristics. But think about it this way: I can hold my breath for two minutes, and he can hold it for 12, but I’m nowhere near my limit. My lung size makes no difference whatsoever until I’ve already learned to push my limits a lot more
Yes, there are physical differences for sure, and they are absolutely crucial. The strongest mind in the world is not going to win the Boston Marathon unless you have all the other physical characteristics. It’s like the nature-nurture question in the sense that it’s almost impossible to separate the role of nature and nurture. And similarly, you have a total kind of synergy between psychological and physiological and physical characteristics that go into defining your limits.
One of the phrases I’ve heard at conferences when people talk about great athletes is that there’s probably some degree of benign masochism that the people who love to go out and run 100 miles a week are not just physically capable but mentally capable of doing that. For whatever reason, their brains are wired in a way that they get more of a kick out of it than the rest of us. Whatever brain chemicals make you feel satisfied, we don’t all get them in the same way, some people are inherently more eager for new experience or novelty or risk.
Is there a way to quantify the effect of the brain versus the body in endurance?
To answer that question, you have to think about what population you are looking at. Let’s say I ask, how important is height in the NBA for in basketball success? If you take the general population, well height is almost everything. If you’re not well over six feet tall, your chances of making it to the NBA are almost zero.
But how important is height to scoring success in the NBA for players who’ve made it? It’s not better to be tall and height is essentially irrelevant at that point. If you want to know who’s gonna be good at a marathon and just talking about in the population of the United States, send everyone to an exercise lab and have them do a bunch of physiological tasks. Those tasks will tell you almost everything you need to know. It really is the human machine. It’s VO2 max, lactate threshold, the running economy. You’re going to pick with very, very high accuracy who’s going to be good and who’s not.
But if you go to the Olympics and you do the same physiological test, that’s going to tell you nothing about what’s going to win the race. Everyone has the physical tools, and it’s not everything.
Each year, Jeff Bezos writes an open letter to Amazon’s shareholders. Over the last 2 decades, these letters have become an unparalleled source of insight into how the world’s richest man thinks about efficiency, online customer experience, retention, managing through crises, and more.
Since founding Amazon in 1994, Jeff Bezos has run his company according to an unconventional set of principles: don’t worry about competitors, don’t worry about making money for shareholders, and don’t worry about the short-term. Focus on the customers, and everything else will fall into place.
Reading Bezos’ shareholder letters gives a unique insight into his next ideas and initiatives for Amazon, and the experiences they’ve had along the way, but its also like a crash course in running a high-growth business:
“Reflect on this from Theodor Seuss Geisel: ‘When something bad happens you have three choices. You can either let it define you, let it destroy you, or you can let it strengthen you.’ I am very optimistic about which of these civilisation is going to choose.”
Bezos’ 2019 letter (published this week, April 2020) has a different tone compared to previous letters. Most of it is focused on the threat posed by Covid-19, both to Amazon and to the world. But there are also some echoes of previous Amazon missives, especially the 2000 letter, which was designed to ease the concerns of Amazon shareholders after the huge sell-off that followed the dot-com boom.
This one is similarly designed to demonstrate resilience in the middle of a crisis, though in a dramatically different context — both in terms of Amazon’s scale and the scale of the unfolding situation around the company. The key message of the letter is simple: Bezos wants the world to know that Amazon is acting aggressively to simultaneously create value and keep people safe.
The Covid-19 pandemic has generated waves of first- and second-order effects on the global economy, with millions laid off, furloughed, or ordered to stay home.
Meanwhile, the majority of Amazon’s nearly 800,000 employees cannot work from home. From warehouse stockers to delivery drivers, Amazon’s workforce is made up of mostly “essential employees” responsible for the company’s vital shipping and logistics infrastructure.
While Amazon has seen sharp increases in sales since the beginning of the pandemic, the company has also come under a corresponding amount of criticism for labor practices, poor handling of warehouse safety, and its climate record. The challenge of this shareholder letter, for Bezos, was how to provide an update that would project strength and preparedness, despite the chaos.
In what is unconventional style for an Amazon shareholder letter, Bezos spends much of the beginning of the document running through a list of initiatives that the company has undertaken to support the efforts of healthcare workers around the world and protect employees. Among these measures are the prioritization of delivery on essential goods, closure of non-essential Amazon retail stores, various social distancing measures, and internal work on building out greater Covid-19 testing capacity.
The clear message of the letter is that Amazon is responding to Covid-19 by acting aggressively to keep its workers healthy, hiring additional workers to meet demand, and helping governments, healthcare organizations, and others collect valuable data on how the virus works and spreads.
The letter is relatively light on Bezos’ usual brand of insight into business and leadership strategy, but instead focuses on the argument that Amazon will emerge from this crisis not merely alive, but strengthened. This is the implicit message of the Dr. Seuss quote near the end of the letter: “When something bad happens you have three choices. You can either let it define you, let it destroy you, or you can let it strengthen you.”
Bezos considers the new stress that Amazon has been put under to be a productive stress — it’s something that will, in the long run, help Amazon by teaching it how to operate under a chaotic set of circumstances. In the context of a traditional shareholder letter, the 2019 letter may look unlike previous iterations in terms of the density of Bezos’ philosophizing, but it still sheds light on Amazon’s priorities and core beliefs as a company.
Jeff Bezos’ 2019 Letter to Shareholders
By Jeff Bezos
on April 16, 2020
To our shareowners:
One thing we’ve learned from the COVID-19 crisis is how important Amazon has become to our customers. We want you to know we take this responsibility seriously, and we’re proud of the work our teams are doing to help customers through this difficult time.
Amazonians are working around the clock to get necessary supplies delivered directly to the doorsteps of people who need them. The demand we are seeing for essential products has been and remains high. But unlike a predictable holiday surge, this spike occurred with little warning, creating major challenges for our suppliers and delivery network. We quickly prioritized the stocking and delivery of essential household staples, medical supplies, and other critical products.
