Peter Fisk

“Free market capitalism is one of humanity’s greatest inventions and the greatest source of prosperity the world has ever seen. At the same time, its single-minded pursuit of profit has led to rampant inequality and the looming threat of climate catastrophe – and now threatens to destroy the society on which it depends.”

I’ve been following the work of Harvard professor Rebecca Henderson for some time.

Her new book, published by Hachette, comes out next month Reimagining Capitalism in a World on Fire, although Penguin, her publisher in the UK has chosen a slightly different title, Reimagining Capitalism: How Business Can Save the World. Maybe there is something about differing psychologies in that?

Of course this is a huge topic right now. From BlackRock Larry Fink’s recent demands to the companies who he invests in, to demonstrate a purpose beyond profit, to Salesforce’s CEO Marc Benioff new book Trailblazer on how business is the best platform for change. From the Business Roundtable to the World Economic Forum, we see new debates and intent emerge. And we also see great examples, like Danone and Patagonia, of companies already doing better:

• Finding more purpose
• Creating a Better Business
• Danone’s transformation with purpose
• Why purpose-driven companies do better
• From purpose and strategy to action and impact

The increasingly extreme weather of recent times has reenergised people as to the urgency and importance of addressing climate change. The accelerating inequality in wealth between rich and poor is causing more outrage. The inadequate support which business gives to employees, particularly as highlighted in America with low incomes and little healthcare, has been brought into the open through the impacts of COVID-19 pandemic right now. The incoherence of business and society.

Or maybe there is a glimmer of new light. As LVMH rushes to transform perfume manufacturing into hand sanitiser, Index turns fast fashion into protective health worker gear, GM and Tesla accelerate production of hospital ventilators, maybe there is a glimmer of hope. Like Microsoft’s Satya Nadella says, business is used to creating futures, now we need to create a better one.

Stakeholders, purpose, sustainability, inclusion, are clearly big words of our times.

Henderson’s skill, honed through years of fabulous teaching of bright and challenging students at Harvard Business School, is to connect these topics in a coherent narrative for business leaders. Her British-sounding accent is also quite striking (?!). And whilst her subject matter is serious, and her voice full of measured passion, she clearly has a sense of humour too:

Henderson’s rigorous research in economics, psychology, and organisational behaviour, as well as her many years of work with companies around the world, gives us a path forward. She debunks the worldview that the only purpose of business is to make money and maximize shareholder value. She shows that we have failed to reimagine capitalism so that it is not only an engine of prosperity but also a system that is in harmony with environmental realities, striving for social justice and the demands of truly democratic institutions.

Her deep understanding of how change takes place, combined with fascinating in-depth stories of companies that have made the first steps towards reimagining capitalism, provides inspiring insight into what capitalism can be. With rich discussions of how the worlds of finance, governance, and leadership must also evolve, Henderson provides the pragmatic foundation for navigating a world faced with unprecedented challenge, but also with extraordinary opportunity for those who can get it right.

Let’s consider “the economics of purpose” because that word “purpose” can be thrown about like mission statements, without much thought about its meaning, or its profound implications. Watch this:

More generally, we need to see the connections. Lots of folks talking purpose come form the sustainability angle. But it has a fundamental impact for the challenges of shareholder value, the shift to stakeholding, and future economic models:

Here are some great resources from her:

Why is Change so Hard and What Can Be Done?

• “Unpacking the Dynamics of Successful Change: Ten Insights from the Private Sector.”Chapter 3 in “Transformational Change in Environmental and Natural Resource Management” (Routledge, 2016). Edited by Michael D. Young and Christine Esau.
• “Architectural Innovation: The Reconfiguration of Existing Product Technologies and The Failure of Established Firms.”Jointly with Kim Clark, March 1990, Administrative Science Quarterly, Vol 35, p9‑30.

Making the Numbers?

• “’Short Termism’ and the Puzzle of Only Occasional Disaster.” Jointly with Hazhir Rahmandad and Nelson P. Repenning, November 2016, Management Science.

What is Organizational Purpose? And Why Does Purpose Drive Performance?

• “Real Effects of Relational Contracts.” Jointly with Steven Blader, Andrea Pratt and Claudine Gartenberg, May 2015, American Economic Review, Papers and Proceedings.

Why Do Firms Have Purpose?

• “The Firm’s Role as a Carrier of Identity and Reputation.” Jointly with Eric Van Den Steen, May 2015, American Economic Review, Papers and Proceedings.
• “Management Practices, Relational Contracts and the Decline of General Motors.”Jointly with Susan Helper, 2014, Journal of Economic Perspectives, Volume 28, Number 1—Winter 2014—Pages 49–72.

What Do Managers Do?

• “Exploring Persistent Performance Differences Among Seemingly Similar Enterprises.”Jointly with Robert Gibbons. Chapter 17 in “The Handbook of Organizational Economics” (Princeton University Press, 2013). Edited by Robert Gibbons and John Roberts.

What Will It Take to Reimagine Capitalism?

• “Making the Business Case for Environmental Sustainability” Chapter 2 in “Leading Sustainable Change” (Oxford University Press, 2015). Edited by Rebecca Henderson, Ranjay Gulati and Michael Tushman.
• “Do Managers Have a Role to Play in Sustaining the Institutions of Capitalism?”Jointly with Karthik Ramanna, February 2015, Brookings Institute.

Useful Cases

• “Aetna & the Transformation of Health Care.” Jointly with Russ Eisenstat and Matthew Preble, February 2018.
• “Gotong Royong: Toward Sustainable Palm Oil.” Jointly with Hann-Shuin Yew & Monica Baraldi, March 2016 (Revision Date: June 6, 2016).
• “Greening Walmart: Progress and Controversy.” Jointly with James Weber, February 2016.
• “Omar Selim: Building a Values-Based Asset Management Firm.” Jointly with George Serafeim and Shannon Gombos, January 2015, HBS No 115-021.
• “1worker1vote: MONDRAGON in the US.” Jointly with Michael Norris, March 2014, HBS No 314-061.
• “Henry Schein: Doing Well by Doing Good.” Jointly with Rafaella Sadun, Aldo Sesia and Russell Eisesnstat, February 2014, HBS Case No: 714-450.
• “Xylem: Let’s Solve Water.” Jointly with James Weber, September 2013, HBS Case No: 313-082.
• “Royal DSM: Fighting Hidden Hunger.” Jointly with Noah Fisher and Mary Shelman, May 2013, HBS Case no 313-085.
• “Triodos Bank – Conscious Money in Action.” Jointly with Kate Isaacs and Katrin Kaeufer, June 2013, HBS Case No 313-109.
• “Sustainable Tea at Unilever.” Jointly with Frederik Peter Nellemann, December 2011, Harvard Business School Case 712-438.

