OBSERVEThe Odgers Berndtson Global Magazine_ Issue 03 2015

SPECIAL ISSUE THE AGE

ALSO INSIDE: OF D ISR UPT ION Linked Join theconversation at: increasingly connected and complex complex and connected increasingly an In jobs. important most their for people best the recruit organisations we help Berndtson, At Odgers odgersberndtson.com borders. national of regardless quality avital is leadership effective that we know worldwide, 27countries in offices 52 of anetwork With basis. aglobal on applies principle this importantly, Most objectives. or size, sector oftheir regardless organisations, other and companies for advantage of competitive point avital remains teams and individuals talented and ambitious motivate and develop to identify, ability The ever. than critical more are services our we believe uncertainty, economic ofwidespread atime in and world, #obobserve @odgersberndtson Odgers Berndtson

FUTURE WORLD FLAT S ELL ING OGY

NOL ECH T OBSERVE The Odgers Global Magazine_ Berndtson OB

Siilasmaa Nokia’s Risto interview with An exclusive UNDER REAMING S ST NE ER M

FUL IND A N O I VAT SS LIFE

BORATION A L L O C

CIENCE S S OPINION ION SEA

H WHY I WHY TOOK ED C R CROWD UCAT THE FUNDING JOB

Issue 03 2015 MARKETING Welcome 21 6 Under Observation 18 The world of disruption

12 Cover story Disruption is Nokia’s Risto Siilasmaa everywhere and in every aspect of our lives. In 18 Opinion whichever part of the Andrew MacLeod on disruption world you live the radical changes 40 afecting social, political, 20 Flat world technological, digital or Return on involvement corporate life are profound in the 21 Education extreme. The rise of MOOCs For some disruption is a force for good, for others an expression of radical change, with all of the dangers that it brings. Whichever stance you 24 Search Global opinion from take, disruption is here to stay. 32 Odgers Berndtson In this special issue of Observe we range across some of the many ways in which disruption is THE manifesting itself. In talent selection, education, 50 28 Life sciences life science, technology, crowdfunding, streaming, Rise of precision medicine marketing, economics and more. We have garnered opinion and comment from business 32 Future leaders around the world – their responses are Microsoft’s Dave Coplin diverse and in some cases surprising. on pinball machines We also provide our own take on what AGE 34 Selling disruption means in the world of human capital. Auction houses Finding the right leaders capable of functioning go all digital efectively in a disruptive world will be a challenge for us all. Odgers Berndtson intends to stay at the 44 35 Crowdfunding heart of this process. Goodbye banks, Finally, we are delighted to have secured an hello people exclusive interview with Nokia boss Risto Siilasmaa as he continues to reinvent the company OF D 38 Mindfulness and steer it through disruptive waters. Stop. For a moment We don’t profess to have all of the answers. No 28 one can do that. Instead we hope to cast some light on those areas that we believe will be most 40 Streaming relevant to senior executives in boardrooms Upsetting the old players across the globe. Do please tell us what you think by using the 44 Collaboration social media channels listed here. ISR A new economic model Michael Mellink,

Managing Partner, Odgers Berndtson 12 35 48 Marketing Netherlands Exchanging the rules @odgersberndtson #obobserve OBSERVEThe Odgers Berndtson Global Magazine_ Issue 03 2015 50 Technology Observe at your SPECIAL ISSUE Disruption cover line one head to go here OBSERVEThe Odgers Berndtson Global Magazine_ Issue 03 2015 Disruption cover line Seven ideas for tomorrow fingertips one text to go here UPT SPECIAL ISSUE Disruption cover line Disruption cover line two head to go here one head to go here Disruption cover line THEDisruption cover line Download the free one text to go here two text to go here Disruption cover line two head to go here Disruption cover line Disruption cover line Issue 03 2015 THE OBSERVEThe Odgers Berndtson Global Magazine_ two head to go here two text to go here Disruption cover line Disruption cover line AGE SPECIAL ISSUE two head to go here two text to go here Observe app for Disruption cover line Disruption cover line one head to go here Disruption cover line AGE two text to go here one text to go here Disruption cover line two head to go here THEDisruption cover line two text to go here Disruption cover line two head to go here Riisto coverOFD line OFD AGEDisruption cover line Riisto cover line your device from the two text to go here one to go here 54 Why I took the job Riisto coverOFD line ALSO INSIDE: one to go here pleaseAn exclusive IS R one to go here interview with ALSO INSIDE: ALSO INSIDE: Nokia’s Risto An exclusive pleaseAn exclusive IS R Siilasmaa IS R App Store or Google interview with please Nokia’s Risto interview with Siilasmaa UPT UPT Nokia’s Risto Play by searching ION ION Siilasmaa UPT Facebook’s Nicola Mendelsohn ‘Odgers Berndtson’ ION 20

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REINVENTING A WING AND A PRAYER WORK THE AGE OF DISRUPTION BOEING’S NEW 777X America’s Moment. Building on the success of the 777 and 787 Dreamliner, the 777X Creating touches every aspect of life, will be the largest and most efficient twin-engine jet in the world, Opportunity in the unmatched in every aspect of performance. The unusual, glider-like Connected Age by industry, business and society. wings of the 777X take carbon composites to a new level. Longer Rework America, and more efficient, these revolutionary wings will, says Boeing, Here are just some examples published by W.W. change how we fly. Norton of the extraordinary thinking American CEOs, technologists, boeing.com going on around the world, community leaders, educators, management experts and plus some books to read (if government officials suggest an BEYOND HAWKING agenda for an “exciting future in this you have the time), apps to time of change”. The book includes INTEL ASSISTIVE CONTEXT- action people can take in their own download and facts to digest AWARE TOOLKIT community, using the reach of the The speech technology system Internet and data to innovate jobs used by Professor Stephen and to reach new markets and using Hawking has now become technology to match employers and INTERNET EVERYWHERE available as a download – free of workers, transitioning to a ‘no-collar’ GOOGLE’S PROJECT LOON charge. Intel has allowed full use working world. of its Context-Aware Toolkit to Google has launched Project Loon that aims to bring balloon powered give those with a similar disease Internet to everyone, anywhere in any situation. Two-thirds of the

an opportunity to better N O I VAT world’s population does not yet have Internet access. Project Loon is FASTER THAN A SPEEDING BULLET communicate and improve a network of balloons travelling on the edge of space, designed to their quality of life. HYPERLOOP TRANSPORTATION TECHNOLOGIES connect people in rural and remote areas, help fill coverage gaps, and OBSER Hyperloop, a conceptual high-speed transportation system put forward bring people back online after disasters. 01.org/acat by entrepreneur Elon Musk, incorporates reduced-pressure tubes in which google.com/loon pressurised capsules ride on an air cushion driven by linear induction SMARTER motors and air compressors. If it ever comes to fruition it will become the THAN YOU world’s fastest train, travelling close to 700mph. THINK hyperlooptech.com The Intelligent Web. Search, Smart Algorithms UNDER and Big Data by Gautam Shroff published by MAN V Oxford University Press MACHINE Now available in paperback, The Glass Shroff’s excellent study takes us Cage. Where on a journey through the Automation is computer science of search, Taking Us by natural language, text mining, Nicholas Carr, machine learning, swarm published by computing, and semantic Bodley Head reasoning, from Watson to Carr, author of the ground- self-driving cars. This machine breaking book The Shallows. intelligence may even mimic at a What the Internet is Doing to basic level what happens in the Our Brains, turns his attention brain. Eye-opening stuff. to the world of automation in a panoramic exposé of the decision-making software A SUITABLE CASE running our lives and how it is changing us all. Rather TRUNKSTER than rejecting technology, More than just a suitcase, the Trunkster is a USB charging, Carr argues we must zipperless-entry product that has been designed to make urgently rethink its role travelling as simple and stress-free as possible. Built-in in our lives, using it to scales help keep the contents within airport guidelines, enhance rather than diminish and the established GPS can aid in locating your luggage. the extraordinary abilities trunkster.co that make us human. ➝

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NO INTERRUPTIONS DON’T CALL MY LAWYER DISRUPTION. GLOBAL STYLE DISRUPTION FACTS LIGHT PHONE The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard No Ordinary This credit-card sized device Susskind and Daniel Susskind published by Oxford Disruption. The speed of technological adoption that works with your existing University Press The Four Global by 50 million users has accelerated phone, is a rather clever piece Doctors, lawyers, teachers, accountants, tax advisers, Forces Breaking of technology that enables from 38 years (radio) to nine months journalists, the clergy – until recently, argue the Susskinds, All the Trends call forwarding without the the position of individuals in these professions was almost by Richard Dobbs, (Twitter) distractions, removing the unassailable. But in today’s Internet-enhanced world all James Manyika obnoxious rings, pings and that is changing. Patients can use online systems to monitor their own and Jonathan Woetzel other sounds that may disrupt Of the US$1.8 trillion of new economic illnesses. Online lectures are replacing conventional classroom teaching. published by PublicAffairs you while you are working or Critically, the book challenges the so-called ‘grand bargain’ – the Not one but four fundamental activity in 2013, US$1 trillion of it, or in a meeting. The battery lasts arrangement that grants various monopolies to today’s professionals. The disruptive forces are changing up to 20 days, with speed dial 60 per cent, was from China Susskinds claim that our current professions are antiquated, opaque and everything, according to the authors and other features available. no longer affordable, enjoyed only by a few. In their place will be new of this intriguing book. The four forces thelightphone.com models for producing and distributing expertise in society. are: the shifting locus of economic By 2025 the world’s economic centre of activity to emerging markets and gravity is expected to be central Asia, cities within them; the acceleration of just north of where it was in the Year 1 INTO THE FUTURE the scope, scale and economic impact of technology, aging demographics LEXUS SLIDE HOVERBOARD and the looming possibility of the Between 2013 and 2025, 440 cities in Car manufacturer Lexus has turned science-fiction into fact and created first-ever global population plateau developing nations will generate SLIDE, a fully-functioning hoverboard, which brings to life the board first and increased connectivity of the seen in the classic 1985 film, Back to the Future. Lexus has remained world through ‘flows’, with ‘South- nearly half of global GDP growth

A N O I VAT tight-lipped about SLIDE and has only released teaser videos. However, South’ flows between emerging rumour has it that this dynamic new mode of transport could soon be markets gaining the greatest By 2025 140 million knowledge worker OBSER available to the general public. momentum. You have been warned. lexus-int.com jobs could be replaced by computers and 75 million jobs by robots ALSO WORTH READING: The Road to reinvention: Food prices, which fell by an average How to Drive Disruption and Accelerate Transformation of 0.7 per cent during the 20th by Josh Linkner century, have risen by almost 120 per published by Jossey Bass UNDER cent since 2000 Big Bang Disruption: Business Survival in the Age Nearly two thirds of US companies THE 3D PEN IS MIGHTIER THAN THE… of Constant Innovation by Larry Downes have positions for which they are 3 published by Portfolio Penguin DOODLER unable to find qualified applicants, 3Doodler, described as the world’s first 3D printing pen, allows you to draw The Great Disruption: in 3D by extruding heated plastic filament that cools almost instantly into a How Business is Coping with the STEM [science, technology, solid, stable structure. Perfect, apparently, for prototyping and identifying With Turbulent Times engineering and management] fields those small details which can only be verbally described by the designer. by Adrian Wooldridge the3doodler.com published by Economist Books topping the list. Only 15 per cent of US graduates major in these fields, a apps to look out for… percentage that ranks the US behind 14 other nations and behind the global flint Vlingo percentage mobile is an a way to intelligent China should overtake the US by 2020 accept software credit cards assistant expensify is an app on spending on consumer electronics on-the-go that enables that uses a natural that describes itself as Wrike is a cloud-based platform that and smartphones. In 2013 China business to get paid on language user interface “expense reports that can be used by people within virtually the spot without the to answer questions, sproutsocial is an app don’t suck.” The app every business department. CEOs, overtook the US in retail sales with need of a card reader. make recommendations, that brings all of your provides easy scanning managers, directors, salespeople, US$300 billion and perform actions by social media messages of receipts and strategists, and marketers use Wrike delegating requests to into a single, filterable categorising of trips with to stay better connected to their various applications. stream. a clean and intuitive UI. co-located and distributed teams. ➝ [Source: No Ordinary Disruption, by Richard Dobbs, James Manyika and Jonathan Woetzel published by PublicAffairs]

