In 2021, Don’t Ask What Will Return. Ask What Lies Ahead

The English naturalist Charles Darwin famously helped us understand that the survival of any species – including our own – hinges precariously on the ability to adapt. 

In 2020, this innate capacity to respond to our changing environment was on full display. We adapted across almost every aspect of culture, creating a watershed moment for tech innovation along the way. I cheered the many (and ongoing) advances, counting them as a silver lining amidst the pandemic’s difficulties. I love the word “tech-celeration” to capture this period of innovation.

In the wake of such forward progress, I find it ironic to encounter so much discussion about which parts of post-covid life will return in 2021. Will workers return to offices, will shoppers go back to stores, will people gather IRL again?

I see these as false choices and indeed the wrong questions to guide leaders into the year ahead. Instead of thinking about when and how life will return “back” to normal, let us look forward to consider the new options created by pandemic tech-celeration.

We must leave behind binary questions and instead participate in building a less neatly categorized, but wholly more exciting post-covid world.

Allow me to tell you about five new fusions I see and provide some innovation sparks that illuminate the possibilities.

fusion one/
CONNECTION

People won’t be together or apart; they will seamlessly blend their physical and virtual worlds 

The pandemic taught us we could easily, virtually connect with our friend across town and our favorite musician across the world. In the year ahead, we will retain the expectation that any place or occasion can be accessed through a screen. 

“Zooming” is now an eponym, and we will continue doing it for social, medical, educational, and professional occasions. Most if not all live events will retain a virtual component. Innovators across the landscape will continue to explore ways to re-invent IRL experiences for virtual participants. 

As people gain comfort with virtual interactions, they will want more sophisticated avatars and consume more virtual goods. Gaming platforms will emerge as an influential backdrop for corporate and cultural interactions. And, the appetite for immersive tech (AR & VR) to feed virtual experiences will grow, fueled by its movement from clunky glasses to smartphone screens. 

Implication

2021 ushers in a mixed reality world. People now see a blurry (eventually disappearing) boundary between virtual and physical places. Companies must do the same. 

Innovation Sparks

1) Bigscreen TV VR Co-Watching 2) Direct to Avatar Economy 3) James Beard VR Dining Experience

fusion two/

HOMES

Homes won’t be sanctuaries or proxies for third spaces; they will continue to do it all

During the pandemic our relationship with “home” was fundamentally altered. For many, our dwellings ceased to be a just a landing place and became for a time our whole world.  

There were two meaningful sides to this shift. On one hand, people developed a new appreciation for an organized and comfortable home, reflected in a resurgence of domestic endeavors. On the other, they adapted their understanding of what a home is for and transformed homes into proxies for third-spaces like schools, restaurants, gyms, and spiritual centers. 

Even as people spend more time out in the world, they will continue to call on their abodes to be both sanctuary and third space stand-in. This will create new consumption behaviors and needs that will be an innovator’s paradise. Some of the current offerings around meals, décor, cleanliness, and wellness are the low-hanging fruit, but these likely only scratch the surface.

Implication

Every company should invest time and resources to understand how the post-covid home impacts their business. What home-related goods, services, and experiences can you provide to meet emerging needs? 

Innovation Sparks

1) Tempo Fitness Studio 2) Just Kitchens Cloud Kitchen 3) Return of Weekday Breakfast

fusion three/ RETAIL

Shoppers won’t choose online or in-store; they’ll blend the best of both formats

We saw eCommerce soar amidst pandemic-driven shutdowns, and experts expect the momentum to continue. Notably, 70% of U.S. consumers who tried a new online shopping behavior during the pandemic say they intend to continue it. However, retailers also anticipate a return to stores in the year ahead. So, what gives; how will consumers toggle between their online and offline shopping worlds? I maintain that they won’t. Rather, they will expect to blend the best of both formats.

