If you want to pick a favourite animal that will surprise even the quirkiest first date, you can’t go wrong with the mantis shrimp. The foot-long, coral reef-dwelling crustacean has a rainbow tail, and punches its prey so hard and so fast that it creates underwater shockwaves.

But even more significant is the mantis shrimp’s vision. Within each large, roving eye, mantis shrimp have twelve types of color-sensitive cells called photoreceptors. That’s four times as many as we humans have, enabling more depth and contrast, as well as distance and width.

Vision matters if you are a business leader.

Not because you are supposed to be “visionary” as the text books sometimes say, but you do need to have a better view of the future than most. A future that comes at us faster than ever, and is more complex and contradictory too. You need more depth and contrast, as well as distance and width.

The best leaders create the future in their own vision.

Like Abraham Lincoln said, the best way to see the future is to create it. This is the real trick of the mantis shrimp. It is not only good at using its roving eyes, but at interpreting the signals faster and more decisively too. Vision means power. A better view of the future becomes your competitive advantage.

For business leaders this means decoding the megatrends, combining analytical knowledge with intuitive foresight, and making smarter choices about where to go, and how to get there.

Where will growth come from?

  • Growing locally … as social tensions rise, localism becomes more important than trying to be global
  • Asia matures … tapping into the new billion-person markets of ICASA (India, China, Africa, SE Asia)
  • New business models … exploring new revenues streams, new price models, new value equations

What will be most disruptive?

  • Technological fusion … connectivity of new techs, AI and automation, networks and devices
  • Customers in the driving seat …digitally empowered customers C2B, and together C2C
  • Network revolution … from value-chains to network-based platforms, asset heavy or light

How will we win differently?

  • Rebuilding trust … finding a new social value equation, authentic and relevant
  • Overcoming fear … working together to outwit cybercriminals, terrorists and fake news
  • Positive impact … embracing a sustainable circular economy, that shares value responsibly

Satya Nedella, CEO of Microsoft, recognised the need to think differently within the business he inherited from Bill Gates and  Steve Ballmer. His new book “Hit Refresh” is a manifesto for seeing our old challenges, assumptions and prejudices, in new ways. By taking a different perspective, often inspired by small companies and marginal operators, he sought fresh ways of working inside Microsoft, and new solutions for personal and business customers.

The best leaders have the courage to create a better future … to think bigger and smarter, to shape the future to their advantage, to drive innovation across the business in a way that reinvents markets and organisations.

The best opportunities for business – to find new growth, to engage customers more deeply, to stand out from the crowd, to improve their profitability – is by seizing the opportunities of changing markets. The best way to seize these changes is by innovating – not just innovating the product, or even the business itself – but by innovating the market.

In the old world we accepted markets as a given – the status quo – and competed within it, with slightly different products and services, or most usually by competing on price. Most new products were quickly imitated, leading to declining margins and commoditisation. Most companies now receognise that this is not a route to long-term success in a rapidly changing world.

Fast-changing markets demand fast-changing businesses.

 

2017 has been an incredible year of science and tech breakthroughs. From Bitcoin’s relentless rise and final fall, to developments in gene editing technologies, to improvements in artificial intelligence and quantum computing, we made more progress than ever.

Just think of five years ago – driverless cars were still a dream, smartphones were the big new idea, Hyperloop hadn’t event entered Elon Musk’s mind.

And now we have designer babies, the end of diseases, genetically modified humans that never age. Outrageous things that used to be science fiction are suddenly becoming reality. The only thing we know for sure is that things will change irreversibly.

Here are a few of the most significant advances of the last year, that will shape all of our futures:

Article by Peter Fisk on future trends: Global shifts and technological fusion, meta intelligence and the dark side … Finding the “megatrends” to amplify your future success

Article by Peter Fisk from 12 months ago: The best 2017 trend reports … inspired by Alibaba’s Buy+, Google’s Tilt Brush and Momondo’s DNA Journey

With insights from the teams at FastCompany, Futurism, Wired and more, here is the background to some of the year’s biggest stories:

CERN advances … 5 new charm particles

As a trained physicist, understanding the building blocks of nature continues to intrigue me. The science of the “small” made some leaps forward in 2017, thanks to work done by scientists using the Large Hadron Collider (LHC). On March 16, the LHC discovered a new system of five particles, all in a single analysis. With overwhelming statistical significance to back it up, the exceptional discovery can’t be dismissed as a fluke. Instead, it provides a new window into our understanding of quantum theories that govern both the physics of particles in our world and beyond it. You can read about the new particles here.

https://www.youtube.com/watch?v=zRkbo-j4Hfs

Quantum computing … the next level

Speaking of quantum theories, 2017 has been a host to some of the biggest developments in quantum technologies to date. Quantum computing, for one, has seen significant advances. Equally important are the breakthroughs in quantum communication, thanks to the efforts of researchers from China and elsewhere to build quantum networks. From demonstrations of quantum entanglement from space, to successfully sending messages using quantum cryptography, researchers have shown that a quantum internet future is on the horizon. Read more here.

SpaceX … reusable rockets

SpaceX is now leading the space race. The rocket company started by Elon Musk in 2002 cemented its hold on rocket technology and space this year, marking a number of “firsts” off of their development checklist.Chief among these is the successful launch of a previously used Falcon 9 rocket booster, signaling the end of an era of expensive space missions. On the 30th of March 2017, SpaceX showed that their Falcon 9 rockets are reusable not just in name. That, however, was just the beginning. With an updated plan for Mars and a revamped BFR rocket, SpaceX continues to work on making every part of their rockets and spacecraft completely reusable. More here.

Artificial womb … lamb in a bag

As for technology that could potentially save lives in the future, in April 2017, a team of physicians from the Children’s Hospital of Philadelphia published a study in the journal Nature Communications that detailed the successful use of an artificial womb. The device, a specialized transparent biobag filled with a fluid that allows it to imitate the environment inside a uterus, successfully housed a 23-week old lamb. This artificial womb can help save the lives of premature babies. The team working on the technology expects it to soon be ready for human use. Read the original story here.

