I loved this book: Endure: Mind, Body, and the Curiously Elastic Limits of Human Performance. Not just because it indulges my love of running, but because it’s about how to endure, how to go further, how to reach higher, how to achieve more.

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:

• Jeff Bezos’ 2019 Letter to Shareholders
• Jeff Bezos’ 2018 Letter to Shareholders
• Jeff Bezos’ 2017 Letter to Shareholders
• Jeff Bezos’ 2016 Letter to Shareholders
• Jeff Bezos’ 2015 Letter to Shareholders
• Jeff Bezos’ 2014 Letter to Shareholders
• Jeff Bezos’ 2013 Letter to Shareholders
• Jeff Bezos’ 2012 Letter to Shareholders
• Jeff Bezos’ 2011 Letter to Shareholders
• Jeff Bezos’ 2010 Letter to Shareholders
• Jeff Bezos’ 2009 Letter to Shareholders
• Jeff Bezos’ 2008 Letter to Shareholders
• Jeff Bezos’ 2007 Letter to Shareholders
• Jeff Bezos’ 2006 Letter to Shareholders
• Jeff Bezos’ 2005 Letter to Shareholders
• Jeff Bezos’ 2004 Letter to Shareholders
• Jeff Bezos’ 2003 Letter to Shareholders
• Jeff Bezos’ 2002 Letter to Shareholders
• Jeff Bezos’ 2001 Letter to Shareholders
• Jeff Bezos’ 2000 Letter to Shareholders
• Jeff Bezos’ 1999 Letter to Shareholders
• Jeff Bezos’ 1998 Letter to Shareholders
• Jeff Bezos’ 1997 Letter to Shareholders

What can we learn his letters?

“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

Today marks the 50th anniversary of Earth Day.

• Download: “People Planet Profit” by Peter Fisk … Free edition of my book to celebrate 50th Earth Day

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.

• Download: People Planet Profit : Free edition of my book for 50th Earth Day
• Download: People Planet Profit : The Manifesto
• Download: People Planet Profit : The 7 Transformations
• Download: People Planet Profit : The Business Case
• Download: People Planet Profit : The Executive Development Programme

More from Peter Fisk

• Article: Adidas to Allbirds – sustainable fashion brands embracing the circular economy
• Article: Upcycling. Reinventing fashion to be more sustainable, interesting and unique
• Article: P&G’s Ambition 2030, sustainable innovation as “a force for a good and a force for growth”
• Case study: Agua Bendita. Handmade swimwear from the colourful scraps of Colombia
• Case study: All Birds. The world’s most comfortable shoes
• Case study: Bolt Threads. Synthetic spider silk for a better luxury world
• Case study: Positive Luxury. The butterfly mark you can trust

Adapt to survive

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
• London. Craft brewer Five Points is recreating the draft beer experience in people’s homes by offering specially-made five litre kegs of beer.
• 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!
• Berlin: Fashion designer Ylenia Gortana has teamed up with fashion lab/creative space Unit 26 to create designer surgical masks by hand.
• Bristol: The micro gin distillery Pyschopomp is using its equipment to make 100ml bottles of hand sanitizer for hospitals in return for a donation.
• 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.

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

• 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.

More from Peter Fisk

• How do you see the future? Future Recoded … Reimagine markets. Reimagine work. Reimagine business. Reimagine success.
• Why innovate in a downturn? Whilst everyone else is losing their heads, the companies of tomorrow are being created right now 
• What are the impacts of COVID-19? What business leaders should do now, to support people and society, and secure their business future.
• The latest edition of my “Fast Leader” magazine … Happy with Zoom, Finding more purpose, Babylon Health, Fujifilm’s anti-viral drugs 

We are living through a time of extraordinary change. And the rate of change is increasing month by month.

That change is unpredictable but it is also somehow connected. Global shock, economic disruption, social pressure, environmental context. It is manifesting itself not just in one area but in our politics, in our technology, in our communities and in our economies, and in our levels of social engagement, activism, and social cohesion (or lack of it).

If we want to survive in this time, if we want to thrive in this time and build something better, we can’t simply extend the old business as usual. We need a new approach to leading ourselves and other people through times of change that is different from how we used to lead ourselves when times were stable.

Nassim Nicholas Taleb’s book “Antifragile: Things that gain from disorder”gives a hint of what that might look like.

In summary, Taleb says that:

• Fragile items break under stress, antifragile items get better from it.
• In order for a system to be antifragile, most of its parts must be fragile.
• Antifragile systems work, because they build extra capacity when put under stress.uncertainty and relentless change

Lesson 1: Fragile items break under stress, antifragile items get better from it.

We all know the label on boxes with glass inside them that reads “Fragile – handle with care”, and we’ve all seen more than one scene in a movie where someone throws a package like that, resulting in a glass shattering noise.

You know that fragile things break when you shock them and toss them around – volatility does them no good. But when you think about it, there isn’t really a word that describes things, which are the opposite, is there?