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YouTubers and Viners and the and the impact of positive ‘on-demand’ and available 24 Webrooming becomes 25 DISRUPTIVE TECHNOLOGY financial ecosystem emerging reinforcement on the bottom through mobile apps that more common than to support them are line. I guess you can’t trade on connect idle or new supplies showrooming (69 per TRENDS 2015-2016 according reminiscent of Hollywood in something so fluffy. Instead, with new or organised cent to 46 per cent the early 1900s. More kids can Wall Street analysts and demand. respectively), according to Brian Solis, digital analyst, name online celebrities than shareholders alike accused New supply will stimulate to Harris poll. they can traditional movie and JetBlue of being “overly new demand. Mobile platforms • Millennials prefer anthropologist and futurist. music stars. To capture brand-conscious and combined with geoloco will webrooming. attention, advertising and customer-focused.” Wall Street continue to bring everyday • Amazon remains the In his work at Altimeter Group, Solis studies content will require an entirely has spoken and JetBlue people and businesses number 1 destination for both the effects of disruptive technology on new approach. CEO Dave Barger has been together to interact with trust showrooming and replaced by someone willing and efficiency serving as webrooming. business and society. Agree or disagree with 12 Cyber security becomes to embrace extra fees, facilitators. his list – and it covers a lot of ground – it paramount to prevent • Emerging connected narrower seats, and diminished in-store experiences link makes fascinating and enlightening reading the next #Sonygate. customer experiences… unless 20 New enterprise drone Nothing creates a sense of management platforms online and offline, leveraging they’re willing to pay for both. urgency like an emergency. something better. change the game for Sony sat on advice to upgrade logistics. 25 Mass personalisation security. They’re hardly alone. 16 Crowd capitalisation It’s not about whether and full funnel 1 Social media 1.0 is dead. Internet of Everything. accelerates disruption… we get pizza or Amazon marketing suites reset Social media becomes part of By 2020, the number of 13 Some companies are still everywhere. packages to our homes. vendor landscape and a digitally transformed devices connected to the greedy and believe the Everything is subject to First, drone delivery will change how brands ecosystem. Internet is expected to exceed Internet should not be creative destruction because impact B2B. Over time, the ‘think’ and work. Real-time and content 40 billion. We’re just getting open for the sake of ideas can now be concept of a personal mailbox marketing becomes more started. profitability. crowdfunded. Every product.

will be upgraded with N O I VAT sophisticated and portable This will impede innovation Every industry. Innovation is dedicates codes that will 8 Wearables will struggle Social becomes key hub for unless we fight back. democratised. facilitate new types of OBSER shaping customer experiences. to find their place in Debate over Internet drone deliveries. everyday life. regulation positions it as either 17 Bitcoin and other 2 The future of search and While cute and seemingly on a utility or a premium service. cryptocurrencies lose 21 Cyber Warfare. search engineering the wrists, necks or fingers of value but teach us how Political battles will play out marketing also lies all of our friends, wearables as 14 Music streaming will to think differently in the 5th dimension. outside of Google. an industry and market are continue to undermine about money. Your privacy is gone: More than 88 per cent of incredibly immature. The the music business and There are 163 cryptocurrencies 22 consumers are influenced by Apple watch will start to artistry. Artists will fight in circulation. Bitcoin is widely it was traded for other consumers’ online create a rising tide. Most back. known. Though its market cap perceived security and UNDER comments. Customers are also wearables are single purpose, Streaming services condition is down, The Bitcoin Stack will also better customer starting searches in places redundant, cute or just plain consumers to seek out their revive the movement. experiences. such as YouTube, Pinterest and useless. They need a killer app! favourite music and play it for Older generations think Brands and agencies start to also in apps directly. free. Sales of music continue 18 Mobile payments: early about privacy differently. think about ‘full funnel 9 Virtual and augmented to freefall. today, but will soon Younger generations use marketing’ and new 3 Messaging apps become reality experiment with Artists feel they’re underpaid skyrocket. privacy as a currency. ‘experience cloud’ suites will the new social media. killer apps for consumer for stream plays. In late 2013, just 6 per cent of take shape to unite marketing, 23 Big data and beacons. and vertical markets. Spotify, Pandora and the like US adults said they had made service and CRM. 4 Asia and other foreign Connect online, in-app, and In 2015, Google Glass gets a compare payment models to a payment in a store by New adtech companies will competitors will in-store experiences. Also ctrl alt del. radio stations. scanning or tapping their focus on strategy + compete to gain share opens the door to new forms 2015 represents the Artists such as Taylor Swift, smartphone at a payment programmatic context, and push messaging of engagement. consumer introduction of Garth Brooks, ACDC, et al, terminal. It will go up to 8 per content AND ads. Beacons provide businesses forward. Oculus Rift. Vertical industries believe artistry is worth more cent this year. Apple’s Optimised mobile affiliate with endless opportunities to along with gamers will drive than is appreciated today. introduction of the Apple Pay tracking capabilities. 5 Notification windows collect massive amounts of early adoption. I argue that streaming will be the key factor that will Publishers will offer introduce a thin layer for untapped data, such as the Companies such as Skully services teach people to listen drive this percentage up. in-house capabilities for rapid engagement. number of beacon hits and are creating killer vertical at will because they can, Mobile payments are already behaviourally programmatic Apps such as Yo, while a customer dwell time at a applications for augmented whereas radio stations gaining traction. Nearly 15 per targeting of premium novelty at first, will redefine particular location within a reality. encouraged consumers to buy. cent of Starbucks customers advertising. what an app is and will be… specified time and date range, already pay with their phones. Omni-channel finally 10 Focus on the kids! busiest hours throughout the 6 Chinese innovation is 15 Wall Street becomes And, 60 per cent of consumers becomes mainstream. Brands Generation Z is mobile day or week, number of going to disrupt the US influential again forcing use their smartphones to pay must think like their first and mobile only and people who walk by a location from the outside in and brands to trump because of loyalty benefits. customers to create seamless they’re nothing like each day, etc. Retailers can the inside out. customer experience for omni-channel shopping Millennials. revenue. 19 The Sharing Economy is then make improvements to experiences that keep 7 The Internet of Things is Stakeholders and investors really about renting or products, staff allocation in customers engaged at all 11 YouTube, Vine, etc., a hot and beautiful mess find it difficult to assess the borrowing. various departments and stages. represent a ‘new’ until it becomes the ROI of customer experiences Everything will become services, and so on. Hollywood.

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When Risto Siilasmaa isto Siilasmaa wasn’t an obvious choice to took over as chairman of take over as chairman Rof Nokia after Jorma Ollila Nokia more than three finally stepped down in May years ago he had a huge 2012. Ollila acknowledged in his challenge ahead of him. subsequent memoir that he had made mistakes by failing to Here he talks exclusively predict changing customer to HEIDI HAMMARSTEN about needs and developing new software. Disruption in the his plans for reinventing tough environment of global the business as it faces mobile phone development – disruptive global forces and an inability to keep in step – had precipitated his downfall. PHOTOS BY JUHO KUVA So the 45-year-old Siilasmaa had much to do. He certainly had the right credentials: an entrepreneurial background from tech business, serving several years as chairman of a telecom operator, a master’s degree in engineering and four years’ experience serving on the Nokia board. At the time Siilasmaa took over the helm at Nokia the health of the former Finnish handset giant was dire. During the first half of 2012, operating losses ran to €2 billion, ➝

12 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 13 Profile COVER STORY cash flow agreement that we would have was strongly got the money even if the negative and sales were down handset deal didn’t go 26 per cent. through,” says Siilasmaa. And yet today under NSN had been struggling for Siilasmaa’s stewardship, Nokia several years after the merger is a thriving network infra- in 2006, but it had eventually Y ABOVE structure provider, number two HERE traffic probe turned into a growing and ALAM

in the global market. The share © data combined with profitable business. So it made : price has more than tripled over sensor technology sense to use it as the core of a can make driving the past three years and its PHOTO safer new strategy. Until August of enterprise value has multiplied this year it was supported by LEFT Curious, tech- by more than 15 times. Nokia Chairman two brands, Nokia of the Board Technologies, which describes Risto Siilasmaa savvy and a little A huge transformation (left) and CEO itself as “a leading innovator of So what happened? Most Rajeev Suri address the core technologies enabling bit idealistic visibly Nokia has done three the media during the Programmable World, a press conference bold, strategic deals: the sale of on the Alcatel- where everything and everyone its handset business to Lucent transaction will be connected,” and, until Microsoft, the acquisition of the in Espoo, Finland, August of this year, its mapping April 2015 remaining 50 per cent share in and location business HERE. Nokia Siemens Networks from But then Nokia sold HERE to a Siemens and the acquisition consortium of German of Alcatel-Lucent. And behind carmakers for US$3.07 billion these deals lies a vast amount allowing it to focus on the of work, including more than Alcatel-Lucent acquisition. 100 board and board During his term as chairman, committee meetings. to follow. “Always assume the managing the board and never Siilasmaa also served as an “It has been a huge best of intentions from others,” avoids tough challenges.” interim CEO for eight months in transformation and the board goes the first rule. Siilasmaa “Curious, tech-savvy and a 2013-2014. The sale of the has made difcult decisions,” and his board knew that they little bit idealistic, at least handset operation to Microsoft says Siilasmaa, referring had to instigate change but compared with me,” says Jouko was then in progress. It had especially to the sale of Nokia’s what kind would it be? Karvinen, former CEO of Stora been announced that CEO handset business, in September “We started a scenario Enso a Finnish pulp and paper Stephen Elop would be 2013. “But difcult decisions analysis and checked out all manufacturer. “He puts more switched to work for Microsoft can be made easy when you do possible alternatives. It was like time and efort into the job than once the deal was concluded, a load of analysis and iterative a tree: some branches were cut any other chairman I’ve met. and the search for the new thinking. By the time the deal of but new ones were growing He’s not into formalities and CEO was under way. ➝ was signed we were certain it to replace them.” he’s not trying to walk on water, was the right decision.” Fellow board members praise which is good.” What Siilasmaa needed to do Siilasmaa for his ability to ensure with both Nokia and its board that everyone has their views Negotiating with Microsoft was to build up trust and heard and even the most difcult The next big deal happened encourage open discussion. “No topics are openly discussed. before the sale of handsets was news is bad news, bad news is “I knew Nokia was a announced, but the two were good news, good news is no turnaround story but I didn’t intertwined. When Nokia was news”, is his slogan for internal know how bad things were negotiating with Microsoft corporate communication. before the first board meeting,” about the deal, it also managed “Everything culminates with says Bruce Brown, former to get a loan from the trust,” says Siilasmaa. He Procter & Gamble CIO. He prospective buyer. started his tenure as chairman joined the board when “This was the funding Nokia by giving everybody in the Siilasmaa started as chairman. used to buy back the Siemens board a set of five Golden Rules “Risto has done an amazing job share of NSN. We had an

14 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 15 COVER STORY “As CEO networking and cloudification.” it was my The €15.6 billion Alcatel- goal to achieve five distinct Lucent deal is the biggest in objectives: create a new vision Finnish business history. “What for Nokia, build a strategy to we need to do first,” says implement the vision, choose the Siilasmaa, “is get through this right organisational structure to interim period as fast and drive the execution of the efciently as possible. The strategy, pick the best CEO to longer it takes the more painful lead the organisation, and it gets,” obviously remembering announce what kind of a balance how the closing of the Microsoft sheet we would be aiming at.” deal lingered on and on. With Networks as the core of When the deal is done, Nokia the new Nokia it was natural is determined to avoid the that the former CEO of NSN problems it met with Nokia Rajeev Suri should be elected to Siemens Networks merger, lead the whole company. “We when both parties were treated want people with not only as equals and diferent professional skills but also an corporate cultures clashed understanding of our corporate head on. The aftermath lasted culture,” says Siilasmaa. for years and business sufered. The first meetings with “We didn’t want a merger of Alcatel-Lucent took place equals, this is a buyout. We already during the closing are going to seek the best period of the Microsoft deal, solution to any problem but the board carried out based on meritocracy, and another rigorous analysis not pay attention to nationality. process and went through The decisions will be made all other possibilities as well. under clear governance: the chairman and the CEO will Understanding networks come from Nokia.” Siilasmaa believes the deal is Market reaction to the driven by changing customer proposed deal was not overly needs. As in many other positive and slightly businesses, even the network disappointing Nokia Q1 operators will in future buy earnings right after the news service as a whole rather than ensured that the stock price separate technologies. For went down. But Q2 profit was Nokia this means that it needs back on track: it exceeded to have a deep understanding expectations and all three of all kinds of networks. So far business units were doing well. it has been a specialist in Siilasmaa says short-term mobile broadband networks. stock price changes don’t afect “We’re not primarily looking Nokia’s strategy. for economies of scale but “This deal is based on a economies of scope,” says careful analysis of the expected Siilasmaa. “With Alcatel-Lucent market dynamics over the next we have created the only 10 years. We are participating in company with significant global a marathon not a 100 metre business on all the diferent race.” network technologies: fixed and mobile broadband, internet Heidi Hammarsten is a business routing and software defined journalist based in Helsinki