GM humans … designer babies

Genetically modified human beings are no longer just the topic of science fiction. In July 2017, MIT Technology Review reported on efforts by researchers in Portland, Oregon to genetically modify human embryos using gene editing tool CRISPR. The researchers, led by Shoukhrat Mitalipov of the Oregon Health and Science University, edited the DNA of one-cell embryos – effectively demonstrating that it’s possible to safely and efficiently correct defective genes that carry heritable diseases. For the full story, check out this article.

Gene editing … inside human patients

Without a doubt, CRISPR is the most efficient and effective gene editing tool we have today. After numerous experiments that demonstrated what CRISPR could do, the gene editing tool was finally applied to a living human patient on the 13th of November. A 44-year-old patient suffering from a rare genetic condition called Hunter syndrome had his genome edited using a CRISPR treatment developed by biotechnology firm Sangamo Therapeutics. You can check out the full story here.

Trappist 1 … life beyond Earth

Last but definitely not the least is one of the biggest discoveries that could affect the future of life beyond Earth. In February 2017, scientists working at the European Southern Observatory and NASA announced the discovery of seven Earth-like exoplanets situated in the habitable space or “goldilocks zone” of a star system called TRAPPIST-1. The TRAPPIST system, located some 39.5 light-years from the Sun, hosts an ultra-cool red dwarf star that’s only a bit larger — although significantly more massive — than Jupiter. Astronomers continue to debate the potential of these seven TRAPPIST exoplanets to host life, but the discovery of a collection of possibly livable exoplanets in just one system is a promising find in the quest for life outside of Earth.

Of course, the future isn’t just about technology. But it is technology that moves us forwards at incredible pace, and the applications of it that enable us to live better lives, to solve societies biggest problems, and to look forward to awe and optimism.

We like to focus on start-ups, the great stories of entrepreneurs who have made their ideas come true, harnessed the power of new digital technologies to disrupt and dream in ways that traditional companies couldn’t event comprehend.

But most of us still work in those “incumbent” companies. Yes we have immense scale, in the form of organisations, customers, products and even cash. Often we’re just not sure what to do with it, or most likely too afraid to give up our old world to create a new one.

Cisco and IMD recently surveyed nearly 1000 executives across 15 industries about their attitudes and behaviours towards digital disruption. One objective for this research was to identify the source of digital disruption – startups or incumbent firms.

Many of the popularized stories of digital disruption come from startups, like Uber, Skype, iZettle, and Spotify. However, there are also plenty of examples of incumbents pursuing digitally disruptive strategies, like GE, Disney, Nike, and BBVA. We were interested to learn what executives regarded as the main threats of digital disruption.

Before we look at the results, let’s look at some classic “incumbent” reinvention stories. Because it’s not the technology , or even the imagination,  that start-ups have. Im sure many company workers have friends who are no smarter than they are, and have the resouces to invest in incredible tech if they wanted to. It’s more a mindset. The fixed versus growth mindset, we often talk about. Consider these classic reinventions and then consider how it could work today:

American Express

American Express was founded during the same excitable westward expansion that spawned Western Union. After gold was discovered in California in 1848, droves of pioneer settlers headed West and relied on express riders — the Pony Express being the most famous — to send and receive packages and currency from the East. Two of the founders of American Express, Henry Wells and William Fargo, split off to found Wells Fargo.

American Express has continuously reinvented itself over its history. In its early days, American Express’s best customers were banks, which relied on American Express to shuttle stock certificates, notes and even currency between remote branches. In 1882, American Express began offering its own financial product, the money order. The company issued the world’s first traveler’s checks in 1891. At the turn of the 20th century, American Express went global, opening currency exchange offices across Europe.

After World War I, American Express entered the luxury travel business, organizing international tours and chartering cruises, including the first-ever “around the world” cruise in 1922. But the reinvention that made the biggest impact to American Express’s bottom line was its entry into the charge card business. The very first American Express charge card was issued in 1958. It charged $6 per year for membership, $1 more than its competitor (Diner’s Club), to establish itself as a prestige card. Today, American Express still thrives as a global financial services and travel company.

Lego

Lego has been around since 1932 and for years has been a hallmark toy in many children’s lives. At one point in 2014, Lego even became the top toy company in the world, surpassing Mattel’s Barbie doll, reported the Wall Street Journal at the time. But the Danish toy company wasn’t always a star performer.

According to a 2015 Fast Company article titled “How Lego Became the Apple of Toys,” the company was reportedly on the brink of bankruptcy more than 10 years ago. The growth of video games and the internet threatened the toy company, which might’ve been considered as “old-fashioned” in the face of new, innovative toys and games, reports Fast Company. In reaction, Lego reportedly made a few mistakes. However, by cutting costs, improving processes and managing cash flow, the company was on its way to bouncing back.

In 2011 came a Lego line called Lego Friends, which helps the brand appeal to young girls and combat the stereotype that only boys can play with the building blocks. But jump ahead to 2014, when “The Lego Movie” hit theaters. The movie and its products really helped Lego get the revenue boost it needed to overshadow Mattel in 2014, according to WSJ. Thanks to innovative products and a successful movie, Lego is now more than just a toy — it’s a cool franchise.

According to BoxOfficeMojo, “The Lego Movie” film has grossed more than $460 million worldwide. And according to the company’s 2015 annual report, as reported by Bloomberg, net income reached 9.2 billion Danish kroner in 2015 — the equivalent of $1.34 billion and an increase of about 31 percent.

IBM

Since debuting as the Computing – Tabulating – Recording Company more than 100 years ago, IBM has undergone major transformations. Back then, C-T-R would manufacture and sell various machinery such as commercial scales, industrial time recorders, meat and cheese slicers, and more. And, it wasn’t until 1924 that C-T-R became the International Business Machines Corporation, although it has operated under the name since 1917 in Canada.

Fast-forward a few decades to the ’50s and ’60s after Thomas J. Watson Jr. became CEO and “led IBM’s transformation from a medium-sized maker of tabulating equipment and typewriters into a computer industry leader,” according to IBM’s website. In 1964, the company created System/360, which essentially made it possible for machines in a product line to work with each other, making a huge impact in the business world. Less than 20 years later, in 1981, the IBM Personal Computer (IBM 5150) arrived. Although it wasn’t the first-ever PC, people began buying these computers to use in their daily lives.