When it comes to eCommerce, this will manifest as a rejection of the online shopping grid and a desire for more engaging virtual storefronts. And, it will mean a growing appetite for innovations like livestream shopping, personalized video shopping, AR experiences, and social retail.

In the physical world, shoppers who invest the time to visit a store will enter with high demands. They will look to retailers to integrate data to provide a personalized experience. They’ll expect burgeoning innovations like touchless retail, decentralized POS, and augmented merchandising to mainstream quickly. And, they’ll appreciate expert human service and an element of retail serendipity as icing on the cake.

Implication 

Retailers should focus on how to cross-pollinate their best practices in 2021. How can you create richer virtual shopping experiences, while bringing the best of pandemic-driven tech innovation into physical stores?

Innovation Sparks

1)  Showfields Magic Wand Mobile App 2)  Canada Goose VR Store 3)  Beautycounter Hybrid Stores

fusion four/ WORK

Work won’t be at the office or at home; it will be everywhere

In 2020, employees worldwide pivoted to work from home in the face of office closures. Amidst this massive HR experiment, many organizations saw productivity and satisfaction soar. Today the genie is out of the bottle, and most companies foresee a lasting shift to remote work. However, the time apart also highlighted limitations of remote work and reaffirmed that most organizations do need IRL spaces for collaboration, training, and relationship building.

 This creates an historic opportunity to reimagine a hybrid work world. Managers can offer employees an unprecedented amount of choice about where and when they work. Concurrently, they have a blank slate to re-create the office of the future. 

In the year work officially escapes the confines of the office and spills into every part of life, leaders will also have new responsibilities to help employees maintain balance. I experienced this future while navigating China’s WeChat work culture and logged some lessons learned. In a nutshell, setting boundaries, naming priorities, and prioritizing relationships will become more important than ever.

Implication

Leaders should shift their focus from where work gets done to think about how it gets done by a hybrid office team. What tech and training tools do you need to support collaboration? How do you attract and retain talent no longer bounded by zip code? What kind of physical office spaces foster wellbeing and strong relationships?

Innovation Sparks

1) Miro online whiteboard 2) AI tools measure remote employee satisfaction 3) Gather game-based office platform

fusion five/ LEADERSHIP

CEOs won’t focus on profit or purpose; they’ll pursue both with equal rigor

 In 2019 the WEF declared that “Profit with Purpose” was set to become the new business norm. That very same year, the Business Roundtable released a statement signed by 181 CEOs redefining the purpose of a corporation to promote an economy that serves all its stakeholders, and companies have since been taking incremental steps to make this a reality.

However, I believe the pandemic increased our shared sense of responsibility and hastened the urgency to act on a wide range of issues. In the 2021 Edelman Trust Barometer, 86% of consumers said they expect CEOs to take action to tackle challenges around Covid, diversity, and the environment in year ahead.

This presents both an opportunity and a mandate. Leaders will continue to pursue profits, of course. But we must strengthen our resolve to tackle social issues with the same tenacity. 

Examples of how this looks in practice abound. One close to my sphere is PepsiCo’s path-breaking Winning with Purpose initiative, which focuses on accelerating the company’s growth by making a difference in our society, including recent commitments to achieve net-zero greenhouse gas emissions by 2040, reduce single-use plastics and lead plant-based protein innovation. Wal-Mart CEO Doug McMillon used this year’s CES platform to highlight his company’s tech initiatives to combat diversity. And at Davos, the WEF launched their “Partnering for Racial Justice” program to drive meaningful workplace change. 

 Implication

Speaking in Davos, Dan Schulman called the idea that purpose and profit are at odds “ridiculous,” and I couldn’t agree more. This is the year to shift from concept to practice. What meaningful steps will your organization take? 

 In the year ahead…

I believe the most exciting possibilities lie not in looking backward to consider when normal life will return. Instead, we will find them when we set our gaze forward to explore the exciting new options around how we live, work, learn, and consume in the post-covid world.

