2nd Order Consequences of COVID-19

The Great Interruption of 2020 will lead to the Great Disruption of 2021. And this will be a disruption unique since World War II - one which took everyone by surprise and is pretty much evenly distributed in a very short period.
Tech disruptions tend to impact over 20 year cycles. This is something different. COVID-19 is driving massive habit change and with it the potential to have deep impact on society - potentially culture-changing impact. We are seeing the initial impact immediately.
Again, uniquely, we have the Great Pause we are all being forced to contemplate, to prepare for what comes next.
There are the first order consequences we see reported on our evening news. The economic shut-down, the school closures, the strain on supply chains.
And then there are the second and third order to come.

Consider:
1. Demographics: Beyond the first order consequence of the death of one-in-ten aged over 80 (which is about in line with deaths from all causes for the over 80s in a typical year), the bigger impact will be in a slump in pregnancy rates. Since COVID-19 was identified as a risk to pregnant mothers, sales of birth control went through the roof. So we can expect a 3-4 month birth lull in 9-12 months time. That gap will be present as it hits the health service, then nursery education age, school age, college age, and entering the workplace in 18-21 years time. That's a lot of flux for all our institutions to handle. The lull is likely to be followed by a boom.
2. Food: Yep, in lock down we think about it a lot. We make meal plans. We start to value 'fresh', we become very conscious of waste, we find time to make from scratch - all the things the convenience (read Easy) generation(s) have bypassed for 20 years. The first order consequence of disruptions to supply lead to second order consequences of increased valuation of the food we do have. New habits forming now could see a mid-term negative impact on restaurants, fast food outlets, convenience food manufacturers... and a positive impact on organic, locally-sourced, fresh suppliers. Reduced consumption (via reduction of waste) is a likely second order consequence across the board.
3. Education: Lessons, quite literally, are being learned about digital. First educators are getting a rapid education in virtual lessons. This has benefits for meeting individual learning styles, aligning with need in more individual ways vs time of day you find best for learning, pace at which you prefer to learn etc. Just as digital has generated the opportunity to move away from treating customers in a one-size-fits-all way, so it reveals an opportunity for segmenting and personalising education which could rapidly accelerate its outcomes for every individual. And beyond that, digital means expanding the capacity of an individual teacher or institution such that we can now teach the world. There's a UN Sustainable Development Goal on the way to being met, right there.
4. Politics: The emergence of an instant Technocracy (rule by unelected experts) is one we seem quite comfortable with. Our politicians right now (as seen from the UK) are pretty much mouth-pieces for their experts - the Chief Medical Officer and the Chief Science Officer bringing a level of evidence-based rigour to decision-making that our very generalist politicians are quick to defer to. Will this be forgotten when our experts on the economy make comment on issues (such as) Brexit in the future? That remains to be seen but trust is science is (outside of the flat-earthers, anti-vaxxers and 5G fallacy peddlars) at an all time high. This bodes well for a shift in the political landscape toward one where the focus is less on what plays well to the gallery (the populist agenda) and more on a test-and-learn, more honest, approach to dealing with the ambiguity of the economy. Less opinions - more evidence. We can hope.
5. Travel. When this lock down is over I suspect a lot of folk will want to travel for pleasure. But from a business point of view, we have learned a lot about how digital really can replace jumping on a plane. Senior execs have been given an accelerated learning and that has positive impacts for their bottom line. Expect travel budgets to be slashed at the very least - with all the second order consequences for airlines, airports, hotels, car rental, conference venues etc.
6. Antifragility - If that sounds like a made up word, let's talk about business resilience instead (though if you are familiar with antifragility, you will appreciate the difference). The bottom line is COVID-19 has revealed to us again how inefficient being too optimised is over anything more than a short-term period. And we cannot predict, with any certainty worth having, how long that short-term may last. Systems - from supply chains, to ways of working, to value proposition have been revealed to be too inflexible to cope with shock. The first order consequence of that is shattered businesses with the shattered lives they leave in their wake. Second order - businesses that survive will have already made themselves anti-fragile in several ways and those that build after will learn from them. The whole notion of leveraging, fantasy multipliers, business plans built on same-happening-next-year-but-a-bit-more must be swept away. Second order may be in the personal realm - we may have just created a generation of savers, folk who will try to build some anti-fragility into their own finances and ways of living. My guess is this will result in reduced consumption as people seek to live lives in reduced debt, building some cash reserves, fore-going the next new car, TV, phone, foreign holiday. Consuming less and savouring more.

