The New Future | 2014 Global Leadership Summit
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The New Future | 2014 Global Leadership Summit

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Costas Markides, Professor of Strategy and Entrepreneurship, presented on how the technologies of social era are changing the way we do business, at London Business School's flagship event, the Global ...

Costas Markides, Professor of Strategy and Entrepreneurship, presented on how the technologies of social era are changing the way we do business, at London Business School's flagship event, the Global Leadership Summit.

Learn more about what happened at #2014GLS: http://bit.ly/1tI2kNn
Learn more about the Global Leadership Summit: http://gls.london.edu

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The New Future | 2014 Global Leadership Summit Presentation Transcript

  • 1. The New Future: How the Technologies of the Social era are Changing the Way we do Business Professor Costas Markides London Business School
  • 2. Lots of Changes: • The technologies of the social era are changing our employees as people. • They are also changing how our employees work. • They are also changing our customers as people and how they shop. • They are changing how we can market to them. • They are changing the internal processes of the organisation. • They are changing the nature of competitive advantage • They are allowing the emergence of several new business models • And so on…
  • 3. The First Change: The new technologies are changing our employees as people: how they think, how they behave, how they work, what motivates them, what their values are…
  • 4. Your Employees Are Now: • Less attentive • More Informed • Less Loyal • More Connected • Less Patient • More Demanding
  • 5. The Evidence: Allow me to substantiate some of these claims…
  • 6. For Example: Research by Professor Gary Small, UCLA 1. Surfing the internet can physically rewire our neural pathways 2. Just 5 hours of exposure to the net is enough to change the structure of our brain. 3. The internet is altering our brains: • Cursory reading • Hurried and distracted thinking • Superficial learning • Attention span reduced to seconds
  • 7. Less “Loyal”: 1. Survey done at London Business School on young executives (avg. age 30). 2. Q: How long do you anticipate staying with your current employer?
  • 8. The Results #1: • 37% expect to stay for less than 2 years…
  • 9. The Results #2: • 90% of them intend to stay with their current employer for no more than 5 years.
  • 10. Similar Results from the USA: • The US Department of Labor estimated that today’s learners (that is 18-year olds) will have 10-14 jobs…
  • 11. Less Loyal: • The US Department of Labor estimates that today’s learners will have 10-14 jobs by the age of 38.
  • 12. There is no question: • Talent is now “less loyal”, more mobile, less constrained and more willing to “jump ship” • The Elephant (= our parents) versus the fleas (= Generation Y)
  • 13. Despite This: • People keep asking the wrong (20th century) question: “How can I attract the best talent to my organisation?”
  • 14. It’s the Wrong Question: • The key is not “how to attract the best talent”? • The key is “how do I retain the best talent?”
  • 15. Therefore: • How do you retain the best talent? • Sumantra Ghoshal: “tear up this envelope”
  • 16. It Gets Worse: • Today’s employees are not only “less loyal”. • They are also more connected, more informed, more mobile, more global, more “out of control”…
  • 17. More Connected: • Which thing in your life can you not live without?
  • 18. More Connected: • I cannot imagine life without: • My current partner: 43%
  • 19. More Connected: • I cannot imagine life without: • My current partner: 43% • A car: 64%
  • 20. More Connected: • I cannot imagine life without: • My current partner: 43% • A car: 64% • The Internet: 84%
  • 21. More Connected: • I cannot imagine life without: • My current partner: 43% • A car: 64% • The Internet: 84% • My mobile phone: 97%
  • 22. More Connected: Nomophobia • 53% of people in Britain suffer from nomophobia
  • 23. What is Nomophobia? • Nomophobia: The fear of being out of phone range…
  • 24. More Informed: • It’s been estimated that one week’s worth of NY Times contains more information than you got in your entire lifetime in the 18th century.
  • 25. More Informed: • In 2006, there were 2.7 billion searches on Google every month.
  • 26. More Informed: • In 2006, there were 2.7 billion searches on Google every month. • In 2012, the number was 31 billion (every month)
  • 27. More Global Citizens: • Get to learn what is happening around the world fast… • More likely to engage in a “cause” far away from home. • Have become more sensitive to other cultures…
  • 28. Less patient: The “Now” Era • Instant Messaging • Instant Feedback • Instant Gratification • Instant Information
  • 29. A New Employee • I could go on here… • But the key point is: You are now dealing with employees (and customers) that are fundamentally different from us or our parents.
  • 30. Therefore, to Repeat: • Change #1: The new technologies are changing your employees as people: how they think, how they behave, how they work, what motivates them, what their values are…