Let’s retain the adaptive mindset we have honed over the past months to grow and flourish FORWARD.

How To Thrive In The “Digital” Next Normal? Let’s Understand, Imagine, Then Lead

How to Thrive in the “Digital” Next Normal?

As we emerge from the earliest months of the global Covid-19 crisis, leaders at companies of all sizes are looking ahead to the “next normal.” What will life look like for our customers and our employees? How do we plan, prepare and lead to succeed?

If there is one inescapable word permeating this period of reflection and planning, it is DIGITAL. We know that, worldwide, time spent online and digital commerce greatly accelerated during the pandemic. Daily, we read about the digital-led recovery, enterprise digital transformation, the rise of the Digital Strategy Officer, and a surge in the use of digital platforms and applications among our consumers and colleagues.

Increasingly, digital is not a place or a descriptor. Life is digital and digital describes our lives; the two concepts are inextricably linked. (For some fun, anecdotal evidence, check out Elon Musk showcasing his brain-machine implant, Neuralink.) 

For business leaders, the logical extension is that digital strategy is business strategy and vice versa. The two can no longer be separated or disconnected – in our minds or within our organizations.

This shift was well underway pre-pandemic. In January 2019, seven of the ten most valuable companies globally were digital platform business models, the likes of Google, Microsoft, Amazon, and Alibaba. For several years, business analysts have used words like “seamless” and “frictionless” to describe the future.

Image Source: The Innovator

Undoubtedly, the pandemic has accelerated the seamless assimilation of digital and physical life to warp speed. By some estimates, consumers have vaulted 5 years forward in digital adoption in a mere 8 weeks. For certain sub-groups like seniors or rural consumers, that leap was likely much larger. 

 The “next normal” is undoubtedly the “Digital Next Normal,” and it is here for every organization. The question facing leaders is how to help yours not only survive but thrive. How to see around corners to spot new opportunities before others do and even create them where they may not inherently exist?

For me, this challenge feels most approachable if it can be broken down into discrete, actionable parts.

Here are 4 guiding principles on my mind as we head into the last quarter of what will undoubtedly be remembered as an historic year.

#1: Understand how your consumers have transformed…

THEN PUT THEM AT THE CORE OF ALL YOU DO.

We hear so much about digital transformation; I think it is easy to lose sight of the underlying cultural transformation that is powering it. 

Across the globe, people’s daily lives have changed in significant ways. In the U.S., the average adult now spends an incredible 16.6 hours per day with digital media; e-commerce sales climbed 25% in the first two weeks of March and continue to grow at a staggering pace. Digital tech supports a myriad of activities that have been shifted to the home.

 A recent Fast Company article dubbed this growing, cross-generational psychographic of digital-first consumers “Generation Novel” (Gen N), writing that companies paying attention will “source the insights necessary to transform and enhance operational and business models, products and services, and customer experiences.” I wholeheartedly agree.

 In this moment, “Job One” for leaders is to understand that the pre-Covid customer you think you know is very likely not the same person powering growth today. This reality calls us to update long-held ideas about our customer, rather than falling back on legacy data – especially when it comes to digital attitudes and behaviors. 

At the end of the day, the most transformative digital leaders will start by understanding and championing how consumers themselves have transformed.

Fuse data-driven consumer insight…

WITH FORESIGHT.

#2: Fuse data-driven consumer insight with foresight

Henry Ford is famously attributed with saying that if he had asked consumers what they wanted they would have gotten a faster horse. Of course they got the Model-T, and the rest is innovation history. We can apply this sentiment to the present to highlight the fact that following the data can only take us so far. It tells us what consumers know they need today, but what about the unmet needs they will discover tomorrow (and the day after that)?

“Foresight” was an innovation buzzword several years back, but interest in imagining the future has more recently given way to innovation powered by data analysis, addressable audiences, and predictive algorithms. 

