Why Your Talent Strategy Is the Key to Agile at Scale?

Why Your Talent Strategy Is the Key to Agile at Scale?

If you want to go fast, go alone. If you want to go far, go together. ~ African Proverb

The authors of the recent HBR article Agile at Scale make compelling arguments for why executives at leading enterprises should push their companies to become more agile.

In our experience working with leaders at 30% of the Fortune 1000, we’ve seen the importance of leaders reflecting agile principles in their own work, resourcing critical business initiatives with silo-busting teams, and thoughtfully sequencing agile rollouts as critical ingredients for success.

1. This isn’t just about innovationit’s about how your company works.

The article focuses on agility to drive innovation, and innovation teams are indeed promising places to pilot. We believe that this transformation to a more agile workforce need not center on innovation. It’s about getting work done faster, better, and more efficiently. Companies we see deploying an agile workforce effectively take the most important initiatives at the organization and use agile workforce concepts to deploy the best resources against them, regardless of where those resources are. This is consistent with the authors’ notions of removing bureaucracy and breaking through silos, and not just for innovation — indeed, for the most important work at the company. One leader at a Fortune 50 company framed it this way to us: agile lets his business operate more like a nimble flotilla of ships than like a large and lumbering tanker, which is especially important in rapidly-changing business conditions. It’s about prioritizing speed.

2. The days of Talent Acquisition are over. It’s time to think about Talent Access.

The article touches on the importance of changes in talent acquisition and motivation needed to support agile at scale. Reconsidering incentives, the role of managers, and performance management are all key. And we believe that this is just the tip of the metaphorical iceberg. Companies where we see successful agile workforce roll-outs stop building their talent strategy and infrastructure around talent acquisition (synonyms: purchase, possession, procurement) and instead build a competency in talent access (synonyms: connection, approach, introduction). This fits well with the idea of agile—which rests on the notion of engaging the right quantity of the right talent for a specific, well-defined mission. That does not always require a full-time employee—it just requires the right person with the right skills at the right time. Yes, talent will always include some portion of people with a company badge, and an agile workforce enables companies to engage employees in a more effective way. But it also includes the broader world of talent available to a company—freelancers, alumni, consultants. An organization should consider those options alongside employees and engage the best skills for the job to be done.

3. Ignore labor demographic trends at your own peril. 

Shifting from talent acquisition to talent access is consistent with the way the world is already working. People beyond the borders of your company are working in a more agile way, and leveraging technology tools that make it possible. You’ve probably noticed many of your colleagues are choosing to work more in a more agile fashion outside your organization. This isn’t just about commoditized work; in fact, many of the very best people — think those with the most niche skill sets — are choosing a different way of working. For enterprises with skills gaps across their organization, losing these talented people is untenable. To maintain access to them (which may include keeping them full-time, or may not), you need to change how you do work inside the company to provide a similar experience to what exists outside.

4. Invest in the proper infrastructure, or agile won’t work at scale.

As the article highlights, modularizing workstreams is important. That is difficult to do without technology. How are you modularizing work? How are you accessing and matching the right skills at the right time? How are you tracking outcomes? How will you do that across your entire organization? Without the right enabling technology, you may miss the mark. When you bring those tools into your company and allow people to engage projects they otherwise didn’t have access to, value results.

Imagine an internal version of the gig economy that enables you to discover and engage the skills and interests of your employees across the far-flung reaches of the company… What would it mean to your high-performers—and to your company—for them to be able to raise their hand and apply their talents on projects across your business? What would it mean for your organization to better understand the competencies that exist within the company, and to have visibility into the skills your colleagues go outside the company to engage?

5. Start small, think big, move fast.

As the article mentions, starting with a full-scale transformation to become radically agile is unlikely to lead to success. Starting small is critical. We also believe that small pilots must be designed with the end in mind. As you roll out tests in your organization, consider what you need to learn about what it would take at scale. We’ve seen companies start with pilots and think they’ve learned what it takes to scale, without realizing that there are fundamentally different implications for a scaled solution that can’t be tested in a smaller, controlled environment. If you’re still reading this and have ideas we haven’t considered, we’d love to hear your thoughts! And if you want to discuss further, we’re always happy to talk.Read more aboutCatalant’s take on workforce agility or download our recent research,Reimagining Work 2020.

Imagine an internal version of the gig economy that enables you to discover and engage the skills and interests of your employees across the far-flung reaches of the company

What would it mean to your high-performers—and to your company—for them to be able to raise their hand and apply their talents on projects across your business? What would it mean for your organization to better understand the competencies that exist within the company, and to have visibility into the skills your colleagues go outside the company to engage?

5. Start small, think big, move fast.

As the article mentions, starting with a full-scale transformation to become radically agile is unlikely to lead to success. Starting small is critical. We also believe that small pilots must be designed with the end in mind. As you roll out tests in your organization, consider what you need to learn about what it would take at scale. We’ve seen companies start with pilots and think they’ve learned what it takes to scale, without realizing that there are fundamentally different implications for a scaled solution that can’t be tested in a smaller, controlled environment. 

Leadership traits and the new talent ecosystem: What does it take to triumph?

Leadership traits and the new talent ecosystem: What does it take to triumph?