However, the ’80s and early ’90s were rough for the company. According to its website, “IBM was thrown into turmoil by back-to-back revolutions.” The company didn’t properly prepare for the PC revolution, reported NPR in 2011. With the focus on “desktop and personal productivity” instead of business applications, IBM suffered annual net losses that reached the billions — a record of $8 billion in 1993.

The company had two options: reinvent or die. So, IBM shifted its focus to IT and consulting, according to NPR.

Still, the company has plans to further reinvent itself. In her 2015 chairman’s letter, CEO Ginni Rometty wrote, “Today, IBM is much more than a ‘hardware, software, services’  company. IBM is now emerging as a cognitive solutions and cloud platform company.” Thanks to its transformation, IBM reported its analytics, cloud, mobile, social and security strategic imperative grew by 26 percent and contributed $29 billion in revenue in 2015.

National Geographical

The National Geographic Society published its first magazine in 1888 and printed its first stunning color photographs of far-flung locations, wild animals and exotic cultures in 1914 [source: Motavalli]. The yellow-bound magazine became a coffee-table staple for generations of American families, but started to hemorrhage subscribers in the 1990s as younger readers dismissed it as their grandparent’s mag.

National Geographic Society CEO John Fahey didn’t wait around for his publication to suffer the same fate as iconic photo magazines like Life. Instead, he spearheaded an effort to reinvent the National Geographic brand across all media platforms, especially the National Geographic Channel, launched in 2001

The National Geographic Society published its first magazine in 1888 and printed its first stunning color photographs of far-flung locations, wild animals and exotic cultures in 1914 [source: Motavalli]. The yellow-bound magazine became a coffee-table staple for generations of American families, but started to hemorrhage subscribers in the 1990s as younger readers dismissed it as their grandparent’s mag.

National Geographic Society CEO John Fahey didn’t wait around for his publication to suffer the same fate as iconic photo magazines like Life. Instead, he spearheaded an effort to reinvent the National Geographic brand across all media platforms, especially the National Geographic Channel, launched in 2001

Netflix

Today’s younger generation probably doesn’t remember that in the late ’90s to the early 2000s, “Netflix and chill” wasn’t as easy as firing up the laptop, logging into a Netflix account and picking a movie or TV show to binge watch. Instead, Netflix was kind of like an online Blockbuster, more or less.

In 1998, Netflix launched the first DVD rental and sales site with Netflix.com. One year later, the company debuted its subscription service, which allowed movie buffs to rent unlimited DVD rentals for a low monthly cost and receive them by mail.

It wasn’t until 2007 that Netflix transitioned into online streaming — and it was a smart move. Finally, viewers of all ages would have access to some of their favorite shows and movies, as well as original Netflix content. In fact, in 2013, Netflix nabbed 31 primetime Emmy nominations for its original shows like “House of Cards” and “Orange Is the New Black.”

Although the company has received some angry outcries from customers over the years because of changes in pricing, the company has experienced financial success over the long term. For example, Netflix stock was trading at $3.80 at the beginning of 2007. On Sept. 1, 2016, the stock closed at $97.38.

These days, it’s safe to say Netflix is considered one of the coolest stocks to invest in. And although the company didn’t grow its subscriber base as much as it wanted to in second-quarter 2016, Netflix did grow its members by 1.7 million.

Nintendo

The history of Nintendo began long before the Japanese gaming company released its monstrously popular Nintendo Entertainment System (NES) console in 1985. Nintendo Koppai was founded all the way back in 1889 as a playing card company by Fusajiro Yamauchi [source: Jones]. In 1949, Fusajiro suffered a stroke and his 22-year-old grandson Hiroshi took over [source: Melia]. Over the next 63 years, Hiroshi Yamauchi would transform Nintendo into the world’s most successful gaming company.

Anxious about the limited market for playing cards, Yamauchi tested other products and services, including a taxi company, instant rice, hourly hotels (wink-wink) and toys [source: Jones]. Nintendo had its first hit toy in 1963 with the Ultra Hand, an extendable plastic grabber with suction-cup fingers. Taking an interest in video game popularity, Nintendo got the rights to distribute the Magnavox Odyssey in Japan, the world’s first home video game console. In 1977, Nintendo released its first game console, the TV-Game 6, offering six versions of the same tennis game; it was eclipsed by Atari’s iconic 2600 console

Yamauchi’s big break came at the arcade. In 1980, legendary Nintendo video game designer Shigeru Miyamoto created the first arcade version of “Donkey Kong,” featuring the hammer-wielding hero who would become Mario [source: CBBC]. When the NES console arrived in the U.S. in 1985, it featured Miyamoto’s classic “Super Mario Bros.” launching the best-selling video game franchise of the next three decades. Yamauchi remained at the helm of Nintendo until his death in 2013 at the age of 85

Western Union

Samuel Morse sent the first telegraph message from Washington, D.C. to Baltimore, Md., in 1844, introducing the world to long-distance communication. Entrepreneurs rushed in to capitalize on this revolutionary technology, laying miles of telegraph lines to connect America’s young cities. One of those fledgling telegraph companies was the New-York and Mississippi Valley Printing Telegraph Company, founded in 1851. The company soon merged with competing telegraph networks and changed its name to Western Union [source: Western Union].

At the peak of popularity, Western Union sent out more than 200 million telegrams in 1929. That business declined with the advent of cheaper long-distance phone service and was finished off by the Internet. Fortunately, the company has always had diverse interests. It started its wire money transfer business back in 1871

Cisco and IMD’s study

In general, executives saw a bigger threat from incumbent firms than they did from startups, but this difference varied substantially by industry. As Figure 1 shows, more than half of the executives in media and entertainment, consumer packaged goods, telecommunication, and retail sectors regarded startups as the most likely source of digital disruption. By contrast, startups were seen as a much smaller threat for companies within the healthcare, utilities, oil and gas, and pharmaceuticals sectors, perhaps due to high entry barriers in these industries.