While these tools remain critical, this moment also requires us to invest the time to employ a healthy dose of forward-looking imagination. We need to anticipate the needs and wants on our consumers’ digital-first horizons, then develop thoughtful offerings that meet them where they are headed.

I see a few glimmers of this mindset on the landscape already:

• Peloton, imagining that some will never return to the gym is expanding their offer of live fitness content and integrating with platforms like Apple’s GymKit to reinvent the idea of the workout facility. 

• Travel purveyors, understanding the pandemic will change nearly every aspect of their industry are imagining door-to-door solutions, including biometric airport check-ins, hygiene-class airline tickets, hovering suitcases with no wheels to touch the dirty ground, and robotic hotel maids to provide contactless cleaning services.

• CVS, imagining that safety concerns will finally nudge U.S. consumers to adopt the contactless payment systems used widely in the rest of the world, is leading the way to roll out Venmo and PayPal in retail stores. 

• Lowe’s, envisioning that homeowners will be reticent to allow outside contractors inside for years to come, is piloting an augmented video chat tool that allows them to conduct virtual visits and provide plans and materials lists without ever setting foot in a space. 

I wholeheartedly believe that companies who imagine quickly and well will be the winners as we proceed into the Digital Next Normal. I am urging my teams to dedicate some time each week to envisioning what “could be” in the next 60, 90, and 365 days.  Won’t you join us?

3. Create hypotheses about your digital company of the future…

THEN BUILD IT.

#3: Create hypotheses about what your digitally-enabled company of the future looks like, then build it.

In some ways it feels like a lifetime since I attended Davos 2020, but one of the themes that has stuck with me is the idea that we can create the digital-first future of our company (and our world, for that matter) by creating hypotheses about what it could look like.  

A key action item for leaders is to envision what your company could look like in the next 5, 10, or 20 years and identify the pieces you need to get there.

As one starting point, we know that shoppers are adopting ecommerce faster than ever during the pandemic. We expect them to retain many of their online shopping habits, with an increased emphasis on safety, personalization, and speed. But, what are the second- and third- order implications of this shift?  

Does your organization need to accelerate testing or adoption around:

·      Touchless Payment: see Alibaba’s “smile to pay”

·      Contactless Delivery: see Covid robot boom and Wal-Mart’s on-demand delivery drones

·      Re-purposing Physical Space: see Best Buy turning stores into delivery hubs

·      Cloud Computing: see explosion of Google Cloud and Berkshire Hathaway’s buy-in to Snowflake

·      Supply Chain Agility: see 4th IR Tech Solutions

·      AI Tech for In-Store Personalization: see “Magic Wand” mobile shopping tool at NY Retailer Showfields 

Have you done enough to break down internal silos that hamper truly seamless digital experiences?

Do you have the right partners to win in the future? Would many have predicted a few months ago the partnership between Accor & AXA to provide medical care to hotel guests? Or Delta & Lysol to innovate on travel hygiene?

On the precipice of the Digital Next Normal, we must diverge in our thinking and honor the tenet that no idea is too far-fetched. If your team is not evaluating at least a few ideas that scare you, I’d venture you aren’t looking far enough down the road! 

4. Create a fail-forward culture…

TO GROW INTO THE DIGITAL NEXT NORMAL

#4: Create a fail-forward culture to grow into the Digital Next Normal

Within my organization, the crisis showed us we can move with speed and agility that would have seemed daunting a few months before the pandemic, especially when it came to digital transformation. This was the true embodiment of the “Fail Forward” culture that is easy to espouse but often difficult to practice in non-crisis times. 

One of my key takeaways is that you really do have to think like an attacker all over again. Even if you were the incumbent, even if you were the leader before this pandemic, you’re now the attacker, so you must take the steps that attackers take.

Over the past six months, we have attacked by creating new global capabilities and rearchitecting processes—from net revenue management, to marketing as a function, to direct business models—with a focus on delivering our products to market with greater speed, agility, personalization and precision than ever before. 