It’s a difficult time. All around us, the news updates on television screens and social media are relentless as COVID-19 multiplies across our cities, nations and continents. The human tragedy, concern for our loved ones, frustration at politicians, admiration for health workers, disbelief at those still socialising, adaptation to new routines under quarantine or lockdown, affects us all. As a society there is a huge concern for each other, whilst as business leaders we know we have to keep our businesses going too.

In years to come we will look back, sociologists and economists, at the way in which we behaved, and the positive and negative impacts it had. Questions will rage about the causes and effects. From the impact of climate change and urbanisation that likely sparked the leap of the virus from animal to human, the global connectedness of travellers that accelerated the contagion’s spread, to the panic buying of some, and the total lack of social responsibility of others.

Of course, Bill Gates was right when in his 2015 TED Talk, he argued that the biggest threat to humanity was not economic or conflict, but a global pandemic for which we were woefully unprepared.

Business impact, and accelerated innovation

The impact on every business has obviously been significant. The travel and hospitality industry was perhaps the first and most dramatically affected. As travel bookings were cancelled, airline share prices plunged (United -57%) as did hotels (Marriott -48%) and booking engines (Expedia 53%). Worst were the cruise lines, with the sight of quarantined ships around the world (Carnival -68%).

In the medical world, scientists are racing to find a vaccine. As they seek to accelerate their research and development, human trials have already started on possible solutions, but it is still 12-18 months away. Incredible, considering previous vaccines took 20 years. Other anti-viral drugs may help patients to recover faster, like Avigan developed by Fujifilm, the former maker of camera film, in 2014. 3M is racing to manufacture millions of new hospital ventilators, whilst Dyson has used its air purifier technology to develop CoVent, a new ventilator in just 10 days, and is now racing to produce 20,000 of their new design.

And other companies have jumped in with support. LVMH quickly converted production of perfumes to hand sanitiser, although it didn’t come with a Louis Vuitton label. Maverick beer brand Brewdog meanwhile developed its own branded santitizer, Brewgel. Both companies gave all stocks free to people in most need. At the same time, Foxxcon transformed its iPhone production into making hi-tech face masks, and Spanish fashion business Inditex shifted to producing protective clothing for health workers.

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

So how do commentators see the business impacts around the world?

Consumer impact, a seismic shift online

BCG analysis of consumer behaviours shows an interesting comparison between Seattle (where COVID-19 first struck in the USA) and the national average. It shows huge drop in transportation and fitness as people stayed at home, but significant increases in groceries, both online and physical, pharmacy and entertainment.

Home delivery services may be a significant “beneficiaries” of our behaviour changes, both during the crisis, and beyond it too

• Domino’s Pizza is urgently seeking to hire about 10,000 workers, from pizza chefs to delivery drivers, in response to a surge in home deliveries, all done without public contact.
• CVS said it needs at least 50,000 more instore staff, home-delivery drivers, distribution centre employees and customer service professionals.
• Amazon is seeking 100,000 more delivers and has introduced a 24 hour rapid recruitment process, supported by AI-based application analysis and rapid online training.
• Instacart, one of the fastest growing grocery delivery companies is seeking to recruit 300,000 new staff, pickers and packers, plus deliverers, to meet the demand of shoppers in isolation at home.

Indeed this shift online is likely to be the most significant business legacy of COVID-19. The shift to home shopping and food deliveries is one example, but even more significant for millions of students is the shift to online education as schools and universities seek to move teaching and assessments online, and in healthcare where much faster and safer advice and diagnostics can be delivered by smartphone consultations and online AI-enhanced analytics.

Economic Impact, dramatic falls on stock markets

Stock markets around the world have seen substantial declines, with most indexes down by 25-35%. USA and European markets were relatively late to appreciate the severity of the coronavirus. Some stocks actually increased in value throughout early February even as the virus was spreading far beyond China, showing how many in the west acted in denial or underestimated the virus impact:

The consequences for many companies will be quickly felt. Particularly for those where their entire revenue streams is abruptly halted, like airlines and car manufacturers, realtors and restaurants, but also for small businesses and gig workers, and those who depend on them. For so many of these companies, margins are slim, and there is no ability to keep paying salaries. Some companies however are doing what they can

• Netflix recently announced that it has set up a $100 million relief fund for cast and crew members, including third parties, working on studio productions that have been halted by the coronavirus outbreak.
• Starbucks has reopened over 95% of stores in China, including sites in Wuhan and the Hubei province, whilst in USA it has committed to paying all staff for at least 30 days whilst stores are closed
• Governments too are recognised their role to support society –  Sweden for example is paying 90% of salaries and deferring tax payments for up to a year at a cost of €27.5bn to the country’s treasury, equivalent to 6% of GDP.

Whilst China received initial criticism for not stopping the initial outbreak of the virus in its tracks, back in January in Wuhan, its subsequent actions seem to have been effective in slowly the spread to the point where business is starting to get back to normal. China’s action included extreme quarantine for anyone with symptoms, tracked through citizens needing to update their daily temperature readings through a government app. Also noticeable was the massive change in air pollution, as the grey smog across industrialised China dissipated for 6 weeks. Now, however, the roads of Beijing are clogged again, and China’s economy is recovering as shown by BCG data:

Action plans for business leaders

McKinsey has brought together a useful checklist of what business leaders should be doing right now. Based on analysis of what companies are effectively doing they propose 5 focus areas, with 18 workstreams of action:

 

 

However every business needs to tread a fine line, between putting people first and profits second. Last week a Wall Street Journal editorial suggested that we may soon face a dilemma, a terrible choice to either severely damage our livelihoods through extended lockdowns, or to sacrifice the lives of thousands, if not millions, to a fast-spreading virus.  If businesses are hugely damaged and many jobs are lost, this could have a great human impact than death. I don’t think that’s a reasonable choice.

McKinsey, instead, have focused on safeguarding lives and livelihoods.

Economic forecasts suggest a 1-3 year downturn

The most positive forecast by McKinsey is that China will undergo a sharp but brief slowdown and relatively quickly rebound to pre-crisis levels of activity. While GDP is expected to drop sharply in Q2 2020, some signs of normal life are returning in Beijing, Shanghai, and most major cities outside Hubei. In this scenario, China’s annual GDP growth for 2020 would end up roughly flat, wiping out the growth of 6 percent we expected just three months ago. Nevertheless, by 2021, China’s economy would be on the way to regaining its pre-crisis trajectory, if not adversely affected by developments in the rest of the world.