Figure 1: Large differences in the perceived source of disruptive threats across industries

Source: DBT Center, 2015

The relative advantages of startups vs incumbents

Respondents were asked about the relative advantages of startups vs incumbents. The results are shown in Figures 2 and 3. Not surprisingly, the advantages differed significantly. The top 5 advantages for startups were: faster innovation capability; greater agility; a culture of experimentation and risk-taking; highly digitalized products and services; and the vision of company leaders. By contrast, the advantages of incumbents were: greater access to capital; strongly trusted brands; a large customer base; high quality of customer relationships; and faster innovation capability.

Figure 2: The top 5 relative advantages of startups

Source: DBT Center, 2015

Figure 3: The top 5 relative advantages of established companies

Source: DBT Center, 2015

These advantages are largely off-setting. Startups compete by being agile, innovative, and active experimenters. Unencumbered by legacy systems and heavy bureaucracies, they adapt and move quickly. Incumbents may be less agile or innovative, but they compete due to strong asset bases, well established brands, along with deep and longstanding relationships with customers and other stakeholders. Ironically, when we talked to incumbents, they were envious of the agility of the startups; when we spoke with startups, they were envious of the stability of incumbents.

Recently, however, this relative balance has shifted in favor of startups. They are maintaining their advantages in innovation and agility, while quickly gaining in the areas of traditional strength for incumbents. Let’s take each of the three top incumbent advantages in turn.

Access to capital

Traditionally, access to capital has been the domain of large, established companies with solid balance sheets, stable revenues, and large asset pools. These organizations are able to tap into debt and equity markets with relative ease. Startups, on the other hand, have traditionally struggled to access capital. This is changing.

We have seen a dramatic rise in venture capital (VC) funding over past decade. According to CB Insights, $100 Billion of VC funding deals were made just in the first three quarters of 2015. The number of Unicorns – private companies valued at US$1 Billion or more – has jumped dramatically in the past 5 years, as shown in Figure 4.

Figure 4: A sharp rise in the number of unicorns

Source: CB Insights and Credit Suisse, 2015

For startups, access to capital is not as much of a constraint today as it was in the past. Low interest rates, large pools of available capital, and competition among lenders lead to generous funding opportunities. While this level of investment is probably not sustainable in the long term, at least for now, the access to capital is not a big constraint for startups.

Strong brands

Brands have traditionally taken decades to build. Yet, today this is changing. New brands are appearing all the time, and it is not taking them long to become household names. Most people had not heard of WhatsApp 5 years ago, Uber 3 years ago, or WeChat 1 year ago, and yet these brands are now global powerhouses. The speed by which brands can rise is paralleled by the speed at which they can fall. Iconic brands in the 1990s like Dell, Nokia, Morgan Stanley, Avon, and Sony have seen their reputations and valuations fall dramatically.

Large customer base

The speed at which new companies are acquiring customers is astonishing. It took Snapchat and Instagram only three years to reach 200 million users and 30% penetration of smartphone users, according to ComScore. Fast customer acquisition and instant brands are not just restricted to Internet companies. Witness the rapid rise in brands such as Uniqlo in fashion, Tesla in automobiles, Xiaomi in telecommunications, and Square in financial services.

The encumbered incumbent

All in all, our analysis does not paint a pretty picture for large, legacy businesses. The strengths that traditionally protected them from smaller and more agile competitors are being whittled away. Startups are maintaining their agility edge, but with easier access to capital, strong brands, and rapid customer acquisition.

However, the future does not need to be bleak for incumbents. In many industries where they are under threat of digital disruption, like financial services, telecommunications, retail, and technology, incumbents lead from a position of strength. They are mostly well capitalized, strongly managed, and profitable. At the moment, many of them struggle to appropriate the advantages traditionally reserved for startups, such as being agile and innovative. However, this need not be the case. If they are able to improve their sensing capability for digital threats and opportunities, their digitization of products, services, and processes, and their speed of execution, then they should be well placed to compete with startups.

We live in the most exciting time … more change in the next 10 years, than in the last 250 years … connected technologies, augmented intelligence and unlimited imagination.

What could we do? What will you do?

I spend much of my time travelling, advising business leaders, and delivering keynotes, meeting the most fascinating companies and innovators, and helping to share the stories of their success too.

In 2017 my clients have ranged from BNP Paribas (rethinking how leaders add most value in the investment bank for a changing world) and Coty (innovating the world’s most disruptive portfolio of beauty brands), to Cartier (how to reinvent luxury in a digital world) and the CTBTO (a new strategy for the UN-supported body that seeks an end to nuclear weapons). I was privileged to host the Thinkers50 European Business Forum (the premier event for Europe’s business leaders) and to write for some of the world’s top magazines.

As director of Thinkers50, we have made huge steps forward in curating the world’s best management ideas for business people to embrace for innovation and growth, working with many of the world’s top business thinkers and leaders. I’ve also taken on a roles asprogram leader of IE Business School’s new flagship executive development, the Global Advanced Management Program, to be launched in 2018:

So is the world changing as fast and dramatically as the hype would have us believe?

This year I visited 45 different countries, spoke at over 80 different events, plus many more workshops and seminars, and took over 200 flights. From Athens to Warsaw, Miami to Boston, Johannesburg to Qatar. And most often to Madrid. Good for the frequent flyer points, but I don’t want to see anymore airports for a little while.

Actually I had some great vacations too – even with more flights!