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Available for tablet and smart phone VIEWPOINT: The age of disruption Richard Boggis-Rolfe

ANDREW MACLEOD says that there is no industry ASLEEP or environment immune from disruption and that the rate and pace of at the change is only increasing WHEEL? CHAIRMAN, ODGERS BERNDTSON There are disruptive forces in the Executive Search market as in other industries and networking databases have thrown challenges at the industry. However the art and science of Executive Search, of courage and it is hard to particularly as practised by Odgers Berndtson, is a great deal pick the right moment. for disruption. Look

OPINION more than a database. Top tier your car when you’re on the In a sense you have to at what Apple or Google are searches require a high degree of highway?” That’s enormously emulate what start-ups are doing to the banking industry personal service, insight and e are currently difcult to do. doing – if you don’t have that or the auto industry – or what too late and you business understanding. We call living in an era It’s a huge amount of cultural alignment and courage that they are about to do. The jury have to look at where this ‘intelligence’ in the sense used by the Intelligence Services – and it that is hyper- change and that is why it has to starts at the top it just won’t is out as to whether or not they it’s going next. cannot be delivered by machines. Wdisruptive and the pace of that start from top. You must set a work. Once you have that there will be successful but I would You can’t swim to the place disruption is significantly mandate and you must be is still no guarantee because certainly say that these that has already been disrupted increasing because the willing, because inherent in you still have to reinvent your traditional industries thought because by the time you get environment is now much more disruptive environments is that whole business model. But at they had models of operation there your rival already has it audiences than the old system conducive to disrupting existing you don’t always know the next least you have a chance. that were safe and stable. That covered; you have to think was able to provide. modalities and ecosystems. new thing – so there are always Start-ups don’t have any is their Achilles heel, because about how to disrupt the player I spent over a decade at For me, that is evidenced by going to be failures. For the baggage. They have an the disruptive players will say who has just disrupted you. Blackberry and within seven the ongoing rate of change we CEO and the Board it is an environment where they might that gives them an advantage In the newspaper industry years we completely disrupted are seeing in… so many existential crisis: they (the throw 10,000 seeds on a field because some of these I work, for 150 years it was the mobile phone industry and industries, that I wouldn’t know Board) have to face the fact and only one or two germinate industries are asleep at essentially a vertically we ate everyone’s lunch; and where to begin. There’s a that their current model has – that’s a start-up environment. the wheel. integrated monopoly that had then in another three or four universality associated with been disrupted. Then you have Whereas incumbents don’t For me, it’s the maturity of a massive revenue stream years we had our lunch eaten. disruptive environments. At the to embrace this notion of how have that luxury, they have to the technology platforms that around print and print You see it with Google, which is core of it a business builds an you re-architect and almost maintain a certain revenue allows for anyone to do advertising. Then the Internet looking over its shoulder at economic construct around a disrupt your own model. stream while simultaneously anything in diferent industries came along and created an Facebook which is looking over certain set of conditions or Without that alignment it reinventing themselves. – and you don’t have the old environment that was ripe for its shoulder at Snapchat... just certain value proposition sets, doesn’t really matter what you I like to say to the people I barriers to entry like capital disruption because the Internet by the fact that you can disrupt and then all of a sudden that do because if you have factions work with, particularly younger and regulation. Every industry breaks the distribution an entire industry the same model is disrupted and a new in the business – with some people, that they are living in is going to enter its own monopoly you have around preconditions allow someone way of doing things arrives, or supporting the move to the new the age of disruption. When we disruptive phase so you might content creation. Now anyone else to disrupt you. a better way of doing things world and some supporting look back 100 years from now as well get good at managing can create and publish content. Whichever way you look at it arrives, and in a period of time staying with the status quo – they are going to look at this through it. Out of that came Google technology by its very nature is – short, medium or long – that you get these internal battles era and say “this was the age of For example, if you are aligning advertising around a disruptive force because you new way of doing things which just makes things worse. disruption”. What’s happening building keyboards and smart search and from there you have are using technology to create a TATCHEVA achieves dominance, invades However I recognise it in technology first started phones and you think you have players like Facebook, new way of doing things. EVA the ecosystem and leaves takes an enormous amount there but now it has been a business around that and all Snapchat and so on and BY existing players to ask: propagated into every industry. of a sudden touch screens increasingly the revenue Andrew MacLeod is Chief “how do you Today all of the industries became the thing, by the time migrates to these platform Operating Officer at Postmedia, one of the largest newspaper and

change the that thought they had safe STRATION you realise that you have to players as they have a new

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wheels on harbours, they are ripe ILL embrace that then typically it’s and better way of reaching

18 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 19 The age of disruption

Flat world navigators KIM TAYLOR MCDONALD on how strategic collaborations are leading to dynamic win-win solutions

n this era of the hyper- country or continent – and the and joint venture partners connected, global DACE competitive advantages being both real and potential, these (Digital, Attention and garnered through them, will relationships are the evolution of ICollaboration Economies) every increasingly take centre stage in networking and marketing. They individual and organisation is the near, mid and long-term are the conduits to the ever under an increasing demand to future of the ‘flat world’ of the more engaged, empowered and do more with less – less time DACE. However, key to these expectant end users of products and less money. As such, a initiatives are the individuals – and services. strategic disruption of the the Flat World Navigators – who Significantly, the core KPI traditional business model is are able to make and maintain in this disruption to the

WORLD FLAT beginning to take authentic bridges, relationship model is ROI – place – as it must as it is through their strategic Return on Involvement – as for all enterprises, business relationships that sustained, authentic regardless of size, bigger, better brands and engagement is the best way locale or profit/ businesses will be built. to create a collaborative non-profit status. Through the use of the ecosystem of credibility, clarity This disruption relationship nodes of online and respect for brand, business equates to a shift connections and working and the bottom line. away from the collaboratively with a network of armour construct clients, colleagues and partners of a ‘command-and-control’ one can achieve far more – model to one which focuses including establishing a radically on dynamic, collaborative, expanded reach, improved win-win solutions. It is through efciency and innovation ES

G these strategic and efective capacity, greater productivity A M I collaborations that profits, both and deeper insights – in less

IKON tangible and intangible, will time, and with fewer costs, : © be made. than going it alone. Along with Kim Taylor McDonald is the author of Flat World Navigation: Collaborative endeavours – creating cohesive collaborative Collaboration and Networking

STRATION be they cross-cubicle, cross- opportunities between in the Global Digital Economy, [2015] published by Kogan Page LLU

I corridor, cross-company, colleagues, clients, customers

20 OBSERVE 3/15 odgersberndtson.com The age of disruption

Learn ION to adapt UCAT ED

With the rise ore people signed one-to-one university tutorial of MOOCs and up for Harvard’s with sherry on the side has online courses been matched by the explosion other online Min a single year than have in online learning, a global learning tools, the attended the actual university business that Forbes says will in its 377 years of existence. be worth US$107 billion in 2015. education industry That staggering fact alone E-learning is a broad category, is in a state of flux indicates the massive, encompassing everything from irreversible change that’s Harvard degrees to online ILLUSTRATION BY MATTHEW RICHARDSON happening – happened – corporate training, the latter in education. The decline of the market is expected to grow by 17 per cent a year to 2017; apparently 77 per cent of US companies now provide online TERTIARY ENROLMENT: PAST AND FUTURE corporate training to their employees. In the UK more than 20 universities now give free online courses under the aegis of FutureLearn. When Edinburgh In 2000, there were 99.4 million students enrolled in higher education institutions. In 2030, research expects University ofered its own this number to rise to 414.2 million MOOCs (massive open online courses) through a US network THE FUTURE IS HERE CURRENT DEMAND it quickly had more than Enrolment in HarvardX OUTSTRIPPING SUPPLY courses as percentage Number of A level 300,000 students sign up – of global enrolment students per available more than nine times the university space number actually attending the Afghanistan 0.0% Afghanistan 3.58 university. Coursera, which Bangladesh 0.3% started as an alliance between Bangladesh 4.79 India 8.2% Stanford University and two Nepal 0.2% India 1.49 dozen others and now boasts 122 partners, claims it has more Pakistan 1.0% Nepal 2.39 Sri Lanka 0.1% than 14 million students signed Pakistan 1.13 up. All those millions of students Australia 2.2% Sri Lanka 4.89 – about two-thirds of whom UK 4.4% don’t live in the US – have their ➝ US 34.9% Source: HarvardX

@odgersberndtson OBSERVE 3/15 21 The age of disruption VIEWPOINT: The rise of Bleisure

Christensen has his critics, such as Jill Lepore, a staf writer at The New Yorker. In a piece called The Disruption Machine In the US around one million Clayton Christensen, the she wrote that “disruptive full-time students are enrolled Harvard Business School innovation is competitive ION in distance learning professor widely created with strategy for an age seized by programmes, rising from less inventing the term ‘disruptive terror… Disruptive innovation as

than 10 per cent in 2002 to innovation’, said that disruptive the explanation for how change

more than 30 per cent today. technologies find success in happens has been subject to ED What’s distinct about markets where “the alternative little serious criticism, partly UCAT e-learning today is scale; we are is nothing”. In his view because it’s headlong, while Jonathan Openshawe poised on the cusp of a truly e-learning is just going to keep critical inquiry is unhurried; ON RECOGNISING THAT THE DIGITAL ‘MILLENNIAL’ MUST BE revolutionary change, driven by on spreading and improving. partly because disrupters SEEN AS A NEW KIND OF WORKER several factors: demand for MOOCs generally arose out ridicule doubters by charging progress tracked, logged, education, insufcient supply of of universities’ interest in them with fogyism, as if to Work their businesses should do Technology has profoundly more to address resource studied, and at the end gain ‘a places to study, and cost. The computer intelligence. The criticise a theory of change were disrupted the workplace, and scarcity, while 65 per cent statement of accomplishment’ biggest markets for both ultimate goal might be software identical to decrying change; this goes deeper than replacing expect them to tackle climate from the course tutor. Martin commercially oriented and that maps an individual’s and partly because, in its fax machines with cloud change and 78 per cent will Bean, vice-chancellor of the degree courses by far are India knowledge and ofers modern usage, innovation is the computing. The digital decide on a job ofer depending UK’s Open University, a leader and China, where conventional e-learning plans specifically idea of progress jammed into a Millennial is a new kind of on how innovative they worker who no longer looks for perceive a company to be. in distance education, has said: university tuition costs are designed to plug the gaps, criticism-proof jack-in-the-box.” a job for life. Instead of Millennials are no longer “Time and again we have seen prohibitively expensive. whatever those might be. long-term security and happy to serve as cogs in a the disruptive impact the But while work on the What lies ahead benefits, members of this corporate machine, but want to internet can have on industries The rise of MOOCs technology to develop that kind In a thoughtful piece on Quartz generation are motivated by a present themselves as brands lifetime of learning and in their own right. Digital – driving innovation and Around 25 per cent of the US of customised individual Rob Huntington argues that “it personal advancement, and Millennial workers are flexible enhancing the customer population is enrolled in some e-learning is proceeding, is ultimately the student and seek specific roles and job titles and collaborative, preferring a experience. I have no doubt form of post-school education e-learning’s biggest potential is teacher working together that that add to their personal modular working structure that MOOCs will do the same programme – making surely the chance of bringing yields deep learning and portfolio. changes with each new project, for education.” accessible quality instruction world-class education to those growth”. True enough; and One of the trends that define and introduces them to new this generation is Bleisure, skillsets and contacts. They are Online education is not a online an efciency that is who otherwise couldn’t aford it. perhaps a video course on which LS:N Global has been highly motivated by particularly new phenomenon. only now being understood. Take, for example, Kepler, a cryptography (as ofered by tracking since 2009. Rather transferrable pay-ofs such as non-profit university programme Coursera) attended by than seeing business and job titles – anything that is as for the developing world, which thousands might not be great leisure as opposing forces to be mobile as they are and that can kept in check – as their parents’ be carried with them to their has a pilot campus in Rwanda. It at personal mentorship. But generation may have done – next role. And this will come ONLINE LEARNING FACTS (COMPILED BY THE ODGERS has what it calls the ‘ambitious once the jack is out of the box Millennials are seeking a more sooner than you might like: they BERNDTSON INFORMATION UNIT) target’ of providing an it’s difcult to put it back. seamless life experience that are not a loyal demographic, and tend to move on after ● The market for online ● SPOCs (Small Private Online “American-accredited degree, a Executives of the next can combine both. Technology learning products hit US$42.7 Courses) delivered on world class education… for generation would do well to facilitates this need. A recent months rather than years. Harris Poll study revealed that Instead of trying to fight the billion in 2014 and is expected MOOC-like platforms have thousands of students for prepare themselves to be able to pass US$50 billion by 2018 also proved their Millennials conduct 26 per cent less appealing characteristics of [Source: University World effectiveness: According to around US$1,000 tuition a year.” to scrutinise CVs not just from of their work on mobile devices, Millennial workers, employers News, ‘Huge Growth in Anant Agarwal, CEO of Naturally there are numerous familiar universities, but from while 42 per cent already own need to start understanding e-learning in Asia’, 2014] Harvard’s EdX, “60 per cent entrepreneurs involved with MOOCs everywhere – you or plan to buy a wearable them better and working with of students at San José State ● Asia’s desire for online device, and 95 per cent of these their strengths. Rather than University passed its e-learning, such as Shai Reshef, wouldn’t want to miss out on degree programmes growing plan to use these devices for pinning them down into specific traditional electronics course, faster – at 17.3 per cent – than who is credited with starting the talent just because the degree work tasks. long-term roles, a trend towards but when a SPOC was anywhere else first online university outside the isn’t from Harvard. With the rise of Bleisure, we job-sharing and long-term introduced the pass rate rose temporary projects is emerging. ● Growth in Nepal and Pakistan to 91 per cent.” US in 2001, based in the have also seen how the rose to more than 30 per cent principles that Millennials apply Full-time employees may begin Further reading: Netherlands. His creation, the in 2014 to their personal lives are to make up a diminishing The End of University of the People, aims to migrating to the workplace. proportion of the workforce, and ● Most Ivy League universities College: Creating provide high quality online Rather than work being a the role of the people manager have fully adopted MOOCs the Future of (that’s Millennial HR) who can but many top UK universities Learning and the education for everyone, free of necessary evil, it has become have preferred to retain their University of all but the smallest of charges an opportunity for them to quickly bring together the actively improve themselves relevant skillsets is on the rise. traditional teaching methods Everywhere (to sit exams). [Source: BBC, ‘Massive Open by Kevin Carey and their community, and even is Editor There may be drawbacks to Jonathan Openshawe Online Courses: Threat or (Riverhead to tackle global inequalities. of LS:N global at The Future Opportunity?”, 2013] Books, 2015) e-learning and certainly Deloitte has found that 68 per Laboratory cent of Millennial workers think