In this scenario, the virus in Europe and the United States would be controlled effectively with between two to three months of economic shutdown. Monetary and fiscal policy would mitigate some of the economic damage with some delays in transmission, so that a strong rebound could begin after the virus was contained at the end of Q2 2020.

In a more pessimistic scenario, China would recover more slowly and would perhaps need to clamp down on regional resurgences of the virus. It would also be hurt by falling exports to the rest of the world. Its economy could face a potentially unprecedented contraction.

The US and Europe could also face more dire outcomes in this scenario. They could fail to contain the virus within one quarter and be forced to implement some form of physical distancing and quarantines throughout the summer. This could end up producing a decline in GDP at an annualized pace of 35 to 40 percent in Q2, with major economies in Europe registering similar performance. Economic policy would fail to prevent a huge spike in unemployment and business closures, creating a far slower recovery even after the virus is contained. In this darker scenario, it could take more than two years before GDP recovers to its pre-virus level, placing both Europe and the United States.

57% of companies were founded in a downturn

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

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

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

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

Finding your North Star to survive and thrive

As business turns to the challenge of survival and renewal, beyond the current economic shocks, to get through what is likely to be a significant global downturn, probably a recession. There are big challenges, but also opportunities:

• Survive – cut all non-essential costs, and preserve cash – better to close temporarily than to limp along at full cost, look after your people as best you can, and do what you can for communities and society in relevant ways.
• Focus – reprioritise, even reimagine your business, right now – what to stop, where to accelerate, how to change – and at the same time be productive yourself – new ideas, new skills, new projects – and stay positive.
• Thrive – Finding new opportunities to innovate and grow – right now, for example, we are seeing a huge surge in people switching to digital services, e-Education when schools are closed, e-Health when we need urgent care.

Being set adrift in a stormy sea means that all the strategies  and plans you did have are thrown away. Instead you need something to keep guiding you. Something to give you direction, and maybe a little hope. Something to frame what you could do, not just what you did do. Purpose is your North Star:

• Purpose – 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.
• Concepts – once you have a purposeful direction, what is the value you bring – how do you make the world better in some way – start to create strategic concepts, big ideas beyond today’s business, ways you could make a mark on the world.
• Actions – aligning your actions to the purpose and concepts – some of it might be doing what you do now, simpler or faster or cheaper; some of it will be doing new things, adjacent and aligned to your current activities, but guided by purpose.

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. But start now!

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

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

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

Look at our changing behaviours right – everybody is suddenly working from home, quickly realising that multi-screen video conferencing, mixed with playing with the kids, and saving on the torturous daily commute is not so bad. Or when calling a doctor, we are asked to shift to online screening and video calls, which are far more personal and efficient for both. Or as schools close, kids form peer to peer learning groups, online seminars and interactive assessments.

The new lifestyles have been possible for some time, now we are using it. Afterwards, will we go back to the old ways?

Here are a few of the recent articles which I found inspiring:

• Rita McGrath, author of the new book Seeing Around Corners which is all about looking for the signals of when markets fundamentally change, wrote a fabulous blog post on Thoughts in the Midst of an Inflection Point
• Amy Webb, a futurist who has just launched her annual report Tech Trends 2020, offers a simple tool you can use to see plausible future states early, with How Futurists Cope With Uncertainty
• Umair Haque, explored 5 ways coronavirus is finally forcing us to make the (radical) socioeconomic transformations we should have made long ago, in his post The Upsides of a Global Pandemic
• Yuval Noah Harari, wrote a great FT article saying this storm will pass, but the choices we make now could change our lives for years to come, called The World After Coronavirus

Seismic changes that lead to downturns are nothing new – economic cycles that thrill us in the upturns, and then just when we realise that times are good, we’re on that rollercoaster to tough times again.

Business progress, is marked by a cycle of boom times and struggles. And whilst the external world may be largely responsible for the disruption in growth, the result is often a time of frantic innovation as businesses use a downturn to reset, and reinvent themselves and their industries. As we enter the so-called fourth industrial revolution maybe it is not so surprising that the world’s economies are looking more turbulent again.

57% of companies were founded in a downturn

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

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

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

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

Finding your North Star to survive and thrive

Of course looking after people is the first priority, staying safe and healthy, and helping those in most need. Business can help short term – like we see right now with LVMH turning its perfume factories to making hand sanitizer, Tesla making hospital ventilators in its car plants, Inditex making protective clothing for health workers.

Then business turns to the challenge of survival the current economic shocks, to get through what is likely to be a significant global downturn, probably a recession. There are big challenges, but also opportunities:

• Survive – cut all non-essential costs, and preserve cash – better to close temporarily than to limp along at full cost, like the airline SAS has already done by immediately shutting down for an unlimited time, but with plans to return.
• Perform – build resilience and sustain performance – be it in terms of supporting social efforts, but also in streamlining and refocusing your existing business – at the same time use any downtime productively – new ideas, new skills, new projects – and stay positive.
• Thrive – Finding new opportunities to innovate and grow – right now, for example, we are seeing a huge surge in people switching to digital services, e-Education when schools are closed, e-Health when we need urgent care.

Being set adrift in a stormy sea means that all the strategies  and plans you did have are thrown away. Instead you need something to keep guiding you. Something to give you direction, and maybe a little hope. Something to frame what you could do, not just what you did do. Purpose is your North Star:

• Purpose – 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.
• Concepts – once you have a purposeful direction, what is the value you bring – how do you make the world better in some way – start to create strategic concepts, big ideas beyond today’s business, ways you could make a mark on the world.
• Actions – aligning your actions to the purpose and concepts – some of it might be doing what you do now, simpler or faster or cheaper; some of it will be doing new things, adjacent and aligned to your current activities, but guided by purpose.

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. But start now!

Black swans, K-waves … time to thrive in a crazy world

“Black swan” is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalised after the fact with the benefit of hindsight.

The phrase “black swan” derives from a Latin expression; its oldest known occurrence is from the 2nd-century Roman poet Juvenal’s characterization of something being “rara avis in terris nigroque simillima cygno” (“a rare bird in the lands and very much like a black swan”). When the phrase was coined, the black swan was presumed not to exist. The importance of the metaphor lies in its analogy to the fragility of any system of thought. A set of conclusions is potentially undone once any of its fundamental postulates is disproved. In this case, the observation of a single black swan would be the undoing of the logic of any system of thought, as well as any reasoning that followed from that underlying logic.

The theory was developed by Nassim Nicholas Taleb to explain:

1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.

