First session: How the change imperative will continue to shake business in the next three years
The Big Rethink has officially begun.
Vjiay Vaitheeswaran of the Economist and Martin Temple of the EEF opened, setting the agenda for the discussion for the next two days: how design can help us get out of the mess we're in. It's a good move to get two people who aren't designers by trade to open by asserting the power of design in not just 'business', but in meeting the global challenges we face today - which obviously will affect, and be affected by, business. However, they are preaching to a room of the converted. It will be interesting to see how and if anyone disputes this view over the next couple of days, (but as most of the attendees will have paid 1.5k to be here: I think it's unlikely.)
Attendees range from designers to business, economists and civil servants. We have a great line-up of speakers, and a slightly disappointing turn-out—the lecture hall is not full. It quickly becomes apparent that the format of discussion is better suited to the fast-paced presenters. And the first session of the morning has set the pace—very snappy indeed, perhaps to match the pace of change in the outside world on which we are here to reflect. (We've been given little remote controls to text in answers and questions.) Short shrift was given by VV to the lengthy intervention during Q&A.
Robin Bew: How the change imperative will continue to shake business in the next 3 years
Welcome to the new world of business, definitely not the same as the old world of business.
Robin Bew, Editorial Director and Chief Economist at the Economist Inteligence Unit, steps up to the platform and describes the scorched earth that is the world's economy and reminds us of the recent traumatic past.
Robin's the only economist presenting at the conference over the next few days so he doesn't want to miss the opportunity to pile on the learnings and share his recent experience.
At the start of the recession many companies were in denial about what the effects of the credit crunch were going to be, everyone knew it was going to be tough but tough for someone else. This was followed by very draconian steps by businesses to rein things back in as they realised that as the tide ran out every ship was lowered. Losing 30% of revenues over the last 18 months was not unusual. Those that survived have changed and changed permanently. Costs and outlays have been slashed and Robin sees this as a semi-permanent thing.
And the consequence of this slash and burn reaction? Strategic thinking was sidelined. Robin believes that now is the time to think bring back strategy, but a new strategy as things just will not return to the 90s. Cheap credit will remain much more limited because of the fragility of the financial institutions and anyway fewer companies will be wanting credit because their own businesses and associated business models are too weak to leverage investment.
Joblessness is looking as if it will also be a major problem, perhaps creating a permanent division in society between those inside the working world and those outside.
In previous decades we have been able to fall back on public finances to help business and society, this is no longer an option. Our alternative? Well developing markets are looking much more attractive.
Robin concludes that the rest of this conference needs to address the significant change in the economy and that that will need to be reflected in significant changes in our businesses. He suggests that we look to immediate sources of value rather than trying to develop momentum to sustain our businesses.
What sort of business strategies will be successful? The only guarantee is the successful ones won't be the old strategies.
Will Hutton: Identifying the new value drivers in business
Will Hutton, author of the State we're in, which was published at the advent of the Blair revolution, was invited up on to stage by VV to give his thoughts at another critical electoral turning point.
He opened with a damning criticism of the UK in comparing the various OECD stimulus packages. No matter what government was saying, and in spite of strenuous efforts by Mandelson, it's clear from the numbers that the character of the UK intervention was extremely not about innovation or investment (as compared with Korea, Australia, Canada, germany, US, sweden - which were all much higher than UK by several orders of magnitude)
He believes we've been living in a dreamland based on north sea oil in the 80s and financial markets in the 90s, and he wielded several facts about the key sectors that witnessed job growth (construction, finance, the public sector). However this type of presentation is not best suited to the slow digestion that facts and figures require of an audience.
Soundbites are more favourable and he had a few: 'we are without an eco-innovation system.' And 'the rise of the knowledge economy is the story of the next 30 years.' So, like so many, WH puts his eggs in the knowledge economy basket. Let's hope it's as good as we think it is.
The weighty intellect of Hutton was no doubt at a disadvantage in this format of discussion. However it bruisingly revealed itself in Q&A as he came down heavily on an accusation that he was taking a post-colonial stance to China.
Nick Jankel: How to collaborate to solve business' biggest problems
Nick Jankel (@mind_maverick) takes to the stage after a slightly disappointing Will Hutton (I've heard Will before and I'm not sure he's well suited to these short 10-15 presentation slots). Nick is CEO at WeCreate and describes himself as a Collaborative Innovation Pioneer and Media Philospher and his focus is 'How to collaborate to solve business' biggest problems'.
Nick's presentation style is much better suited to the quick fire session. We're taken on a journey from the 1930's and Alfred Slon introduction of the line manager and KPIs, and a period of authoritarian marketing where Pavlov's dog ruled - marketers whistle and we buy. To a 21st Century post-industrial economy where monolithic media is collapsing under it's own weight and the agile consumer is using social media to interact with each other and undermine brands they dislike.
Summing up we've moved, or are moving, from a mechanistic, linear approach to business to a networked and collaborative model. Nick claims that this inherently disruptive and that this shifts power. As power is shifts hierarchy is subverted.
Nick bombards us with sound bites 'petabyte intelligence', 'augmented reality', 'web to world', 'culture creates change' and briefly explains them but it is difficult to digest such a rapid stream of nuggets. He promises he'll upload his presentation and provide notes at www.wecreate.cc
We're all being changed from cogs in the machine, hopeful to intelligent independent interdependent self-organisation individuals.
We're left with 10 key trends that businesses looking to leverage this new environment should embrace:
nurture collaborative natures
cycle between node and network
celebrate mavericks (the edges of your org)
trust peer leadership
mission motiv ated
Steve Evans: How climate change will drive business innovation
Steve Evans (Professor of Life Cycle Engineering, Cranfield University), working within a university system after a career in industry, spends much of his time, by his own admission, visiting companies,' observing and observing and boiling it down to the important messages.'
I've had several conversations with Steve before - and am always impressed at his ability to reposition problems, to see things differently, and this presentation didn't disappoint.
His focus is to stress the importance of the ways we see and interpret the world - and how changing that is crucial to changing behaviour.
All we need, to understand behaviour in the modern world, is Adam Smith and Darwin (apparently). The modern business world is built on the systems established during the industrial revolution - when labour was scarce and natural resources in abundance. Although now those conditions have reversed - we have no materials and 9bn people, business is still largely predicated on 19th century assumptions. We have to bear in mind that the industrial revolution did not plan to get us where we are today.
So we need to start seeing what we have in abundance and for free, see the growing global population as a resource of value-producing workers. (He listed some other things we're not likely to run out of: time, gravity, ideas, solar income.)
And in order to stop waste, we need to start seeing what we are wasting. If each individual can see the need to make a change we'll be able to stop 'sub-contracting' the problem to energy companies.
Steve talks in terms of paradigm shifts - changing world-views. And accordingly he ended with a challenge to business: most businesses (hopefully) started with a coherent idea, suited to the needs of a particular time and place. But the time and place is changing quickly, so the business model must do also. Incremental improvement won't do - your company just won't exist in a few years time - so when are you going to change?
This post is a combination of write ups from Jocelyn Bailey and Richard Sedley
[This post was blogged live from the Economist's Big Rethink conference in London