22 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 23 The age of disruption The age of disruption

MARK BRAITHWAITE VIRGINIA BOTTOMLEY Managing Director, Chair, Board Practice at Odgers Berndtson Global Odgers Berndtson Asia Pacific There has been a profound transformation in what we do and how we do For most, the concept of disruption links it. Technology has revolutionised the workplace, requiring diferent skills, potentially releasing intellectual energy and rapidly increasing response rates directly to technology. Technology and communication. advancements enable new business models to The feminisation of the workforce is growing at pace. Within my lifetime I’ve displace old business models. This is nothing seen the first woman prime minister, leader of the Commons and the Lords [in new as technology advances have been consistently changing the business ROMAN the UK], FTSE 100 chairperson, chairperson of the World Bank and the IMF, and even Chancellor of landscape since the discovery of the wheel. The difference now though is Germany. The contribution of the female workforce is beyond all expectation and will only grow. that speed of change is outpacing the ability of our organisations to adapt. TYSHKOVSKIY We’ve also seen attitudes to work and careers transform beyond recognition in a generation. Few What most executives do not yet see is that an even bigger factor is Managing Partner, now expect a career for life, work is considered in phases or stages related to what the individual Odgers Berndtson Russia expects at diferent points. There is also an expectation that work in itself is fulfilling and rewarding, about to compound the disruption challenge. The workforce is shrinking in just about every economy relevant to global businesses. The The way we consume with employees wanting to have pride in the business or the organisation where they are information has changed demographic tipping point that brings this problem to our front door is occupied and employers really need to understand that. dramatically in recent years, SEA Lastly, the ageing population means that the conventional approach to a career from 20 already here and is forecast to worsen every year until 2050. We are facing with the volume of information to 65 will never be the same again. a gaping hole in the global workforce and the war for talent is about to flows increased at least 15 times. R We all have to embrace change and not resist or be fearful of it. At Odgers Berndtson we intensify. But the problem is that our practice what we preach. Our technology is advanced, the composition of our workforce is For companies wrestling with the changes that technology disruption brains cannot change that fast HC diverse and we work to give people a sense of value and worth in their occupation. By and is still adjusting to these embracing the forces of disruption we are able to better serve our clients and assist them on their brings, employer brand is critical for attracting and retaining talent. As brilliant as the new strategy is for the future, execution without the right changes. That involves losing journey. attention, becoming distracted people is a sure path to failure. by diferent communication KESTER Odgers Berndtson has faced its own disruption. We have evolved to channels and ultimately providing solutions to the complex leadership challenges faced by forgetting key things. People SCROPE disrupted organisations. This goes way beyond the recruitment who are open to diferent The view CEO, Odgers transaction and has a true partnership role. We call it Search Intelligence. information sources 24/7 don’t Berndtson As one of our clients recently said: “We are hiring on potential. Our even have time to think over from Odgers We embrace market has changed so much there is nobody out there who has done this. what they are looking at and analyse it in depth. That seems It’s a new world as a leader.” disruptive forces. to be a really significant Berndtson The speed and disruption and it is still not impact of change is irresistible, accelerating obvious how to manage it. And With 52 offices and the opportunities that it opens up are that is a big challenge for every in 27 countries exciting. Companies that win tomorrow will HÅKAN EKSTRÖM manager: how to maintain and be those that exploit knowledge by having the Managing Partner, increase human capital Odgers Berndtson productivity and efciency. I’ve right expert teams in the right places and that Odgers Berndtson Sweden has a direct line noticed that every meeting can adapt quickly. Our role in supporting our Disruption for our industry means we without any gadgets is much into the thinking clients in employing the right leadership skills have to deliver more value around every more efcient than a meeting of Boards and within this environment comes with great candidate, not just a CV that fits the with people who never stop responsibility. It affects lives and companies profile. Focusing on a candidate’s true using their devices. Modern C-suite people more than ever. performance, leadership style and so on technologies create fantastic across the globe. The new world requires us to have global becomes even more critical. Equally, the value that we bring at opportunities but the efciency reach and expertise across sectors in the the early stage of an assignment needs to be top notch. This goes down! That is the Here are some includes forming the profile based on the future challenges for challenge disrupting all the economy to access the best possible talent. previous modes of of the diverse As a global company working collaboratively the company, i.e. a true understanding of what competencies are needed for that company or industry going forward, which communication. And working on to harness our cumulative knowledge, views from in turn leads to increased specialisation. However, it also means a new communication behaviour, a new managing network and reach on behalf of our clients knowing where that talent and knowledge can be found. So we Odgers Berndtson model is a priority not only for makes our job more exciting than ever. need to understand other industries as well. Being able to find human capital industries, but for partners on the the talent and/or skills that are not present in an industry, and every manager who strives for Age of Disruption bring it to them from another is a real ‘value add’. Companies DISRUPTION efciency. ➝ cannot easily do this themselves, but executive search firms with knowledge of a multitude of industries can.

24 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 25 The age of disruption The age of disruption

process. It has actually become a very STEVE POTTER AYSE OZTUNA efective way to discriminate, which in my view means that there is a real Managing Partner, Managing Partner, ethical struggle accompanying this Odgers Berndtson USA Odgers Berndtson Turkey disruption. When it comes to the disruption We are being disrupted in numerous ways: Now people open up their lives on the of business models, North not just by technological advances but through Internet, making it easy to gain access to data that is no longer private and that has America is leading the way. globalisation, digitisation and other activities. a great efect on human capital trends. Recently, John Chambers, the Yet we also see disruption as innovation, a We’ve had to change and adapt outgoing CEO of Cisco, a positive force. Because innovative disruption leads to new working and MICHAEL MELLINK Managing Partner, because there is more open access and worldwide leader in information technology, predicted that business models, it is vital that we understand this new order as we work more data available for all of these Odgers Berndtson as many as 40 per cent of companies that exist today will no with clients and candidates. So we use tools, methods, science to help us potential candidates. LinkedIn can be longer be in business in 10 years’ time. The message from Netherlands reconsider our value proposition and to position ourselves as trusted used almost as a phone book now, so it Chambers: “disrupt or be disrupted.” Google’s announcement advisors to our clients. The disruptive age is having a means that it is not very easy to make a significant impact on human decision between who is the best person that it is going after the car business is just one example of We adopt a smart, intelligent approach because we know capital trends. Technology such as for the job. how all industries will be affected. The need for innovation SEA that today’s talent is more connected, more informed, more social media has already altered However, companies are finding it is and challenging the status quo at the board and senior R mobile than ever before. They are open to opportunities but business models, the way that not the best way to recruit. We’re seeing executive table has never been greater. Companies need are also very fluid. In Turkey we have a very young talent society is organised, and also the that they realise that the best thing is to different perspectives and out-of-the-box thinking to help HC pool and it will remain so for the next 10 years. We have a way in which you can find people. come back to an executive search them look forward and rethink their business model. As special responsibility, at least in an emerging market like Turkey, to deeply We’ve quickly changed from a company like Odgers Berndtson to do trusted advisors to many Fortune 500 companies, we believe closed society to an open society. the job properly. We have the experience understand this new – and rapidly evolving – group. Quite simply, if you that disrupting the traditional leadership model will Many employers are now using and knowledge to really find out who is cannot adapt you cannot survive. search engines. It has become the best fit for the job. And that point is determine whether companies adapt and thrive in this new standard to ‘Google’ people or becoming increasingly important in a environment. The ‘same old’ simply won’t cut it anymore. search them on Facebook or world where people can be approached Disruption is here to stay. LinkedIn during the recruitment every day by email or LinkedIn.

KLAUS HANSEN Managing Partner, Odgers Berndtson Germany PATRIK KVIKANT for an SAP consultant for example, it is not Managing Partner, You can find both Odgers Berndtson and if I look back to my really critical what their character is like as Odgers Berndtson positives and early days our key service to our client was to long as they know SAP. Finland negatives in find candidates. That was our real asset – to On the other hand, if you’re looking for a Disruption in business life is disruption. The know where the good candidates were. board member, which is our core business, the increased by both key point from our Today this is almost completely irrelevant expert knowledge is almost irrelevant and the digitalization and globalization. perspective is that the growth in disruptive because this part of the service can be done by personality is absolutely paramount for It is visible today and will technologies is making our candidates far anyone and is far more accurate and far more making a good candidate. become stronger in the future. This directly efects the required leadership competencies for top executives. more transparent. And by transparency I don’t up to speed than it has ever been. For that reason assessment of the The ability to make fast decisions with limited amount just mean being able to see their employment This has dramatically changed our business candidates has become crucial. At the upper of information becomes a necessity. It is likely that history, but rather if they have done things that model because today our value added service end of our services our business is still very there will be less room for ‘pure growth’ leaders that perhaps they should not have done. is the assessment of the candidate to check healthy because the recruitment agencies and only perform well during upturn phases. The ability to Disruption has made our work easier in their cultural fit. To find candidates is a HR departments of our clients do not have renew yourself and your business becomes more and some respects as it has enabled us to speed up commodity, a no brainer, but to offer that value the experience to operate in that senior level. more critical. Good leaders must demonstrate this parts of our process that are not related to added service of ensuring they are exactly If you are able to create your own profile on continuous behavioural pattern in their daily work as initially assessing the candidate, such as right for the business is the real skill. LinkedIn then you are able to push it as you safe career environments and long careers are most generating candidates, inviting them to Converesly if the universe of candidates is wish. Candidates are increasingly fine tuning likely gone for the foreseeable future. Companies, and more specifically boards, must be alert and evaluate the interview and collating information about much more transparent then our clients the information about their career that is CEOs competencies constantly because of the them. All of this work is far more efficient believe that they can do their own recruiting. visible on the Internet, which puts incredible increasing disruption around us. Today your CEO is because now we have so much more that we The more general expertise and knowledge responsibility on us to ensure that all the spot on for your needs but they can quickly become

DISRUPTION can easily store, sort, look after and manage. that people have, then the less important is the information is correct and, most importantly, the wrong person because of sudden market changes I recently celebrated my 2oth anniversary at assessment of the personality. If you’re looking can be proven. caused by disruption.