Leadership traits and the new talent ecosystem[1]: What are we speaking about? What do we mean by new talent ecosystem?

by Jean Luc Seguin CRHA – CHRP

First things first: an ecosystem is a community made up of living organisms and nonliving components such as air, water, and mineral soil. Ecosystems can be studied as structured systems and communities governed by general rules (Wikipedia).

The notion of a talent ecosystem is one in which everything on the people side of the business is connected – attracting and acquiring talent, managing, connecting and developing talent, understanding and planning talent. It is about the way an organization is and will manage critical capabilities to gain a competitive edge. In the new context of complex changes, executives and organizational leaders are facing unknown situations that may generate enormous puzzlement.

The complexity increases with the new way of sourcing and onboarding talent and building organizations. If, within this context, we react using established, obsolete strategies, skills and methods, seeking to obtain quick fixes in the short term, we may be putting the survival of our organization at risk. 

According to most of the major consulting firms, automation, cognitive computing, and crowdsourcing are paradigm-shifting forces that reshape the workforce and the way people are managed and interact. This is a great opportunity to rethink the way the C-suite leads and engages people to achieve results and create values. We will explore what type of leadership characteristics will be most beneficial in this new social and corporate environment.

According to Deloitte the top companies in those new paradigm-shifting forces are built around structures that encourage teams and individuals to meet, share information transparently and move from team to team, depending on the issue to be tackled. Organizations that empower their teams to make decisions and create this ability to move between teams without risk are critical characteristics of today’s high-performing and agile companies.

The successful organization would be the one empowering their people to make decisions and make them accountable for results. If people need freedom to act, think, perform, then organizations need their people to be accountable for results. In our world, one comes with the other. Before proposing what we think could be the right leadership traits in this new ecosystem, let us pause for a moment on those two critical characteristics in the workplace.

Empowerment and Accountability

According to the Cambridge dictionary, empowerment “is the process of gaining freedom and power to do what you want or to control what happens to you”.

Empower comes from the Latin noun “posse” meaning power, force, “to be able”, “have power”. It is someone armed with legal authority. Empowerment in the workplace is a philosophy and strategy that businesses use to entrust their employees with the power they need to make decisions and behave according to their understanding of business goals (Wiktionary).Empowering people to make decisions and relying on networks of interactions does not mean that people are no longer accountable for results.

‘Accountable’ comes from Medieval Latin imputabilisand from Modern Latin imputare “to charge, ascribe” (etymonline.com). Accountability (charging someone to deliver result) becomes more transparent as organizations use goal-setting to support success. It is then easier to measure and track. The sense of accountability this can create is critical to team and corporate effectiveness, and is among the top drivers of outstanding financial outcomes.If empowerment and accountability are two critical organizational traits, what type of leadership characteristics do we need for a dynamic new ecosystem?

Key leadership traits to triumph in the new environment

Facilitating the transition to the new paradigm requires executives and leaders to develop a set of attributes critical to engage and mobilize the new talent ecosystem.

There is no magic stick to engage people, especially when speaking about crowdsourcing. Nevertheless, if not all-embracing, there are key characteristics: authenticity, enthusiasms and resilience, creativity, and empathy and compassion.

Authenticity

“If you are your authentic self, you have no competition”Anonymous

Authenticity comes directly from Medieval Latin authenticus, from Greek authentikos “original, genuine, principal,” from authentes “one acting on one’s own authority” (online ethymology dictionary). In the modern world, authenticity means “true to one’s own personality, spirit, or character” (Merriam-Webster).

Janet Louise Stephenson, an American writer, teacher and social activist who wrote in the areas of civil rights, the women’s movement, the peace movement, the environment and the arts, said: “Authenticity requires a certain measure of vulnerability, transparency, and integrity.” Authenticity, with integrity, and a certain measure of vulnerability, would go a long way in engaging and mobilizing people around business vision and its execution. Humans can relate to one another more easily if the relationship is ingrained in honesty. Authenticity enhances credibility and reputation, as a positive differentiation to achieve effective leadership.

Enthusiasm and Resilience

“The happiest, most interesting people are those who have found the secret of maintaining their enthusiasm, that God within.”Earl Nightingale.

“The word ‘enthusiasm’ comes from the Greek word ‘entheos’ which means the God within. It is a great adjective for describing anything you do cheerfully.” Because it is vital to engaging the hearts and minds of all talent in the new ecosystem, enthusiastic leaders have the spark that can foster commitment and determination in people. They are the strong believers that inspire passion and the belief that we have the ability to achieve the unimaginable and create enchantment.As explained in a previous post by Jean-Luc’s, resilience is coming from the Latin verb “resilio”, literally “jump back,” “rebound, resist”. In physics, resilience is a term that characterizes the energy absorbed by a body during deformation (Test of Charpy). According to the French neuropsychiatrist Boris Cyrulnik, “Resilience is the ability of an individual to generate biological, psychological and social factors to resist, adapt and fortify himself in the face of a risk situation”. As a result, resilience generates individual, social and moral success. In a time of rapid and complex changes, a leader without resilience will drown in the midst of complexity and chaos.

Creativity

“Once we believe in ourselves, we can risk curiosity, creativity, wonder, spontaneous delight or any experience that reveals the human spirit”. E. E. Cummings

We often think about creativity as making something, but in fact the root meaning of the word means ‘to grow’. Though we’re tempted to think of creativity as having ties to the aesthetic world, creativity is a business tool as well – as leaders learn to look at challenges from different perspectives and find new opportunities emerge as a result.