The next challenge is to figure out how to embrace this approach even when the urgency has receded. In my company, this means experimenting with new digital working and training practices, reimagining physical spaces from the factory to the grocery store. And, evolving the roadmap for unconventional partnerships and acquisitions. What does the freedom to fail forward look like for your team?

What’s next…

IN THE DIGITAL NEXT NORMAL?

What’s Next in the Digital Next Normal?

I had a chance to live the prequel of this journey in China, where the 2003 SARS outbreak (among other things) is credited with pushing the county to the digital-first future into which the rest of the world is now embarking.

Thinking back on it, I am reminded that life in that future is dynamic and invigorating. It is full of chances to chase down new ideas, nimbly pivot, and continuously improve along the way.

I am optimistic about the opportunities to re-imagine and re-engineer. Please join me, and let us share successes and leadership learning along the way.

  

Davos Reflections: Tech Transformation and 4 Steps to Get There

 I’m happy to be home from a whirlwind trip to the World Economic Forum, where it was my privilege to meet and hear from thought leaders who are the shaping the world across different walks of life. Things have been hectic since my return, and I appreciated the opportunity of the long President’s Day weekend to reflect on my experiences.

During my three days, I packed in 27 sessions, multiple dinner discussions, 1 creativity retreat, and countless captivating conversations. One of my highlights was a dinner with 3 Nobel Laureates – Joseph Stiglitz, Robert Shiller, and Brian Schmidt. What an incredible brain trust! 

Across my interactions, a single recurrent word stuck with me: TRANSFORMATION.

Below, I’ll dig into that and share my Davos-inspired Transformation Roadmap for 2020. 

TECH LEADERS MUST THINK TRANSFORMATION, NOT PROCESS AUTOMATION

“We live in a world of disrupt or be disrupted.
Every CEO has an obligation to become the chief transformation officer.”

This exhortation from Salesforce CEO Keith Block kicked off a lively discussion about the role of leaders in the 4th Industrial Revolution. “Transformation” is a lofty word, so let’s break it down. 

The WEF introduced the term “4th Industrial Revolution” (4th IR) in 2016. (See my recap here.) It describes the fusion of our physical, digital, and biological worlds, a process that started around the turn of the millennium. This fusion has undoubtedly increased over the past few years, as showed by a couple of statistics that jumped out at me in Davos:

By 2022 60% of the global GDP will be digitized.

Further, 70% of new economic growth will come from digitally-enabled platforms.

These numbers are striking if you pause to reflect. We live in a world where an overwhelming number of new sources of value (over two-thirds of them) are digital. This might be something we know, but what does it mean? 

It means that every leader in every organization is by default a tech leader. Further, it requires us to understand that tech leadership is not about automating existing processes or making sure we have the fastest network or the right new software systems. Rather, it is about having the foresight to understand how the 4th IR will disrupt our organization and transform it accordingly.

My interactions at Davos suggested a few strategies for success, which I highlight in my Tech Transformation Roadmap below.

Step 1: THINK ABOUT THE SHIFT FROM PRODUCT TO PLATFORM

In the 4th IR, every company must become a digital platform to survive. Platform companies, by the Davos definition, are organizations created by common sets of utilities and data that adds value for customers. PayPal and Venmo are great examples of how a digital platform can disrupt a brick and mortar industry. 

Shifting from physical company to digital platform can be a daunting step. In Davos, I was reminded that going back to the basics and asking a few simple questions can help companies successfully transition. Fundamental questions, like: “What business are we really in?” “Why do we deserve to exist as a company?” “Where can we add the most value for digitally-enabled consumers?”

In one of my sessions, I enjoyed hearing Stephanie Linnartz talk about her company’s journey from hotelier to platform. Marriot invested in consumer data to create a digital offering to compete with Expedia & Airbnb, understanding that their value comes from experiences not physical hotel buildings. They have assembled an array of villas and homes for rental via their website. And, they are looking at expanding to offer home sharing, food service, and credit via 3rd party partners. Viola, a simple recognition of their true business offer sparked the beginning of the journey from company to platform.