Taleb’s “black swan theory” refers only to unexpected events of large magnitude and consequence and their dominant role in history, and COVID-19 is one of the most significant, certainly in terms of its dramatic effect on the world’s economy in recent weeks. Such events, considered extreme outliers, collectively play vastly larger roles in shaping economies, markets and societies than regular occurrences.

Russian economist Nikolai Kondratiev was shot by firing squad on the orders of Stalin in 1938. He died for what he believed was the truth. His execution was ordered because his academic work propounded that the capitalist system would not collapse as a result of the great depression of 1929. This truth Stalin did not want to hear, and his work suppressed for over two decades.

Kondratiev’s analysis described how international capitalism had gone through many such “great depressions” and as such were a normal part of the international mercantile credit system. The long term business cycles that he identified through meticulous research are now called “Kondratieff” cycles or “K” waves.

The K wave is a 60 year cycle (+/- a year or so) with internal phases that are sometimes characterized as seasons: spring, summer, autumn and winter:

• Spring phase: a new factor of production, good economic times, rising inflation
• Summer: hubristic ‘peak’ war followed by societal doubts and double digit inflation
• Autumn: the financial fix of inflation leads to a credit boom which creates a false plateau of prosperity that ends in a speculative bubble
• Winter: excess capacity worked off by massive debt repudiation, commodity deflation & economic depression. A ‘trough’ war breaks psychology of doom.

Increasingly economic academia has come to realize the brilliant insight of Nikolai Kondratiev and accordingly there have been many reports, articles, theses and books written on the subject of this “cyclical” phenomenon. An influential essay, written by Professor W. Thompson of Indiana University, has indicated that K waves have influenced world technological development since the 900’s. His thesis states that “modern” economic development commenced in 930AD in the Sung province of China and he propounds that since this date there have been 18 K waves lasting on average 60 years.

COVID-19 has already sparked a huge fall in stock markets around the world. Maybe we were already on the edge, and it was due, and it just pushed us over.

So what am I doing right now … and how can I help?

Now that I think back, I remember some of the seismic moments when the world was gripped by fear and panic, and how so many great projects and opportunities emerged.

When “shock and awe” launched the Gulf War of 1990, I was a young brand marketer at a global airline. I remember joining an urgent taskforce of smart minds across the business to think through survival strategies. I remember sitting alongside the CEO Liam Strong and others, working on The World’s Biggest Offer, which became a thrilling project.

In 2001 when the terrible scenes of 9/11 terrorism were flashed across every screen in my London office, we froze in shock and panic, but then quickly swung into action. As stock markets plunged, businesses shifted for the first time to online working, as we rushed in the following weeks to create tools for collaborative working, learning and support.

And when the financial crisis of 2008 crossed the world like an economic tsunami, I remember being asked by numerous companies to quickly prepare articles and webinars to help companies and their employees to reprioritise strategies, but also to think creatively about how to survive and thrive whilst everyone else was losing their heads.

Now in 2020, what will you do? Maybe start off by dipping into my most recent Fast Leader magazines, in which I seek to capture what’s happening right now around the world, with ideas and inspiration for you and your business. It’s for business leaders who are ready to think smarter and act faster. You can download them free right now:

• Fast Leader March Edition … How Bob Iger digitalised Disney … Tan Le, the Vietnamese refugee brainwave innovator … 10 years at the Moonshot Factory … 99%: Mass impoverishment and how we can end it … and more
• Fast Leader February Edition … Man and Machine in Las Vegas … A Better Kind of Capitalism … World’s Most Sustainable Companies 2020 … Quantum Mechanics of Chinese Business … and more
• Fast Leader January Edition … No Human is Limited says Eliud Kipchoge … Jensen Huang, the World’s #1 CEO … Finding your Purpose …. Blue Oceans win the Oscars of Business … and more

I’m here to support business as they urgently change direction, work in new ways, rethink priorities, but also seek to stay positive, and look forwards. Tune into my forthcoming webinar:

• Fast Leader Live: Thriving in a Crazy World, March 26 at 1730 (UK time) … Sign up here
• Fast Leader Live: Finding your Purpose, April 14 at 1700 (UK time) … Sign up here
• Fast Leader Live: Exponential Innovation, May 7 at 1730 (UK time) … Sign up here
• More dates to come!

Also

• 25 Online Tools for Smarter Working … don’t just Skype, here’s how to create a better online work or learning experience.
• Creating your future fast and digital … Workshops on Rethinking Strategy, Innovation, Change and Leadership

More great reads

So here are some of the best articles I’ve come across for preparing, surviving – but also thriving – in times of downturn:

Companies Need to Prepare for the Next Economic Downturn by Martin Reeves, Kevin Whitaker, Christian Ketels … Whenever it happens, it won’t look like 2008.

What Companies Should Do to Prepare for a Recession by Kevin Laczkowski and Mihir Mysore … Here’s what successful companies did last time around.

How to Survive a Recession and Thrive Afterward by Walter Frick … A research roundup.

Seize Advantage in a Downturn by David Rhodes and Daniel Stelter …  A downturn opens up rare opportunities to outmaneuver rivals. But first you need to put your own house in order.

Save or Invest? How Companies Should Navigate Recessions by Ioannis Ioannou and Caroline Flammer … You need to do both; one or the other isn’t enough.

How to Be a Good Boss in a Bad Economy by Robert I. Sutton … Finds ways to provide more predictability, understanding, control, and compassion.

Layoffs that Don’t Break Your Company. by Sandra J. Sucher and Shalene Gupta … Research shows that job cuts rarely help senior leaders achieve their goals.

Roaring Out of Recession  by Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen … Master the delicate balance between cutting costs to survive today and investing to grow tomorrow.

What do you think of when you hear “innovation lab?”

You may have in mind something closer to the original innovation lab, which was the Skunk Works at Lockheed Martin started decades ago.

Innovation labs have shifted beyond the traditional, insular R&D role of the past – maybe you recall the secretive projects of Xerox PARC or Bell Labs – and today typically focus on two roles :

• Focus on developing innovative concepts and business models without the distractions, demands and expectations, breaking down cultural and organisational obstacles, of everyday business.
• Focus on developing new ventures, that require collaborative working and investments with external partners – be that other companies, new start-ups, and specialists – and may even lead to a new business.

With that in mind, here is a definition: “An innovation lab is an open, collaborative space where companies and organisations team up their employees from different departments with outside partners, tech experts, designers, and academics, seeking to emulate the culture, speed, tech integration, and disruptiveness of a start-up, in order to develop new products, services, experiences and business models that take advantage of new business strategies and advances in technology.”