We might talk about something being robust or durable, but that really just means it can resist shocks and stress better than fragile items – but it doesn’t benefit from them. You’d still label the boxes you ship robust things in with “Handle with care”, not with “Please handle roughly”.

Nassim Taleb took care of this dilemma by giving us a word for what we’re looking for: antifragile. It describes things that benefit from shock and thrive in volatile environments, because as they’re stressed and put under pressure, they get better, not worse.

Can you think of an example? Here’s one: When Hercules fights the Hydra, every time he slices off one of her heads, two grow back. So for every time the beast is hurt, it actually gets stronger. That’s an example of being antifragile.

Lesson 2: An antifragile system usually consists of many fragile parts.

There are quite a few more good examples of antifragile systems, one being the evolutionary process.

Evolution itself is incredibly antifragile – we’ve evolved from our ancestors based on the genetic features and traits which helped us survive the most and succeed. However, that also meant many humans before us had to die.

Any individual specimen of a species is usually fragile – every human being or animal can die and quite easily so. But, because the system can use life and death as indicators of success and failure, the evolution of species in itself is antifragile. For example, our hands weren’t always built to handle tools so well. Through evolution it became apparent that the more advanced our hands got, the longer we could survive, so eventually our genetic code morphed to include the incredibly refined hands we all have today.

So for an antifragile system to work, its individual parts must be fragile, because the success and failure of these parts serves as important feedback for the system as a whole and allows it to get better in chaotic circumstances.

Lesson 3: Antifragile systems work, because they build extra capacity when put under stress.

How exactly does that happen? Why does antifragility work?

Actually you do experience it quite often, if you exercise regularly, that is. When you go to the gym and lift really heavy weights, and when you feel the burn, you push on and do just one more rep – that’s when growth happens.The fragile parts, the tissue in your muscles, is broken down – the failure is reported to the system.

In order to ensure future success, your body now overcompensates for this shock, by building extra capacity to handle even bigger shocks better. Over night, as you sleep and recover, your muscles are rebuilt and they’re now a bit stronger than before. Usually, the human body is incredibly efficient, and doesn’t want any excess capacity “lying around”. But in the case of being antifragile, your body builds redundancy in order to prepare for future extreme situations and emergencies.

That’s how stress can prepare your body for even bigger stress and it’s building this extra capacity that lies at the core of why being antifragile is so helpful to thrive in critical situations.

I thought you might like to see a summary of today’s interview with Bloomberg and McKinsey on the challenges and opportunities for business leaders in the current crisis … plus here are three additional articles, with extracts from my forthcoming book Business Recoded, and more details behind the Q&A:

• How do you see the future? Future Recoded … Reimagine markets. Reimagine work. Reimagine business. Reimagine success.
• Why innovate in a downturn? Whilst everyone else is losing their heads, the companies of tomorrow are being created right now 
• What are the impacts of COVID-19? What business leaders should do now, to support people and society, and secure their business future.
• The latest edition of my “Fast Leader” magazine … Happy Homeworking with Zoom, Finding more purpose, Babylon Health, Fujifilm’s anti-viral drugs 

Q. Crisis feels like a scary time, when we should stop everything, save money and wait the bad times to blow over. Is a crisis more of a threat or opportunity for business?  

Crisis is a time of change. Yes, you need to survive, but it is also an opportunity to thrive.

57% of the world’s leading companies were founded in a downturn – companies like Apple and Disney, Microsoft and McDonalds – when attitudes and behaviours changed, when old competitors failed because they didn’t adapt, and when the psychological constraints drove bolder innovation.

90 of the world’s 325 “unicorn” businesses, those private companies that at least were valued at over $1 billion, were founded in the last economic crisis of 2008-9. Airbnb, Dropbox, Square, and Uber. These 90 companies seized the opportunities of crisis, to create almost $500 billion of value over subsequent years.

I see three phases for business leaders to consider – survive, adapt and thrive.

• Survive: Start by surviving firstly, and most importantly, as a human challenge. Helping your employees, customers and local communities through this difficult time. Indeed, as Burberry makes protective clothing, Louis Vuitton makes hand sanitizer, Tesla makes hospital equipment we realise that business can be tremendously helpful and caring to society. It is also about surviving economically – finding ways to stay solvent, minimising costs and sustaining some revenues.  This is for 0-6 months.
• Adapt: Time to move forwards, even if we are still in lockdown. In particular, understand what has changed about your world, and your customers’ world. Fundamental needs of customers have not changed – to eat, work, learn, play – but how they do it might. How can you embrace these changes, by adapting existing activities, or creating new? How can you streamline, by focusing on the most important audiences and products for your future? Now is the time to accelerate innovation. This is 6-18 months.
• Thrive: Reimagine a better future. How can you use crisis as the catalyst for reinvention, to shift your core business, to embrace the future whilst others are slow to recover?  How can you harness the huge “megatrend” changes in our world – the shift from west to east markets, to ageing populations, to health and wellness, to intelligent machines, to sustainable businesses, to smarter living? Now is the time to reshape markets, and lead the future. Employees, customers, investors will all be looking for leadership out of a crisis, searching for hope and optimism. This is your moment to be that leader. This is 1-5 years.