Our Whole Foods Market stores have remained open, providing fresh food and other vital goods for customers. We are taking steps to help those most vulnerable to the virus, setting aside the first hour of shopping at Whole Foods each day for seniors. We have temporarily closed Amazon Books, Amazon 4-star, and Amazon Pop Up stores because they don’t sell essential products, and we offered associates from those closed stores the opportunity to continue working in other parts of Amazon.
Crucially, while providing these essential services, we are focused on the safety of our employees and contractors around the world—we are deeply grateful for their heroic work and are committed to their health and well-being. Consulting closely with medical experts and health authorities, we’ve made over 150 significant process changes in our operations network and Whole Foods Market stores to help teams stay healthy, and we conduct daily audits of the measures we’ve put into place. We’ve distributed face masks and implemented temperature checks at sites around the world to help protect employees and support staff. We regularly sanitize door handles, stairway handrails, lockers, elevator buttons, and touch screens, and disinfectant wipes and hand sanitizer are standard across our network.
We’ve also introduced extensive social distancing measures to help protect our associates. We have eliminated stand-up meetings during shifts, moved information sharing to bulletin boards, staggered break times, and spread out chairs in breakrooms. While training new hires is challenging with new distancing requirements, we continue to ensure that every new employee gets six hours of safety training. We’ve shifted training protocols so we don’t have employees gathering in one spot, and we’ve adjusted our hiring processes to allow for social distancing.
A next step in protecting our employees might be regular testing of all Amazonians, including those showing no symptoms. Regular testing on a global scale, across all industries, would both help keep people safe and help get the economy back up and running. For this to work, we as a society would need vastly more testing capacity than is currently available. If every person could be tested regularly, it would make a huge difference in how we fight this virus. Those who test positive could be quarantined and cared for, and everyone who tests negative could re-enter the economy with confidence.
We’ve begun the work of building incremental testing capacity. A team of Amazonians—from research scientists and program managers to procurement specialists and software engineers—moved from their normal day jobs onto a dedicated team to work on this initiative. We have begun assembling the equipment we need to build our first lab and hope to start testing small numbers of our frontline employees soon. We are not sure how far we will get in the relevant timeframe, but we think it’s worth trying, and we stand ready to share anything we learn.
While we explore longer-term solutions, we are also committed to helping support employees now. We increased our minimum wage through the end of April by $2 per hour in the U.S., $2 per hour in Canada, £2 per hour in the UK, and €2 per hour in many European countries. And we are paying associates double our regular rate for any overtime worked—a minimum of $34 an hour—an increase from time and a half. These wage increases will cost more than $500 million, just through the end of April, and likely more than that over time. While we recognize this is expensive, we believe it’s the right thing to do under the circumstances. We also established the Amazon Relief Fund—with an initial $25 million in funding—to support our independent delivery service partners and their drivers, Amazon Flex participants, and temporary employees under financial distress.
In March, we opened 100,000 new positions across our fulfillment and delivery network. Earlier this week, after successfully filling those roles, we announced we were creating another 75,000 jobs to respond to customer demand. These new hires are helping customers who depend on us to meet their critical needs. We know that many people around the world have suffered financially as jobs are lost or furloughed. We are happy to have them on our teams until things return to normal and either their former employer can bring them back or new jobs become available. We’ve welcomed Joe Duffy, who joined after losing his job as a mechanic at Newark airport and learned about an opening from a friend who is an Amazon operations analyst. Dallas preschool teacher Darby Griffin joined after her school closed on March 9th and now helps manage new inventory. We’re happy to have Darby with us until she can return to the classroom.
Amazon is acting aggressively to protect our customers from bad actors looking to exploit the crisis. We’ve removed over half a million offers from our stores due to COVID-based price gouging, and we’ve suspended more than 6,000 selling accounts globally for violating our fair-pricing policies. Amazon turned over information about sellers we suspect engaged in price gouging of products related to COVID-19 to 42 state attorneys general offices. To accelerate our response to price-gouging incidents, we created a special communication channel for state attorneys general to quickly and easily escalate consumer complaints to us.
Amazon Web Services is also playing an important role in this crisis. The ability for organizations to access scalable, dependable, and highly secure computing power—whether for vital healthcare work, to help students continue learning, or to keep unprecedented numbers of employees online and productive from home—is critical in this situation. Hospital networks, pharmaceutical companies, and research labs are using AWS to care for patients, explore treatments, and mitigate the impacts of COVID-19 in many other ways. Academic institutions around the world are transitioning from in-person to virtual classrooms and are running on AWS to help ensure continuity of learning. And governments are leveraging AWS as a secure platform to build out new capabilities in their efforts to end this pandemic.
We are collaborating with the World Health Organization, supplying advanced cloud technologies and technical expertise to track the virus, understand the outbreak, and better contain its spread. WHO is leveraging our cloud to build large-scale data lakes, aggregate epidemiological country data, rapidly translate medical training videos into different languages, and help global healthcare workers better treat patients. We are separately making a public AWS COVID-19 data lake available as a centralized repository for up-to-date and curated information related to the spread and characteristics of the virus and its associated illness so experts can access and analyze the latest data in their battle against the disease.
We also launched the AWS Diagnostic Development Initiative, a program to support customers working to bring more accurate diagnostic solutions to market for COVID-19. Better diagnostics help accelerate treatment and containment of this pandemic. We committed $20 million to accelerate this work and help our customers harness the cloud to tackle this challenge. While the program was established in response to COVID-19, we also are looking toward the future, and we will fund diagnostic research projects that have the potential to blunt future infectious disease outbreaks.