26 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 27 The age of disruption THE AGE OF PRECISION MEDICINE ROCHE A small number of pharma information and a big part of companies account for the that is the diagnosis.” SCIENCE JOHN JAKENFELDS and DOUG MORRISON look at the lion’s share of personalised He continues: “In medical medicine and one of the terms, we say the targets LIFE disruptive forces at work in the life sciences undoubted disruptors here is come from pharma and the Roche with a total of almost diagnostics picks this up and arena and the extraordinary research being US$20 billion in sales from its sees where we can find the targeted drugs. so-called bio-markers, carried out that will revolutionise medicine The Swiss group identified anything in blood or tissue personalised healthcare as a which would indicate the

key business strategy as long validity of this hypothesis. So

ago as the mid-1990s when its we work together very early S big corporate play was to have and we have advantages diagnostics and because we work without pharmaceuticals together boundaries.” under one roof. One of Roche’s early hese are heady days at the everything,” says John McKinley, CEO of According to breakthroughs was R&D end of healthcare with Precision Medicine Catapult (PMC), a Roland Diggelmann, Herceptin, a drug what seems like a constant new agency established by the UK Roche’s COO that targets the Diagnostics, this HER2 genetic Tdrip-feed of news on breakthrough government to accelerate the twin-track mutation in a drugs. Yet the latest buzz around this introduction of products and services. approach gives particular form of sector turns not so much on the Precision medicine is essentially a the group “a breast cancer. fundamental Global sales of underlying science but a new approach refinement of the already established advantage” over its Herceptin in 2014 to delivery – precision medicine. area of personalised medicine, competitors in an alone totalled This is all about tailoring medicine to harnessing the disruptive therapies and area of healthcare CHF6.3 billion that customises (US$6.4 billion). specific patient innovation from pioneers such as Roche medicine for specific patient “Personalised healthcare is groups and (see sidebar) but with greater use of groups, if not yet for the very much a reality,” he adds. consequently computer technology. individual. “It’s going to increase in “In simplified terms you’re importance as we continue to making healthcare “It comes from big data in the first looking for a genetic mutation make scientific advances, we more efcient, both instance and what you are producing at or genetic status and then you understand more about the medically and the end, are new therapies, new can tailor the medicine, and individual patient make-up, then you know that the about how biology works and financially. vaccines, new drugs,” says McKinley. response rate for that all the molecular information. “The aim is to get And as he suggests, it is ‘a golden age’ particular group is going to be And that ultimately leads to personalised drugs of discovery, with all the advances in higher than for the general more and more tailored population,” he says. “This is medicines. This is exactly what and therapy to the such areas as epigenetics and immuno- the approach of personalised modern and future medicine is patient faster and therapy. When PMC was launching a healthcare and it’s a all about – having the best more cheaply. The UK-wide network of innovation centres, compelling approach. The possible understanding of a more you know the better you patient’s situation and then patient becomes Oxfordshire-based Immunocore raised can treat. The basis to that is, having the ability to select the centre of £205 million (US$340 million) in the ➝ of course, the gathering of treatment.”

28 OBSERVE 3/15 odgersberndtson.com @odgersberndtson VIEWPOINT: The age of disruption The culture of change

IMMUNOCORE biggest private financing of a European changes in the industry over the next 50 There is genuine excitement surrounding life sciences company, reflecting the because of innovation, new technology, immunotherapy – drugs that harness the expectations around immuno-oncology. new diseases happening every day,” body’s immune system to fight cancerous cells – and one UK company is a leader in research With health services worldwide adds McKinley. “Healthcare has to move and development in the field – Immunocore. strapped for cash and resources, the more towards the individual.” Oxford-based Immunocore is well known in stakes are high. PMC estimates that the biotech world following high-level Fraser Thompson partnerships with the likes of Roche, precision medicine is already worth US John Jakenfelds is the Global Practice AstraZeneca and GSK. But in July this year the IS DIRECTOR, SINGAPORE, $14 billion in annual sales worldwide, Leader for Life Sciences at company’s profile soared to a new level of ALPHABETA STRATEGY X Odgers Berndtson; ECONOMICS and it is forecast to reach US$50-60 public consciousness after raising £205 million Doug Morrison is (US$340 million) in Europe’s largest private life billion by 2020. a business journalist sciences financing. It’s easy to get lost in change. “There’s a universal recognition that Leading institutional investors piled in Whilst the changes taking place are immense, a set of simple yet the healthcare models of the past 50 because Immunocore’s main drug – IMCgp100 – has shown huge promise in trials on patients powerful questions are useful to years will not be able to sustain the with melanoma. In effect, the drug enables the test your readiness to manage this immune system to recognise and kill new environment: cancerous cells it would not other wise Can you confidently name three recognise and, as a result, offers a nine-fold to five economic events that pose increase in success rates compared with the biggest risks or opportunities conventional cancer therapies. to your business? Are they Immunocore’s so-called T-cell receptor technology, is described by Chief Executive diferent than a few years ago? Eliot Forster as a “potential game-changer” Are you clear about the first-, within the field of immuno-oncology – itself second-, and even third-order

SCIENCE widely acknowledged as the biggest advance impacts these forces could have on in cancer treatment for a generation. your business? LIFE “We don’t think that this will be the only way Does your management team of treating cancer but it certainly, we believe, have an action plan to respond to will be an important component in treating these events and to shore up any cancers,” he says. “This technology is rather vulnerability before it occurs? like the development of monoclonal antibodies Have you identified leading in the ’80s and that started in a very narrow indicators to monitor and agreed

area and eventually has gone on to be the

most widespread drug classes available today. on trigger points at which you will reassess your strategy? S “We believe that this technology has many parallels to that. We’ve started our work with Do you have the skills (and oncology but we’ve already announced we culture) in your organisation to have a collaboration with GSK in anti-virals and navigate this changing landscape? we’re also interested in auto-immune Since the start of the 21st century, diseases.” the world has been changing Now in late-stage development, radically with Asia-Pacific at the Immunocore’s breakthrough skin cancer drug heart of the transformation. All at could be just three years away from once, emerging economies are widespread usage following the fundraising. rapidly industrialising, populations Forster adds: “The sad fact is that though huge progress has been made in the treatment are aging, new technologies are of cancer over the last 20 years, it really has coming into use, and a growing only been baby steps and the quality of life of web of interconnectedness is patients and the expectation of life still leave a transforming geopolitics, the lot to be desired. There’s a real opportunity for competitive landscape, and Healthcare has to these patients and we believe we can help.” sustainability concerns. None of these disruptions, on its move more towards own, is a surprise. The unique challenge is that they are the individual happening at the same time – and on a huge scale, creating efects that are scarcely possible to anticipate. The ‘rules of the game’ have changed fundamentally, and business and government leaders will need to reset their intuition or risk being left behind. The major consumer markets of tomorrow will look very diferent from today, but this will create both opportunities and risks for consumer-facing companies.

30 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 31 The age of disruption VIEWPOINT: The age of the drone of the environment that you are Disruptive technology But that approach is really focused on and to look for narrow minded. It implies that additional factors and influences of fully autonomous driving – nothing else will happen that that may impart a new direction, binary world of science’s hall where all of the driving not just may afect or supersede this opportunity or risk. of fame. ince the beginning of the motorway miles development. History has shown This process has a lot in Robert Boyle, the father of time, our natural and the parking us that this is almost never the common with the alchemists of chemistry, was an alchemist first instinct has always – is done by the case especially over the long old. They were and a chemist second. Isaac Murat Kansu, MD of Sbeen to create new things in the car and not the term. Do we really think that by misunderstood and Newton the genius who Microsoft Turkey, image of old things. This is one driver is still a 2070 we won’t have found a judged by their quantified gravitational ON EMBRACING DISRUPTIVE of the main barriers preventing long way of. better mode of transportation societal peers as attraction, discovered the TECHNOLOGY us from making the next leap to Recent data than the car (automated or not)? dreamers or component colours of white A disruptive technology is one that how technology can transform indicates that it won’t People are already working on occultists who light and the calculus, also spent shakes up an established our lives and our businesses. be until 2040 when 50 per cent drones to deliver packages, how thought that it was more than 30 years recording technology and destabilises an entire industry, creating a new way When all we see in front of us is of all miles driven are driven long is it before someone magic not science that over a million words on the of doing things. a straight line projected from autonomously, and it won’t be realises that a human being is held the answers to life, the subject of alchemy allegedly in At Microsoft we’ve often taken our past, we’re actually missing until 2070 where that number just a bigger (and in my universe and everything. This pursuit of the philosopher’s advantage of such technologies as a huge part of the picture. reaches 100 per cent. case, much heavier) could not have been further stone. What both Boyle and they allow you to spread into new Here’s an example to illustrate Just think about that for package and we can from the truth. The key attribute Newton intrinsically knew and areas by being diferent and by being innovative. the point. Driverless cars are an a moment. Think about then embark on a possessed by most alchemists ultimately discovered is that Think of the personal computer. It extraordinary technological what else might have new route of personal was merely their ability to see sometimes the logical answers completely and irreversibly development. There have happened by that moment autonomous drones? the future diferently. Quite are best found out by illogical changed the way we work and been some amazing test in time. I wonder if in 2070 we And what of the hover simply, these were people means. communicate. The Windows operating system, employing that cases that help cement their will still be thinking that the best board, or the flying car or let’s who were able to separate I think we are entering combination of compatibility and place in our minds as the ‘future way to move people around in be honest, why on earth are we what ‘is’ from what ‘could a new period in the user-friendly interface was of transportation’. But in reality, our society is inside a robotic still looking at this in terms of be’ such that they could history of alchemy only absolutely instrumental in the rapid I would argue that metal box with wheels. vehicles when surely the answer look beyond the current this time it is in the development of the PC industry. driverless cars are Essentially, all that’s is the StarTrek teleporter? form or function to be trans formational nature Email has transformed the world, as has mobile computing, which a pretty obvious happened is that people have The trick for making your own able to see new applications of technology rather than disrupted the traditional way of progression that predicted the future of predictions is to remember that or potential. metals where we need to divine working by allowing people to are steeped in our automotive transportation by the future of anything is rarely some magic. work wherever they are and past rather than simply looking at the past, ever a straight line, instead it’s a From alchemy Now more than ever our whenever they want. Most recently cloud computing our future linking it to what we do today in lot more like a pinball, bouncing to science organisations (and our society)

FUTURE has been hugely disruptive, and as a result the present and connecting the from bumper to bumper where It is always worth remembering need a new generation of displacing traditional resources I am yet to be convinced two points together such that each interaction imparts a that many of history’s greatest alchemists; people who can see that were in a home or business. that they are in fact, the the line can be extrapolated to slightly diferent direction and scientists started out as new potential in old things. But, That kind of disruption puts future of driving. give them the answer for the opportunity. The art lies in being alchemists, and it was only unlike their historical pressure on companies such as Microsoft, but we always aim to The latest estimates future. able to take a really broad view through their hard work and predecessors, we should not take advantage of new show that the tenacity that history showed make fun or ostracise them technologies as early as possible. development their theories to be right such when they make bold attempts Our industry does not respect that they would finally be to achieve great things that are tradition, it only respects innovation. It has to be in welcomed into the clinical, ultimately doomed to fail but we F THE Microsoft’s DNA to actualise the O should instead congratulate impossible and to embrace every RISE them for their audacity. new and disruptive technology. HE To be successful in this disruptive T age you must be proactive and take advantage of technology. It’s all about innovation. Establish a DAVE COPLIN, corporate culture based around innovation, provoke new ideas Chief Envisioning and encourage that way of thinking, creating an Officer for Microsoft UK, environment where people ALCHEMISTS can bring their ideas to life. believes that predicting future We started with Bill Gates’ technological developments in a vision of a computer for each TECHNOLOGY person and for each home. disruptive age requires a combination We have achieved that and now we are transforming of alchemy and a pinball machine ourselves to create more disruptive shifts in the industry.