All these consequences of COVID-19 (and I'm sure you can think of many others) accelerate the demand for what I had already identified as twin increasing trends:

1. Ways of dealing with the ambiguous, complex requirements of the digital world
2. Ways of handling the rising prioritisation of concerns for the planet.

The first because we face such a period of disruption in which we may see what is hitting us but we lack clarity as to the connections between cause and effect. We have to probe-sense-respond our way through this to develop the most appropriate digital responses.

The second because we have seen we CAN make a difference (in those pollution-falls stories you will have seen). We all have a renewed appreciation of the simple pleasure of time spent in nature. We are all learning the importance of reducing waste. And we are all appreciating more the damaging impact of unchecked consumption on our own lives and on the fragility of the systems, economic and natural, we depend on.

Change is coming. You have time to act. Don't waste the opportunity.

Photo by Melissa Askew on Unsplash

Creating new value - or simply keeping up?

Photo by Fancycrave on Unsplash

Demand for digital transformation is at an all time high - according to a survey of 600 leading execs for a DXC report: 2019: The year of digital decisions. It provides timely evidence that supports my mapping of the situation facing industry right now - referred to in detail here.

Referencing that article (The Job Of Digital Strategy Consulting): Companies are testing the water, feeling their way with agile here, lean there, new-tools-but-same-ways -of-working almost everywhere... There is no certain way of doing or being digital yet. Not by some distance. But we must expect that there will be movement in that direction.

What the increased demand/desire tells us is that digital transformation is headed toward ubiquity and with it standarisation and the need for interoperability. There's an increasing realisation that companies must build themselves a new future and this is at such scale that trying to do this with hand wrought nuts and bolts is too bespoke - too slow and too expensive.

What this also reminds us is that digital transformation is not the end product. It is a process of creating the nuts and bolts on which higher-order complexity - the novel stuff that creates greatest value - gets built.

When you have all the nuts and bolts, and power supplies and gears and pulleys and all those things you need to make stuff, it doesn't magically self-assemble. into things of value.

How you are able to use what you have brought together - the pile of 'what's' your grand 'why' of digital transformation may have provided you - that is where the magic happens.

The insight, the imagination, the ideation, the design, the rapid iteration, the testing and scaling - without these your digital investments are simply 'efficiency' spends. They won't even reduce your IT budgett. When we make stuff more efficiently we tend to use more of it (as Simon Wardley points out. Think how many more nuts and bolts got used as a result of standardising them.

What is needed is a way in which you can standardise and make repeatable the insight, the imagination, the ideation, the design, the rapid iteration, the testing and scaling. What is needed is a new way of working.

This is the 'How' of digital transformation and it is where the fight for market mastery gets won and lost.

In 2019 this is the most pressing challenge for creating new value vs simply keeping up.