Customers around the world have leveraged the cloud to scale up services and stand up responses to COVID-19. We joined the New York City COVID-19 Rapid Response Coalition to develop a conversational agent to enable at-risk and elderly New Yorkers to receive accurate, timely information about medical and other important needs. In response to a request from the Los Angeles Unified School District to transition 700,000 students to remote learning, AWS helped establish a call center to field IT questions, provide remote support, and enable staff to answer calls. We are providing cloud services to the CDC to help thousands of public health practitioners and clinicians gather data related to COVID-19 and inform response efforts. In the UK, AWS provides the cloud computing infrastructure for a project that analyzes hospital occupancy levels, emergency room capacity, and patient wait times to help the country’s National Health Service decide where best to allocate resources. In Canada, OTN—one of the world’s largest virtual care networks—is scaling its AWS-powered video service to accommodate a 4,000% spike in demand to support citizens as the pandemic continues. In Brazil, AWS will provide the São Paulo State Government with cloud computing infrastructure to guarantee online classes to 1 million students in public schools across the state.
Following CDC guidance, our Alexa health team built an experience that lets U.S. customers check their risk level for COVID-19 at home. Customers can ask, “Alexa, what do I do if I think I have COVID-19?” or “Alexa, what do I do if I think I have coronavirus?” Alexa then asks a series of questions about the person’s symptoms and possible exposure. Based on those responses, Alexa then provides CDC-sourced guidance. We created a similar service in Japan, based on guidance from the Japanese Ministry of Health, Labor, and Welfare.
We’re making it easy for customers to use Amazon.com or Alexa to donate directly to charities on the front lines of the COVID-19 crisis, including Feeding America, the American Red Cross, and Save the Children. Echo users have the option to say, “Alexa, make a donation to Feeding America COVID-19 Response Fund.” In Seattle, we’ve partnered with a catering business to distribute 73,000 meals to 2,700 elderly and medically vulnerable residents in Seattle and King County during the outbreak, and we donated 8,200 laptops to help Seattle Public Schools students gain access to a device while classes are conducted virtually.
Beyond COVID
Although these are incredibly difficult times, they are an important reminder that what we do as a company can make a big difference in people’s lives. Customers count on us to be there, and we are fortunate to be able to help. With our scale and ability to innovate quickly, Amazon can make a positive impact and be an organizing force for progress.
Last year, we co-founded The Climate Pledge with Christiana Figueres, the UN’s former climate change chief and founder of Global Optimism, and became the first signatory to the pledge. The pledge commits Amazon to meet the goals of the Paris Agreement 10 years early—and be net zero carbon by 2040. Amazon faces significant challenges in achieving this goal because we don’t just move information around—we have extensive physical infrastructure and deliver more than 10 billion items worldwide a year. And we believe if Amazon can get to net zero carbon ten years early, any company can—and we want to work together with all companies to make it a reality.
To that end, we are recruiting other companies to sign The Climate Pledge. Signatories agree to measure and report greenhouse gas emissions regularly, implement decarbonization strategies in line with the Paris Agreement, and achieve net zero annual carbon emissions by 2040. (We’ll be announcing new signatories soon.)
We plan to meet the pledge, in part, by purchasing 100,000 electric delivery vans from Rivian—a Michigan-based producer of electric vehicles. Amazon aims to have 10,000 of Rivian’s new electric vans on the road as early as 2022, and all 100,000 vehicles on the road by 2030. That’s good for the environment, but the promise is even greater. This type of investment sends a signal to the marketplace to start inventing and developing new technologies that large, global companies need to transition to a low-carbon economy.
We’ve also committed to reaching 80% renewable energy by 2024 and 100% renewable energy by 2030. (The team is actually pushing to get to 100% by 2025 and has a challenging but credible plan to pull that off.) Globally, Amazon has 86 solar and wind projects that have the capacity to generate over 2,300 MW and deliver more than 6.3 million MWh of energy annually—enough to power more than 580,000 U.S. homes.
We’ve made tremendous progress cutting packaging waste. More than a decade ago, we created the Frustration-Free Packaging program to encourage manufacturers to package their products in easy-to-open, 100% recyclable packaging that is ready to ship to customers without the need for an additional shipping box. Since 2008, this program has saved more than 810,000 tons of packaging material and eliminated the use of 1.4 billion shipping boxes.
We are making these significant investments to drive our carbon footprint to zero despite the fact that shopping online is already inherently more carbon efficient than going to the store. Amazon’s sustainability scientists have spent more than three years developing the models, tools, and metrics to measure our carbon footprint. Their detailed analysis has found that shopping online consistently generates less carbon than driving to a store, since a single delivery van trip can take approximately 100 roundtrip car journeys off the road on average. Our scientists developed a model to compare the carbon intensity of ordering Whole Foods Market groceries online versus driving to your nearest Whole Foods Market store. The study found that, averaged across all basket sizes, online grocery deliveries generate 43% lower carbon emissions per item compared to shopping in stores. Smaller basket sizes generate even greater carbon savings.
AWS is also inherently more efficient than the traditional in-house data center. That’s primarily due to two things—higher utilization, and the fact that our servers and facilities are more efficient than what most companies can achieve running their own data centers. Typical single-company data centers operate at roughly 18% server utilization. They need that excess capacity to handle large usage spikes. AWS benefits from multi-tenant usage patterns and operates at far higher server utilization rates. In addition, AWS has been successful in increasing the energy efficiency of its facilities and equipment, for instance by using more efficient evaporative cooling in certain data centers instead of traditional air conditioning. A study by 451 Research found that AWS’s infrastructure is 3.6 times more energy efficient than the median U.S. enterprise data center surveyed. Along with our use of renewable energy, these factors enable AWS to do the same tasks as traditional data centers with an 88% lower carbon footprint. And don’t think we’re not going to get those last 12 points—we’ll make AWS 100% carbon free through more investments in renewable energy projects.
Leveraging scale for good
Over the last decade, no company has created more jobs than Amazon. Amazon directly employs 840,000 workers worldwide, including over 590,000 in the U.S., 115,000 in Europe, and 95,000 in Asia. In total, Amazon directly and indirectly supports 2 million jobs in the U.S., including 680,000-plus jobs created by Amazon’s investments in areas like construction, logistics, and professional services, plus another 830,000 jobs created by small and medium-sized businesses selling on Amazon. Globally, we support nearly 4 million jobs. We are especially proud of the fact that many of these are entry-level jobs that give people their first opportunity to participate in the workforce.