  • 31. Your Employees Are Now: • Less attentive • More Informed • Less Loyal • More Connected • Less Patient • More Demanding
  • 32. The Second Change: • Not only are the new technologies changing our employees as people, but they are also changing how they work.
  • 33. Decentralised Workaholics: • When do you stop work?
  • 34. Work All the Time: • 72% of Europeans take their mobile phones or iPads to bed! • The last thing they see before falling asleep and the first thing they check when they wake up is news…
  • 35. More Informed Workaholics: • 93% of executives take their blackberries on vacation. • (data provided by RIM)
  • 36. Interestingly: • 93% of executives take their blackberries on vacation. • 47% tell their partners that they left it at home.
  • 37. The Hierarchy is Dead: • Decentralised: Work from home, at the airport, at Starbucks…
  • 38. For Example: • In 2009, it was estimated that over 50 million US workers (40% of the working population) worked from home at least part of the time. • The forecast is that this number will jump to more than 75% by 2020.
  • 39. The Hierarchy is Dead: • Decentralised: Work from home, at the airport, at Starbucks… • Virtual Teams, Geographically-dispersed giving rise to the Network Organisation…
  • 40. The Hierarchy is Dead: • Decentralised: Work from home, at the airport, at Starbucks… • Virtual Teams, Geographically-dispersed giving rise to the Network Organisation… • From employees to Co-Creators: working with outsiders (non- employees) on common projects
  • 41. The Implications: • We now have to deal with people who have different expectations, behave differently and work in decentralised and networked environments…
  • 42. Two Questions: • How do we motivate these people? • How do we “control” these people?
  • 43. Possible Answers? • I don’t pretend to have all the answers but I know one thing for sure…
  • 44. How to Motivate Gen Y: • Increasingly, we will have to rely less and less on money to motivate people and more on “emotional” rewards: • A motivating sense of purpose • A unique and special culture
  • 45. For Example: • According to research at Princeton University, more than 85% of young people claim that the No. 1 thing they look for in their job is…
  • 46. What is it they want? • Meaning and a sense of purpose. • Why am I working here?
  • 47. Therefore: • Organisations will have to rely more and more on a strong and shared Sense of Purpose to attract and galvanize the best people to the organisation.
  • 48. For Example: • Facebook: Give People the power to share and make the world more open and connected. • Apple: We will change the way people think of computers (or music or TV or news…)
  • 49. But Please Note: • It is “strong” because you actively sold this purpose or vision to them and won their emotional commitment.
  • 50. Similarly: • The same thing applies to the question: “How do we control these people?”
  • 51. The Wrong Thing to Do: • You cannot “control” the new employee…[for example, how do you know if they are working or are “wasting time” on Facebook?] • And you certainly cannot “control” them with rules and regulations.
  • 52. How Then? • Exactly how you “control” your children… • Strong shared values as the “control” mechanism (rather than rules and regulations).
  • 53. But Note: • They are strong because you actively “sold” these values to them and won their emotional commitment. • Move your values from the wall to people’s hearts.
  • 54. A Key Question in all of this: • Do we have the right people for this? • Gen X leaders trying to manage Gen Y employees using “emotional” benefits?!
  • 55. The Third Change: • The same changes are affecting our customers. • They too are becoming less attentive, more demanding, less loyal, more connected, more informed. • As a result…
  • 56. As a result: • Not only are the new technologies changing our consumers as people, but they are also changing how they shop, how they buy and what they expect from you and your products.
  • 57. For Example: • Digital Natives: More and more online shopping (which is killing the high-street).
  • 58. Online Shopping • Companies have of course noticed this trend towards online shopping. • They have therefore tried to make the online shopping experience easier—further fuelling its growth.
  • 59. Technology: Online Product Presentation— Today’s Must-Have Standard Options
  • 60. Technology: Online Product Presentation – Today’s Must-Have Standard Options
  • 61. Technology: Online Product Presentation Trends – Interactivity
  • 62. Sub title Technology: Online Payment Trends
  • 63. The Result
  • 64. Sub title The Result: A New Organisation Needed Yesterday’s Functions Today’s Functions • Sales Manager • eCommerce Manager • Field people • Social Media Manager • Trade Marketing Manager • Content Manager • Promotion Manager • Web Designer • POS Manager • Online Promotion Manager • SEO & SEM Specialist
  • 65. Not only online but mobile as well: 1. More and more online shopping (which is killing the high-street). 2. More and more mobile shopping