So here are just a few of the places and companies that have inspired me in 2017:

  • Barcelona. Whilst the Catalans fought over their future, the city was the destination for many of the world’s top beauty brands. Coty has combined its French heritage with P&G’s global brand portfolio to create a new force, rethinking everything in beauty, from brands to business models.
  • Chicago. Driving north from O’Hare airport, along the shore of Lake Michigan, I was amazed by the number of healthcare companies, big and small. Atos Medical are a great example of the shift to innovative care solutions, service more than product, with direct patient relationships.
  • Dubai. Innovation is everywhere, preparing for World Expo 2020, and realising that a nation needs to do more than sell oil, and attract tourists. Emirates is now twice as big as any other airline, focusing on being a hub not a destination, and the Museum of the Future showcases where next.
  • Hamburg. Germany used to be the industrial powerhouse of Europe, but the engineering mindset that loves quality and precision is finding it hard to explore, innovate and change. BASF to Bayer, BMW to Bosch struggle to keep pace with a new generation of agile global players.
  • Guayaquil. The largest city in Ecuador is a hub of social innovation. Mashpi Lodge is a great example of responsible tourism, with sky bikes through the Andean cloud forest, or Nevada Roses with its closed-loop ecosystem, and the most amazing organic fair-trade chocolate by Pacari.
  • Odense. Denmark’s third largest city has reinvented itself, from remote land of HC Andersen’s children’s storytelling to Europe’s leading robotics hub. The city itself is being rebuilt as a smart, social metropolis, and has just attracted Facebook (and Thinkers50) to create a base here.
  • Pretoria. MMI is a merger of South Africa’s two largest insurance companies, Metropolitan and Momentum, bringing together very different organisational cultures and operating models. They are now focused on growth, and whilst the RSA economy is weak, Africa is growing rapidly.
  • Qingdao. One of China’s fast growing cities, and not too far from South Korea, it is the home of Haier (and also of Thinkers50 in China). Their “rendanheyi” (or win-win) business model has created over 200 micro businesses, retaining entrepreneurship whilst achieving scale.
  • Zurich. Iron deficiency is the world’s most common health condition, and particularly debilitates women. Working with a fantastic innovator in new treatments, Vifor Pharma, we were inspired by the Lucky Iron Fish Project in Vietnam – finding simple, human solutions to complex problems.

For more

From Amazon Go’s checkout-free shops to Magic Leap’s next generation virtual reality, L’Oreal’s intelligent hair brush to Norman Foster’s droneports that helps aid agencies reach people in need quicker, 2017 has been a year of incredible innovation. Here are a few more reminders:

  • Bitcoin. The cryptocurrency grew from $1000 to $20,000 over the 12 months of 2017. Whilst the bubble will eventually burst, the underlying blockchain technology is set to revolutionise businesses far beyond finance, democratising markets, and how consumers engage with brands
  • Boom Technology. Dubai Air Show saw the launch of a “new Concorde” aircraft, featuring the iconic delta wing and able to fly at Mach 2.2. In collaboration with Virgin, Boom is on schedule to launch next year, bringing back memories of when I could breakfast in LHR, and again in JFK.
  • Brewdog. The Scottish craft beer entrepreneurs became a $1 billion-valued “unicorn” in 2017, partly through consumer crowdfunding, aka “Equity for Punks”. Known for its provocative marketing, and strong brews, it opened a brewery in Ohio, and plans a DogHotel with bedside DogTap if thirsty.
  • GZ Media. Digital tech isn’t everything, as seen by the trend for vinyl records. The world’s largest manufacturer comes from the small Czech town of Lodenice, and produces 25 million records a year. Live Nation is the world’s most profitable music company, live events soaring in a digital world.
  • Hyperloop. 3 years ago Elon Musk launched his vacuum-tube 760 mph trains, and the first 1 mile test loop is now in place. By open-sourcing the technology, companies across the world are all working on perfect and implementing next generation travel. Tesla and SpaceX were just starters.
  • Jio Phone. Indian billionaire Mukesh Ambani launched the Jio Phone in 2017, an (almost) free smartphone for the hundreds of millions of aspirational Indians who he serves, and a radical rethinking of the telecoms business model. Handset and calls are free, data comes at a small fee.
  • Stripe. 26 year old John Collison from Ireland is now the world’s youngest self-made billionaire. He co-founded the $9bn software system that enables companies around the world to more easily accept online payments. Snapchat’s Evan Spiegel is slightly wealthier, but two months older.

What I take from these insights and experiences is that the sensationalist phrase I started with – more change in the next 10 years, than last 250 – is very real, and happening right now. Across every sector, in emerging and developed markets, digital and analogue, companies big and small are shaking up our world.

They embrace the new technologies in smart ways, they focus on ways to make life better, and they are driven by leaders with the courage and foresight to look beyond today’s priorities and paradigms, to shape the future in their own visions.

For more

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Estonia is leading the world in digitalisation.

Tallinn is one of my favourite cities, its ancient centre with beautiful Hanseatic buildings, interspersed with the world’s advanced digital start-ups. Since I first started working with the Estonian government’s innovation team 7 years ago, the nation’s leaders and entrepreneurs have shown a more practical approach to digital innovation – how to make life better, be it in playing games, or parking your car.

In August 2017, government officials announced plans for a national cryptocurrency. Much of the support comes from understanding what the Estcoin would be for — as a currency to support Estonia’s plans for a digital nation, a program they call e-Residency. While the Baltic nation isn’t the first to have shown interest in adapting an official cryptocurrency, Estonia’s plans seem to have a more solid foundation than China’s proposed e-currency, or Russia’s dream of an Ethereum blockchain.

In a blog post this week, Estonia’s e-Residency program managing director Kaspar Korjus described three potential uses for the cryptocurrency. The crypto coin would primarily serve as a “community token” for Estonia’s e-residents, and plans for this crypto token system have been unveiled this week.

Blockchain-based currency

Korjus described the e-Residency program as a government startup, in which virtually anyone with access to the internet can become a “digital citizen” of Estonia. The idea is to simplify the requirements for setting up a business in Estonia. “Join the digital nation,” says the e-Residency official website.

Ethereum co-founder Vitalik Buterin said that the e-Residency program and estcoin would benefit from being built on a blockchain. “If these Estcoins are issued on top of a blockchain (they could possibly be issued in multiple formats at the same time, nothing wrong with this) then it would become easy and convenient to use them inside of smart contracts and other applications,” Buterin wrote in his blog, where he gave feedback on the whole plan.

Since it was announced, there are already 4,272 companies registered under Estonia’s e-Residency program, with more than 27,000 applicants from over 140 countries. By taking advantage of Estonia’s online government infrastructure, non-residents can set up their businesses with ease and become part of what could be the first “borderless digital nation” with its own cryptocurrency.