And Amazon’s jobs come with an industry-leading $15 minimum wage and comprehensive benefits. More than 40 million Americans—many making the federal minimum wage of $7.25 an hour—earn less than the lowest-paid Amazon associate. When we raised our starting minimum wage to $15 an hour in 2018, it had an immediate and meaningful impact on the hundreds of thousands of people working in our fulfillment centers. We want other big employers to join us by raising their own minimum pay rates, and we continue to lobby for a $15 federal minimum wage.
We want to improve workers’ lives beyond pay. Amazon provides every full-time employee with health insurance, a 401(k) plan, 20 weeks paid maternity leave, and other benefits. These are the same benefits that Amazon’s most senior executives receive. And with our rapidly changing economy, we see more clearly than ever the need for workers to evolve their skills continually to keep up with technology. That’s why we’re spending $700 million to provide more than 100,000 Amazonians access to training programs, at their places of work, in high-demand fields such as healthcare, cloud computing, and machine learning. Since 2012, we have offered Career Choice, a pre-paid tuition program for fulfillment center associates looking to move into high- demand occupations. Amazon pays up to 95% of tuition and fees toward a certificate or diploma in qualified fields of study, leading to enhanced employment opportunities in high-demand jobs. Since its launch, more than 25,000 Amazonians have received training for in-demand occupations.
To ensure that future generations have the skills they need to thrive in a technology-driven economy, we started a program last year called Amazon Future Engineer, which is designed to educate and train low-income and disadvantaged young people to pursue careers in computer science. We have an ambitious goal: to help hundreds of thousands of students each year learn computer science and coding. Amazon Future Engineer currently funds Introduction to Computer Science and AP Computer Science classes for more than 2,000 schools in underserved communities across the country. Each year, Amazon Future Engineer also gives 100 four-year, $40,000 college scholarships to computer science students from low-income backgrounds. Those scholarship recipients also receive guaranteed, paid internships at Amazon after their first year of college. Our program in the UK funds 120 engineering apprenticeships and helps students from disadvantaged backgrounds pursue technology careers.
For now, my own time and thinking continues to be focused on COVID-19 and how Amazon can help while we’re in the middle of it. I am extremely grateful to my fellow Amazonians for all the grit and ingenuity they are showing as we move through this. You can count on all of us to look beyond the immediate crisis for insights and lessons and how to apply them going forward.
Reflect on this from Theodor Seuss Geisel:
“When something bad happens you have three choices. You can either let it define you, let it destroy you, or you can let it strengthen you.”
I am very optimistic about which of these civilization is going to choose.
Even in these circumstances, it remains Day 1. As always, I attach a copy of our original 1997 letter.
Sincerely,
Jeffrey P. Bezos Founder and Chief Executive Officer Amazon.com, Inc.
—————————————————————————————————————————–
1997 LETTER TO SHAREHOLDERS
(Reprinted from the 1997 Annual Report)
To our shareholders:
Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry.
But this is Day 1 for the Internet and, if we execute well, for Amazon.com. Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.
We have a window of opportunity as larger players marshal the resources to pursue the online opportunity and as customers, new to purchasing online, are receptive to forming new relationships. The competitive landscape has continued to evolve at a fast pace. Many large players have moved online with credible offerings and have devoted substantial energy and resources to building awareness, traffic, and sales. Our goal is to move quickly to solidify and extend our current position while we begin to pursue the online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investment and crisp execution against established franchise leaders.
It’s All About the Long Term
We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.
Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.
Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:
We will continue to focus relentlessly on our customers.
We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.
We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.
We aren’t so bold as to claim that the above is the “right” investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.
With this foundation, we would like to turn to a review of our business focus, our progress in 1997, and our outlook for the future.
Obsess Over Customers
From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy- to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-Click shopping℠, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat purchases and word of mouth have combined to make Amazon.com the market leader in online bookselling.
By many measures, Amazon.com came a long way in 1997:
Sales grew from $15.7 million in 1996 to $147.8 million – an 838% increase.
Cumulative customer accounts grew from 180,000 to 1,510,000 – a 738% increase.
The percentage of orders from repeat customers grew from over 46% in the fourth quarter of 1996 to over 58% in the same period in 1997.
In terms of audience reach, per Media Metrix, our Web site went from a rank of 90th to within the top 20.
We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy.
Infrastructure
During 1997, we worked hard to expand our business infrastructure to support these greatly increased traffic, sales, and service levels:
Amazon.com’s employee base grew from 158 to 614, and we significantly strengthened our management team.
Distribution center capacity grew from 50,000 to 285,000 square feet, including a 70% expansion of our Seattle facilities and the launch of our second distribution center in Delaware in November.
Inventories rose to over 200,000 titles at year-end, enabling us to improve availability for our customers.
Our cash and investment balances at year-end were $125 million, thanks to our initial public offering in May 1997 and our $75 million loan, affording us substantial strategic flexibility.
Our Employees
The past year’s success is the product of a talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.
It’s not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com.
Goals for 1998
We are still in the early stages of learning how to bring new value to our customers through Internet commerce and merchandising. Our goal remains to continue to solidify and extend our brand and customer base. This requires sustained investment in systems and infrastructure to support outstanding customer convenience, selection, and service while we grow. We are planning to add music to our product offering, and over time we believe that other products may be prudent investments. We also believe there are significant opportunities to better serve our customers overseas, such as reducing delivery times and better tailoring the customer experience. To be certain, a big part of the challenge for us will lie not in finding new ways to expand our business, but in prioritizing our investments.