According to the World Economic Forum, creativity is one of the fundamental skills toward 2020. It moved from the #10 skill set in 2015 to # 3 in 2020. It contributes, among other things, to the construction of an organizational culture to generate ideas and initiatives that will enrich the organization’s value, produce magic and rally people. 

Empathy and Compassion

“Love and compassion are necessities, not luxuries. Without them humanity cannot survive”. Dalai Lama

Empathy is the capacity to understand or feel what another person is experiencing from within. The English word empathy is derived from the Ancient Greek word empatheia, meaning “physical affection or compassion”.

According to Paul Ekman, an American psychologist and professor emeritus at the University of California, San Francisco who is a pioneer in the study of emotions, the term “empathy” is used to describe a wide range of experiences. It is generally defined as the ability to sense other people’s emotions, coupled with the ability to imagine what someone else might be thinking or feeling.The importance of empathy in business is rooted in data. 92% of HR professionals note that an empathetic workplace is a major factor for people retention.

Being empathetic in the workplace provides meaningful, concrete returns, it pushes people to listen to each other and care for one another. Coupled with compassion, it motivates people to go out of their way to help other people in the workplace which in return has a positive impact on business performance. Leading people to connect to one another helps sustain blooming companies built for the long term.

Into a New Adventure

As we move towards new organizational models with new types of interaction and networks, leaders need to embed in their fabrics simple human characteristics that shape the future, foster genuine engagement of people and in return, impact positively the bottom line.

Those key characteristics: authenticity, enthusiasm and resilience, creativity, and empathy and compassion are the lifeblood of brilliant possible outlooks. The more we tend to dehumanize our world, the more we need the cleanliness of the real self and the vibrant intensity of genuine encounters and relationships. The workplace isn’t different!


[1]Talent ecosystem is the new paradigm of people bringing and creating value for the organization from the most traditional form of being an employee to the most agile practice of crowdsourcing.

Four Ways Work Will Change in the Future

Four Ways Work Will Change in the Future

At a Stanford symposium, experts discuss shifting education expectations, technology’s impact, and new worker demands.

By Louise Lee

In the future, a traditional college degree will remain useful to build fundamental skills, but after graduation, workers will be expected to continue their education throughout their careers.

Workers, for instance, may increasingly pursue specific job-oriented qualifications or applied credentials in incremental steps in flexible, lower-cost programs, says Jeff Maggioncalda, chief executive of online learning company Coursera.

Maggioncalda, who received his MBA from Stanford Graduate School of Business in 1996, spoke at “The Future of Work,” an all-day symposium held at Stanford’s Frances C. Arrillaga Alumni Center on August 30.

Speakers explored the changing workplace, new possibilities for higher education, and technology’s impact on careers and industries.

Embracing the Liberal Arts

Students are hesitating to major in the humanities and social sciences out of fear that those degrees will lead only to low-wage jobs, says Harry Elam, Jr.., Stanford’s senior vice provost for education. Yet those fields remain crucially important to industry, which needs liberal arts students for countless tasks, such as to help understand biases in data, facilitate collaboration, bring insight, provide historical perspective, and “humanize technology in a data-driven world,” he says.

For instance, machines should not only function but should also optimize human welfare. What if a self-driving car needs to go faster than the speed limit to avoid an accident? Should that car be allowed to break the law? These kinds of questions of the new digital economy “all require diversity of thought, diversity of approach, and diversity of background to address these complex issues,” Elam says.Those who major in the humanities or social sciences, especially fields like philosophy and public policy, can easily develop transferable skills that employers value, says Trent Hazy, a current student at Stanford GSB and co-founder of MindSumo, a firm that connects college students with employers by inviting students to submit solutions to challenges that companies post online.

Because many employers seek candidates comfortable with data and data analysis, humanities majors who also learn some quantitative skills by taking classes in, say, statistics or logic will have an advantage over those who don’t, says Hazy.

Learning Throughout Life

Speakers generally agreed that the traditional brick-and-mortar college campus will certainly remain because the face-to-face encounters in and outside the classroom are educationally and socially valuable. After graduation, though, employees will increasingly need continuing education to stay competitive, and companies recognize that, says Julia Stiglitz, vice-president at Coursera who earned her Stanford MBA in 2010. Already, some large firms such as AT&T use online learning in a “massive reskilling effort” to re-train workers. “There are all of these educational opportunities that are open to anyone who has the will and desire and ability to go through it, and as a result I think we’re going to see all sorts of new people come into fields they otherwise wouldn’t have access to,” she says.Anant Agarwal, professor at Massachusetts Institute of Technology and chief executive of online learning firm edX, adds that workers may think of continual training and education through online classes as earning “micro-credentials” that could garner credit toward a full degree at a traditional institution. Individuals could earn multiple micro-credentials over years, perhaps beginning even with a “micro-bachelor’s” in high school as a head start on an undergraduate degree, he says.Michael Moe, co-founder of GSV Asset Management, notes that over the course of their careers, people will augment “the three R’s” of reading, writing, and arithmetic that they learned early in life with “the four C’s” of critical thinking, communication, creativity, and cultural fluency.