There are many different types of innovation labs – you will probably have heard of incubators and accelerators too. These typically focus on incubating new start-up businesses which have less resources or experiences, or accelerating start-ups to a scale-up phase by adding more corporate structure, collaboration and more. They may be run by independent companies, or venture capital funds who want to ensure that their investments are spent effectively, but they might equally be run by larger corporates who want to bring start-ups  into their fold, either to share in their entrepreneurial culture, or to have first option on the outcomes.

Here’s a vision of DZ Bank’s innovation lab, “The Think and Do Tank” showing how it seeks to combine radical ideation, with rapid development (design thinking, lean sprints etc) and accelerated implementation:

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

Here is a list of typical goals of a typical innovation lab:

• Faster development of new products and/or explore new business models that solve core client needs and drive company revenue.
• Shift the company culture towards greater innovation, tech integration, and collaboration both internally and with outside groups.
• Enable change from their existing strategy to a new business strategy (more customer-centric, digital transformation, design thinking, etc.).
• Stave off the threat of digital disruption from competitors, especially start-ups.
• Demonstrate products and capabilities to current clients, potential clients, and business partners.
• Foster partnerships with outside companies, startups, and leading academic organizations.
• Explore the potential of new technologies independent of current product development, to solve client problems in new ways.
• Be a working lab to collaborate with clients to solve their specific challenges.
• Be a stage for presentations and videos, in the age of YouTube and Instagram.
• Open a collaborative space closer to industry innovators and tech centers.
• Collaborate with customers to co-create and get feedback about new products.
• Appeal to, recruit, and retain digitally-skilled new talent.
• Create multiple innovation centers focused on different client vertical markets, geographic regions, or high-potential new technologies.

Industry and academic experts have studied how innovation labs markedly shifts business models and improves product/service offerings. Here are two key findings:

• Continually Manage Stakeholders To Ensure Successful Innovation Actually Gets Used: When an innovation lab develops a breakthrough new product or business model, there will likely be resistance to folding that new product back into the core business units or starting a new standalone division. Strong communication and buy-in from key stakeholders within the company will grease the wheels and help new innovations take root. This has been the experience of Tendayi Viki, Managing Partner, Benneli Jacobs, as described in Forbes, and Scott Kirsner, editor, and co-founder of Innovation Leader, as interviewed in Forbes.
• Ambidextrous Organizations Are More Successful: Most corporations focus their innovation lab on either incremental innovations that match their current business model or breakthrough innovations that disrupt their current business model. Ambidextrous organizations focus on both. These ambidextrous organizations are much more successful than companies that focus on only incremental or only breakthrough innovation. That’s the finding of Charles A. O’Reilly III and Michal L. Tushman, professors and consultants on innovation, as published in the Harvard Business Review.

Here are some of the world’s most celebrated innovation labs – research and development, creative and design – spaces which effectively explore, develop and accelerate new ideas to our worlds:

Boston Dynamics

Boston Dynamics began as a spin-off from MIT, where they developed the first robots that ran and moved like animals. Now we are taking the next step, combining the principles of dynamic control and balance with sophisticated mechanical designs, cutting-edge electronics, and software for perception, navigation, and intelligence. Boston Dynamics has an extraordinary technical team of engineers and scientists who seamlessly combine advanced analytical thinking with bold engineering and boots-in-the-mud practicality.

Chinese Academy of Sciences

CAS act as the national scientific think tank that provides advisory services to the government on all issues regarding science and technology, but also in the context of developing the economy and social improvement. It is the largest research organization in the world with over 60,000 researchers working in 114 institutes across China. Based on the total number of research papers published in Nature and its affiliate network, CAS ranked #1 among the world’s leading research organizations.

CERN

CERN (Conseil Européen pour la Recherche Nucléaire) is the European research organization, primary focused on particle physics, investigating smallest observable particles in the universe and their fundamental interactions. It operates the biggest particle accelerator in the world, the Large Hadron Collider that works on antimatter and the discovery of W and Z bosons. CERN is also, of course, the birthplace of the World Wide Web which started with a project named ENQUIRE by Tim Berners-Lee and Robert Cailliau sometime in 1990.

Deepmind

DeepMind is the world leader in artificial intelligence research and its application for positive impact. “We’re on a scientific mission to push the boundaries of AI, developing programs that can learn to solve any complex problem without needing to be taught how. If we’re successful, we believe this will be one of the most important and widely beneficial scientific advances ever made, increasing our capacity to understand the mysteries of the universe and to tackle some of our most pressing real-world challenges. From climate change to the need for radically improved healthcare, too many problems suffer from painfully slow progress, their complexity overwhelming our ability to find solutions. With AI as a multiplier for human ingenuity, those solutions will come into reach.” It famously sets challenges for AI to outperform humans at chess, go, and StarShip.

Fraunhofer Society

The Fraunhofer Society is an organization of a total of 69 premier German Institutes all across Germany, specializes in various fields of applied science. One of the famous projects of the Fraunhofer Society is the MP3 compression algorithm. They also contributed to a popular video compression standard MPEG-4 Part 10. The organization has seven research centers in the United States and three in the Asian region.

MIT Media Lab

”The combination of computing and communication, as we know it now and can expect it to evolve in the decades ahead, will vastly expand human creative capacity” said Jerry Wiesner, when opening the Media Lab in 1986. For over 30 years Media Lab researchers have anticipated and created technologies to make our lives safer, cleaner, healthier, fairer, and more productive. But along with benefits, technology’s everyday efficiencies have also brought their share of issues: obesity, poverty, ethical implications, bullying, divergent politics. The Media Lab’s antidisciplinary research community is uniquely equipped to address these concerns, leveraging the best that technology has to offer, and connecting technology back to the social and the human. Current Lab research examines the deeper implications of where technology creation and adoption has led us — and where we want to go next.

Nestle R&D Accelerator

The Nestlé R&D Accelerator, located at Nestlé’s R&D center in Konolfingen, Switzerland, provides a world-class acceleration platform for start-ups, students and scientists. At the R&D Accelerator, they can leverage Nestlé’s unique dairy and plant protein expertise to quickly bring products from ideation to commercialization.

Nestlé R&D Konolfingen is a fundamental part of the Swiss innovation ecosystem. It is the company’s largest research and development center for dairy products and plant-based dairy alternatives. The R&D center develops new product concepts for Nestlé’s dairy and infant nutrition businesses before they are introduced to consumers around the world.

Nike Innovation Center

Four and a half years in the making, Nike’s new 750,000-square-foot LeBron James Innovation Center in Beaverton, Oregon, marks the first time the company has ever combined apparel, shoe design, and athlete analysis all under one roof.