We now know vastly more about online commerce than when Amazon.com was founded, but we still have so much to learn. Though we are optimistic, we must remain vigilant and maintain a sense of urgency. The challenges and hurdles we will face to make our long-term vision for Amazon.com a reality are several: aggressive, capable, well-funded competition; considerable growth challenges and execution risk; the risks of product and geographic expansion; and the need for large continuing investments to meet an expanding market opportunity. However, as we’ve long said, online bookselling, and online commerce in general, should prove to be a very large market, and it’s likely that a number of companies will see significant benefit. We feel good about what we’ve done, and even more excited about what we want to do.
1997 was indeed an incredible year. We at Amazon.com are grateful to our customers for their business and trust, to each other for our hard work, and to our shareholders for their support and encouragement.
Jeffrey P. Bezos Founder and Chief Executive Officer Amazon.com, Inc.
On 22nd April 1970 an estimated 20 million Americans, 10% of the population, took to the streets. They were incensed by the increasing damage to our environment. In recent years they had seen oil spills off the coast of California, the introduction of commercial insecticides, and the discovery of acid rain damaging historic forest. Lake Erie and its waterways had become so polluted that a nearby river caught fire. The first Earth Day is credited with launching the modern environmental movement.
Fast forward 50 years, and little has changed.
Last year was Australia’s hottest and driest year on record, as wildfires burned 27 million acres and killed 29 people. Global temperatures have steadily increased for each year of the past two decades. Antartica’s ice sheets are melting and cracking off into the sea. Exceptional droughts, fierce storms and record-breaking rain were our new normals.
Today, we see the fragility of our society, environment and economies.
Yes, because a global pandemic has shutdown our industries, fish now swim again in Italy’s crystal blue Venice canals, because cruise ships and motor boats no longer churn up the muddy bottom. The amount of nitrogen dioxide in China, caused by burning fossil fuels, dropped 30% in January. The notorious smog in Los Angeles has dissipated, and air quality in the city is the best it’s been in 40 years. Carbon monoxide emissions are down 50% in New York City. People can see the stars in Delhi, and the tip of Mount Kenya can be seen from Nairobi. The EIA says that energy-related CO2 emissions will drop 7.5% this year. If as individuals and as societies we continue on this path, we could see reversals of extreme weather, rising temperatures and sea level rise.
The pandemic caused something else peculiar to happen this week: the price of a barrel of oil dropped below $0, the lowest it’s been since 1946. Oil producers could not give it away. A string of other oil headlines sent people reeling. The famous Singapore oil trading firm Hin Leong was revealed to have allegedly hid about $800 million in losses racked up in futures trading. A Nigerian oil-industry union ditched plans to strike, after they were accused of breaking rules aimed at containing the coronavirus. And Mexico’s Pemex has too much gasoline and nowhere to store it because of the fast-spreading coronavirus.
What we do now will shape all of our futures.
Earth Day is now recognized as the planet’s largest civic event and it led to passage of landmark environmental laws in the United States, including the Clean Air, Clear Water and Endangered Species Acts. Many countries soon adopted similar laws, and in 2016, United Nations chose Earth Day as the day to sign the Paris climate agreement into force.
The enormous challenges – but also the vast opportunities – of acting on climate change have distinguished the issue as the most pressing topic for the 50th anniversary year. At the end of 2020, nations will be expected to increase their national commitments to the Paris Agreement, so the time is now for citizens to call for greater global ambition to tackle our climate crisis.
Climate change represents the biggest challenge to the future of humanity and the life-support systems that make our world habitable. Unless every country in the world steps up – and steps up with urgency and ambition – we are consigning current and future generations to a dangerous future.
Earth Day 2020 is far more than a day. It must be a historic moment when citizens of the world rise up in a united call for the creativity, innovation, ambition, and bravery that we need to meet our climate crisis and seize the enormous opportunities of a zero-carbon future.
In the midst of crisis, companies are frantically adapting to survive and to support people in need.
We have all seen how global brands, have let go of their obsessions with luxury and profitability to respond in the hour of need – from Burberry to Inditex, Brewdog to LVMH, Dyson to Tesla – shifting production lines from perfumes to hand sanitizer, luxury fashion to protective clothing for medics, cars and cleaners to hospital devices and ventilators.
We also see a huge shift to support people locked down in their homes, isolated from normality, but still trying to live and work the best they can – cafes and restaurants offering home deliveries, theatres and cinemas opening in car parks where people stay safe in their vehicles, sports competitions online like running a 5k or marathon alone but connected by Strava.
Pivot to thrive
Then we have the acceleration of new approaches, organisations who are set to thrive in a downturn as they respond to the new needs, and maybe lasting behaviours, of people.
Online shopping has more demand than it can cope with, Amazon to Alibaba, Deliveroo to Grab. Instacart, the fresh food delivered to you home app, recruiting 300,000 extra pickers and packers for example. Online education has become a norm for kids. Health diagnostics and consultations by smartphone, like Babylon or Good Doctor. They could all become normal.
And then we see organisations, particularly start-ups choosing to pivot their futures in entirely new directions. Perhaps its not a surprise that 57% of the Fortune 500 were born in a crisis, a time when everything is shaken up, new attitudes and behaviours emerge, old competitors fail, and people look for new help and hope.
Examples of Pivots
San Francisco. Airbnb has taken its Experiences business online during lockdown, making it the primary offering of the brand, with home cooking, tango classes, magic tricks, and much more from around the world to your sofa.
Kottayam, India. Manorama Weekly, a family entertainment publication, has seen record sales and a 30% rise in circulation thanks to a collab with the Kerala government which entailed free vegetable seeds included in every copy.
Singapore. Creative agency BBH Singapore has developed an Animal Crossing campaign for the popular holiday island of Sentosa – the country’s first branded virtual destination on Nintendo Switch – with 36 bookings available each day.
Amsterdam. Vegan restaurant Mediamatic Eden is trialling a new method of socially-distanced dining with diners seated in separated greenhouses overlooking the water, named ‘serres séparées’ .