Restructuring Roles and Workweeks

Research suggests that by 2030, about half of today’s jobs will be gone. Speakers agreed that automation will perform many current blue-collar and white-collar jobs, while independent contractors will fill a large fraction of future positions. Robots and other automation in the short term will displace individual workers, but technology over the long term is likely to create new economic opportunity and new jobs. “While automation eats jobs, it doesn’t eat work,” says Moe.Future workers’ attitudes toward employment will be different from those of today’s workers, forcing companies to change how they recruit and retain. In a survey of college students, respondents indicated that they highly value work-life balance and are interested in working from home one or two days a week, says Roberto Angulo, chief executive of AfterCollege, a career network for college students and recent graduates. “Students are switching from living for their work and shifting more toward making a living so they can actually enjoy life,” he says.Other shifts in demographics will force employers to rethink how they structure work and benefits. Many aging “baby boomers,” for instance, are remaining in the workforce past the traditional retirement age of 65 and may demand fewer hours or shorter workweeks. “There are different things people value at different ages,” says Guy Berger, economist at LinkedIn.

Aiming for Equity

Companies are committing to a diverse workforce for varying motivations. Some believe that diverse teams are just “smarter and more creative,” says Joelle Emerson, adjunct lecturer at Stanford GSB and founder and chief executive of diversity strategy firm Paradigm. Other firms, especially technology companies, believe that they’re disproportionately responsible for designing the future and therefore it’s simply wrong to leave entire communities out of their teams, Emerson says.Overall, Emerson adds, companies must understand that the same strategies that increase diversity also boost a range of other positive outcomes as well. For instance, “When people feel like they belong at work, they perform significantly better,” she says. They take fewer sick days and less time off.Speakers cited various initiatives designed to increase inclusion, such as reacHire, which trains and supports women re-entering the workforce, and Stanford’s Distinguished Careers Institute, which brings individuals with 20 to 30 years of career experience to campus for a year of “intergenerational connection” and learning with undergrads and graduate students. “There are so many people who are not 18- to 22-year-olds who are still interested in being alive, alert, connected, and contributing,” says Kathryn Gillam, the institute’s executive director.“Diversity is a fact, inclusion is a practice, equity is a goal,” says Dereca Blackmon, Stanford associate dean and director of the Diversity and First Generation Office.

Competing in a World Without Borders | Curated Thoughts for Founders & CEOs

Competing in a World Without Borders | Curated Thoughts for Founders & CEOs

Curated Thoughts for Founders & CEOs | By Helena M. Herrero L.

Article by Venkat Atluri, Miklós Dietz, and Nicolaus Henke.

Rakuten Ichiba is Japan’s single largest online retail marketplace. It also provides loyalty points and e-money usable at hundreds of thousands of stores, virtual and real. It issues credit cards to tens of millions of members. It offers financial products and services that range from mortgages to securities brokerage. And the company runs one of Japan’s largest online travel portals—plus an instant-messaging app, Viber, which has some 800 million users worldwide. Retailer? Financial company? Rakuten Ichiba is all that and more—just as Amazon and China’s Tencent are tough to categorize as the former engages in e-commerce, cloud-computing, logistics, and consumer electronics, while the latter provides services ranging from social media to gaming to finance and beyond.

Organizations such as these—digital natives that are not defined or constrained by any one industry—may seem like outliers. How applicable to traditional industries is the notion of simultaneously competing in multiple sectors, let alone reimagining sector boundaries? We would be the first to acknowledge that opportunities to attack and to win across sectors vary considerably and that industry definitions have always been fluid: technological developments cause sectors to appear, disappear, and merge. Banking, for example, was born from the merger of money exchange, merchant banking, savings banking, and safety-deposit services, among others. Supermarkets unified previously separate retail subsectors into one big “grocery” category. Changes such as these created new competitors, shifted vast amounts of wealth, and reshaped significant parts of the economy. Before the term was in vogue, one could even say the shifts were “disruptive.”

Yet there does appear to be something new happening here. The ongoing digital revolution, which has been reducing frictional, transactional costs for years, has accelerated recently with tremendous increases in electronic data, the ubiquity of mobile interfaces, and the growing power of artificial intelligence. Together, these forces are reshaping customer expectations and creating the potential for virtually every sector with a distribution component to have its borders redrawn or redefined, at a more rapid pace than we have previously experienced.

Consider first how customer expectations are shifting. As Steve Jobs famously observed, “A lot of times, people don’t know what they want until you show it to them.” By creating a customer-centric, unified value proposition that extends beyond what end users could previously obtain (or, at least, could obtain almost instantly from one interface), digital pioneers are bridging the openings along the value chain, reducing customers’ costs, providing them with new experiences, and whetting their appetites for more.

We’ve all experienced businesses that once seemed disconnected fitting together seamlessly and unleashing surprising synergies: look no farther than the phone in your pocket, your music and video in the cloud, the smart watch on your wrist, and the TV in your living room. Or consider the 89 million customers now accessing Ping An Good Doctor, where on a single platform run by the trusted Ping An insurance company they can connect with doctors not only for online bookings but to receive diagnoses and suggested treatments, often by exchanging pictures and videos. What used to take many weeks and multiple providers can now be done in minutes on one app.