Palo Alto Research Center (PARC)

Located in Silicon Valley, PARC is a renowned Open Innovation company that’s been at the heart of some of the most important technological breakthroughs of our time. We bring leading scientists, engineers, and designers together to form bespoke teams across a series of Focus Areas that we believe are the future of technology, science, and innovation.

Creativity and science are core to PARC’s mission to reduce the time and risk attached to innovation. We draw on our revered history and our energy for the future to create technologies that improve our world and solve complex challenges.

Working with PARC means benefiting from something unique. Because every technological challenge is different, the team you work with will assemble and grow organically, based on your innovation goals. It’s this approach to combining expertise and capabilities that have led to some of our most interesting and exciting R&D, technology and IP projects with startups, government agencies and Fortune 500 partners.

Samsung Digital City

Samsung’s secretive R&D labs just outside of Seoul, where CEO Hyun-Suk Kim is leading a team of researchers working on automotive tech, wearable robotics, the country’s future 5G network, and new mobile healthcare technology.

Unilever Foundry

Unilever’s approach to innovation includes a networks of innovation labs, start-up accelerators and ideas incubators. Unilever Foundry is its global startup collaboration platform, partnering with the world’s best startups to accelerate business innovation globally. Separately, based in the Netherlands, the new Global Foods Innovation Centre is an inspiring, sustainable, and practical building that facilitates innovative ways of collaborating.

X by Alphabet

X is a diverse group of inventors and entrepreneurs who build and launch technologies that aim to improve the lives of millions, even billions, of people. “Our goal is 10x impact on the world’s most intractable problems, not just 10% improvement. We approach projects that have the aspiration and riskiness of research with the speed and ambition of a startup.”

Read my article: A Decade of Moonshots at Alphabet’s X … addressing huge problems, with breakthrough technologies, creating radical innovation

Spanish eco-fashion brand Ecoalf this month launched in the Japanese market with a joint-venture with Japanese clothing company Sanyo Shokai. Ecoalf opened its first store in Tokyo as part of the omni-channel strategy that will cover retail, online and wholesale.

However what really caught media attention was its reuse the back of old advertising posters, another example of its “up cycling” approach.

Javier Goyeneche, Ecoalf’s founder and CEO, who features in my forthcoming book Business Recoded talked about his passion for creating a more sustainable life, and whilst it started in turning plastic bottles into shirts, is now becoming a much more diverse approach to making better use of life’s waste materials – from coffee grounds to ink cartridges – and turning them into something new and interesting.

In launching the new Japanese venture, Goyeneche, said “I am pleased to announce this partnership with Sanyo in Japan, a market where we see significant growth opportunity specifically in the sustainable fashion lifestyle. What we do, how we do it and with whom we do it, is key for Ecoalf. This is why Sanyo’s 70 years of extensive expertise and tradition in the Japanese market is a best-in-class alliance for Ecoalf’s successful expansion into Japan”.

Isao Iwata, president, Sanyo Shokai, added “According to WWF reports, if mankind continues to live as it does today, we will need resources equivalent to those of two planets by 2030. Moreover, measures are being considered at the national level to deal with marine pollution caused by plastic garbage as an international issue. Through our business activities, Sanyo, together with Ecoalf, will work to create a new business model with low environmental impact and to promote a sustainable society both for the next generation and for the future.”

EcoAlf was created by Javier Goyeneche in 2012 to realise innovation in recycled clothing. The idea for a truly sustainable brand was born from a deep frustration with the excessive use of the world’s natural resources and the amount of waste produced by industrialised countries – specifically by the fashion industry. But Ecoalf is more than a conscious clothing brand; it is a mission to create the first generation of recycled products with the same attention to quality, design and technical properties as the best non-recycled products in the market.

Javier Goyeneche was born in Madrid, Javier studied in Spain, London and Paris, while also taking part in top international equestrian competitions. He received his degree in Business Administration from the European Business School and continued with post-graduate work in International Marketing Strategies at Northwestern University in Chicago.

In 1995, he founded Fun & Basics, specializing in contemporary fashion handbags and accessories. Within 10 years, Javier grew the business to 350 points of sale and 70 branded retail stores. His accomplishments were recognized by the industry when he was awarded Best Young Entrepreneur of Madrid in 2005.

Although he achieved tremendous success with Fun & Basics, Javier gradually grew frustrated with the amount of waste he saw being produced by the fashion industry. He embarked on a mission to create an entirely new concept that would combine his design sensibility and understanding of the fashion consumer with the latest in recycled materials. In 2008 he launched EcoAlf..

Under his leadership, the company has grown steadily and now produces a full lifestyle collection of outerwear, swimwear, casual apparel, shoes and accessories. Javier has strategically expanded EcoAlf ’s distribution to include many of the world’s most prestigious department stores and specialty retailers. In 2012, he oversaw the opening of an integrated EcoAlf  concept store, showroom and office in Madrid. Most recently Javier spearheaded a partnership with Apple, supplying the company with cases for its MacBook Pro products. Moving forward he will continue to forge strategic alliances that will position EcoAlf  as a leader in fashion and accessories crafted from recycled material.

The concept of the brand came after the birth of Goyeneche’s son, Alfredo (the company is named after him) when I was reflecting upon the world we would leave to the next generation, and my frustration with the excessive use of the World’s natural resources.

EcoAlf was born in 2009. Goyeneche’s idea was to create a fashion brand that is truly sustainable.

All studies showed that we are presently using five times more natural resources than the planet is able to auto-generate. We cannot live in this world as if we have another one to go when this one is ruined.

Goyeneche spent the three first years on sourcing and developing fabrics. The problem was that when I sourced the market for recycled materials the offer was small and of very poor quality. Most fabrics only contained a very small percentage of recycled material (15-20%).

So he found the need to start creating partnerships with factories in order to develop fabrics, lining, straps, labels and cords using recycled materials.

The goal was to create the first generation of recycled products with the same quality, design and technical properties as the best non-recycled products to show that there is no need to use our world’s natural resources in careless way.

Discarded fishing nets, post-consumer plastic bottles, worn-out tires, post-industrial cotton, and used coffee grinds…where people see trash I see high quality raw materials.

Hopefully, in a near future, their vision and efforts will encourage others to move in the same path, as more sustainable fashion labels will emerge resulting in a global compromise towards recycling and sustainability.

When EcoAlf first emerged, their first challenge was to change people´s conceptual approach of recycling, as recycling and quality did not seem to connect. People imagine them taking their grandmothers quilt and making a simple rough backpack.

Their efforts during the past years have clearly proven that recycling connects with quality and design, resulting in boosting a change of mentality where people now believe trash equals natural resources with the same quality.