  • 66. Are you a Mobile Shopper? • Percent of people who have done mobile shopping on smart phone or tablet (USA, 2012) Yes: 79 % No: 21%
  • 67. Sub title Web Traffic for a German Online Retailer Jan- Feb 2013 Jan – Feb 2014 % PC 4.1 m 3.6m -13% Tablet 0.7 1.2 +71% Smartphone 0.7 1.6 +130% Tablet and Smartphone as a % of total 25% 44%
  • 68. Digital, Online and Fully Informed • More and more online shopping (which is killing the high-street). • More and more mobile shopping • Much more informed consumers
  • 69. A Helping Hand • (US smartphone owners who have used their device to find a better price while shopping in store) • 2009: 15% • 2010: 40% • 2011: 59%
  • 70. Where do Consumers search first? Q2 2009 Q2 2012 Amazon 13% 30% Google 24% 18%
  • 71. More Informed and more Agile: • More and more online shopping (which is killing the high-street). • More and more mobile shopping • Much more informed consumers • Using technology to aid shopping
  • 72. Search One Way, Buy Another (Oct 2011) • Search on the PC and then buy in the store: 57% • Search in store, buy online: 38% • Search on Mobile, buy on the pc: 26% • Search on Mobile, buy in store: 24%
  • 73. Reliant on Word of Mouth: • More and more online shopping (which is killing the high-street). • More and more mobile shopping • Much more informed consumers • Using technology to aid shopping • More reliant on social media and recommendations from strangers
  • 74. Sub title How do You Buy Now? Generation X Generation Y I rely on recommendations from friends and family 66% 49% I rely on reviews by strangers and chatter on social media 62% 79%
  • 75. More Demanding, Less Forgiving: 1. More and more online shopping (which is killing the high- street). 2. More and more mobile shopping 3. Much more informed consumers 4. Using technology to aid shopping 5. More reliant on social media 6. More vocal
  • 76. The Implication: • Every single interaction with a customer has the potential to be either a global PR disaster or a PR triumph for us. • How do we ensure that every employee (not just Marketing people) deliver excellent customer service, anytime, anywhere, all the time?
  • 77. The Only Way Forward: • Customer-centric behaviors have to be institutionalised in the culture of the organisation…
  • 78. The Fourth Change: • Not only are the new technologies changing our customers as people, and how they shop but they are also changing how we market to them.
  • 79. For Example: • Increasing Customisation…
  • 80. Technology: Online Buying Options – Customization Becoming Standard
  • 81. For Example: • Customised Products • Customised Marketing
  • 82. For Example: • Customised Products • Customised Marketing • Customised Promotions
  • 83. For Example: • Customised Products • Customised Marketing • Customised Promotions • Using technology to fit the customers’ new needs.
  • 84. Obviously: • The more things companies do to “wow” customers, the more we change their expectations of what is normal!
  • 85. The Fifth Change • The new technologies are changing the internal processes of the organisation.
  • 86. For Example: • From internal R&D to Open Innovation…
  • 87. Changing Our Processes: • From internal R&D to Open Innovation… • From centralised financing to Crowdfunding…
  • 88. Changing Our Processes: • From internal R&D to Open Innovation… • From centralised financing to Crowdfunding… • From fixed pricing to dynamic pricing…
  • 89. Changing Our Processes: • From internal R&D to Open Innovation… • From centralised financing to Crowdfunding… • From fixed pricing to dynamic pricing… • From top-down strategy to democratic strategy…
  • 90. The Sixth Change • The new technologies are making competitive advantages less sustainable (and more easily imitated).
  • 91. Implying That: • Continuous innovation is the only source of advantage. • Easier said than done!
  • 92. An academic study on creativity by Professor George Land • Who has the ability to think in a creative way? • Anybody who scores 10/10 is called a genius in creativity
  • 93. How Creative? • 3-5 year old kids:
  • 94. How Creative? • 3-5 year old kids: 98% score as genius
  • 95. How Creative? • 3-5 year old kids: 98% score as genius • 8-10 year olds: 32%
  • 96. How Creative? • 3-5 year old kids: 98% score as genius • 8-10 year olds: 32% • 13-15 year olds: 10%
  • 97. How Creative? • 3-5 year old kids: 98% score as genius • 8-10 year olds: 32% • 13-15 year olds: 10% • 2,000 adults 25+ year old: 2%
  • 98. Implying: • Continuous innovation is the only source of advantage. • But only those companies that find ways to “unleash” the “imprisoned” creativity of their people will succeed.
  • 99. Lots of Changes! • I do not want to give the impression that the new technologies will change everything! • Some things will stay the same…
  • 100. It’s a new World • Not everything will change… • But hopefully I have challenged you enough to start thinking about the many things that YOU need to change in your organisations.
  • 101. In Particular: • Shared Purpose • Strong Shared Values • Strong Culture • [not to mention recruitment, performance measurement, motivation, etc, etc]
  • 102. And Of Course: Good Luck!