London. Transparent screens, hands-free doors and an in-house barista: some of the measures that architecture and design studio Weston Williamson is bringing into its office – outlined here with some excellent illustrations.
Detroit. Fisheye Farms has gone from selling its produce to restaurants to residents after partnering with Steward, a platform for investing in sustainable farms, to set up an e-commerce platform.
Tokyo. Creative agency Whatever has teamed up with designer Akihiko Kimura to create WFH Jammies – combining the formal look of a shirt up top with loose comfort everywhere else
New York. Influential streetwear brand Sprayground has launched its new Miami 305 collection using 3D animated models in a short film.
South Korea. CJ CGV, a major cinema chain in South Korea, has gone completely contactless using robots, automated snack bars and unmanned ticketing systems.
LA. The robata grill has been fired up at MTN in Venice as Juan Hernandez and Pedro Aquino, chefs de cuisine at Gjelina and MTN respectively, have launched a Oaxacan pop-up restaurant – takeaway only.
New York. Condom company Trojan has launched a free online cookbookcalled ‘Rising Time’, including sensual bread recipes and food photography. Recipes include ‘Get A Pizza That Booty’ and ‘Knot Without A Condom.’
Shanghai. Cosmetics brand Lin Qingxuan closed 40% of its stores, but redeployed 100 beauty advisors as online influencers to engage customers virtually, driving over 200% sales growth.
UK. An ancient water mill mentioned in the Domesday Book of 1086 and now used as a tourist site has relaunched production following flour shortages due to the rise of at-home sourdough baking.
Amsterdam. Community-driven delivery platform Roodkappje has launched, allowing volunteers on a jog (or out to walk the dog) to deliver parcels around the neighbourhood.
Helsinki. For those who aren’t escaping their home is this multifunctional work-from-home station, the Fem Desk, from office interior architecture agency Fyra.
Minnesota. Loll Designs has designed a hospital field bed out of recyclable, easy-to-clean and hygienic High Density Polyethylene (HDPE), using leftover material from its outdoor furniture line.
Colombia. Fashion brand Maaji has launched a colourful collection of protective clothing using recycled plastic, from face masks to body suits.
Czech Republic. Unpasteurised and unfiltered beer can go bad quickly – coming along to help ‘save’ the bottles is this initiative which connects local beer lovers with hundreds of breweries in trouble.
Melbourne. Vaughan and Nathan Mossop, founders of design studio Neighbourhood Creative, have launched Take Away, a cookbook series that gives restaurants and chefs a way to earn much-needed cash.
Amsterdam. Sick of your couch? Amid plunging occupancy rates, hotel brand Zoku has launched ‘Private WorkLofts’ – for €50 you get a kitted-out workspace for the day, plus room-service lunch, stationary and supplies.
London. Knitwear brand Country of Origin has teamed up with design agency IYA Studio to launch Hande – an organic, alcohol-based hand sanitiser brand. The operation was set up in two weeks at an industrial space in Peckham.
Boulder. Trident Booksellers and Cafe has launched a ‘mystery bags’ delivery service. For $50, it will arrange and hand-deliver bags with four to six books chosen by staff – plus a bag of coffee or tea.
Berlin. Jan Horeis of Studio Horeis Florist has teamed up with restaurant The Hidden to create ‘DIY dinner with flowers’, a package with prepared food ingredients and flowers.
London. Online fashion brand, Rosie On Fire, launched its own dedicated website to sell lockdown-related packages to UK consumers. The consumer boxes on offer include the “Lockdown Birthday Kit” and “Lockdown Date Night Kit”
Texas: EVO Entertainment has converted its carpark into a movie theatre. Drive-in movie theatres are popping up everywhere, led by AirGarage, which already monetises and manages parking lots for small businesses.
London: Fashion rental brand Rotaro has temporarily become a food delivery company promising fresh food and vegetable boxes delivered to your door in 48 hours.
NYC: Streetwear brand Chinatown Market has doubled down on useful social content, deploying Instagram TV to teach how to customise sneakers or tie-dye. Sure, lots of brands are going down this path, but they’re doing it particularly well.
Berlin: Michelberger Hotel has turned its restaurant into a grocery store, selling fresh produce, bread, juice, healthcare products and its signature coconut water drink, Monkey Michelberger.
Silicon Valley: Animal sanctuary Sweet Farm is raising funds by allowing people to pay for Zoom cameos from llamas, goats, turkeys, pigs and other animals – with prices ranging from $65 to $250.
San Francisco: Hims and Hers – best known for hair loss, erectile dysfunction and skincare medicine – has expanded its telemedicine services into virtual Covid-19 self-assessments.
Sydney: Stagekings, creators of specialist structures for music and art events, have started designing, manufacturing and selling stand-up desks and other ‘isolation’ office furniture.
Seattle: Event photo booth company, The Snap Bar, have adapted their operations to launch ‘Keep Seattle Smiling’ – gift boxes that help struggling local businesses.
London: Musician booking platform Encore have launched a new initiative that allows customers to book artists to create personalised music videos for friends and loved ones.
Melbourne: Clothing brand Scanlan Theodore have repurposed their factory in Fiji to manufacture (rather chic) PPE – starting with gowns.
Bali: Documentary production company Far Features have launched a new initiative called the Far Found Project – repurposing old footage, and that of their customers, into brand stories.
Coventry: Graphic design agency Twenty Two Digital are now primarily focusing on building websites for businesses without an online presence, creating sites in 24 hours.
Cape Town: Normally makers of high-end swimwear, Granadilla has focused all of their attention on ‘Granadilla Eats’ – working with local farmers and small businesses to deliver fresh food boxes door-to-door.
Beijing: Liu Wei has designed new line of stylish protective wear. The Chinese designer’s three-piece range is all made from waterproof, anti-static, dust-resistant fabric with a germ-resistant layer underneath.
Richmond: Advertising agency Little Creatures has created a website called Keep Calm and Nom Nom to direct locals to restaurants and breweries that are struggling.