Think micro and act macro. Goyeneche believes this change will be not be driven by governments but by small companies who will step by step guide the small customer towards this world compromised with recycling and sustainability and demonstrate that things can be done in a different way.

By investing in R+D and traveling around the world, he started to identify the ideal manufacturing resources, and started to build carefully the foundation that would become EcoAlf.

Today the company has 11 active alliances around the world (Taiwan, Korea, Portugal, Mexico, Japan, Spain, etc.) that allow us to continually develop all necessary elements to manufacture with recycled materials.

In the short time of EcoAlf existence, 30 million plastic bottles and 40 tons of fishing nets were recycled to make its products.

There are too many people complaining and a few pushing to change things. All industries should act, react and focus all resources in I+D. Natural resources are not endless and we need to start acting now, as we can still change the world we all live in.

If you want to make a difference don’t let anybody tell you “it’s impossible”!!

EcoAlf is working on a major project for a while now. Until now, EcoAlf has been reducing waste by recycling materials from landfills but my personal challenge has always been to help cleaning up the ocean.

The idea is to collect marine debris with the help of Fishermen and recycle them into consumer products. I had spent the last year investigating the feasibility of the project and finding all the right partners, such as recycling facilities, spinners, weavers and most importantly Fishermen Associations. Because the Fishermen are pulling up a huge amount of plastic in their nets and have always been throwing it back in the sea. Simply because that was how it was done during generations.

 

“We do not consider the purpose of this company to be returning money to shareholders. There is a broader purpose.” says Emmanuel Faber, CEO of Danone.

As the realities of climate change meet the injustices of wealth distribution, many people are struggling to see how capitalism in its current form can stay relevant. At the same time, it’s not clear how any alternative system could possibly keep a growing population fed, sheltered, and employed.

One answer is to reform the system we have, as a growing band of hedge fund billionaires and public-company CEOs have suggested. But when executives talk about serving a purpose beyond making rich shareholders richer, their words can ring hollow. Too often we find that what a company does, for example avoiding taxation, conflicts outright with these lofty new promises to society.

In an exclusive extract from my forthcoming book Business Recoded, meet one of the most inspiring concepts shaking up today’s world. DeepMind embraces the opportunities of relentless change, the incredible latent power of artificial intelligence, and the possibilities of technology to create a different, also better, future for humanity. In the book, I explore the stories of many of the world’s most fascinating businesses and innovations right now, and develop 49 codes that help you redefine the future of your business, and yourself.

The Future Code of DeepMind

The ability to process huge amounts of data at incredible speeds, to learn through repetitive process, and to harness the strength and agility of robotics challenge many of the ways in which humans used to excel.

The game of chess has long served as a benchmark for artificial intelligence researchers. John McCarthy, who coined the term “artificial intelligence” in the early 1950s, once referred to chess as “the Drosophilia of AI” comparing it to the way in which the fruit fly is used to understand genetics.

In 1996, IBM’s Deep Blue supercomputer embarked upon a series of chess games against Garry Kasparov, the world champion. Deep Blue eventually beat Kasparov, marking the first time a machine had defeated a world champion.

Within a few years computing technology was consistently beating chess grandmasters.

However, AI developers knew that they needed greater challenges, searching for more complex games to test their increasingly sophisticated algorithms. They turned their attention to the ancient Chinese strategy game of Go, which is both deceptively simple to play, yet extraordinarily complex to master.

The game was invented in China more than 2,500 years ago and is believed to be the oldest board game continuously played to the present day. It was considered one of the four essential arts of the cultured aristocratic Chinese. Go has a larger board than chess, a 19×19 grid of lines containing 361 points, and therefore with many more alternatives to consider per move.

It took another decade of machine learning development until scientists were able to create a truly competitive AI-based Go player.

In 2014, a team at London-based Deepmind Technologies started working on a deep learning neural network called AlphaGo. Two years later a mysterious online Go player named “Master” appeared on the popular Asian game platform Tygem. The mysterious player dominated games against many world champions.

Eventually it was confirmed that the “master” was in fact created by DeepMind, since acquired by Google, and now a subsidiary of Alphabet.

The master was replaced by a grandmaster in 2017. AlphaZero, an enhanced version of the original system, embraced an even more sophisticated algorithm designed to learn as it progressed through games. The system simply plays against itself, over and over, and learns how to master whatever game it has been programmed to work with. Searching through 80,000 positions, a fraction of what other predictive software had used, it had perfected the game in 24 hours using a AI-type of intuition.

AlphaZero achieved two things: autonomy from humans, and superhuman ability. Scientist and futurist James Lovelock calls this “the novacene”, translated as “the new new” in Latin and Greek, where a new form of intelligent life emerges from a human-initiated AI-based machine into one which no longer requires human intervention.

He calls AlphaZero, and other such beings, cyborgs.

In his book Novacene: The Coming Age of Hyperintelligence, Lovelock suggests that AI-based entities can think and act 10,000 times faster than humans (and to put that in perspective, that humans can think and act 10,000 times faster than plants). He then reflects that maybe AI-based life would be rather boring, considering that a flight to Australia using physical transport would currently take 3000 AI-based years.

The real point of a cyborg, a term first coined by Austria’s Manfred Clynes to describe an organism as self-sufficient as a human but made of engineered materials, is that it is able to improve and replicate itself.

Which quickly takes us to a future beyond what Hungarian John Van Neumann called “the singularity”, the point at which technological growth becomes uncontrollable and irreversible. Both physicist Stephen Hawking and entrepreneur Elon Musk have warned of the profound implication of autonomous AI.

Of course, we already have many devices which learn and improve continually. Take Google Maps, for example, which constantly learns from all its users about realtime traffic situations, and the more users it has the better the information becomes. Or consider Google Nest, an intelligent thermostat which takes control of the temperature in our homes. For now, they are useful tools, to help us live better.

In the meantime, DeepMind continues to explore the future. StarCraft, considered to be one of the most challenging Real-Time Strategy (RTS) games and one of the longest-played esports of all time, has emerged by consensus as the latest “grand challenge” for AI researchers around the world.

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

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

The Leadership Code of Ali Parsa

Ali Parsa is on a mission to reinvent the world’s access to healthcare. Maybe now, at a time of global emergency, when coronavirus is putting more pressure on every traditional healthcare system, and people need answers fast and remotely, his time has come.

“Two-and-a-half thousand years ago” he says “you would go to the square in Babylon. It was called the Square of the Sick, I think, and citizens, if they’d come across your ailment, would share how they’d recovered. As a result of that simple peer-to-peer model, it has been estimated that Babylon had the longest life expectancy of any city in the world.”