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

Q. After a crisis like the current pandemic ends, in which markets do you see the best opportunities for new growth?

The potential is there now, so do not wait for the pandemic to end. Start now. A vaccine is most likely 12-18 months away. Businesses need to move forwards before then, even with constraints.

Like every market across the world, we see fundamental changes in consumer behaviours, as they are locked down at home, as they fear the economic impact. We are all familiar with these right now. From online working to online education, online health to online shopping, online gaming to online socialising. Some of these changes will stick.

The specific opportunity is to take what you already do well, and take it to places that don’t.  Particularly to the growth markets of Asia. Companies like Grab, which combined home delivery with finance and data engines to know customers in Singapore better than anyone else, or Twitch which is the world’s leading platform for gamers, are poised to thrive in this crisis.

Q. What about Industry 4.0 and digital transformation, will they be accelerated or be delayed by the crisis, as companies focus on survival?

Now is the time to accelerate innovation.

However there are two important warnings. Firstly innovation is not the same as technology. Innovation is about solving problems better, most obviously by creating better solutions for customers. This requires deep insight, creativity and design, new business models and organisation models, plus technology. Secondly digital transformation is not about automating old ways of working, it is firstly about changing how you work. This demands transformation in strategies, in business models, and market models. Then applying technology to it to make it happen.

Most companies have automated processes, but they haven’t really transformed themselves, or their markets. Now is the time to step up. Business transformation, enabled by digital technologies. Of all the technologies, AI will be most significant – massively accelerating the speed at which machines can work, and delivering more personal, predictive and positive solutions. Genetic analysis enabling proactive healthcare treatments before you need them, and personalised medicines when you do. However new technologies are incredibly expensive and risky, so it is much better to work in partnership with technology companies, to share risk and reward, but also to share creativity and create innovatively new fused concepts.

As I said, sectors such as healthcare, education, shopping and education are likely to see lasting change, and fundamental shifts towards putting digital platforms at their core. Companies in these sectors are doing well. Instacart is recruiting 300,000 new employees in USA, going from a small shopping app to the nation’s leading grocer in 6 weeks. Zoom, developed by Eric Yuan to be simpler than other videoconferencing platforms has become our favourite tool for work and socialising, and has seen its market value triple since January to over $35 billion.

In healthcare, 95% of doctor consultations are now done by smartphone, compared to 5% just a few months ago. In Singapore and South Korea we see the benefits of real-time AI-enabled health tracking and remote diagnostics. This is not only fast and easy for patients, but efficient for doctors too. Old habits are quickly forgotten, privacy issues are rapidly overcome, competitors work together. Good Doctor is now the world’s largest health platform, serving over 1 billion Chinese people. Google and Apple are working together on new diagnostic apps.

In education, online learning has become the norm in many countries with huge distances to travel. Online lessons, accompanied by peer-to-peer learning between children has been the norm in countries from Finland to South Africa. Not only does this enable more children to access high quality education in any part of the world, but it is also better. Children quickly learn to learn in new ways – from each other, learning to think rather than just acquire knowledge, learning to empathise, explain and apply ideas rather than know them.

Q. When we look back in years to come, will there be a more fundamental restructuring of economies that began during this crisis?

We will recover from this crisis. However we will likely see an 18-36 month downturn because of the enormous disruption to economies, and the time waiting for a vaccine until we can live and work normally again. Some businesses will fail, but life will get back to more normality.

However the new normal for business, is unlikely to be stable, predictable growth. Markets and consumers will evolve. And we will continue to experience more turbulence, more shocks, including more pandemics. The world is simply more dynamic than ever before.

What I believe will change is the relationship between business and society.

I have a new book coming out later this year which is called “Business Recoded”, defining 49 new codes for business success.

In many ways, I believe we are seeing the dawn of a new capitalism.

We have been heading for some form of crisis for a while. There are 4 fundamental forces of change that are colliding, and driving us to rethink:

• The rapid growth of technologies, has transformed how we live and work, but also brought fear and distrust, of global connectedness, privacy and control
• The environmental crisis, from global warming to declining biodiversity, has strained the relationship between industrial growth and natural resources.
• The shift to Asia, where 60% of the world, including 95% of the world’s under 25s now live, will be the predominant driver of consumer market growth
• Business and society are increasingly out of sync, a growing inequality of wealth, and lack of empathy and support to society.

Businesses need to rediscover their purpose, why it exists.

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

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

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

So what does that mean for Tesla? Well it means they reframe their space around energy rather than cars, and a diverse portfolio that includes a new generation of  battery technology for everything from small devices to smart cities, and new products like their solar-energy tiles. They then use new business models to accelerate the shift, future proofing cars with more adaptive software updates ready for a self-driving future, Powerwalls to overcome consumer fears of not being able to charge, a range of cars to access more consumers, a subscription model to make it easier, direct sales model to engage directly with their consumers, and fully robotic factories to build cars in a pandemic. Not surprisingly they are the only car manufacturer still making money in today’s crisis.

