As We Head Into 2014…
Perhaps one of the most interesting and intriguing aspects of our times is that, unlike many previous centuries, in the 21st century, citizens at all levels of society are also given the opportunity, if not forced, to make many, many decisions. Transparency, accountability, and excess information have made it imperative to try to figure out what matters more, what matters less and what doesn’t matter any more. This includes the infinite distracting options in our everyday life on the internet.
One of the great changes of the 21st C is that people worldwide no longer trust those in authority to make decisions for them. They want to make their own decisions. Arab Spring is one example, internet newspaper, another, as well as the investment community’s continued shift from defined benefit to defined contribution. After the crisis of ’08, people learned that they are better trusting their own decisions than taking someone else’s.
The world is changing. If Bill Gates’s predictions are right, “by 2035, there will be almost no poor countries left in the world” (2014 Gates Foundation Annual Letter). Disruptive technology was one of the main focal points during discussions at Davos this year. Marissa Mayer, chief executive of Yahoo, noted, “we really are living in a hyperconnected reality, which while it can be disruptive can also be incredibly productive” (World Economic Forum). More people will have more access to unprecedented opportunities than ever before.
If I were to put it in a few words, empowering people to make their own decisions is powerful, and it works. Perhaps here I can share a few observations about opportunities we are missing and opportunities to come.
For millennia, information in books was physically located in libraries - from ancient Alexandria to colonial Boston. Access to acquired intelligence was constricted by physical access to the building. Now, the means of delivering knowledge has exploded exponentially2 thanks to the internet. Think of what libraries have contributed to mankind’s development, and now what the internet can do, as not only sources of information, but a destination for the congregation of talent and opportunity, resourcefulness, scholarliness and plain hard work. Despite the velocity of change, we’re just at the beginning to harvest the benefits of wide spread dissemination of knowledge. In automotive terms, despite all the progress of the last decade or two, we’re still on the horse drawn carriage stage.
2. Stupidity and Complacency
Amazingly, these are still a problem. There are far too many outdated ideas, policies, and procedures working hard to maintain dysfunctional order. These are still powerful beasts manifesting themselves in the protection of inherited inefficiencies and the pursuit of privileged restraint, rather than the benefits of enlightenment. How many government agencies, corporations and other institutions around the world are staffed with thousands of people who can say no to an idea, and so very few who can say yes? Think about the power of yes.
How do we learn to continually think like an immigrant? For those of us in the U.S., think of the highly motivated Indian or Korean immigrants. The first thing they do on arrival in the U.S., is find the best possible education for their children. The second thing is to observe what’s going on here, what’s working in the economy? With absolutely fresh eyes, they say, “I am going to get into that business.” They don’t look for annuities, protection, or privilege. They look to smartly figure out what works the best. They are the first to join that train and ASAP lead it.
4. Creativity and Clarity
“Creativity is intelligence having fun.”
– Albert Einstein
“There are painters who transform the sun to a yellow spot, but there are others who with the help of their art and their intelligence, transform a yellow spot into sun”
– Pablo Picasso
ARE YOU HAVING FUN YET?
5. Pick the Right Problem
The world is full of managers diligently solving inherited problems without regard to whether the problem is still relevant. I have been thinking about the few instances where enlightened leaders have been redefining problems and therefore redirecting enormous amounts of energy to more productive means; Google to advertising, Amazon to retail, Instagram to sharing photographs, 20 years ago, China to manufacturing. We’ve only just begun….
6. Opt-in vs. Kept-in
For centuries, economies protected themselves by drawing circles, building walls, and making it difficult for any form of competition to survive. It was about keeping it all inside the circle. What we’ve seen in the last few years is the power of doing the opposite. By not opting-in but keeping-in, Kodak forced image-makers to use chemicals because Kodak was a chemical company. Then popped up Instagram and helped image-makers do what they wanted to do - take pictures and share them with friends ASAP anywhere in the world with incredible ease, and for free! Kodak lost a hundred year leadership position in a hundred days. The economies of opting-in, (Facebook and Twitter, to name a couple), foster immense connectivity and remarkable equity valuations. It’s certainly more fun, more fair, more profitable and more democratic. How many more opt-in experiences are there?
7. 'Japanization' of the West?
On the economic front, there are many things to watch. But I’m going to suggest perhaps the most significant might be whether or not Western economies will follow Japan’s path - a prolonged period of low interest rates, immeasurable rounds of quantitative easing and political process engaged in gridlock and unable to deal with obvious problems until recently. How many years of denial did it take before economic activity started to rebound recently? One might hope and suspect that the Western world might react faster. Maybe we should start by looking at France - clearly one of the most sophisticated Western economies. How fast and how agile are they at adapting?
8. Velocity of Change
Think about Sweden and San Francisco among others. Technology crashed in 2000. No longer is technology primarily about hardware or software, it’s about providing solutions to everything we think about, touch, do, consume, etc. Northern California hit the ropes, now it’s booming. The evolutionary change happened very fast. Consider Sweden and how quickly it has migrated from the crisis in the 1990s to become one of the most vibrant, entrepreneurial countries in Europe, if not the world. Sweden has some of the lowest tax rates in Europe, an advanced civil society, a profound entrepreneurial hub and amongst the best sense of design in the world. Their velocity of change is a lesson the rest of the West is learning. My sense is that the velocity of change is going to be much quicker in many sectors than we might anticipate.
Watch for some exciting news from us in coming weeks.