Nestle is the largest food and beverage producer in the world: from Nespresso to Häagen-Dazs to Pellegrino to DiGiorno to Toll House to Purina (if you’re a dog or cat.) 29 of Nestlé’s brands have sales that top $1 billion annually.

But the Swiss company has experienced a slowdown in its sales growth, at the same time as it tries to transform itself from a company best known for sweet treats—like KitKat bars—into a business more focused on nutrition and wellness. In 2017, Nestlé paid $2.3 billion to acquire Atrium Innovations, a Canadian producer of nutritional supplements like Omega-3 fish oil and organic multivitamins.

A key part of that pivot—and of making Nestlé more open to great outside ideas—is its HENRi initiative, launched in July 2016. The launch marked the company’s 150th year in business, and the initiative was named after Henri Nestlé, a pharmacist who started the company in 1867 after inventing a baby formula.

“HENRi is all about taking on projects that matter,” explains Gerardo Mazzeo, Global Innovation Director at Nestlé. “That’s the way we want to differentiate HENRi from other open innovation systems that already exist out there. It’s about creating a healthier future for consumers and families, and contributing to more of a sustainable future. It links beautifully with the core of what Nestlé is all about.”

And HENRi was set up with a clear mechanism for funding an initial pilot test with one of Nestlé’s 8,500 brands.

Mazzeo, who took on his role in 2012, recently explained how HENRi is structured, and how he spreads the word inside and outside of Nestlé.

“What we say is that HENRi is a bit like a matchmaker, where creativity meets scale,” Mazzeo says. “We’re looking to bring together the ingenuity of startups—their creative spirit, the passion for what they do—with the scale, geographic reach, and breadth that Nestlé can provide, in terms of marketing, R&D, or mentorship.”

A first set of innovation “challenges” launched in 2016 focused on forging collaborations between Nestlé brands and startups working in fields like mobile apps, augmented reality, and data analytics. One example: working with Boston startup Crowdly to help the Nestlé Purina pet food division understand who its most influential social media followers are, and improve word-of-mouth marketing.

More recent challenges posted to the HENRi site deal with topics like encouraging kids to exercise; diagnosing micronutrient deficiencies; or helping support a new class of “agripreneuers”—next-generation farmers—around the world.

“We’re very demanding of the quality of the challenge that goes onto HENRi,” Mazzeo says. “It really is about purposeful innovation. It has to be linked to our core purpose and values, and how we’re going to enhance the quality of our consumers’ lives. I’m not after short-term tactical projects. Those we can do internally, with our existing networks and agency partners.”

Evolve

The HENRi platform itself was designed, built, and launched in about five months, Mazzeo says. “The back end already existed—there was already an existing platform internally within digital services and global IT—so we were able to just focus on the front end, design, look and feel, registration, and data collection. That made the launch less costly.” Mazzeo describes the initial project as “a lean startup—it was ‘me, myself, and I’ from Nestlé, along with an agency team of two or three people.”

Mazzeo, who reports to Nestlé’s Global Head of Marketing and Consumer Communication, says he is the only person who works on HENRi full-time. But he adds that a handful of others in the company, and at the advertising agency McCann, provide support “when their subject matter expertise is needed.”

Business needs

For each challenge posted to the HENRi site, there is already an internal brand sponsor at Nestlé, and $50,000 in funding allocated to get a pilot test underway. “The challenge and funding needs to be signed off by a senior executive in [a specific Nestlé] business,” Mazzeo says. And the funding, while small, helps “to lubricate the beginning of that partner-pilot proof of concept phase. It shows true commitment that they’re deadly serious about this particular challenge.”

Mazzeo views one of his roles as an editor or curator of challenges. He says being selective is crucial.

“I’d rather have disappointed internal people than have the dilution of having lots of challenges on the HENRi website,” he says. “Fewer challenges of higher quality is better.”

Sourcing those challenges requires lots of internal legwork. “Getting the traction, getting the awareness, getting the amplification—we’ve learned to do that in a much more creative way since we started,” Mazzeo says. “Any initiative that comes out of the global headquarters is always going to be met with some resistance.” But getting a first wave of “good quality challenges,” he says, really helped to “wake people up to the idea that, if we engage with HENRi, they can really have impact.”

And participating in many business unit committee meetings, he adds, is part of what it takes to build support for something new in a large organization. “I’ve had to spend a lot of time internally with our different strategic business units, presenting HENRi—what we’re doing, how they can get involved.”

But Mazzeo says he emphasizes that his team will handle much of the heavy lifting of running a challenge. He explained that business unit leaders will only help define the challenge itself, along with the selection criteria, or “filter” that will help to weed out irrelevant startups. Once five startups have been chosen, the business unit leader will listen to pitches from five different companies—either in person or via Skype. Following the pitch session, “the business owner will select a startup that they best feel meets their challenge,” Mazzeo says.

Simplify

To make it more appealing for startups to work on projects with Nestlé—and limit frustration on both sides of the equation—Mazzeo says it’s important to reduce the number of steps and the pages of paperwork required to run a pilot test.

Mazzeo has representatives of legal, procurement, and finance who work closely with his team, and, he explains, “We have significantly reduced our NDA [non-disclosure agreement] and scope-of-work documents to two pages. I said [to colleagues in the legal department], ‘How can we make the process easier and simpler for startups?’ I asked a controller, ‘Who is the best person I should speak to in order to help our brand teams when it comes to payment terms? How can we turn this thing upside-down to get payment terms down to the absolute minimum?’”

Even after more than a year of running HENRi, Mazzeo says he is “learning every single day about how to best manage our peer-to-peer relationship with startups.”

Just as speedy payment is important, so is a speedy decision about whether Nestlé is interested in a partnership. “Startups want to hear the word yes, but if you tell them no, they can move on,” Mazzeo adds. “The word we don’t want to use is ‘maybe.’”

“Startups are not suppliers,” he continues. “They are our future partners on the challenges. Within 24 hours, we’ll get back to every startup and every inquiry so we do not keep them waiting.”