Finding a higher purpose, defining the positive contribution which business makes to the world is not just about doing good. It also creates a new strategic frame for your business – it inspires employees and customers, investors and society. It gives you more clarity of direction to make smarter choices and explore new possibilities, it brings people together with a common ambition, and it gives you a cause to keep fighting for in times of incredible change.

There was a great quote in the Wall Street Journal last week saying “In the fight against Covid-19 though we might look forward in doom, one day we will look backward in awe.”

Henry Mintzberg, the 80 year old Canadian academic believes the time has come to “rebalance society”.

Mintzberg is the John Cleghorn Professor of Management Studies (Strategy & Organization) and Faculty Director (International Masters for Health Leadership) at the Desautels Faculty of Management of McGill University in Montreal where he has been teaching since 1968.

In 2004 he published a book entitled Managers Not MBAs in which he argues that there is much wrong with management education today. He claimed that prestigious schools like Harvard and Wharton are obsessed with numbers and that their overzealous attempts to make management a science are damaging the discipline of management. He advocated more emphasis on executive programs  for practicing managers (rather than students with little experience) built around action learning and their own experiences.

Rebalancing Society

In 2015 he published Rebalancing Society (download free), a theme which he had worked on for several years, but seems more relevant than ever in the wake of global pandemic, racial protests, and ever more urgent issues of climate change and social inequality.

The Declaration of Interdependence

Looking for a way to express his message, a colleague suggested that a  they look at the American Declaration of Independence, and paraphrase it. Mintzberg’s declaration of “interdependence” starts by making the point that “Our world has reached the limits of growth driven by the pursuit of individual rights at the expense of shared responsibilities.”  

By the “rebalancing” of society he means “finding a dynamic equilibrium across public sector needs that have to be respected, private sector interests that have to be responsible, and plural sector, or community, concerns that have to be robust. Businesses have to contribute in a constructive way, governments have to do the work of protecting us from imbalance, and the plural sector associations have to help drive the changes in government and business.”

Asked what will happen if we don’t act now, he says “The answer is on the news almost every day, from flooding and fires to the election of thugs by people who are angry.”

Image: Unsplash

Change is relentless, innovation accelerates, crisis shakes everything up.

For business leaders, now is the time to reimagine. To explore, innovate and accelerate a shift to the future.

How are markets changing? What are the structural and economic changes, the attitudes and behaviours of consumers, that are shifting right now. In just a few weeks, for example, most of the world shifting from physical to online eduction, online working, online shopping, online entertainment.

95% of doctor consultations now take place by mobile phone. Will we go back to the old ways? As children embrace online classrooms, enhanced by peer to peer chat, will they find physical school slow and boring. As Zoom has come to dominate our locked-down home working and personal lives, will we want to need to travel and meet in the same ways as before?

Technological progress, environmental crisis and economic shock have now come together, to create a moment of potentially seismic change.

What new opportunities will come with tomorrow’s technological advancement, for both people and for business? Where does your organisation fit in? How will you respond to constant disruption? It is time to reimagine everything.

The current pandemic rolling across the world has accelerated a world which was heading for a meltdown, as the business status quo looked increasingly out of sync with the world.

Rapid technological developments  created ever more strain on society and the environment. People reacted by rejecting progress. Brexit and Trump, nationalism and migration. The environment responded with ever more unpredictable and extreme weather, global warming, rising sea levels and diminishing biodiversity.

So how can we use this crisis as a turning point, to recognise that capitalism as we know it cannot go on, that business and society, technology and humanity need to work better together, to create a better world for all of us?

Recoding business

Over the last year I have worked on a huge RECODE project to understand how business can and needs to respond to a changing world.  This include 49 new codes for business, built around a new DNA for business and leadership.

The project drove me to more deeply understand the drivers of change, the huge forces that are causing us to shift. My book comes out in September, but in advance here is a sneak view of the megatrends changing our world right now:

Five megatrends are shaping our future right, shifting the way we live and work. They fall into 5 categories:

• Megatrend 1: Aging World … the shift from young to old … People are living longer, healthier lives throughout the world, as healthcare, education and lifestyles improve.
• Megatrend 2: Booming Asia … the shift from west to east … Consumers are more affluent, particularly across Asia. So-called emerging markets will represent 6 of the 7 largest economies by 2050.
• Megatrend 3: Cognitive Tech … the shift from automation to intelligence … Technology unlocks new possibilities, and exponential progress. 125 billion connected devices by 2030.
• Megatrend 4: Dense Living … the shift from towns to megacities … 65% of the world will be concentrated in urban environments by 2050, today in the megacities of Asia, tomorrow in even larger cities of Africa.
• Megatrend 5: Eco Renewal … the shift from crisis to circularity … 50% of the world’s energy will be sustainable by 2050, as we seek ways to combat climate change, and also the stress on natural resources.