Consulting faces a digital reset

Disruption creates opportunity. In the challenges to our cherished business models and organisational norms there is the requirement to act.
The burning bridge beneath our feet prompts us to make significant and often rapid movement. Just such a moment has arrived for the consulting world.
Platforms enhanced by AI are making application development, business process engineering and customer management all things a business can now do for itself - shifting the role of technology consulting. (in large part out of the door).
New ways of working are giving everyone in the business (and from IT) access to human insight, ideation and rapid innovation - blurring roles and delivering organisational adaptability to align with the needs of the digital world.
And these two drivers alone would be significant enough to force a change in perspective.
But add to the plans in the UK to overhaul regulations in respect of the big four accountancy firms and business as normal faces an existential threat.
KPMG has already announced is will no longer offer consultancy to businesses it audits. It, like the others, has been down this road before.
The Enron scandal in the US prompted a break-up and realignment that resulted in Atos, BearingPoint, Cap Gemini. and a merry go round of acquisitions, rebrands and bankruptcy. Accenture while moving first, was born out of the same climate of concern over  operating models.
So we can expect to see great change in the market.
And with this comes the opportunity to reconfigure consulting for the digital world.
In many ways the industry is late to the party. Digital has wrought its disruption to media, retail, travel, utilities, even government.  Now the consulting business has the opportunity to press its reset.
I believe that means becoming genuinely digital. Digital first. Because all business is becoming digital.  Business is changing/has changed the way it thinks about value, about customer, about experience, about responsiveness (to market mastery).
That means consulting must identify its own a clear value proposition that makes sense in a digital world - understanding its place in what are no longer supply chains or value chains, but eco-systems.

• It means setting a strategic position as a value hypothesis to be tested through rapid iteration with customer insight at the heart.
• It means embracing new ways of working and making them the way to work from pitch to delivery - emphasising customer-led design, agility and market responsiveness
• It means changing KPIs to deliver the open, collaborative, trust-building behaviours required of organisational vs individual performance.
• It means addressing digital capabiltity and capacity short-falls in creative and scalable ways (see also blurry people)
• It means establishing the legal and commercial frameworks to support rapid partnership models and value-led billing models
• It means organising around product/service design, development and life-cycle management
• It means tackling ambiguity head on - with minimum viable organisations from which to scale out fast, enabled by blurry people and responsive products and services

Make no mistake - when disruption comes knocking at this scale, incremental change will only delay the inevitable. The start-up mentality IS the digital mentality.

The strategic importance of managed innovation in digital transformation

A couple of thoughts in visual form on the strategic importance of managed innovation in digital transformation - and the behaviours required of the people involved:

First - the strategic importance:

Second - the behaviours

The Digital Customer exposes the need for value in all interactions

We already have digital versions of ourselves populating our increasingly digital world: Your Linkedin, Facebook and Twitter profiles, your Amazon and Google footprints are all examples.
For the most part they are not yet autonomous. But it cannot be long before the 'MeBot' - an autonomous and intelligent you - becomes a ubiquitous part of our daily interaction with people, things and data.
All of which strongly suggests that brands and organisations must start developing strategies that place the digital customer at their heart.
Let me be clear, that digital version of you will always be informed by and learning from the real you. But increasingly it will be the digital rather than analogue version of you who will be making the transactions (tilting, as these thing are, to online more heavily by the day).
And if Digital You has got the spends - Digital You is going to be the target.
So what does advertising/targeting/relationship-building/comms/PR/you-name-it look like when it is aimed at our MeBot?
Well - I suspect MeBot's will rapidly learn which lies to ignore, which content sources to trust, which deals are for-real. They may even be less swayed by the Herd mentality humans find it so hard to resist (think of the impact on the Stock Markets...).
This is likely to starkly expose some of the realities and truths of relationships of trust - such as...

1. Customers are not inhabitants of your omnichannels waiting to be managed from one to the next. They live in a 4D world with limitless touchpoints. The analogue digital combination will evidence that by the truck-load. Map that!
2. Customers are not waiting to be engaged, made your friend, or have anything else 'done' to them. They need a reason to interact with you... which leads us to point 3.
3. Customers are not loyal. Forget loyalty - focus on proof of value. Unless you are offering a good enough value proposition your wheels will just keep on spinning.