London: Previously focused on making EV chargers and software, EO Charging has collaborated with Brompton Bikes, Octopus and Formula E to create free online lessons for kids on topics such as sustainability and energy use.
Ottawa: Cannabis company Canopy Growth is launching a series of instructional ‘how to’ videos on Instagram including ‘How to roll’ and ‘How to clean your setup’.
New York: Horderly, an in–person home organisation service, has created a new virtual service in the space of three days. Start off with your book shelf, and arrange the books in a rainbow colour scheme to honour frontline workers!
Faroe Islands. Now you can explore the islands thanks to a camera-wearing local who responds to your commands from anywhere in the world, to virtually show you around the islands.
Tokyo. Short-term rental company Kasoku offers spouses apartments to avoid ‘COVID divorce’. It is marketing its empty fully-furnished apartments as a way for stressed couples to get some time apart during the lockdown.
Links to more pivots
Covid Innovations: 100s of meaningful COVID-related innovations, worldwide. Segmented by industry. Brought to you by the teams behind TrendWatching.
Board of Innovation: Defining the new “low touch economy” and co-created tracker of companies who are shifting to new business models as consumers seek safety in distance.
Sifted from the FT: 19 European startups have pivoted in the face of coronavirus, from producing medical gear for the first time to swapping fashion sales for “lockdown kits”.
Refine and Refocus: New Orleans bow ties to Scottish dog walkers, Spanish publishing firm keeping kids happy, and hand sanitzer with a hint of marijana in Massachusetts.
Maddyness: 19 businesses pivoting in response to COVID-19 from supporting health workers to homeworkers, keeping kids entertained, and old people staying positive.
Forbes: How brands have pivoted since the COVID-19 outbreak, from Kora Organics to Daily Harvest, Obagi and Theragun, Havianas and H&M, and Yes Way Rose.
There are hundreds of stories of companies adapting, or whole-heartedly reinventing themselves.
How will you pivot your business?
Shifting your business from surviving to a rapid strategy of thriving is completely possible. There are hundreds of examples, inspirations to follow, but there are also some important steps. Of course every business is different in terms of finances and resources, market and ambition. These all matter, because surviving and thriving is much more than hanging onto sales:
Step 1: Cashflow … Immediate strategies to preserve cash, resources and adjust your business to the immediate changes. Example questions: What is your current cash position? What is your burn rate? What accounts receivable can you secure?
Step2: Reimagine … Using existing resources to shift to meet new demand and client realities. Example questions: What do we currently offer that we can still deliver on? What changes could we make to still fulfil orders? What new adjustments can we make to what we offer that fits the current situation?
Step 3: Survive … How to diversify revenue and bring down costs. Example questions: Is there a new revenue stream that can be started now? or in the near future? Given the nature of employees working from home, is there additional downsizing to costs to be considered
Step 4: Thrive: How to pivot your business in this new reality. Example questions: How do you reframe your business in the face of likely economic downturn? What customer behaviors and attitudes will change and how can we adapt to them? What can we provide that will be in demand going forward?
Reimagine with purpose
A lot of my work recently has been around business purpose. There is no more important time than now to find a sense of direction whilst everything else is chaotic and changing.
Finding your bigger idea is more important than ever right now – like sailors in stormy seas, we need a rough direction to head in, but this is your choice – not just what you do now, but your bigger ambition, passion and goals. With a clear sense of purpose, even the stormiest seas can seem less bewildering – or days locked in your home, might seem like a unique opportunity to pause and think about where you are going in life and work. With a clear sense of purpose, you can steer your way through and out of today’s chaos, to find a better tomorrow.
Simon Sinek gives a useful example of following your “why”, rather than your “what”, with relevance to my own area of business. If I can’t deliver keynote speeches or education workshops like usual, what could I do? Go online you say, but that’s not the answer, there are much bigger and richer opportunities. Or if you are an airline, don’t just think of your business as transportation, think about connecting people in new ways, helping them explore the world in new ways, or relaxation or entertainment, to satisfy their motive in a different or better way. “Why” lets you be more:
Alibaba and Amazon
We have seen nations different radically in their approaches in their response to the crisis, from the high tech tracking of South Korea and Germany, to the laid back approach of Sweden and Netherlands, the chaos of governments in UK and US. Similarly, companies have different approaches. Compare two of the world largest online retailers, Alibaba and Amazon:
Alibaba emphasized massive donations to the relief efforts centered in Wuhan, while also reorienting parts of its businesses to the shifting environment. For example, when its supermarket subsidiary Freshippo (aka Hema in Chinese) was faced with a huge surge in demand for grocery delivery services, the company partnered with dozens of businesses such as restaurant chains to deploy their sidelined employees, a tactic that was soon followed by competitors such as JD.com’s 7Fresh and Meituan Dianping as well as Alibaba’s own restaurant delivery unit Ele.me.
It also moved quickly to support retailers to make the transition to e-commerce with support from livestreaming to help drive sales, waived merchant fees and offered low-interest loans via affiliate Ant Financial. While the company’s bottom line is expected to take a hit (along with the rest of the economy), it’s betting that the emphasis on being a good corporate citizen first will create long-lasting brand equity that will help it emerge from the crisis in a stronger position, and it is now going global with a series of high-profile donations to dozens of countries including the United States.
In contrast, Amazon’s reputation has been weighed down by its responsesto employee protests over pay, sick leave and working conditions. The company has also struggled to manage a supply chain that is heavily dependent on Chinese-made goods, leading to a postponement of its annual Prime Day shopping event.
The company has already cut back on the products its warehouses will accept to essential items, hurting sellers, and Prime customers are seeing delivery times for most non-essential items rising to four weeks from the usual two days. While Amazon has made donations to coronavirus relief efforts (albeit on a much smaller scale than Alibaba), announced plans to hire 100,000 workers to meet increased demand, and offered a pay hike, the perception of the company as putting profits first is fueling greater distrust.