In his book Future Shock, Alvin Toffler identified the watershed of a new post-industrial age, pinpointing the enormous structural change afoot in the global economy, and the acceleration of technological advances towards a ‘super-industrial society’ in an information era. 50 years later we see much of what he predicted coming true.

Using a range of data sources, including UN and OECD, and most usefully Max Roser’s fantastic website, OurWorldinData.org, we explore these five trends and their implications for business:

Megatrend 1: Aging World … the shift from young to old

Socio-demographic changes, particularly the aging of populations throughout the world, will have a huge impact on every nation:

• Asian boom: Global population will likely increase to 8.5 billion by 2030, from 7.2 billion in 2020 – made up of 5bn Asians, 1.5bn Africans, 750m Europeans and Latin Americans, 400m North Americans, and 50m in Oceania.
• Declining youth: Birth rates are declining, particularly in wealthy nations, resulting in fewer young people, and 90% of the world’s population under 30 now living in emerging markets.
• Living longer: Most profound is a likely 45% increase in the world’s over 60s population by 2030, with 80% of them living in Asia by 2050 (Asia’s over 60s already outnumbers the entire USA population).
• Global citizens: 4% of the world’s population are migrants, not living in the country of their birth. Some individual countries are much higher – UAE 85% due to migrant workers, but also Australia 29%, Canada 22%, and USA 14%.

The implications for support include:

• Healthcare: As population’s age, demand for heathcare and home support will grow rapidly. US healthcare spending is set to rise by 8% of GDP each year for next two decades, around $3.4 trillion every year.
• Pensions: A $400 trillion gap in retirement funding will likely emerge by 2050, as pension funds prove insufficient, people live longer than expected, and need more support. Young people will find need to meet this shortfall, and be less well off.
• Robo workforce: As people of working age decline, we will turn to automation to do more, machines and robotics becoming a necessary rather than unwelcome substitution within the workforce, taking manual jobs, as humans add more value.
• Consumption: age and health will significantly shape markets from travel and entertainment, to food and fashion. In terms of food, we will demand products that are fresh and organic, functional and medical, convenient and delivered.

Megatrend 2: Booming Asia … the shift from west to east

From west to east … population growth drives a significant global shift in economic power, and the rise of a huge new middle class of consumers:

• Made in Asia for Asia: “Emerging” economies have shifted from being producers for developed countries, to becoming the primary consumers of the world. They now account for 80% of the world’s growth, and 85% of growth in consumption
• Chinese superpower: 15 years ago China’s economy was 10% of the US economy, but will surpass it by the late 2020s. China expects to have 200 cities with over a million people by 2025.
• ASEAN tigers: South East Asia’s growth will outpace China, in particular Vietnam and Thailand. India has world’s 10 fastest growing cities. Delhi will soon displace Tokyo as the world’s largest city, whilst the port of Surat grows fastest.
• New consumers: Asia’s new “middle class” has boomed in recent times, and will represent 66% of the world’s 5.3 billion mid-income consumers by 2030. 70% of Chinese will be in this group, a $10 trillion consumer market.

The implications for markets include:

• China’s economic power will be consolidated in coming years, despite being driven by high debt levels and property market valuations. China has also grown astute in developing “soft power” using culture and business for global influence.
• Chinese business growth is relentless with over 100 unicorns, and over 7500 new companies registered per year and more patent registrations than any other nation. It’s support to start-ups help them survive infancy and accelerate scale-up.
• Intra-Asian markets will dominate the global economy. 15 of the world’s 20 largest air travel routes are within Asia, led by KUL-SIN with over 30,000 travellers per year (compared to LHR-JFK with half as many, the 13th largest).
• The E7 (as Goldman Sachs termed the emerging economies of China, India, Brazil, Mexico, Russia, Indonesia and Turkey) will be larger than the G7 by 2030, and double their size by 2050 (E7 already outperforms G7 on purchasing power parity).

Megatrend 3: Cognitive Tech … the shift from automation to intelligence

The “fourth industrial revolution” sees a shift to connected and intelligent technologies that underpin every other trend: 

• Exponential change, as digital platforms connect markets, IOT connects everything and network effects multiply the impacts, robotics displace manual workers, and artificial intelligence outthinks our minds.
• Merged reality. The concept of digital v physical is rapidly evolving into a fused state, in which every experience is both real and technically enhanced. Augmented reality and holographic 3D displays accelerate this, as does gaming and movies.
• Data is the new oil. 90% of the world’s data was connected in the last 2 years, with 1 trillion connected objects by 2025, over 90% of stock trading is now done by algorithm, and around 66% of the world’s population is “online” at any one time.
• Intelligent life. 60% of all occupations could see at least 30% of their component activities automated. Robotics and AI have can enhance are human capabilities, free us from repetitive tasks, enhance sporting prowess, and release our creativity.