32 OBSERVE 3/15 odgersberndtson.com OBSERVE 3/15 33 The age of disruption Going, going, gone Does a move to digital signal the end of conventional auctions?

s it becoming slightly passé hitting auction houses, where Goodman joined the auction to attend an auction in dealing with data – except for house from the Madison Square person, however high- the cash register takings – has Garden Company, where he was Iprofile the lots may be? The conventionally been overlooked. the president of productions answer may well be ‘yes’. The Auctioneers are becoming and live entertainment. nascent trend in the world of digital information managers. In Last year Sotheby’s and eBay high end auctions, 2010 Christie’s hired Steven struck a partnership which saw as in so many Murphy as CEO to implement its live-streaming auctions start in SELL other disciplines, digital strategy. His background April this year. Christie’s is to go digital. was in publishing and music but followed suit by buying the ING According to the he espouses the digital world. online collection management 2015 edition of the Interviewed by the Financial platform Collectrium. Christie’s Hiscox Online Times in September last year, he increased its number of online Trade Report, the commented: “We did research auctions from seven in 2012 to online art market reached that showed our customers 49 this year. It even has an app US$2.64 billion in 2014, a 68 per were living half their life, if not that allows you to bid live from cent rise year-on-year, and more, with online experiences. tablets and phones. could reach US$6.3 billion in Even our multi-billionaire clients For Fru Tholstrup, director of 2019. It’s still a drop in the who were highly interested in S2, Sotheby’s contemporary ocean – online buying accounts art and objects were personally gallery space, “Instagram has for about five per cent of the going online to study them. The become indispensable. It allows US$55.2 billion global art imperative was clear: we needed me to introduce collectors to market, and much of the online to create a digital version of the previously unseen and unknown commerce is less than Christie’s experience in a works of art, through shots US$15,000 an item, which platform-agnostic way.” taken on studio visits to the upmarket auction houses have Not to be outdone, Sotheby’s gallery, and has led to sales in a spurned, in order to maintain has hired David Goodman as its number of cases.” their high-value image. new digital and marketing chief. But the inability to physically But a trend is in place. Hiscox inspect a work remains an issue. says that “art buyers are Hiscox says: “In 2014, 82 per tie’s becoming less dependent on ris cent of online art buyers (up h the physical gallery or auction C from 78 per cent last year) say eBay house… there is an increasing S by’s the biggest challenge when level of indiference othe buying art online is the fact they between the channels are not able to inspect the work. that collectors want to In a similar vein, those worried use when buying art. that the artwork may appear IMAGES Going forward it will diferent from its representation ON K be critical to ofer I online has risen from 64 per potential art buyers : © cent to 74 per cent year on a choice of channels year.” But as digital technology when acquiring art.” becomes more immersive this

Digital disruption is ILLUSTRATION problem will also diminish.

34 OBSERVE 3/15 odgersberndtson.com The age of disruption FUNDING THEFUTURE Crowdfunding platforms such as Kickstarter have grown rapidly in recent years, offering budding entrepreneurs global exposure and funding in the process. KILLIAN FOX looks at the emergence of the sector and where it may go next

n November 2012, Brooke’s story is by no means Emily Brooke launched a unique. To date, nearly 90,000 crowdfunding campaign to projects have been successfully Iraise money for an idea she’d funded through Kickstarter, developed during her final year with more than US $1.8 billion at university in Brighton. pledged on the platform since Brooke wanted to manufacture it launched in 2009. And a bike light with a diference: as Kickstarter is not the only well as functioning like a normal player in the game; according front light, it would also project to a recent Massolution survey a green bike symbol on to the of 1,250 active crowdfunding ground five metres ahead, so platforms around the world, that drivers know a cyclist is US$16.2 billion was raised coming up behind them. globally last year, up from For a ‘little girl from US$6.1 billion in 2013. university with a good idea’ but In the past, entrepreneurs no manufacturing experience, it relied on individual investors would have been a struggle to and VCs if they wanted to raise raise the initial £25,000 by early-stage funding. Now, conventional means, but on the thanks to the explosive

crowdfunding platform popularity of the crowdfunding CROWD FUNDING Kickstarter, which had just model, which is driven by the launched in the UK, Brooke hit connective power of the ES

G her target in just five days. In Internet, more and more IMA the end, 782 backers pledged a start-ups are raising funds from

IKON total of £55,000 to the large numbers of people, most : © campaign. The Blaze Laserlight of whom they will never meet launched in February 2014; now face-to-face. The most it’s being sold in 47 countries successful crowdfunded project

ILLUSTRATION worldwide. to date, an online video game ➝

@odgersberndtson OBSERVE 3/15 35 VIEWPOINT: The age of disruption Disruptive innovation called Star Citizen, claims to market will more than double in Dylan Collins, you need to crowd. “We would potentially particularly want to be in this have raised more than US$85 size again in 2015, rising to assess its impact on a sector- look at a company like sector,” he says. million in the past three years US$34.4 billion. specific basis. “If you look at CrowdCube for our next round Collins also predicts that and is being funded by nearly But to what extent is it the toy market,” says Collins, of financing,” says Brooke, disciplines rendered one million people. disrupting the established who is also the CEO of kids’ adding: “That’s where I think uneconomical by digital media, If you are one of the backers finance industry? According to digital media company the biggest change is coming such as investigative journalism, of Star Citizen – or other Nir Vulkan, associate professor SuperAwesome, “it’s very hard from: equity crowdfunding. And will increasingly benefit from Shane Owenby mega-successful crowdfunded of business economics at Saïd if not impossible to raise an I think that really will start crowdfunding. “TV economics ON WHY BEING ‘UBERISED’ projects – you are efectively Business School, University of investment if you’re a small unsettling early-stage doesn’t support expensive SHOULD BE ON YOUR RADAR buying the product in advance, Oxford, crowdfunding is – for business. But if you run a good investors.” investigations any more but it I love disruption, whether it is with the added satisfaction of now, at least – filling a gap Kickstarter campaign and you Collins points to peer-to-peer doesn’t mean people are less geoeconomic disruption (like the financial crisis) or start-ups looking knowing you’ve helped bring it rather than competing directly have people pre-ordering a toy, lending services such as interested, so I can envisage to disrupt established verticals. to market. (Star Citizen’s with VCs and financial thus giving you working Funding Circle in the UK and groups of people buying rights Amazon Web Services (AWS) backers will have to wait till institutions. “In the last few capital, that changes Lending Club in the US, which to a story and getting return on provides enterprises, start-ups and 2016 before they get to play the years VCs have moved up in everything. So I think in certain allow savers to lend money their investment if it’s resold governments with access to computer capacity, storage and game.) This is known as the terms of level of investment areas crowdfunding is having a directly to SMEs without around the world. That would networking (or cloud computing) pre-order model. You can also and it’s harder to get smaller hugely positive impact.” involving banks or other be really interesting. via a pay-as-you-go model that access perks, such as a signed amounts,” says Vulkan, who is The benefits extend well traditional financial institutions, “It’s a fascinating sector to fuels innovation and industry poster or a deluxe edition of the conducting new research into beyond access to capital. as a potentially major source of watch,” he adds. “Whatever disruption without the need to product, depending on how the economics of equity When Emily Brooke ran her disruption. “I’m pretty certain happens, I think crowdfunding have large amounts of capital. Just look at Spotify or Airbnb, much you pay, but you take no crowdfunding. “The alternative Kickstarter campaign back in this phenomenon will get much will keep on growing for some who run on AWS and are stake in the company. has been ‘angels’ or friends and 2012, her primary motivation bigger as the banks don’t time.” completely disrupting the markets On the other end of the family, but it’s not easy to get was to show that demand they operate in. I regularly warn spectrum is the equity model, more than a few thousand existed for her bike light. large enterprises about being ‘Uber-ised’ or ‘Airbnb-ised’. Those whereby broad groups of pounds, unless you have a rich “Kickstarter helped me prove types of companies are completely people buy equity in start-ups family. A company like Seedrs is that people would actually pay disrupting big enterprises and through online platforms such good at addressing that for my idea,” she says. On top making them seriously question as Seedrs. The motivation in particular niche and you see a of that she received customer whether they have the DNA and this case is profit but, as with all lot of projects now getting feedback. “The 782 people who the muscle to remain competitive. AWS is often approached by investments, risks are involved funding of £100,000 to backed our campaign told us large established corporations and there is no return on £200,000. what they liked and didn’t like asking us how they can bring best investment when a “But it is gaining momentum,” and the product changed an practices of innovation into their company fails. he adds, “and deals are clearly awful lot in that process – organisations. Many of these conversations revolve back to the increasing, and so it is beginning basically they’re paying to do amount of disruption they are to have a disruptive efect.” your market research, which is facing from existing competitors, If you want to fully incredible.” Brooke also counts new start-ups or changing appreciate the efect as a major benefit the publicity marketing conditions. crowdfunding is having, says that comes from running an Old school companies that think they can carry on doing what Irish entrepreneur and investor eye-catching campaign. you’re doing for a long time are Of course not all campaigns mistaken. Every industry and every turn out as brilliantly as enterprise is ripe for disruption. Brooke’s. Yes, nearly 90,000 I don’t think, for example, the world’s largest hotel chains projects have been successfully thought they were going to be funded on Kickstarter, but the usurped by someone renting out CROWD CROWD FUNDING number of unsuccessful rooms in people’s private homes projects is considerably higher but it’s happened. And it’s exactly Despite regulations on equity – currently around 150,000. the same for Uber and taxi licenses, or the way that Whatsapp crowdfunding in many Still, crowdfunding flops don’t has transformed telecoms. countries, including the US seem to be deterring more and Companies need to start where only accredited investors more people from investing expecting disruption rather than are eligible to partake, it’s clear money and launching their own wondering when or where it’s going to happen. that crowdfunding as a whole is campaigns. And it’s not just on the rise – the Massolution early-stage funding rounds that Shane Owenby is Managing Director of Amazon Web survey predicts that the global are being thrown open to the Services, Asia Pacific

36 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 37 VIEWPOINT: The age of disruption Masters of our fate

of yesterday’s leadership… programme used by the likes of Speed doesn’t cut it any more. LinkedIn, AXA, Schlumberger, But a clear mind does. It helps Ford and BAE Systems. It you do the right things, instead combines meditation practices of all the things that call on you. with advanced neuroscience “Experience was needed and technology to achieve yesterday. But today it can put resilience, a positive mindset THE GAME your business in the grave. For and centred leadership. all the benefits of experience it According to its website: also has a shadow: it can close “Efective leadership isn’t about Robert Madelin MindfulnessMIND is radically changing Second Ahead: Enhance your eyes and make you just checking of more tasks. It’s DON’T FEAR DISRUPTION, Your Performance at Work with cognitively rigid. It can make defined by how well we use our THINK ABOUT THE the leadership landscape OPPORTUNITIES IT PROVIDES Mindfulness, and Founder and you miss the overnight changes minds and interact with others. Managing Director of The and make you fail because you We need flexibility and clear Disruption is abundant in the tech sector. Just look at the way that IT Potential Project – the global see today with the glasses purpose in the face of has changed our approach to the magine if, even for one outdated. Think you can leading provider of corporate of yesterday.” complexity… yet our workplaces world. It’s unleashed new and second, you could press the multitask? Think again. mindfulness programmes: “The For Hougaard, leaders are are churning out burned out radical options that mean it is pause button. For many Faced with a relentless flood new normal in business is an living in an ‘attention economy’ leaders who report little seldom not disruptive in any form. Any data-driven innovation or pure Ileaders it may seem an absurd of information and distractions ever changing, globally where mental fitness is the bandwidth for big-picture tech innovation is dissolving proposition – after all, we live in our brains are dealt the interconnected and competitive defining competitive advantage. thinking, for innovation, truly previously impermeable frontiers an incredibly complex and impossible task of processing reality. Traditional factors of “It’s disrupting the whole understanding others and between sectors and activities in a fast-paced world where 24/7 everything simultaneously. It knowledge, speed and paradigm that multitasking and building strong culture.” way that many find uncomfortable. distractions, constant pressure decreases efciency, has a experience no longer meet the running faster is a great thing. Hougaard, who through The In order to deal with disruption we’re going to have to re-learn the and information overload have dramatic impact on demands. In fact, today they can Level of focus now determines Potential Project provides value of infrastructure. People become accepted as ‘part of efectiveness and drastically become the factors that keep business and leadership mindfulness programmes to assume that in this new immaterial, the job’. reduces productivity. you stagnated in the status quo performance, it is one of the Fortune 500 companies around digital world we no longer need But what if you were told that Today, the smart leader is with a leadership style of foundation tools for leadership the world, points to another infrastructure and if you look at the underinvestment into taking a brief moment to slow slowing down in order to speed yesterday.” excellence,” he says. example. “Steve Jobs was a infrastructure over the last 10 or down – focusing solely on the up. Mindfulness enables senior “Knowledge was foundation “Clarity of mind is regular meditator for more than 20 years it’s a tragedy. task in hand, the person you’re leaders to improve their focus, yesterday,” he continues. “But fundamental. It can be the 25 years of his life,” he says. Education and the availability of talking to or the surroundings flexibility and adaptability in today’s leadership calls for quality that puts you a second “He attributed his ability to learning in order to keep up to you’re moving in order to move beyond minds that have high levels of ahead of others, in both think completely outside the date with the speed of disruption will be critical, and we’ll finally have – is now the key traditional ways of thinking. clarity to embrace and thoughts and actions, and I’ve box, and even Apple’s entire to wake up to the fact that we will MIND diferentiator As a result the world penetrate the unparalleled no doubt that it can ultimately ethos of striving for total cutting have to invest in the fundamentals between a leader becomes open to new ways of complexity. Speed was the fuel mean the diference between edge innovation, to his in order to be successful. FUL who is able to understanding, leading, success and failure.” practising mindfulness Secondly, We’ll have to progressively understand that the simply survive creating and innovating. The proliferation of techniques.” untapped value of data and NESS and a leader who According to Rasmus mindfulness throughout the There is no secret. By taking data-driven innovation is so big will thrive? Hougaard, author of One corporate world is considerable. the time to focus, to correctly that current ideas about who owns The answer is mindfulness. Google, Microsoft, Nike, Intel, direct attention and to approach that data and who has rights to It’s likely you’ve heard the term American Express, General work with the clarity and focus access it will need to change radically. It’s an ethical question – it is, after all, the latest Electric, Sony and Transport for that mindfulness provides, that is in the interests of society. buzzword in the executive London, to name a few, provide leaders are now bringing all Disruption is something that we vernacular. But this is far mindfulness programmes for their capabilities to leadership. cannot avoid. What we lack as more than a fad. Inspired employees while Harvard Quite simply, it’s a must have. human beings is the ability to say “I want to understand potential by the ancient Buddhist Business School now includes By stopping, taking a breath and changes and to master them”. In practice of paying mindfulness practices in its focusing on the task ahead the other words we, as a society, need attention with focus, clarity leadership programme. smart leader will be able to buy to get back into a mindset of being and discernment, Google’s ‘Search Inside themselves an extra second. masters of our fate. mindfulness is revolutionising Yourself’ mindfulness course, And in today’s fast-paced I believe that a more participative approach in society will unleash the way leaders approach their which started as an in-house executive landscape that may our optimism about change. day-to-day activity. ofering for employees has well be all you need to distance Making business decisions become a globally recognised yourself from the competition. Robert Madelin is Senior Innovation Adviser at the on the basis of experience is European Commission