Now nondigital natives are starting to think seriously about their cross-sector opportunities and existential threats that may lurk across boundaries. One example: We recently interviewed 300 CEOs worldwide, across 37 sectors, about advanced data analytics. Fully one-third of them had cross-sector dynamics at top of mind. Many worried, for instance, that “companies from other industries have clearer insight into my customers than I do.” We’ve also seen conglomerates that until recently had thought of themselves as little more than holding companies taking the first steps to set up enterprise-wide consumer data lakes, integrate databases, and optimize the products, services, and insights they provide to their customers. Although these companies must of course abide by privacy laws—and even more, meet their users’ expectations of trust—data sets and sources are becoming great unifiers and creating new, cross-sectoral competitive dynamics.

Do these dynamics portend a sea change for every company? Of course not. People will still stroll impromptu into neighborhood stores, heavy industry (with the benefit of technological advances, to be sure) will go on extracting and processing the materials essential to our daily lives, and countless other enterprises beyond the digital space will continue to channel the ingenuity of their founders and employees to serve a world of incredibly varied preferences and needs. It’s obvious that digital will not—and cannot—change everything.

But it’s just as apparent that its effects on the competitive landscape are already profound and that the stakes are getting higher. As boundaries between industry sectors continue to blur, CEOs—many of whose companies have long commanded large revenue pools within traditional industry lines—will face off against companies and industries they never previously viewed as competitors. This new environment will play out by new rules, require different capabilities, and rely to an extraordinary extent upon data. Defending your position will be mission critical, but so too will be attacking and capturing the opportunities across sectors before others get there first. To put it another way: within a decade, companies will define their business models not by how they play against traditional industry peers but by how effective they are in competing within rapidly emerging “ecosystems,” comprising a variety of businesses from dimensionally different sectors.

A world of digital ecosystems

As the approaching contest plays out, we believe an increasing number of industries will converge under newer, broader, and more dynamic alignments: digital ecosystems. A world of ecosystems will be a highly customer-centric model, where users can enjoy an end-to-end experience for a wide range of products and services through a single access gateway, without leaving the ecosystem. Ecosystems will comprise diverse players who provide digitally accessed, multi-industry solutions. The relationship among these participants will be commercial and contractual, and the contracts (whether written, digital, or both) will formally regulate the payments or other considerations trading hands, the services provided, and the rules governing the provision of and access to ecosystem data.

Beyond just defining relationships among ecosystem participants, the digitization of many such arrangements is changing the boundaries of the company by reducing frictional costs associated with activities such as trading, measurement, and maintaining trust. More than 80 years ago, Nobel laureate Ronald Coase argued that companies establish their boundaries on the basis of transaction costs like these: when the cost of transacting for a product or service on the open market exceeds the cost of managing and coordinating the incremental activity needed to create that product or service internally, the company will perform the activity in-house. As digitization reduces transaction costs, it becomes economic for companies to contract out more activities, and a richer set of more specialized ecosystem relationships is facilitated.

Rising expectations

Those ecosystem relationships, in turn, are making it possible to better meet rising customer expectations. The mobile Internet, the data-crunching power of advanced analytics, and the maturation of artificial intelligence (AI) have led consumers to expect fully personalized solutions, delivered in milliseconds. Ecosystem orchestrators use data to connect the dots—by, for example, linking all possible producers with all possible customers, and, increasingly, by predicting the needs of customers before they are articulated. The more a company knows about its customers, the better able it is to offer a truly integrated, end-to-end digital experience and the more services in its ecosystem it can connect to those customers, learning ever more in the process. Amazon, among digital natives, and Centrica, the British utility whose Hive offering seeks to become a digital hub for controlling the home from any device, are early examples of how pivotal players can become embedded in the everyday life of customers.

For all of the speed with which sector boundaries will shift and even disappear, courting deep customer relationships is not a one-step dance. Becoming part of an individual’s day-to-day experience takes time and, because digitization lowers switching costs and heightens price transparency, sustaining trust takes even longer. Over that time frame, significant surplus may shift to consumers—a phenomenon already underway, as digital players are destroying billions to create millions. It’s also a process that will require deploying newer tools and technologies, such as using bots in multidevice environments and exploiting AI to build machine-to-machine capabilities. Paradoxically, sustaining customer relationships will depend as well on factors that defy analytical formulae: the power of a brand, the tone of one’s message, and the emotions your products and services can inspire.

Strategic moves

The growing importance of customer-centricity and the appreciation that consumers will expect a more seamless user experience are reflected in the flurry of recent strategic moves of leading companies across the world. Witness Apple Pay; Tencent’s and Alibaba’s service expansions; Amazon’s decisions to (among other things) launch Amazon Go, acquire Whole Foods, and provide online vehicle searches in Europe; and the wave of announcements from other digital leaders heralding service expansion across emerging ecosystems. Innovative financial players such as CBA (housing and B2B services), mBank (B2C marketplace), and Ping An (for health, housing, and autos) are mobilizing. So are telcos, including Telstra and Telus (each playing in the health ecosystem), and retailers such as Starbucks (with digital content, as well as seamless mobile payments and pre-ordering). Not to be left out are industrial companies such as GE (seeking to make analytics the new “core to the company”) and Ford (which has started to redefine itself as “a mobility company and not just as a car and truck manufacturer”). We’ve also seen ecosystem-minded combinations such as Google’s acquisition of Waze and Microsoft’s purchase of LinkedIn. Many of these initiatives will seem like baby steps when we look back a decade from now, but they reveal the significance placed by corporate strategists on the emergence of a new world.