The implications of fast tech progress include:

• Ideas unlimited. The speed of technological advancement accelerates beyond the shifting behaviours of consumers, or the needs of business. The creative challenge is not the technology development, but how to apply it most usefully.
• Beyond the singularity. Ray Kurzweil describes a hypothetical future point, around 2045, when intelligent machines is no longer controllable by humans. Elon Musk shares his fear, and is a critic of Alphabet’s Deepmind.
• Sustainable tech. Many of today’s environmental challenges will ultimately be addressed by technology, through new approaches to additive manufacturing and renewal, or the capture of carbon and conversion of waste.
• Ethics and security. The growing intelligence of machines pose many ethical dilemmas for business and society. Security and privacy issues will only be addressed by considering new approaches to authenticity and regulation.

Megatrend 4: Dense Living … the shift from towns to megacities

More than half of the world’s population now lives in towns and cities, and by 2030 this number will grow to about 5 billion, mostly in Asia and Africa.

• Megacities of 10 million. In 1990 there were only 10 such cities, by 2025 there will be 45, with 33 of them in Asia. Many large cities are building secondary overflow cities, like Xiongan New Area, which is 100km from Beijing.
• Migration to cities. Globally, more people live in urban than rural areas. In 1950, 30% of the world lived in cities, today it is 55%, growing to 66% by 2050. Cities disproportionately attract young people in search of work and prosperity.
• Life is better in the cities. Cities typically have better services, schools and hospitals, better access to sports and culture. People are healthier, better educated and wealthier. In China urban income per capita is triple that in rural areas.
• Smart cities. Cities are first to adopt new technological infrastructures, from free connectivity to driverless cars, intelligent homes and renewable energy. The “smart city” market will triple in 10 years to $1.2 trillion by 2030.

The implications of this urbanisation are

• Cities are driven by modern urban populations that demand advanced infrastructures, and quickly embrace technology and innovation. New cities are able to build from plan, whilst older cities have to adapt legacy structures.
• Health and safety will drive new levels of surveillance, as authorities seek to overcome crime and improve traffic flows, sanitation, and emergency response. Alibaba’s “CityBrain”, for example, is deployed in many Chinese cities.
• Consumer aspirations change, as traditional symbols of progress, like a car or larger house, are infeasible. Instead new priorities emerge such as fashion and entertainment, product miniturisation and personalisation of services.
• Virtual communities, replace the more traditional forms based on location and neighbours. Resources become increasingly shared, from energy suppliers to mobility solutions. Virtual, group behaviour dominates in new ways.

Megatrend 5: Eco Renewal … the shift from crisis to circularity

 The impact of climate change is all around us. Rising temperatures and sea levels, forest fires and food prices,

• Population strain. Growing numbers of people drives huge demand for energy, water and food, testing the planet’s finite resources of the planet. The population of 2030 will demand 35% more food, 40% more water, and 50% more energy.
• Industrial strain. Food production has depleted the land and oceans of natural stocks, damaged ecology and reduced biodiversity. Technological products have stripped the earth of precious metals, and oil is increasingly a limited resources.
• Carbon emissions. Greenhouse gases, primarily carbon dioxide from fossil fuels, will drive warming above 2 degrees by 2036 at current rates. That could cause sea levels to rise by 2m by 2100, flooding the homes of 250 million people.
• Extreme weather. Global warming drives more unpredictable and extreme weather, hot summers driving desertification and loss of agricultural land, storms threatening cities. Extreme weather caused $148 billion damage in 2018.

The implications of these environmental impacts are

• More from less. Meeting the population demands, requires innovation to improve production with less resource. Detecting weeds with sensors and spot sprays could reduce herbicide usage by up to 95%.
• From oil to renewables. Converting to sustainable energy, particularly solar and wind, will accelerate as battery storage develops rapidly. Government policies and taxation will be key drivers of business, alongside consumer demand.
• Electric travel. The shift to non-carbon fuels in road vehicles will accelerate rapidly, seeing carbon-fuelled vehicles eliminated by 2040. The same shift is now required in all modes of transport. (Road drives 70% of emission, air and sea 14% each).
• Circular consumption. 66% of consumer would pay more for environmental-friendly products, rising to 73% for millennials. This will be the biggest driver of businesses adopting more sustainable, and circular economic models.

Decision-making in a crisis can be tough.

Situations change at bewildering speed, there is more complexity, more uncertainty, more urgency and more pressure.

How do we react under pressure and what can we do to improve our judgements and decisions?

• How do you see the future? Future Recoded … Reimagine markets. Reimagine work. Reimagine business. Reimagine success.
• What are the impacts of Covid-19? What business leaders should do now, to support people and society, and secure their business future.
• Why innovate in a downturn? Whilst everyone else is losing their heads, the companies of tomorrow are being created right now 
• The latest edition of my “Fast Leader” magazine Happy with Zoom, Finding more purpose, Babylon Health, Fujifilm’s anti-viral drugs 

Leading in a world of Covid-19

As the Covid-19 pandemic spread across the world, the response of different leaders will remain a case study for years to come. Whilst some were fast to act, like South Korea, others dithered and lived in denial, like in the UK. Stock markets too were slow to respond, with dramatical falls in late February, 6-8 weeks after the first signs of what was emerging.