Communicate

One of the key learnings from getting HENRi up and running, Mazzeo says, is that the best startups don’t just flock to a big company because it has unveiled a new website. “Amplification and awareness” are essential, Mazzeo explains.

“We didn’t realize how impactful being on a panel would be, or being a keynote speaker, or having a booth at a trade show where we talk about HENRi,” he says. “You meet people with similar shared ambitions to what you want to do at a global level; you meet partners that want to work with you. The event schedule has been really important. We go to food and beverage events; we went to an agritech event where I was on a panel. Establishing thought leadership at the events is really important.” In recent years, that has included events like the Festival of Marketing in London, ad:tech, and a New York City panel discussion on “The Future of Food, and Who Will Feed Us.”

Open innovation

If a startup wants to engage with Nestlé, but doesn’t have an offering that is relevant to a specific challenge, it can still register on the platform. “When we have appropriate challenges, we will contact them directly,” Mazzeo says. “We’re opening ourselves up for business.” HENRi is intended to be, in Mazzeo’s words, “the entry point for global startups” that want to collaborate with Nestlé.

As a result, Mazzeo says, “our database of great startups is improving. We had over 160 applications to the first six challenges, and three of those [pilots] are now in field.” In total, he adds that nine projects have come through the HENRi matchmaking process and are either being piloted, or heading toward a pilot test.

Next steps

The next phase for HENRi may involve running challenges specific to Asia, South America, and other non-English speaking regions. And in 2018, Mazzeo says his team will be “ramping up the event schedule” to promote HENRi to startups around the world. And he’s also continuing to meet with colleagues at Nestlé, “playing Sherlock Holmes,” as he puts it, “and finding more great challenges to run.”

One thing is definitively not on the roadmap for HENRi’s future, according to Mazzeo. “From the very beginning, we were clear that HENRi will never become an idea suggestion box” for collecting ideas from Nestlé’s 330,000 employees. “They never work,” he clarifies. “You don’t open yourself up to the outside world, and it doesn’t link to strategy.”

Mazzeo says he’s gratified to see that Nestlé’s CEO, Mark Schneider, has been touting the company’s new emphasis on open innovation in recent talks. But Mazzeo says he knows that, before long, the collaborations that HENRi is spawning will need to deliver tangible returns to the company.

“My CMO is soon going to be asking, ‘Show me the impact, show me the rate of return—which are very valid KPIs,’” Mazzeo says. “But the learning and the collaboration have been incredible. And the fact that an organization of our size and complexity can do this—we’re Swiss, we can be risk-averse and conservative—I think it shows that the culture of experimentation is beginning to build.”

Example project

The Future of Bottled Water:

“The PET plastic that we use for the majority of our packaging today is the best solution, but it’s not without challenges. Conventional plastic is not seen as a credible biodegradable material, as it requires fossil fuels and recycling rates are still far from being what they need to be.

Meanwhile, carton-based packaging is not a viable alternative as consumers want to be able to see the water through the packaging. But there are innovations in packaging and delivery systems that we might not yet have considered or tested. That’s why we want to work with the right partner to scout for new, complementary alternatives and to find new, additional ways to make tasty, quality drinking water available to our consumers.

We’ll source and test solutions that companies of all sizes (from start-ups to established groups) might have already in the market or plan to launch—for mineral water, spring water and purified water. The chosen solution will need to be see-through, allow for branding, protect water quality and not require any municipal works (such as hundreds of kilometers of new pipework). It also needs to be credible in the eyes of eco-conscious consumers if we’re going to make a genuine difference to how we access water. This is a long-term challenge. The sooner it is met the better. Once we have selected the most promising solutions, we’ll pilot them and afterwards look to roll them out to the wider Nestlé Waters organization.”

The most wonderful time of the year. For brands. For marketers. And for retailers of course, at least those online … Christmas markets serving Gluhwein, Starbucks’ festive coffee cups, and the Coca-Cola Christmas trucks. Don’t forget it was Coke who gave us Santa Claus (at least the version in a red coat). However British brands have long been ahead in creating emotionally-charged festive TV advertising.

Starting with the UK market then, London-based social analytics firm 4C used artificial intelligence to process the number of times each brand was discussed on Facebook and Twitter in the five minutes after its ad was broadcast. It compared the figure to the number of times the brand was mentioned in the lead up to the advert and used this to calculate the increase in social media interest, or the ‘lift’, generated by the advert.

4C also analysed whether the words used in association with the advert were positive and negative to determine the number of viewers who felt positively towards it.  Marks & Spencer topped the ‘sentimentality’ list with 87.5 per cent of tweets being classed as positive. Discount supermarket Aldi was second while pharmacy chain Boots came in third place.

Aldi’s ad, which saw the return from previous years of Kevin the Carrot, topped the list of the most discussed TV spot and came second in the list of the most liked, leading it to be crowned the overall winner. It’s Kevin the Carrot soft toys became a hit instore too, and quickly sold out. Soon Kevin was the must-have sold-out Christmas gift, trading on eBay for 4-figure sums:

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

Marks & Spencer’s use of the loveable bear Paddington, which coincided with the launch of the most recent Paddington movie, offering a double win:

In recent year’s John Lewis has been the UK’s winning festive advertiser, often with a feel-good remix of a classic song. This year’s attempt has proved less successful:

https://www.youtube.com/watch?v=Jw1Y-zhQURU

In the USA, retailer’s are learning from the UK’s emotional epics. Macy’s brings us the story of Max, a young boy whose unwavering compassion shines even brighter than the lighthouse near his home

Apple came late to the advertising game, but its use of a Sam Smith soundtrack creates another winning brand moment, to support its new flagship iPhone X:

https://www.youtube.com/watch?v=1lGHZ5NMHRY

In Australia, where snow is replaced by sunshine and barbies on the beach, an unexpected friend and a little creativity saves Santa this Christmas (with the help of Lego):

Talking of Australia, Amazon has just entered the market. (It’s amazing to think that their are still countries around the world not dominated by Bezos and team!). Here, Amazon’s encourages more:

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

Meanwhile in New Zealand, the Kiwis are known to put their own spin on words, mixing up vowels and leaving the rest of the world pretty confused. Santa is too:

https://www.youtube.com/watch?v=2mDoqrhiem0

In Spain, a 19 minute epic shows an alien falling to Earth in a Christmas ad called Danielle for the Spanish Lottery. It is also a great example of multi-platform execution, from social media to point of sale:

Meanwhile, Coca Cola continues its multi-platform storytelling with this year’s offerings that still prove unbeatable in much of the world, and reminding us that the best ads consistently build a story over time:

https://www.youtube.com/watch?v=9cMk97E_YNU

https://www.youtube.com/watch?v=5_r_Qbg35ls

 

Say hello to the democratised economy … the blockchain has the potential to change every market.