38 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 39 The age of disruption The age of disruption

been the change in landscape; Sky now ofers day-by-day streaming deals through Now TV, on almost any device. For Sky, a consistent innovator, the rapid development of streaming technology has presented an UP opportunity to reach a new customer base. STREAM Now TV’s director of strategy James Alexander tells Observe: CHRIS SMITH on how Internet-based, Increasingly, in 2015, they’re “Now the technology is in on-demand entertainment content getting it directly from content place, the whole OTT [over the creators like HBO, Showtime, top streaming] sector is is widely disrupting traditional WWE, Amazon and Netflix. exploding in the UK. distribution models “Thanks to streaming “There are so many things solutions, we’re witnessing a happening to eliminate barriers great unbundling of for people who have long programming and the idea of wanted access to pay TV traditional television is fading,” content, but have taken igital media says Brian Solis, the author themselves out of consideration. streaming is a and Principal Analyst at The “Now TV is a way to go after revolution enabled Altimeter Group. that part of the market, to take Dby the rapid advancement of “The increasing number of advantage of Sky’s assets and communications technology. devices carried and available to repackage them in a way, In the US, traditional content providers are also changing tack. High-speed Internet at home, internet bandwidth has led to a which plays to the consumer Crown jewel networks HBO and Showtime have in mid-2015 gone on the go and even in the skies great disruption in consumer demand. It taps into a diferent directly to customers with standalone streaming services that do is enabling consumers to enjoy expectations.” type of customer and this is their favourite media content BskyB in the UK is one of why we experience such little not require a cbale TV subscription; a huge watershed moment on demand, wherever they many companies adapting the cannibalisation and why the roam and on any screen business model to meet the two brands are still they choose. demands of the streaming era. experiencing growth. These afordable monthly, the WWE Network – the first REAMING But what does this Consider this, new customers “The economics of over the no-commitment platforms seek ever 24/7 over-the- mean for businesses? had traditionally been locked top delivery means it makes to address three issues for the top TV network. ST Traditional media into pricey 12-month accords, sense to serve these customers show-makers like HBO and Instead of providers in the requiring a home dish and day by day.” Showtime: The rampant piracy consumers paying television, music and set-top box installation. Such has In the US, traditional content of their content (the June finale $55 a month for gaming industries are providers are also changing of Game of Thrones was monthly PPV events facing unprecedented tack. Crown jewel networks illegally downloaded 2.2 million via a cable provider,

challenges from HBO and Showtime have in times in 10 hours, while some Network subscribers

fresh-faced tech STREAMING BY NUMBERS mid-2015 gone directly to used a new live streaming app get those same • According to a recent Wall Street ST innovators and, Journal report, Spotify has been customers with standalone called Periscope to beam a events, stacks of while innovative valued at US$8.4 billion streaming services that do not feed of the show to Twitter in original programming

new solutions are • An estimated 41 million people require a cable TV subscription; real-time!) the dramatic rise of and the vast library REAMING paid for streaming music services resonating with them, decades- in 2014, versus 28 million in 2013 a huge watershed moment and Netflix as an original content of archive content available old business models are also • In the first half of 2015 Netflix’s a hallmark of the unbundling competitor, and the rise of the for US$10/£10 a month. altering rapidly. share of peak period downstream Solis speaks of. binge-viewing, cord cutter. WWE Chief Revenue & trafc from fixed internet In TV land streaming services “Consumers are now in Vince McMahon’s World Marketing Ofcer Michelle connections grew to 36.48 have ofered viewers a percent. [Source: statistica.com] control of their own ecosystems. Wrestling Entertainment Wilson explained the decision tantalising glimpse at • US online consumers spend Rather than 100s of channels (WWE) pioneered and rode the to tear up the tried and trusted democratised, à la carte 10 per cent of their entertainment they never watch, the mantra of pay-per-view distribution business model. time streaming movies or TV on original content available to subscription services connected customers is now ‘all model for 30 years. Now it is She told us: “We spent three watch on their schedule. [Source: Nielsen] you need is… less.’” selling direct to customers via and a half years looking at ➝

40 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 41 VIEWPOINT: The age of disruption Mobile in Asia

all options available and “The rate of this growth has now, but I think it will grow to a than 20 hours a week watching “To understand the saw the consumer adoption made it abundantly clear to us billion. In between there’ll be a other people play video games. phenomenon in simple terms, of direct to consumer that in years to come, healthy business.” It’s a staggering level of people enjoy watching others subscriptions grow streaming will be the way that One industry that does not engagement and has catapulted who are the best at what they dramatically. most people enjoy music,” require re-growth is gaming. the company to the fourth most do when it involves a shared “Combining that with the fact Warner CEO Stephen Cooper However, streaming is still popular website (during peak interest.” that WWE fans consume five said during the earnings call. having a huge impact; not so trafc times) in the US. With that said, are streaming times the amount of digital During this transitional much in how games are played, Its 100 million unique viewers services like Twitch.tv, about to Jacob Kvist content than the average period, the economics of but how they’re watched. a month are turning into 1.5 surpass the act of actually ON MOBILE DISRUPTION IN consumer and are two times streaming are the subject of Twitch.tv, a four-year-old million individual broadcasters playing? Are gamers prepared SOUTHEAST ASIA more likely to order Netflix or great debate, but little clarity. start-up was recently sold to and spending a long time to drop their controllers, sit back In our region disruption centres on Hulu, we realised going direct Royalties for per stream over Amazon for a staggering watching. Some of the 11,000 and watch the elite? the rise of mobile. Vietnam is still to consumer was a very sales are inherently lower, but US$1 billion. Here’s why: partner channels get so many “Viewers eclipsing players is a quite a traditional media market, as viable option. companies like Spotify, by far Half of its user- followers they’re able to make a tough thing to gauge,” DiPietro is Southeast Asia in general, but consumers have advanced. “It provides us with a the most dominant player, are base spends living from the shared muses, “but it’s safe to say both They’re no longer spending their tremendous global opportunity persisting with ad-funded more subscription proceeds. playing and watching games are time around TV but on mobile to have a one-on-one options that give music away Matthew DiPietro the continually on the rise.” technology, and no one has really relationship with our fans and for free, as well as the £10 company’s SVP of marketing Speaking of on the rise, there cracked how we can use that as a significant marketing platform. access to critical data that we monthly Premium tier. tells Observe: “It was the are few sectors immune from The old model of simply buying didn’t have in the past.” Apple and another streaming ubiquity of broadband that the streaming revolution, advertising space simply doesn’t However, before conquering newcomer Tidal (fronted by made Twitch and its live including air travel. Both JetBlue work on mobile. So, our clients are TV, Apple has work to do in hip-hop mogul Jay-Z) ofer high definition video and Virgin America are utilising investing in advertising and other streaming sectors. It’s paid-only tiers. As a result, content available on a new satellite broadband spending money on media that is becoming less efective, which is a already playing catch-up in the influential artists like global scale possible technology to bring an end to huge disruption to the ecosystem digital music arena it had Taylor Swift are siding and revived the those in-flight ‘this connection but also a great opportunity. previously dominated. with Apple and Tidal appeal of does not support streaming There are two ways to crack that For years Apple watched and withholding music watching services’ blues. disruption. The ‘defensive’ approach involves optimising streaming services like Spotify from Spotify, who suddenly games. JetBlue has partnered with whatever is being done on tear chunks out of its iTunes seem old guard. Amazon to ofer Prime Instant traditional media. We’re adopting Music Store revenue. It’s easy to “Tidal believes in valuing Video access to the entire the more ofensive play: investing see why. A monthly subscription music,” said Pål Bråtelund, library via its free Fly-Fi heavily in mobile advertising and ofers access to 30 million the company’s Strategic broadband service on flights in employing a lot of people focused purely on that platform. tracks for the same price as a Partnership Manager. “That is the US using their own devices Have we truly cracked how to REAMING single album a model that wants to deliver or the seatback console. That’s engage consumers in a cost- download. value to fans but compensate a big deal. efective, mass reach way on ST However, on June artists at the same time. To The technology is there and mobile yet? The answer is no. Nobody in our industry has. 30 2015 Apple fought us it’s important that the the appetite for on-demand When it comes to communication back. Apple Music money comes back into content in any setting on any consumers are now in control. Our matches Spotify’s music creation. device is higher – quite literally investments have shifted towards proposition and price “This market is experiencing – than ever. conversations than messaging. point, while ofering big movement and we’ll The disruption has had such an impact that the entire industry is Chris Smith is a technology writer the advantage of continue to see that for the struggling to adapt due to this based in New York built-in access to next five to 10 years as the massive shift in power from hundreds of millions world transitions to streaming. publishers/brands to consumers. of customers already “We are a market with 40-50 The lines between who does what in the industry will become carrying iPhones and iPads. million paying customers right more blurred in the future. You It’s a big shift for Apple’s won’t necessarily have an business model, but a necessary advertising agency that comes up and overdue one. Warner Music with an idea, then a media agency Group announced in May it had Apple and another streaming newcomer Tidal (fronted by and a digital agency that execute it because it just doesn’t work with made more money from hip-hop mogul Jay-Z) offer paid-only tiers. As a result, influential where the consumers are at. The streaming than digital artists like Taylor Swift are siding with Apple and Tidal and lines need to be redrawn. downloads for the first time. witholding music from Spotify, who suddenly seem old guard Jacob Kvist is CEO of Group M The tide has turned. in Vietnam