As the reality, the magnitude of the crisis dawned on leaders, they swung into action. Whilst some had an immediate concern for people, like in New Zealand, others were more concerned about the economy, like in Germany. Whilst come decisions changed, others just looked for scapegoats.

Whilst these leaders, whose skill is typically more political than leadership, they were clearly unprepared to adjust from their normal behaviours in good times, to those required now.

Making better decisions

There is no magic to making decisions. Leaders typically create a strategic framework for their organisation – purpose and strategy, objectives and metrics – within which decisions are about making the right choices.

The are 4 important moments in any devision

• Define the problem – Identify the problem, although this is not obvious, why may require deeper analysis – asking why. Then establish the decision making criteria, which would normally be aligned to the strategic framework.
• Explore the options – Options are based on creative solutions, balanced against the risks involved – which decision will solve the problem, or achieve the goal best?
• Make the decision – Having evaluated the options, and the implications, and the criteria for making the decision – then its time to be decisive.
• Review the impact – Whilst decisions are clear, they can sometimes be wrong. This is not a failure, more important is learning about what’s wrong, and making the decision better.

A useful models, similar to the above, often used for decision making is DECIDE, an acronym for six decision-making steps:

1. Define the problem
2. Establish the criteria
3. Consider all alternatives
4. Identify best alternative
5. Develop and implement
6. Evaluate and monitor

There is much more depth into what makes good decisions, which is covered elsewhere. At a high level, decision-making can be an individual or collective activity, it can be more rational or irrational, usually meaning more analytical or intuitive, using knowledge that is explicit or tacit.

It also depends on authority, and therefore how much influence over actions one has, how idealistic or “perfect” you want the decision to be compared to a “good enough” practical solution, the culture in which you work which may differ significantly in the use of authority and consensus, and your own thinking and behavioural styles.

“A good plan, violently executed now, is better than a perfect plan next week.” General George Patton

Jeff Bezos discussed how Amazon takes decisions, in his recent annual letter to shareholders, and in particular how it is willing to take big risks with the knowledge that 90% of them will fail. He distinguishes two kinds of decision-making that affect how he thinks about risks.

• Absolute decisions are not reversible, and you have to be very careful making them.
• Agile decisions are reversible, like walking through a door — if you don’t like the decision, you can always go back.

The problem, he says, comes from confusing the two, and that as organisations get larger, there is a tendency to favour absolute decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.

Making better decisions in a crisis 

Approaches to problem solving and decision making that work well in normal circumstances might not work well in a crisis. e The “Cynefin” Framework developed by Kurtz and Snowden. This is a sensemaking framework with five domains:

• Obvious or Simple (the known) — We’ve seen this a million times and as such can categorize and respond according to established best practices. The relationship between cause and effect is well known.
• Complicated (the knowable) — Although we don’t immediately know what is happening, we can analyze the situation and come to a conclusion of what must be done. We can enlist experts to analyze, set up constraints and a process addressing resolution.
• Complex (the unknowable) — We’re not able to determine what will cause a particular result. The best course of action is to conduct experiments and check if any or all take us in the correct direction. A lot of time when human opinion and decision is involved we could be working in this area; simply because humans are complex beings.
• Chaotic (the incoherent) — The situation is very unstable. We don’t have time to experiment or probe since the situation is dire and we need to act. An IT issue that must be taken care of immediately with no delay may be categorized as such. If we have no time to figure out a system deadlock issue, we may opt to get ourselves out of this chaotic state by rebooting the server.
• Disorder (not determined) — Anything whose domain has not been determined falls into this domain.

Leaders who don’t recognise that a complex domain requires a more experimental mode of management may become impatient when they don’t seem to be achieving the results they were aiming for. They may also find it difficult to tolerate failure, which is an essential aspect of experimental understanding. If they try to overcontrol the organization, they will preempt the opportunity for informative patterns to emerge. Leaders who try to impose order in a complex context will fail, but those who set the stage, step back a bit, allow patterns to emerge, and determine which ones are desirable will succeed.

Pyschologists suggest that, in the face of a crisis, our mental state tends to move from one of relatively restful contemplation towards increased anxiety, worry and anger.  The fatigue that inevitably comes with a period of prolonged crisis only heightens the level of emotion.

Why does this matter? Because a change in our emotional state is likely to affect the way we make judgements and reduce the effectiveness of decisions.

Many will call for faster decisions,  because humans are programmed to respond faster to threats than opportunities, but also urgency may be able to save lives or reputations, however others believe that it is better to make slower decisions in a crisis.

Important issues to consider include:

• Stress reduces thinking power. Worrying uses up valuable mental resources resulting in less thinking capacity to solve a crisis. Just as our computers slow down when we have lots of applications open at the same time, our processing power is also reduced when we are distracted by the anxiety caused by potential hits to personal reputation, share price or product sales.
• Crisis encourages narrow thinking. On some occasions, concentrating on priority information can provide a necessary and helpful focus. Too often, however, it can lead to myopic thinking which may miss the bigger picture. This bigger picture is often crucial to managing the crisis effectively.
• Time pressure can lead to bias. Even when professionals do try and consider the bigger picture, there is a tendency just to confirmation bias and groupthink – select the facts and information that support or confirm initial interpretations and conclusions.
• Emotions drive quick decisions. Crisis decision-making is stressful and uncomfortable. One means to overcome the emotion is to drive towards quick decisions. The first reasonable option is selected, with little or no thought given to the optimum approach. This approach manages the negative emotion at the cost of taking effective decisions.

