Oct 282015
european money

Europe risks heading into a ‘digital recession’ warn Bhaskar Chakravorti and Ravi Shankar Chaturvedi in the Harvard Business Review.

Chaturvedi and Chakravorti base their concerns on the Digital Innovation Index they created that looks at the sophistication and speed of digital change across fifty developed countries.

Most Northern European countries, along with Japan and Australia, were advanced but their rate of adoption was falling risking their economies dropping behind the researchers found.


The solution offered by the authors was for the countries to encourage investment, immigration and exports.

The only way they can jump-start their recovery is to follow what Stand Out countries do best: redouble on innovation and continue to seek markets beyond domestic borders. Stall Out countries are also aging. Attracting talented, young immigrants can help revive innovation quickly.

A striking problem in Europe is the state of e-commerce across the continent where consumers prefer to buy from US based sites than from those of fellow EU countries.

In many of the nations government Austerity policies have also hurt investment while risk averse cultures have discouraged innovation and new business formation.

For Europe, the risks of being left behind are real and with an aging population a fall in living standards is a likely possibility. It would be a shame if the European Union experiment ends up failing due to a digital recession.


Sep 302015

Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his latest book, Lethal Generosity.

In this book, Israel’s previous works include Naked Conversations and Age of Context which were both written in collaboration with Robert Scoble, he looks at the technological and social changes affecting business and how they can adapt to a rapidly evolving marketplace.

Key to that evolving marketplace is the explosion of data offering businesses deep insight into their customers. as Scoble describes in Lethal Generosity’s introduction in talking about social analytics service Vintank;

VinTank was acquired by a big PR agency that wants VinTank to do for all sorts of industries what it has done for the wine industry. Are you a restaurant or a winery ignoring that data? Go ahead and keep doing that for a decade. Your competition won’t.

Israel illustrates the need to watch the marketplace in citing a campaign where Canadian brewer Molsons completely wrong footed an oblivious competitor, something similar to how one bank discovered a rival’s successful marketing campaign through real time bank deposits data described  at the recent Splunk conference.

Focusing on the customers

A customer centric outlook, not looking at competitors but focusing on what consumers want is key to success in the new economy, Israel believes. This is enhanced by technologies that allow both products and marketing to be personalised as shown in the chapter detailing how retailers and airports are using beacons and data analytics in their operations.

One good example is AirBnB, while Israel trots out the ‘biggest hotel chain’ in the world fallacy that’s pervasive among commentators, its effects on the established industry has been profound and have forced hospitality operators around the world to re-evaluate their business models.

Israel suggests the best response for businesses affected by the ‘Uberization’ of their industries is to adopt the social and analytic tools and strategies being used the upstart businesses and he provides a wealth of examples.

Seamless sales

Tapingo, the food ordering service for US college students, illustrates the seamless experience that consumers are increasingly demanding in their shopping, business and leisure activities. Israel cites how Tapingo’s merchant partners are seeing an in-store traffic boost of 7 percent and a gross profit rise of 11 percent as a result of using the service.

Shel also illustrates some of the failures in deploying new technologies, specifically London’s Regent Street Alliance that failed due to poor execution and a failure to engage the marketplace.

One of the weakness in the book – which Israel acknowledges – is its focus on US, and specifically Bay Area, case studies. While there are some non-North American examples such as Australia’s Telstra and China’s Alipay, most of the examples cited are of companies based in or around San Francisco and Silicon Valley.

Focus on Millennials

Another weakness of the book is the over-focus on Millennials or Digital Natives. While this group is important that obsession risks Israel’s message being pigeonholed amongst the noise of poorly thought out pop demographics and poor analysis that marks much of the discussion around changing tastes and habits between generations.

Israel’s point that the post 1982 generation will soon outnumber older cohorts in both the workforce and the marketplace in the near future though is an important aspect for businesses to keep in mind with the safe certainties and predictable customer behaviour of the baby boom era being long gone.

However the shift in consumer and workplace behaviour is just as pronounced among all the post World War II generations as technology and the economy evolves in the early 21st Century. Focusing on the younger groups risks missing similar shifts among older members of the community.

The value of customer service

Ultimately though, Israel’s message is about customer service. Shel himself flags this is not new, in describing the competition between hiking goods suppliers The North Face and Sierra Designs in 1970s Berkeley.

What is different between today’s businesses and those of forty years ago is technology now allows companies to deeply understand their customers and provide customised marketing, products and experiences to the connected consumer.

For the business owner, manager or entrepreneur, Lethal Generosity is a good starting point to understand the forces changing today’s marketplace. The case studies alone are worth considering for how an organisation can adapt to a rapidly evolving world with radically shifting customer behaviour.

Sep 282015

“No business or brand has a divine right to succeed,” said McDonald’s CEO Steve Easterbrook last May.

As McDonalds’ management desperately try to adapt to a changed marketplace, Bloomberg Business spoke to some of those bearing the greatest risks – the fast food chain’s franchisees.

The expansion of menu items and the shift to more custom produced burgers is creating problems for franchisees and store managers as equipment and procedures designed for simpler times struggles with varying demands.

McDonalds is in a terrible bind as the company faces a society-wide shift in consumption that leaves its business model stranded at the same time that the market is wanting more customised products.

The latter is an aspect that many businesses whose success and profitability is based on mass production are now facing as customised products become easier and cheaper to produce.

While McDonalds isn’t likely to go out of business soon, the broader trends aren’t running in its favour. That’s bad news for both the company and its franchisees.

Jul 182015

As the world worries about whether China is the next Japan, the Japanese themselves are getting on with life in a low growth economy.