Value at Stake

While it might be tempting to conclude as a governing principle that aggressively buying your way into new sectors is the secret spice for ecosystem success, massive combinations can also be recipes for massive value destruction. To keep your bearings in this new world, focus on what matters most—your core value propositions, your distinct competitive advantages, fundamental human and organizational needs, and the data and technologies available to tie them all together. That calls for thinking strategically about what you can provide your customers within a logically connected network of goods and services: critical building blocks of an ecosystem, as we’ve noted above.

The actual shape and composition of these ecosystems will vary by country and region, both because of the effects of regulations and as a result of more subtle, cultural customs and tastes. We already see in China, for example, how a large base of young, tech-savvy consumers, a wide amalgam of low-efficiency traditional industries, and, not least, a powerful regulator have converged to give rise to leviathans such as Alibaba and Tencent—ideal for the Chinese market but not (at least, not yet) able to capture significant share in other geographies.

The value at stake is enormous. The World Bank projects the combined revenue of global businesses will be more than $190 trillion within a decade. If digital distribution (combining B2B and B2C commerce) represents about one-half of the nonproduction portion of the global economy by that time, the revenues that could, theoretically, be redistributed across traditional sectoral borders in 2025 would exceed $60 trillion—about 30 percent of world revenue pools that year. Under standard margin assumptions, this would translate to some $11 trillion in global profits, which, once we subtract approximately $10 trillion for cost of equity, amounts to $1 trillion in total economic profit.

Snapshots of the future

Again, it’s uncertain how much of this value will be reapportioned between businesses and consumers, let alone among industries, sectors, and individual companies, or whether and to what extent governments will take steps to weigh in. To a significant degree, many of the steps that companies are taking and contemplating are defensive in nature—fending off newer entrants, by using data and customer relationships to shore up their core. As incumbents and digital natives alike seek to secure their positions while building new ones, ecosystems are sure to evolve in ways that surprise us. Here is a quick look at developments underway in three of them.

Consumer marketplaces

By now, purchasing and selling on sites such as Alibaba, Amazon, and eBay is almost instinctive; retail has already been changed forever. But we expect that the very concept of a clearly demarcated retail sector will be radically altered within a decade. Three critical, related factors are at work.

First, the frame of reference: what we think of now as one-off purchases will more properly be understood as part of a consumer’s passage through time—the accumulation of purchases made from day to day, month to month, year to year, and ultimately the way those interact over a lifetime. Income and wealth certainly have predictive value for future purchases, but behavior matters even more. Choices to eat more healthily, for example, correlate to a likelihood for higher consumption of physical fitness gear and services, and also to a more attractive profile for health and life insurers, which should result in more affordable coverage.

The second major factor, reinforcing the first, is the growing ability of data and analytics to transform disparate pieces of information about a consumer’s immediate desires and behavior into insight about the consumer’s broader needs. That requires a combination of capturing innumerable data points and turning them, within milliseconds, into predictive, actionable opportunities for both sellers and buyers. Advances in big data analytics, processing power, and AI are already making such connections possible.

This all generates a highly robust “network factor”—the third major force behind emerging consumer marketplaces. In a world of digital networks, consumer lenders, food and beverage providers, and telecom players will simultaneously coexist, actively partner, and aggressively move to capture share from one another. And while digitization may offer the sizzle, traditional industries still have their share of the steak. These businesses not only provide the core goods and services that end users demand, but often also have developed relationships with other businesses along the value chain and, most important, with the end users themselves. Succeeding in digital marketplaces will require these companies to stretch beyond their core capabilities, to be sure, but if they understand the essentials of what’s happening and take the right steps to secure and expand their relationships, nondigital businesses can still hold high ground when the waves of change arrive.

B2B services

The administrative burdens of medium, small, and microsize companies are both cumbersome and costly. In addition to managing their own products and services, these businesses (like their larger peers) must navigate a slew of necessary functions including human resources, tax planning, legal services, accounting, finance, and insurance.

Today, each of these fields exists as an independent sector, but it’s easy to imagine them converging within a decade on shared, cloud-based platforms that will serve as one-stop shops. With so many service providers available at the ease of a click, all with greater transparency on price, performance, and reputation, competition will ramp up and established players can anticipate more challengers from different directions. At the same time, it’s likely that something approaching a genuine community will develop, with businesses being able to create partnerships and tap far more sophisticated services than they can at present—including cash-planning tools, instant credit lines, and tailored insurance.

Already, we can glimpse such innovations starting to flourish in a range of creative solutions. Idea Bank in Poland, for example, offers “idea hubs” and applications such as e-invoicing and online factoring. ING’s commercial platform stretches beyond traditional banking services to include (among other things) a digital loyalty program and crowdfunding. And Lloyds Bank’s Business Toolbox includes legal assistance, online backup, and email hosting. As other businesses join in, we expect the scope and utility of this space to grow dramatically.

Mobility

Finally, consider personal mobility, which encompasses vehicle purchase and maintenance management, ridesharing, carpooling, traffic management, vehicle connectivity, and much more. The individual pieces of the mobility puzzle are starting to become familiar, but it’s their cumulative impact that truly shows the degree to which industry borders are blurring.