There are some useful ways to avoid these traits, and improve crisis decision-making:

• Don’t hide away. Fight the tendency to hunker down and maintain your worldview, and connections. Social support reduces stress, keeps issues in context and improves the thinking process. While tempting, the hunker down approach often leads to narrow thinking.
• Set clear goals at the outset of the crisis. It’s important to be realistic about what can be achieved and not be overly ambitious. The process of setting goals also helps the crisis team stick to objectives and prioritise the right issues.
• See crises as an opportunity to learn from adversity. This more positive ‘frame’ of a crisis can reduce anxiety and stress, build resilience and lead to significant improvements in the future. Run a full debrief once the crisis has been averted.
• Put things in perspective. Think carefully about whether you need to apply a sticking plaster or carry out a full-blown crisis operation. There is a difference between a relatively isolated crisis and an incident that’s reflective of a much bigger problem.
• Accept that some things are outside of your control. There will be some aspects of a crisis that cannot be changed, regardless of what you’d like to happen. Move on to other things that you can exert some influence over.
• Prepare for it. Easy to say afterwards, but by identifying and practicing reactions to different scenarios, we can help to remove some of the negative emotions naturally associated with live crises.

By recognising the effects of emotion we can introduce measures to address the likely flaws in our decision-making process. By understanding the psychology of crisis, we can improve our approach to communications and protect, and sometimes even enhance, company reputation

More articles: 

• New Scientist: Making better decisions
• Jeff Bezos on reversible and irreversible decisions
• HBR article: Slow down to make better decisions in a crisis
• Forbes, Comparing business to military models of decision making

More videos:

• The Art and Science of Decision Making Daniel Kahneman
• Decision making under uncertainty
• How do smart people make decisions? Gerd Gigerenze
• The OODA Loop: A Competitive Decision-Making Tool

In a world of limitless media noise, how can businesses break through to customers? Context.

We are in the midst of a massive media revolution. For the first time in history, ordinary people around the world have the ability to create, distribute, and consume content instantly, from anywhere, using connected devices. The massive increase in media “noise” created by these consumers and devices creates an entirely new situation that makes conventional marketing models obsolete. And yet countless companies and marketing organizations continue to rely on traditional models, assuming that their “campaigns” will sway customers. They couldn’t be more wrong.

First a little context of my own.

I first met Mathew Sweezey at a huge digital marketing event in Rimini. It’s a strange place out of season. I ran for 10km along the seafront, and saw beach after beach, cafe after cafe, incredible homes and luxurious spas. But not a person around. It was April, so the sun was shining. But not one Italian was heading to the beach. Rimini is a bit like Atlantic City in the USA, or Blackpool in the UK. Bold and brash in summer, dormant beyond. And then in walks Sweezey. He had chosen to make a bit of a world tour of his trip to the keynote, with Rimini included. A kind of late gap year as he already works for Salesforce. He wasn’t brash , but he did have a bold vision for marketing.

Having spent my early career as a marketer, and been CEO of the world’s largest network of marketers, I feel its my subject too. But beyond Kotler and Aaker, Godin (that permission word, again!) and Lindstrom, few people have really challenged the rules of marketing. We still have the 4Ps, 4Cs, or variants on them. But then up stood Mathew (his opening line is always his name – his mother chose Mathew with one “t”, so nobody would call him Matt, or Mat). His session was fresh and fabulous, and he has a personal obsession to design great slides, which I love. So much that a few months later I invited him to join me on stage again, this time in Istanbul. In between the Grand Bazaar and much meze, he gave another fantastic session.

Sweezey’s new book The Context Marketing Revolution: How to Motivate Buyers in the Age of Infinite Media boldly outlines this new “infinite media” environment and poses a profound question: In a transformed world where customers shape their own experience, what is the key to breaking through and motivating them to buy? It is context–the close linkage between an individual’s immediate desires and the experiences a brand creates to fulfill them. Drawing on new research and new insights into current consumer psychology, Sweezey defines the five key elements of context. Customer experiences must be:

• Available: Helping people achieve the value they seek in the moment
• Permissioned (is that actually a word?): Giving people what they’ve asked for, on their terms
• Personal: Going beyond how personal it is to how personally you can deliver it
• Authentic: Combining voice, empathy, and brand congruence simultaneously
• Purposeful: Creating a deeper connection to the brand, beyond the product.

He uses vivid examples to highlight a new marketing model used by high-performing brands big and small. The final part of the book shifts to execution, providing a new rule book for context-based marketing.

“The Context Marketing Revolution” he likes to declare, will change forever how you think about the purpose and practice of marketing. Maybe it will.