One of the latest ideas is to convert disused golf courses into solar energy farms as manufacturing giant Kyocera proposes a solution to deal with the nation’s power shortage after the closure of the Fukushima power plants.

Japan’s golf course boom of the 1980s, which they exported around the world, was a classic case of overinvestment driven by easy money and lax lending standards. Something that China has certainly had in spades.

The aging nation isn’t doing a perfect job however with the Washington Post reporting that the country’s over 65s are convicted of more crimes than juveniles and the sad reason is seniors are shoplifting to survive.

One of the major mistakes made by Japanese governments through the 1990s was to pour money into corrupt civil projects to stimulate the economy. That money was largely wasted on bridges to nowhere and bullet trains to tiny towns which did little to add to the nation’s productivity or build a safety net for the aging population.

Japan may well be leading the way for other aging nations, we need to heed their mistakes before our societies follow them.

Jun 102015
now hiring happy workers

Last week in Sydney recruitment company Indeed sponsored a Future of Work summit to tease out some ideas about the what jobs will look like in the future.

While I wasn’t able to attend, being in Melbourne to deliver the Managing the Data Age presentation, I did manage to attend a lunch where Paul D’Arcy, the head of Indeed’s Hiring Lab, spoke about some of the trends we’re seeing in the workplace.

“One of the things we see is the change in the role of work over time,” says D’Arcy. “There was a period before the industrial revolution where work was where natural resources were. With the industrial revolution there was a shift to where the companies were organised.”

The interesting thing with that view is that the companies of the early industrial revolution gathered where the natural resources were easily accessed and finish products could be shipped as we saw when visiting England’s Ironbridge, one of the birthplaces of modern industry.

D’Arcy sees technology changing the idea that work goes to the companies, “where people with highly in demand skills congregate then that’s where jobs are created.”

The employment centres of the future will be the cities that attract those highly skilled workers, D’Arcy believes.

Spreading the developer love

One of the changes Indeed has seen in the workplace is how coding has now become a widespread skill with three quarters of all software developers around the world being employed by software companies. In the US it’s only 7% of coders are working for pure tech organisations.

Marketing is one field that has seen a dramatic shift says D’Arcy, “marketing has seen an enormous shift from what was predominately a creative industry to one driven by data.”

One of the constant questions confounding those of us writing and speaking about the future of business is ‘what will be the jobs of the future?’ While D’Arcy didn’t really have that answer one of the points is clear that programming and coding will be among the skills in demand over the near future.

In the longer term it’s still not clear exactly what jobs will be in demand in twenty or thirty years time, then again twenty years ago who would have guessed many of the technology jobs in demand today would have even existed.

While we’re still struggling with what roles will define the workplace it’s clear the location of the workplace is changing as well. The worker of the future will be a much more mobile creature than today and that has ramifications for the future.

Jun 092015

The Twentieth Century was defined by abundant and cheap energy while this century will be shaped by our access to massive amounts of data.

How do managers deal with the information age along with the changes bought about by technologies like the Internet of Things, 3D printing, automation and social media?

Management in the Data Age looks at some of the opportunities and risks that face those running businesses. It was originally prepared for a private corporate briefing in June 2015.

Some further background reading on the topic include the following links.


May 172015
cheap robots cleaning computers

Once again the question of what happens to the jobs of today in the face of technology is raised in a Quartz story by Zake Kanter looking at how driverless cars will lost the US economy millions of jobs over the next decade.

Zake isn’t alone in this, just one study predicts half the US police workforce could be put out of work as autonomous vehicles take to the road.

Worrying about today’s jobs is understandable as it’s clear the news won’t be good for many occupations. However the discussion should be about what roles are going to be needed in the future.

Looking back

Should we go back a hundred years there were a huge number of people, primarily young boys, employed in cleaning roads of horse dung. The equine industries provided work for tens of thousands of workers ranging from skilled blacksmiths and buggy makers through to those unskilled street sweepers.

Most of those people lost their jobs and their careers became redundant as the age of the motor vehicle took over.

Yet those displaced eventually founds jobs – as mechanics, panel beaters, traffic cops and gas station workers – although for many the dislocation was tough.

Automotive transformation

The motor car also stimulated a transformation in society as it made travel easier and wide scale logistics viable. Those changes allowed supermarkets, drive-in theatres and fast food chains to develop, all of which were unthinkable at the beginning of the Twentieth Century.

Industries like fast food and the drive-in theatre were also driven by the demographic and social changes of the mid-Twentieth century as concepts like the teenager and the consumerist society were developed.

Demographics and economy

Those changes to demographics are important as well, the developed economies’ aging populations and shifting income patterns are going to determine the shape of society and the workforce even more so than technology.

For businesses and governments assuming the mid Twentieth Century consumerist economy is the future the next wave of change could be a difficult time. Even more so given that model of growth and employment was allowed to continue far beyond its natural life by the 1980s credit boom.

Credit, and banking, will be one of the challenging fields for the next decade as governments struggle with the consequences of guaranteeing institutions during the Global Financial Crisis along with the disruptions of higher frequency algorithmic trading, Big Data analytics and startups with new payments platforms.

Disruption everywhere

The disruptive effect on the banking industry by new technology will be repeated across sectors with startups and new business models challenging everyone from retailers to window cleaners, it’s not just the automotive industry that’s challenges.

While it’s difficult to predict exactly what the world is going to look like in 2025, it is clear that many industries and occupations will be struggling with a very changed world. The task for managers and business owners is to be aware of unexpected threats and opportunities.

Some of the opportunities are going to lie in studying statistics – essential in a world of big data – and learning the basics of software coding. Design is another area that is going to need many new workers.

For today’s workers, it’s more important than ever to be grabbing the skills required to be employed in the industries of the mid Twenty-First Century.