Sports and Fitness, Coffee and Tea
Fitness brands that were heavily dependent on retail stood out by pivoting to support their target customers with relevant content, which in turn helped to drive online sales. Nike launched a special series of workout videos and livestreams featuring local coaches and trainers that was available through multiple platforms as well as on Nike’s own app, while Lululemon offered dozens of live yoga classes and a list of instructors offering online classes on Douyin and livestreaming platforms.
Both companies have reported that online sales helped to offset losses from retail store closures and were optimistic about their China business bouncing back.
Other brands that relied on in-person consumption used e-commerce platforms to share new offerings with consumers, such as products that encouraged consumers to recreate in-store experiences at home.This trend was especially notable in efforts by major coffee and tea chains that partnered with Tmall to boost online sales.
To celebrate International Women’s Day on March 8, Starbucks partnered with the e-commerce platform on a line of cherry blossom-themed products, including a pink mug topped with a lid in the shape of Tmall’s cat-ear logo, an apparent reference to the coffee chain’s highly coveted cat’s paw cups from last year.
The upscale tea chain Naixue Tea (also known as Nayuki) encouraged users to recreate the brand’s signature “cheese tea” drinks at home with a drinking glass that featured a foam design around the top, which was sold on Tmall along with a range of new products that celebrated the brand’s connection to China’s cultural heritage. In another innovative partnership, Naixue teamed up with e-commerce livestreamer Zhang Dayi and her BigEve beauty brand on a gift box in the shape of a to-go cup with drink vouchers and limited-edition beauty product collaborations, which sold 10,000 units through Zhang’s Taobao Live broadcast.
Rival chain Hey Tea (喜茶) is also planning a flagship store on Tmall to sell derivative products along with new product lines including juices, yogurt and snack foods. During the coronavirus outbreak, Hey Tea collaborated with Alibaba’s Freshippo on joint-branded sweets for the Spring Festival, and the new store will expand its reach beyond the current limited radius for delivery from its retail outlets.
More “pivot” anecdotes
Airbnb announced a new global initiative to help house 100,000 healthcare professionals, relief workers, and first responders around the world during the COVID-19 crisis. Airbnb will waive all fees for stays arranged through this initiative.
accuRx have developed a video consultation service (in the space of a weekend!) and made it free for all frontline NHS staff. Patients don’t need to download anything and doctors don’t need fancy webcams or anything to use it. The statistics and feedback are incredible.
Top Cuvée, normally a neighbourhood restaurant and a bottle shop with a great bar becomes Shop Cuvée delivering food, drink and toiletries to their customers.
To support the NHS with medical equipment in the fighting against the COVID-19 crisis, Dyson has created the Dyson ventilator. It is efficient in conserving oxygen, bed-mounted, portable and doesn’t need a fixed air supply.
Tunisian taxi startup IntiGo has temporarily become a delivery service. For $4/hour, the company will deliver groceries and other products to customers.
In London, Experience Haus has created OpenHaus, a series of virtual workshops to join for free throughout April, to keep on learning while self-isolating.
The Los Angeles-based food truck turned restaurant Guerrilla Tacos has just launched several ‘Emergency Kits’. The $149 option contains enough products for 60 tacos, plus a roll of toilet paper.
Signature Brew is paying out-of-work musicians to hand-deliver its ‘Pub In A Box’ product with glassware, snacks, a music quiz, playlists and beer.
Spiffy, the US on-demand car cleaning service have rolled-out a service to sanitise facilities and properties.
The UK’s Department for Transport will explore new transportation modes including e-scooters and e-cargo bikes, as well as bringing the on-demand model (popularised by services like Uber) to buses and other public transport alternatives, as well as using drones for medical deliveries. It has also announced funding of £90M ($112M) for three new Future Transport Zones to trial these new services.
ChargedUp, the specialist in phone charging stations created CleanedUp for venues to provide hand sanitising facilities for their customers, to keep everyone safe and give confidence during and after the COVID-19 crisis.
BrewDog has transformed its distillery in a bid to help with the shortage of hand sanitisers, by creating a new one for giveaways to those in need.
The Rapids have transformed their “Field Trip” workshops into “Remote Field Trips”, to help businesses seize opportunities, deliver mission-critical change and ride these rapids.
Netflix Party allows you to watch movies and TV shows with friends, wherever you are and also has group chat so you can react and discuss together.
1Rebel, London-based fitness club has announced that it is willing to offer its gym spaces to the NHS for extra beds during the coronavirus pandemic. 1Rebel co-founder James Balfour has said that he believes the gyms have space for up to 400 beds.
In Canada, INKSmith, a startup that was making design and tech tools accessible for kids, has now moved to make face shields and is hiring up to 100 new employees to meet demand.
3D-printing companies like Massachusetts-based Markforged and Formlabs are both making personal protective equipment like face shields, as well as nasal swabs to use for COVID-19 testing.
From sewing bow ties to making masks, New Orleans small business NOLA Beaux Ties, is pivoting to support health care providers responding to COVID-19
A Scottish dog walking company has pivoted to delivering groceries and medicine to its elderly clients, free of charge.
Veoleo Press, a small publishing company of Spanish children’s books, has pivoted to a pay-as-you-wish model selling coloring sheets that are created by Latinx artists to maintain Spanish learning in the home during the quarantine.
Individuals are pivoting too. Boston based small business networking community, Alignable.com, has observed that restaurants and retailers are increasingly hiring out-of-work wait staff to deliver food and goods to consumers.
Edible Arrangements has also pivoted from offering elaborate bouquets of fruits cut in the shape of flowers, to providing assorted boxes of whole fruits like apples, oranges, bananas, and melon.
Even cannabis companies are pivoting. The Commonwealth Dispensary Association of Massachusetts, which represents 36 marijuana businesses statewide, announced that its members could start producing hand sanitizer to be donated to local hospitals.