Emerging priorities for the borderless economy

These glimpses of the future are rooted in the here and now, and they are emblematic of shifts underway in most sectors of the economy—including, more likely than not, yours. We hope this article is a useful starting point for identifying potential industry shifts that could be coming your way. Recognition is the first step, and then you need a game plan for a world of sectors without borders. The following four priorities are critical:

  • Adopt an ecosystem mind-set. The landscape described in this article differs significantly from the one that still dominates most companies’ business planning and operating approaches. Job one for many companies is to broaden their view of competitors and opportunities so that it is truly multisectoral, defines the ecosystems and industries where change will be fastest, and identifies the critical new sources of value most meaningful for an expanding consumer base. In essence, you must refine your “self vision” by asking yourself, and your top team, questions such as: “What surprising, disruptive boundary shifts can we imagine—and try to get ahead of?” and “How can we turn our physical assets and long-established customer relationships into genuine consumer insights to secure what we have and stake out an advantage over our competitors—including the digital giants?” That shift will necessarily involve an important organizational component, and leaders should expect some measure of internal resistance, particularly when existing business goals, incentives, and performance-management principles do not accord with new strategic priorities. It will also, of course, require competitive targeting beyond the four walls of your company. But resist the impulse to just open up your acquisition checkbook. The combinations that make good sense will be part of a rational answer to perennial strategic questions about where and how your company needs to compete—playing out on an expanding field.
  • Follow the data. In our borderless world, data are the coins of the realm. Competing effectively means both collecting large amounts of data, and developing capabilities for storing, processing, and translating the data into actionable business insights. A critical goal for most companies is data diversity—achieved, in part, through partnerships—which will enable you to pursue ever-finer microsegmentation and create more value in more ecosystems. Information from telecommunications-services players, for example, can help banks to engage their customers and make a variety of commercial decisions more effectively. Deeper data insights are finally beginning to take ideas that had always seemed good but too often fell short of their potential to turn into winning models. Consider loyalty cards: by understanding customers better, card providers such as Nectar, the largest loyalty program in the United Kingdom, and Plenti, a rewards programs introduced by American Express, can connect hundreds of companies of all sizes and across multiple industries to provide significant savings for consumers and new growth opportunities for the businesses that serve them. Meanwhile, the cost of sharing data is falling as cloud-based data stores proliferate and AI makes it easier to link data sets to individual customers or segments. Better data can also support analytically driven scenario planning to inform how ecosystems will evolve, at which points along the value chain your data can create value, and whether or where you can identify potential “Holy Grail” data assets. What data points and sources are critical to your business? How many do you have? What can you do to acquire or gain access to the rest? You should be asking your organization questions like these regularly.
  • Build emotional ties to customers. If blurring sector boundaries are turning data into currency, customer ownership is becoming the ultimate prize. Companies that lack strong customer connections run the risk of disintermediation and perhaps of becoming “white-label back offices” (or production centers), with limited headroom to create or retain economic surplus. Data (to customize offerings), content (to capture the attention of customers), and digital engagement models (to create seamless customer journeys that solve customer pain points) can all help you build emotional connections with customers and occupy attractive roles in critical ecosystems. You should continually be asking your organization, “What’s our plan for using data, content, and digital-engagement tools to connect emotionally with customers?” and “What else can we provide, with simplicity and speed, to strengthen our consumer bond?” After all, Google’s launch of initiatives such as Chrome and Gmail, and Alibaba’s introduction of enterprises such as Alipay and the financial platform Yu’E Bao, weren’t executed merely because they already had a huge customer base and wanted to capture new sources of revenue (although they did succeed in doing so). They took action to help ensure they would keep—and expand—that huge customer base.
  • Change your partnership paradigm. Given the opportunities for specialization created by an ecosystem economy, companies need more and different kinds of partners. In at least a dozen markets worldwide—including Brazil, Turkey, and several countries in Asia, where in many respects data are currently less robust than they are in other regions—we’re seeing a new wave of partnership energy aimed at making the whole greater than the sum of its parts. Regardless of your base geography, core industry, and state of data readiness, start by asking what white spaces you need to fill, what partners can best help with those gaps, and what “gives” and “gets” might be mutually beneficial. You’ll also need to think about how to create an infrastructural and operational framework that invites a steady exchange with outside entities of data, ideas, and services to fuel innovation. Don’t forget about the implications for your information architecture, including the application programming interfaces (APIs) that will enable critical external linkages, and don’t neglect the possibility that you may need to enlist a more natural integrator from across your partnerships, which could include a company more appropriate for the role, such as a telco, or a third-party provider that can more effectively connect nondigital natives. And don’t assume that if you were to acquire a potential partner, you’d necessarily be adding and sustaining their revenues on a dollar-for-dollar basis over the long term.

No one can precisely peg the future. But when we study the details already available to us and think more expansively about how fundamental human needs and powerful technologies are likely to converge going forward, it is difficult to conclude that tomorrow’s industries and sector borders will look like today’s. Massive, multi-industry ecosystems are on the rise, and enormous amounts of value will be on the move.

Companies that have long operated with relative insularity in traditional industries may be most open to cross-boundary attack. Yet with the right strategy and approach, leaders can exploit new openings to go on offense, as well. Now is the time to take stock and to start shaping nascent opportunities.

How ‘social intelligence’ can guide decisions

How ‘social intelligence’ can guide decisions

Aug 14, 2017: Weekly Curated Thought-Sharing on Digital Disruption, Applied Neuroscience and Other Interesting Related Matters.