Step 1 Takeaway: To drive transformation from conventional company to platform, ask what business you are really in. 

Step 2: CONSIDER HOW TECH CAN PROPEL YOUR PLATFORM

Every company is swimming in data, and my Davos sessions hummed with the buzzwords: quantum, edge, cloud computing, 5G. The common thread was that all of these innovations these are converging to provide 5G-driven connectivity. Tech is facilitating a faster-better-deeper understanding of the world for companies across industry. 

Amidst this revolution, an interesting Davos insight: business leaders aren’t doing a great job harnessing the power of tech. Only 10% of companies investing in new technology are getting ROI. Why? Because the use cases are not well defined, and there is too much emphasis on process automation vs. transforming the business. 

As leaders, we can’t necessarily predict where tech will be even 1 year from now. We can, however, be more strategic by stepping back to think about what our organization needs to do better-faster-smarter and how tech can help facilitate. We can then prioritize so that execution follows a broader transformation strategy.

At PayPal, I learned this means using real-time data to identify underserved financial deserts and make small business loans in minutes vs. the weeks required by traditional banks. For a CPG company, it might mean using data to drive innovation. Davos fun fact: did you know 1 pack of milk generate 170 MB of data? Imagine what that data could do in the hand of an AI-enabled innovation team!

Step 2 Takeaway: What business needs can your company use technology to address? What do you need to do smarter, faster, and in a more connected way? Start there with tech efforts and dollars.

Step 3: THINK CRITICALLY ABOUT THE ROLE OF AI

There was no argument among Davos attendees that Artificial Intelligence is emerging as a powerful tool. Alphabet’s Sundar Pichai expressed the view that it’s impact on humanity will be “profound,” possibly as disruptive as the invention of fire. 

For leaders, the point around AI-enabled transformation goes back to the need for a high-level vision. A recent HBR article noted that only 8% of firms engage in core practices that support widespread AI adoption. Most have run only ad hoc pilots or apply AI in a single business practice. It’s not surprising, then, to learn that most organizations have had limited success, with AI initiatives failing to show ROI or scale. 

I appreciate the simple and straightforward process Bain proposes to change this, which goes something like: (1) Explore potential use cases. (2) Test scalability and potential value. (3) Select 2-3 to solve the most business urgent needs and start there. It is one I am continuing to advocate and guide within my own organization. 

Step 3 Takeaway: To develop an AI action plan that will return investment and scale, identify 2-3 important business needs and explore how your data can help solve them.

Step 4: HONE HUMAN LEADERSHIP TRAITS TO LEAD TRUE TRANSFORMATION

As I mentioned, one of my Davos highlights was a dinner discussion with 3 Nobel Laureates from the fields of economics and physics. A peek at my notes is revealing and maybe a little surprising for it’s lack of technical ideas or disciplinary terms…

1. Always important to experiment and be OK with mistakes

2. Make time for self-learning

3. The essence of learning is making new connections

4. Some ideas take a long time to gestate; remember science advanced one atom at a time!

5. Create the future by creating hypotheses about what it could look like; in this process multi-disciplinary teams provide fresh perspective and new ideas

While these luminaries come from fields quite different than my own, it was reinvigorating to discover an overlap in leadership values between their worlds and mine. Intellectual curiosity, love of learning, cultivating a diverse perspective, and accepting a few mistakes around the way. These principles have served great leaders throughout history and will continue to guide us into the heart of the 4th IR.

As we continue down the path of re-imagining our organizations for the digital age, let us take our cue from the Laureates and hone time-tested leadership qualities to help us. May we grant ourselves time for new learning and dot connecting and the courage to embrace a fail-fast approach along the way!