The fourth industrial revolution … from digitalisation to automation, robotisation, 3D printing, artificial intelligence, new transportation systems (Hyperloop, electric vehicles, drones) and much more … will shape not just our economies, but the way we socialise and shop, work and learn, vote and play, earn and trust.

These fast-emerging technologies will enhance democratic freedoms, enable local transactions that are faster, cheaper and more trusted, whilst also enabling global business to be simpler and transparent. It will enable businesses large and small to work equally, countries large and small to compete fairly, and consumers everywhere to reengage with society and learn to trust business again.

Blockchains eliminate the old frictions, and create new market models.

Imagine if any transaction – paying a bill, sharing news, buying products, making an investment, getting a passport, voting in an election – could be done fast and simply locally, administered by ourselves, without the need for intermediaries or centralised organisations. A blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.

Blockchains will fundamentally reshape industries like banking, and far beyond.

Democratising marketspaces

Bettina Warburg describes how the blockchain will eliminate the need for centralized institutions like banks or governments to facilitate trade, evolving age-old models of commerce and finance into something far more interesting: a distributed, transparent, autonomous system for exchanging value:

Let’s hold on a moment, and just take time to reflect on the basics again. What really is a blockchain? Here Australia’s Westpac seeks to explain the concept, without getting lost in the hype (a bigger revolution than the world wide web), and the technology itself:

Jessi Baker is the founder of Provenance a startup using novel technologies like the blockchain to revolutionise supply chain transparency and product trust. She works with suppliers, brands, and certifiers to enable every product to come with an open, secure record of its journey and creation:

Initial focus has been on financial services, yet blockchain could be equally disruptive in any industry, both in the supply chain (transparent, democratic, decentralized, efficient, and secure), but most significantly in how people engage with business, and with each other. Here are some examples:

Whilst 72 year old Don Tapscott’s views on technology and networks have become a little predictable, he is still regarded by many as the pin-up storyteller of the Blockchain Revolution. He will be joining me for the the European Business Forum in Odense on 26-27 September 2018:

More

 

Before speculative bubbles could form around dotcom companies (late-1990s) or housing prices (mid-2000s), some of the first financial bubbles formed from the prospect of trading with faraway lands.

Looking back, it’s pretty easy to see why.

Companies like the Dutch East India Company (known in Dutch as the VOC, or Verenigde Oost-Indische Compagnie) were granted monopolies on trade, and they engaged in daring voyages to mysterious and foreign places. They could acquire exotic goods, establish colonies, create military forces, and even initiate wars or conflicts around the world.

Of course, the very nature of these risky ventures made getting any accurate indication of intrinsic value nearly impossible, which meant there were no real benchmarks for what companies like this should be worth.

The Dutch East India Company was established as a charter company in 1602, when it was granted a 21-year monopoly by the Dutch government for the spice trade in Asia. The company would eventually send over one million voyagers to Asia, which is more than the rest of Europe combined.

However, despite its 200-year run as Europe’s foremost trading juggernaut – the speculative peak of the company’s prospects coincided with Tulip Mania in Holland in 1637.

Widely considered the world’s first financial bubble, the history of Tulip Mania is a fantastic story in itself. During this frothy time, the Dutch East India Company was worth 78 million Dutch guilders, which translates to a whopping $7.9 trillion in modern dollars.

This is according to sources such as Alex Planes from The Motley Fool, who has conducted extensive research on the history of very large companies in history.

Modern comparisons

The peak value of the Dutch East India Company was so high, that it puts modern economies to shame.

In fact, at its height, the Dutch East India Company was worth roughly the same amount as the GDPs of modern-day Japan ($4.8T) and Germany ($3.4T) added together.

Even further, in today’s chart, we added the market caps of 20 of the world’s largest companies, such as Apple, Microsoft, Amazon, ExxonMobil, Berkshire Hathaway, Tencent, and Wells Fargo. All of them combined gets us to $7.9 trillion.

At the same time, the world’s most valuable company (Apple) only makes it to 11% of the peak value of the Dutch East India Company by itself.

Historic Heavyweights

Despite the speculation that fueled the run-up of Dutch East India Company shares, the company was still successful in real terms. At one point, it even had 70,000 employees – a massive accomplishment for a company born over 400 years ago.

The same thing can’t be said for the other two most valuable companies in history – both of which were the subject of simultaneous bubbles occurring in France and Britain that popped in 1720.

In France, the wealth of Louisiana was exaggerated in a marketing scheme for the newly formed Mississippi Company, and its value temporarily soared to the equivalent of $6.5 trillion today. Meanwhile, a joint-stock company in Britain, known as the South Sea Company, was granted a monopoly to trade with South America. It was eventually worth $4.3 trillion in modern currency.

Interestingly, both would barely engage in any actual trade with the Americas.

The other historic heavyweights included in the chart?

  • Saudi Aramco, at $4.1 trillion, based on calculations by University of Texas finance professor Sheridan Titman in 2010, and adjusted for inflation.
  • PetroChina surpassed $1 trillion in market cap in 2007. Adjusted for inflation that’s $1.4 trillion today.
  • Standard Oil, before its famous breakup due to monopolistic reasons, was worth at least $1 trillion. Adjusted for inflation it would likely be more, but we kept this conservative.
  • Microsoft reached its peak valuation in 1999, at the top of the Dotcom Bubble. Today, that would be equal to $912 billion.