By Martin Harrysson, Hugo Sarrazin and Estelle Metayer

Curated by Helena M. Herrero Lamuedra

In many companies, marketers have been first movers in social media, tapping into it for insights on how consumers think and behave. As social technologies mature and organizations become convinced of their power, we believe they will take on a broader role: informing competitive strategy.

In particular, social media should help companies overcome some limits of old-school intelligence gathering, which typically involves collecting information from a range of public and proprietary sources, distilling insights using time-tested analytic methods, and creating reports for internal company “clients” often “siloed” by function or business unit.

Today, many people who have expert knowledge and shape perceptions about markets are freely exchanging data and viewpoints through social platforms. By identifying and engaging these players, employing potent Web-focused analytics to draw strategic meaning from social-media data, and channeling this information to people within the organization who need and want it, companies can develop a “social intelligence” that is forward looking, global in scope, and capable of playing out in real time.

This isn’t to suggest that “social” will entirely displace current methods of intelligence gathering. But it should emerge as a strong complement. As it does, social-intelligence literacy will become a critical asset for C-level executives and board members seeking the best possible basis for their decisions.

From identifying data to mapping people and conversations

Social media creates a new information map. Competitive analysts today differentiate between primary sources of information (from experts, competitors, employees, and suppliers), on the one hand, and secondary sources (such as published data, articles, and market research), on the other. Social intelligence operates on a different plane, identifying people and their conversations in social spaces. Its logic is that if you can find the right “curators” and experts collecting and channeling vital, accurate information, that eliminates the need for extensive searches of traditional databases and published information. Identifying the right people ultimately should induce companies to join existing online conversations and even shape them. This real-time information may help preempt key actions of competitors or lead to adjustments of strategy.

Intelligence analysts often report exclusively to a single department, such as communications, marketing, or strategy. That can make analysts gravitate toward the approved pattern of thinking within their function, potentially limiting the breadth of insight they distill and sometimes even interfering with their judgment. Curating a variety of perspectives from multiple social-media sources should help internal checks and balances play out more freely and, in some cases, lead to necessary whistle-blowing. To reinforce this diversity of thought, companies can embed analysts across the organization in functions ranging from strategic planning and product development to R&D, customer service, and M&A planning.

As companies make such moves, they will probably need to update the profiles of their competitive-intelligence analysts. Recruitment from outside the company or even the industry can improve the odds that analysts will pick up a variety of signals that now may be missed. Leaders, too, will need to understand that decrypting weak signals may offer better strategic insights than the familiar patterns traditional intelligence sometimes serves up.

From data gathering to engaging and tracking

Analysts typically spend 80 percent of their time gathering information before they begin to analyze it. Social intelligence radically alters this process. Numerous tools allow analysts to create dynamic maps that pinpoint where information and expertise reside and to track new data in real time. The most effective way of obtaining new information is to engage a carefully mapped network of experts on specific subjects.

Companies today normally hire people with outstanding research and analytical skills. But socially astute analysts will need more, such as the ability to manage and engage an online community of trend spotters and, above all, the curiosity to reach out for novel sources of expertise. In effect, they must become hunters of information rather than gatherers. Companies will need to invest in the tools, such as network-mapping and influence-rating metrics, that analysts need to manage these new networks—for example, by helping to assess the expertise and relevance of community members. An obvious corollary is that companies should also be trying to reduce the odds of competitors “hunting” them in social spaces by making their people aware of how easy it is to inadvertently divulge valuable information.

From analysis and synthesis to structuring and mining

Few analysts deploy tools robust enough to draw useful insights from the turbulent new streams of social data. Most use older-line approaches taught in business schools—such as standard SWOT. Even analysts who have dipped in the waters of social media often find themselves swimming upstream. Most of today’s techniques simply extract conversation flows found on the “usual suspects”: Facebook and Twitter.

Yet the availability of vast quantities of social-media data points has spawned an array of new analytic methods that can structure and derive insight from complex information. The range of analytical techniques has exploded, and to stay ahead of the game companies must tap new areas of expertise. Some may have to seek talented people from outside the organization who are familiar with the new methods or to invest heavily in upgrading the skills of current intelligence analysts. Central to this quest will be convincing senior leaders that the new methodologies are sound and the insights they provide will improve decision making. With little history and few case studies demonstrating their impact, this is often an uphill battle.

From reporting to curating and embedding

One complaint we often hear from analysts is that senior managers don’t act on the information channeled their way. There are good reasons for this inattention: intelligence reports often are formal documents sent by e-mail, broadcast by corporate newsletters, or posted on intranets. Content sometimes covers the waterfront of competitive topics, and information can be dated by the time it gets into decision makers’ hands.

By contrast, new social software now on the market lets companies rapidly, even automatically, curate highly pertinent information—from news sources, Web discussions by experts and influencers, freshly minted market data, and customer feedback. This software allows companies to produce “micro-publications” that can be dispatched to decision makers instantly. Almost any user within a company can therefore create a personalized information dashboard, which “democratizes” intelligence and embeds relevant data deep within the organization.


The information that companies need to meet competitive challenges is moving quickly from published and proprietary sources to the open, chaotic world of social platforms. Navigating this new environment effectively will require new skills and a willingness to engage in social conversations rather than merely assemble information. This is a mission that should extend across the organization. Senior executives can’t leave such important work to specialists. Social intelligence will sharpen strategic insights, and leaders must be immersed in the new information currents.