Babylon was the capital of Babylonia, a kingdom in ancient Mesopotamia between 1800-600 BC, built along the banks of the Euphrates river, about 85km south of modern day Baghdad.

Parsa himself, grew up in nearby Iran, then escaped as a lone teenager, trekking through Afghanistan and eventually to Europe, and settling as a refugee in London.  Having taught himself English and maths, he won a scholarship to study for a a PdD in engineering, whilst also running an events business called Victorian and Gilan which he later sold. He found his way into banking, as head of technology investment for Goldman Sachs.

Parsa was much more interested in people than money, and now a father, saw huge opportunities in healthcare for the use of new technologies. In 2004 he co-founded Circle Health, driven by what he saw as a terrible state-run healthcare. He secured £500m from Lehman Brothers to create a chain of luxury private hospitals designed by famous architects and run by hoteliers. However when Lehman’s crashed, so did his dream.

He realised that the biggest difference he could make was not in the hospital experience itself, but in what happened before and after. He set out to create “the Google” of healthcare information. It took the form of an AI-driven app through which people could diagnose illnesses through simple questions, and if required gain instant video consultations with doctors.

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

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

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

In 2015 Bill Gates warned in a TED Talk, that the biggest risk to humanity was not a global conflict, climate change, or maybe even an asteroid hitting Earth. He said it was the threat of a new global pandemic.

In recent years we have watched as the megatrends of today’s world have massed in ever greater power, and their combined effects creating diverse and increasingly extreme scenarios for the future.

Climate change drives global warming, alongside diminishing biodiversity and changing coexistence of animals and humans. Mass urbanisation brings huge populations together in small spaces, whilst globalisation creates huge intermingling of people for travel and work.

The Impact of COVID-19

As humans have spread across the world, so have infectious diseases. Even in this modern era, outbreaks are continuous though not every outbreak reaches pandemic level as the current coronavirus (COVID-19) has.

Pan·dem·ic /panˈdemik/ (of a disease) prevalent over a whole country or the world.

COVID-19 is one example of the changes unleashed. For which we are clearly demonstrating that we are unprepared, not only in lack of healthcare response, but the chaotic thinking of society too.

Whilst China acted rapidly once it realised the serious epidemic in its Wuhan province, governments like the UK’s have run around in denial, and then playing with fanciful theories of behavioural science, rather than trying to save lives.  At the same time we see an incredible example of scientists, health and pharma experts around the world collaborating on a high-speed innovation journey to find a vaccine.

COVID-19 has gripped the world within weeks, as cities then entire countries faced lockdown, and global travel bans were quickly followed by plunging stock markets. We also saw new behaviours emerge rapidly, from e-Health such as smartphone video clinics treating patients, to a rapid growth of e-Learning and remote working become the norm.

A new infographic by Visual Capitalist outlines some of history’s most deadly pandemics, from the Antonine Plague to the current COVID-19 pandemic:

A Timeline of Historical Pandemics

Disease and illnesses have plagued humanity since the earliest days, our mortal flaw. However, it was not until the marked shift to agrarian communities that the scale and spread of these diseases increased dramatically.

Widespread trade created new opportunities for human and animal interactions that sped up such epidemics. Malaria, tuberculosis, leprosy, influenza, smallpox, and others first appeared during these early years.

The more civilized humans became – with larger cities, more exotic trade routes, and increased contact with different populations of people, animals, and ecosystems – the more likely pandemics would occur.

Here are some of the major pandemics that have occurred over time:

Despite the persistence of disease and pandemics throughout history, there’s one consistent trend over time – a gradual reduction in the death rate. Healthcare improvements and understanding the factors that incubate pandemics have been powerful tools in mitigating their impact.

Wrath of the Gods

In many ancient societies, people believed that spirits and gods inflicted disease and destruction upon those that deserved their wrath. This unscientific perception often led to disastrous responses that resulted in the deaths of thousands, if not millions.

In the case of Justinian’s plague, the Byzantine historian Procopius of Caesarea traced the origins of the plague (the Yersinia pestis bacteria) to China and northeast India, via land and sea trade routes to Egypt where it entered the Byzantine Empire through Mediterranean ports.

Despite his apparent knowledge of the role geography and trade played in this spread, Procopius laid blame for the outbreak on the Emperor Justinian, declaring him to be either a devil, or invoking God’s punishment for his evil ways. Some historians found that this event could have dashed Emperor Justinian’s efforts to reunite the Western and Eastern remnants of the Roman Empire, and marked the beginning of the Dark Ages.

Luckily, humanity’s understanding of the causes of disease has improved, and this is resulting in a drastic improvement in the response to modern pandemics, albeit slow and incomplete.

Importing Disease

The practice of quarantine began during the 14th century, in an effort to protect coastal cities from plague epidemics. Cautious port authorities required ships arriving in Venice from infected ports to sit at anchor for 40 days before landing — the origin of the word quarantine from the Italian “quaranta giorni”, or 40 days.

One of the first instances of relying on geography and statistical analysis was in mid-19th century London, during a cholera outbreak. In 1854, Dr. John Snow came to the conclusion that cholera was spreading via tainted water and decided to display neighborhood mortality data directly on a map. This method revealed a cluster of cases around a specific pump from which people were drawing their water from.

While the interactions created through trade and urban life play a pivotal role, it is also the virulent nature of particular diseases that indicate the trajectory of a pandemic.

Tracking Infectiousness

Scientists use a basic measure to track the infectiousness of a disease called the reproduction number — also known as R0 or “R naught.” This number tells us how many susceptible people, on average, each sick person will in turn infect.

Measles tops the list, being the most contagious with a R0 range of 12-18. This means a single person can infect, on average, 12 to 18 people in an unvaccinated population.

While measles may be the most virulent, vaccination efforts and herd immunity can curb its spread. The more people are immune to a disease, the less likely it is to proliferate, making vaccinations critical to prevent the resurgence of known and treatable diseases.

It’s hard to calculate and forecast the true impact of COVID-19, as the outbreak is still ongoing and researchers are still learning about this new form of coronavirus.

Urbanization and the Spread of Disease

We arrive at where we began, with rising global connections and interactions as a driving force behind pandemics. From small hunting and gathering tribes to the metropolis, humanity’s reliance on one another has also sparked opportunities for disease to spread.

Urbanization in the developing world is bringing more and more rural residents into denser neighborhoods, while population increases are putting greater pressure on the environment. At the same time, passenger air traffic nearly doubled in the past decade. These macro trends are having a profound impact on the spread of infectious disease.

As organizations and governments around the world ask for citizens to practice social distancing to help reduce the rate of infection, the digital world is allowing people to maintain connections and commerce like never before.