The professional touch: And other ways to kill your effectiveness

What does being professional mean in a digital world?
Once it was 'professional' to complete and perfect products to the nth degree before releasing them from secrecy. Now it is the norm to release Betas and Alphas to learn from doing, to measure response, to shape to adoption and behaviour.
In the same way professional writing, publications, presentations and thought leadership once served to provide a clear and final view. This was how it was. No argument expected and few tolerated.
Blogging, and other social media changed that - a space was created where ideas were kept alive rather than shot dead to be stuffed and placed on the wall as some kind of trophy.
The digital world requires a different kind of 'professionalism' - one which is less about the refinement of the 'professional touch' and more about using your skills to engage, learn and iterate.
This is a world in which a messy kitchen is more valuable than a neat and tidy professional one. Clay Shirky came up with the analogy in an interview I conducted with him 10 years ago. He argued that people felt less comfortable about joining in if they entered a kitchen in which nothing was out of place. If there was a little bit of mess, we were more likely to pick up a utensil and help out.
There's evidence from the world of dodgy fonts, too. While the professional approach is to use clear fonts with limited amounts of variation in size, emphasis or hue, what actually works is somewhat different.
Studies at Princeton discovered hard to read - or what designers call 'ugly' fonts deliver greater retention of what has been read. If you want to land the message make it ugly, messy and... naturally add some emotion.
Professional detachment is of low value in this last case. Creating memories does not simply rely on the world we experience externally. It is as much about our feelings at the time of experiencing. Let the excitement shine out.

Maya Angelou — 'At the end of the day people won't remember what you said or did, they will remember how you made them feel.'

If we accept that we can scale our effectiveness as professionals when we gain engagement, and in so doing can better land an idea, then what passes for professional communication demands to be reappraised.

If you build it, who wins what?

From the movie - Field of Dreams

Digital is the creation of value from connecting people, data and devices.
You can't create value for a device (that would require conscious machines and we are still some distance from that). You can't create value for data.
You can only create value for people.
People feel stuff.
If I instrument machines to automate their optimisation, their effectiveness, extending their lives, the machinery really doesn't care. It feels nothing.
The engineer who now doesn't have to tweak it to balance loads or speed up the run every few moments, or take time out to order parts, and fit them - she's happier. She now has more time to think about how this machine could be improved, where else a machine could be applied, what other aspects of the business around her could be automated, for example.
Creating value for people should be an absolutely natural part of any digital development (and by extension, any AI deployment).
Who wins what?
Only when we find that value and build to deliver it do we create technological solutions that matter.
The rest is just built on the assumption 'they will come'. And we now have much evidence that this is the road to expensive failure.
I read somewhere once how the average number of members of online message boards is a somewhat lonely, one.  They built, but nobody came.

Digital is not a destination

I see a lot of talk about the journey to digital transformation as if its some kind of destination.
Becoming digital is not the end point. In many ways it's a launch pad to becoming a business prepared to engage in an increasingly digitized world.
There are some basic essentials with anything digital - understanding the technology requirements, the role of the data ( where you are going to get it from, store it, what it's going to inform, how you are going to draw insights from it) - the architectures required to bring business, hardware and software together, the layers of integration demanded; The people and the processes; the skills and the new ways of working, etc
But all you will achieve is the same but faster and cheaper (ideally) if becoming digital is your end game.
Becoming a different kind of business is where you should be headed; one which places customers in a different role; and one in which the business itself sees itself playing a different role. Setting this new goal, this new destination, is your first essential step. The roadmap comes second.
Digital is the way we connect ourselves; it reveals to us a connectedness which requires us to open and think differently about our role in the world. Does our presence in the life of customers offer us unique opportunities to understand behaviour; does that understanding reveal new business opportunities - does it reveal new benefits for society?
Uber is valued so high because it set out to value data first. It figured that by being a peer-supplied taxi service it would get lots of data about moving people and things. It is this data which they see as their long term business - delivering what ever you need where-ever you need it when-ever you need it.
That *may* reduce the carbon footprint of vehicle deliveries in the long run. It *may* reduce your costs or benefit your convenience. Soon they are going to have to be explicit about this every time your data is shared with them.
Be sure that businesses must  begin to think holistically about this - about having the best interests of their customers at heart and being able to demonstrate this. Without this they will not be allowed to take advantage of the new bounties data is offering.
Digital Transformation has always been a journey, not an end in itself. The end remains becoming an Open Business.

Beware the business bots

Image via: http://www.inspirefirst.com/

In the future every business will be digital.

For many that future has already arrived. You know you have arrived in that future when 50.1% or more of your revenue comes via digital. You can probably draw a line on your revenue growth and decline charts to identify the point at which that becomes true for you.

In the future every business will be a technology company. Being digitally, socially connected, always on via the cloud and mobile will be an essential of even the most mom & pop business.

Yes those businesses which require your corporeal presence (those that will congregate in High Streets) may feel this effect later than most, but feel it they will. If I can choose to book a haircut via my mobile vs turn-up and hope, over time even the strongest habits and relationships will be challenged. You can be sure new habits and relationships will more likely be established via the technology route. Old habits die hard - but time kills even the oldest in the end.

So it would be sensible to prepare for your digital and technological future.
But in doing so never lose sight of what will make all this technology work for you - the scalable human relationships it empowers.

Without the human heart of your business - its purpose, your belief, your demonstration of your values through what you do (not what you say) you'll end up with a business which acts like a bot.

In a dark, bleak future there is a world of business bots all following each other and trying to sell to each other based on the faked behaviours each is demonstrating to each other- rather like twitter would become if all the humans left over night.

It's easy to imagine organisations sleep walking into this future - focused on getting technology to do everything for you and for your customer. Bots see and bots do but there is no meaning for them or those they interact with in what they do. Transaction after transaction without meaning.

In the bright, belief-filled future, businesses are using technology to enable and enhance rather than to mechanically do. Here humans are connecting with humans building trust through relationships in which each has the other's best interests at heart. They are partners. They are working together to achieve a shared purpose. They generate meaning.

The role of technology is to reduce the friction in each transaction - whether that be purchasing goods, connecting people with shared purpose, or sharing ideas.  Reduce the transaction cost and you reduce the cost of action.

But we must always be careful to keep the meaning in. Industrialisation took it out. We have the opportunity to rediscover it through the human connectedness the web enables. We can take advantage - or we can build bots.

My bit for Davos: Rethinking IP in the Digital Age

I'm linking to this from  the WEF site. Principle 6?

Over the past six to nine months I've been one of "100 experts from media and technology industry, government, civil society and thought leaders, including innovators and artists" gathered from all around the world to contribute to the World Economic Forum's Seven Principles for Adapting to the New Digital World.

Today the principles are being launched at the WEF's 2014 meeting in Davos.

As is inevitable with so many voices to consider, the outputs are broad.

What they aren't is a How-To guide. How they are implemented by organisations and businesses raises a whole world of new questions and challenges.

The principles do at least provide a framework to ask the right questions within. For example -

" inform users about ownership and rights. "

This in itself can trigger a wide-ranging debate including new definitions of ownership and new measures of return on contribution. The Co-Ip model, considered in my chapter on Open Innovation in The 10 Principles of Open Business springs to mind.

The seven principles - in the words of the WEF

“The way we create, consume and share content and information has changed dramatically in the digital era,” said Diana El-Azar, Senior Director of Media, Entertainment and Information Industries at the World Economic Forum. “The principles lay out a vision for the way we want our online culture to evolve.”

Developed by over 100 experts in workshops and interviews in 2013, the Principles for the Creative and Information Economy in the Digital Age encourage governments, policy-makers, the private sector, civil society groups and individuals to:

• Foster and reward creativity
• Build an ecosystem for innovation
• Expand access to content
• Inform users about ownership and rights
• Give creators and rights owners control and choice
• Enable people to be creators
• Strengthen global collaboration

The Norms and Values in Digital Media: Rethinking Intellectual Property in the Digital Age present a shared set of goals to help adapt business practices and policy-making to changing norms and values in a hyperconnected world. The principles are part of a World Economic Forum initiative which examines digital issues related to privacy, freedom of expression and intellectual property.

 Full release and supporting information,