42 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 43 The age of disruption The age of disruption

achel Botsman is one to hire other people to do jobs another round of lectures and of the world’s leading and tasks), Etsy, Kickstarter, talks as well as embarking on commentators on the Vandebron (a Dutch start-up teaching the first-ever MBA Rrise of the so-called which arranges for consumers course on the collaborative collaborative or share economy: to buy electricity directly from economy at Oxford University’s the radical system where independent producers cutting Saïd School of Business. ✁ consumers share goods, utilities out of the transaction It’s a timely moment for services, space and money entirely), Cohealo (pioneering Oxford to ofer such a course. empowered by social networks, collaborative consumption in According to Forbes, “The mobile devices, online healthcare), Fon (which enables revenue flowing through the marketplaces and other new people to share some of their share economy directly into technologies. home Wi-Fi network in people’s wallets will surpass Botsman describes the exchange for getting free Wi-Fi US$3.5 billion this year [2014], collaborative economy as an from anyone of the seven million with growth exceeding 25 per “economic system of people in Fon’s network), and cent. At that rate, peer-to-peer decentralised networks and numerous others both large and sharing is moving from an marketplaces that unlocks the small have disrupted economic income boost in a stagnant value of underused assets by models in ways that are only wage market into a disruptive matching needs and haves in now being understood. economic force.” ways that bypass middlemen.” This crucial elimination of the middleman and thus bypassing of the traditional modes of production, distribution and consumption, have thrust the collaborative and share Renting, lending, swapping, sharing, economy to the forefront of current economic thinking. bartering, gifting through technology Botsman is a World Economic Forum Young Global Leader, was named by Fast Company as one of the ‘Most Creative People in Business’ and Monocle cited Looking really clunky her as one of the top 20 As Botsman says: “Renting, speakers in the world to have at lending, swapping, sharing, your conference. bartering, gifting through Her writings and research technology,” is taking place in C have featured in the Harvard ways and on a scale simply not Business Review, Wall Street possible before the Internet. O Journal, the Economist, and In the five years since L numerous other publications. Botsman and her co-author Roo The unstoppable She has spoken to and advised Rogers wrote their ground- L a diverse range of companies breaking book Collaborative including the Clinton Global Consumption things have A Initiative, Google, Microsoft, moved on remarkably fast. PwC and many others on the “When we wrote the book we BORATION rise of collaboration power of the collaborative had the likes of eBay and Craig’s IMAGES economy as a “lens to view list,” says Botsman, “which now “At a macro level,” says RACHEL BOTSMAN is a global expert on the power N IKO challenges and unlock new look really clunky compared Botsman, “what is causing

of collaboration and sharing – which excludes the N: © opportunities in the world”. with what we see today.” change in a way that we are As we will see the likes of When Observe caught up just starting to understand middleman – to transform how we live, work and consume. Uber, Airbnb, TaskRabbit (a with Botsman she was passing is a big shift from top-down,

She talks to Observe about this brave new world ILLUSTRATIO mobile marketplace for people through London en route to centralised organisations that ➝

44 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 45 VIEWPOINT: The age of disruption Disruption in MENA control the creation and and transportation. People technology is disruptive: not distribution of goods towards were suddenly saying ‘Oh my just for established companies, distributed marketplaces and God, this will completely rethink but for the people who work in networks where the creation, the way we get from A to B’.” them and their families.” the access and the distribution Botsman believes these new “If you take this principle of of goods look very diferent.” players aren’t just rethinking access over ownership,” says What this means in a transportation or hospitality Botsman, “and shared access to John Vickerman disruptive age, says Botsman, is “but rethinking supply and resources [see Vandebron] it ON DISRUPTION IN THE that there is a “fundamental demand and rethinking where can have massive applications MIDDLE EAST AND NORTH change in customer behaviour customers get products and in emerging markets where it AFRICA (MENA) that can’t be reversed”. services from and who they can be anything from there isn’t In the MENA region, disruption Botsman continues: “Take trust in ways that can transform a banking or transportation comes in many forms. Airbnb. People originally saw it not just taxis or hospitality but infrastructure, because you can Technology is a significant as a way for people to share a bigger behaviour.” bypass many of the traditional disruptive force that has enabled us to compete digitally alongside homes but what is fascinating is However, this brave new models. M-Pesa is a really good the traditional cable and satellite how technology created not collaborative world does have example. You can directly lend delivery methods. Growth in digital only efciency but also the its complications. At the time of money through a mobile phone means that we can now deliver trust that meant they didn’t writing Uber’s foray into France and bypass the bank all the way great content to customers on the move or at home, and on various have to build a portfolio of hadn’t exactly gone according through.” connected devices. hotels or accommodation but to plan. Uber closed its ride- Customers now watch TV while could facilitate access to sharing service, UberPop, in Democratising access simultaneously interacting with inventory that already existed Paris, after the arrest of two In a recent investigation into social media on their iphone, tablet and, through that, they could executives and a series of mobile finance, the Economist and other devices, which allows us to gain instant feedback and have scale very rapidly. But they increasingly disruptive protests said: “In Africa, only one in four more accurate information on the could also give people an against the company in France. people has a bank account but content they are watching and entirely new experience – and The Guardian newspaper eight in 10 have access to a want to watch. in a very short window of time reported that the company had mobile. An early fintech success A very young population is fuelling this disruption. In Saudi they are changing customer made the decision as a result of was M-Pesa, a Kenyan phone- Arabia, for example, 46.9 per cent behaviour around travel.” “intimidation, violent protests based payments scheme of the population is under 24, and organised aggression launched in 2007 by Safaricom, company: the hosts, the guests, Future of work and jobs highly educated and afuent, so Rethinking from A to B against UberPop drivers and a telecoms group. By knitting the employees are all seen as According to Botsman, over the the adoption of new technologies Botsman adopts the same users … due to a minority of together a network of agents one big organisation. You may next couple of years the “future is swift and consumers demand high quality content instantly. principle for Uber, the out-of-control individuals. Uber selling airtime into something be an employee one day, a host of work, the future of jobs, the Recent figures from Dubai School collaborative business that does not wish to run the akin to a banking grid, the or guest another. rise of an independent, more of Government reveal that the allows users to hire a taxi, slightest risk to UberPop drivers scheme opened up cheap and “The traditional way of distributed labour force is MENA region has approximately private car or rideshare directly and passengers,” it added. instant payments to the masses. thinking is that there’s a firm going to become a massive 125 million Internet users, of which 53 million use social media every from a mobile phone, in Despite this unexpected and It is now used by three-quarters line between employees and topic of conversation. What I day. A separate study records that minutes, using its app. “It violent reaction to ride sharing of Kenya’s 22 million adults.” the people you provide goods am starting to see, and I really 80 per cent of Internet users in the [Uber] is really frightening to collaboration, 10,000 drivers What about the people who and services for, so they have encourage this in organisations, region spend more than one hour people because it’s gone into a have signed up for the service run these new organisations? to structure these companies is the behavioural changes: every day on social media. sector that really hasn’t in France. Uber said: “We Such innovative businesses completely diferently. how does this change the It adds up to tremendous interconnectivity and the rapid changed for 50 years – taxis understand that new have human capital needs that Customer experience, trust and way I think about something uptake of new ideas and are outside of the norm. Says safety, they’re the largest that in turn leads to a bigger technologies across traditional Botsman: “The people actually divisions in these businesses.” system change.” country boundaries, which are then running and building these Botsman knows that “these Ultimately for Botsman it’s adapted and defined for those cultures and markets. companies have a very diferent guys” (at Airbnb, Uber et al) about “having the leaders in It’s easy to see new markets as DNA. Many of those I have “are incredibly commercially place that can re-imagine the risky or volatile, but engage with spent time with recognise the savvy but they think completely way value is going to be them and understand them, don’t It’s about continually creating new relationship the customer diferently about organisational created and then consumed.” just fly in/fly out or wait for them (if you can call them that) culture and structure. to stabilise – by the time they are stable in a western sense, the challenges and opening new doors rachelbotsman.com and the company wants is Traditional roles are being opportunity may be lost. fundamentally diferent. For redefined or completely What’s Mine Is Yours: The Rise of Collaborative Consumption Airbnb there is no distinction fractured because they have John Vickerman is Senior Vice (2010) by Rachel Botsman and President HR at OSN, the largest between community and multiple dimensions.” Roo Rogers is available now pay per view TV network in MENA

46 OBSERVE 3/15 odgersberndtson.com @odgersberndtson OBSERVE 3/15 47 The age of disruption The age of disruption

Brand and people exchange A battle of attrition involving a value through Values, in a pinball don’t know if the consumer feels an empathetic forensically guided investments in marketing linear journey towards loyalty journey towards relationships connection with the brand, perceives integrity in activity to exploit that ‘brand value’. FROM its purpose, or finds it possible to relate to the And, while one is changing to eXchange, why manner in which the brand conducts itself? not re-think the whole business model of the BROADCAST- The future of the market research industry research industry? The advisory model is all- depends upon saying goodbye to the idea of pervasive. A bit of data is served up by battalions OBEDIENCE TO conversion, and welcoming the meritocracy-based of people, sometimes brilliantly, sometimes idea of ‘eXchange’. We need subtle, complex lugubriously. Businesses like Uber have shown us MERITOCRATIC- insights into human feelings – how we are being we can revolutionise things, into a ‘software as a seduced one way, persuaded another. service’ model. The insight industry should invest EXCHANGE Then there’s the challenge of data itself. Most in giving value through its IP: analysing powerful insight is still gathered the old way: via ‘system 2’, properties and opportunities in brands, and how post-rationalised questionnaires. That might have clients can leverage those in a self-aware, NADIM SADEK on why the been ok, until Nobel Prize-winning Professor empowered fashion, rather than perpetuating a world of marketing needs Daniel Kahneman made it clear through his cadre of craftspeople, variable in quality and neuro-scientific enquiries, that much of our subject to a host of system 2 flaws themselves, radical change decision-making in life is reflexive, rather than often prone to commentating rather than reflective. “At the heart of his… work is the idea improving the odds of success. Relied upon authoritative Relies upon Inclination broadcast-obedience to Interact based on that when we think, we use two systems. There is So what is the future? eXchange, not conversion. mutual respect f you want to beat your competitive set, you our “fast” system 1: automatic, efortless, intuitive, system 1, not just system 2. Seduction and need to know where what you do works best, and capable of providing instant answers to simple persuasion to unlock understanding of people’s relative to all the others. And what to do about questions like ‘2 + 2 =’ or ‘Do you love your inclination to interact. Pull to understand brand Iit in a way that gives you competitive advantage. mother?’ Then there is our ‘slow’ system 2, the potential, Push to know how well it’s being Marketing needs better understanding of people. back-up processor, which comes into operation activated. Commercially relevant correlated It requires the will to say that the vast banks of when we need to stop and think about questions measures. A SaaS (software as a service) to drive data sitting in the vaults of the major research like ‘What’s 24 × 17?’ or ‘What’s the endgame in down costs, and better serve brand-owners’ houses are obsolete. Sure, that’s a big step. Marketing and Research New, subtle, contemporary Crimea?’ (Thanks to Richard Godwin of the needs. dominated by rational measurements reflecting the Invested infrastructures need to be declared measures and data capture Values and drivers which lead London Evening Standard for this summary.) Does this work all around the world? Yes! Take a redundant. But the time has come for normative to Inclinations to Interact Despite complex language and higher-order macro view: we used to believe them, they who data to be reset. It’s time for a positive disruption. cognitive function being part-definers of the stood on pedestals. The ‘pillars of society’. They Using much more consumer-aligned, culture- sophistication of homo sapiens, our basic instincts were the wise, we were the willing. World leaders, attuned measures is completely tenable, today. still govern most of what we do. Instinctively we banks, religions. Even FIFA! It was globally true Why would one persist in using a map, when we ‘know’. Really want a car? Spend ages poring over that we liked authoritative figures in broadcast can use SatNav with dynamic trafc predictions? every report to justify it. Don’t like that woman you mode, telling us what to do. Then things changed. In marketing terms, the old world worked on the just met in an interview? Pore over her data to We discovered that talking to each other was Though it’s a higher order Implicit Response Timing theory of conversion funnels. Tell them the story, human characteristic, gathers heartfelt responses, justify her exclusion from the candidate list. generally as helpful as listening receiving ‘voices neuroscience has proven that giving depth, granularity, and tell it good, tell it again and again, and it’ll stick. humans primarily rely on feeling, to measurements of Insights need to be measured by system 1-type, from on high’. Instead of waiting for our next System 1 rather than System 2 relationships MARKETING Acquire. Transact. Retain. ‘We’ve got ‘em now!’ It thinking in brand behaviours reflexive data-gathering. System 1 thinking is heart- lesson, we explored, taught ourselves, came to our relied upon broadcast-obedience. Today, it’s felt, it makes us feel at ease with what we do, and own understanding. diferent. We have an Inclination to Interact, or how we behave. System 2 rationalises what we Peer power reigns everywhere. Transparency not. Interactions happen at diferent points on feel. Yet, with market research data, it’s been through technology lets us know every facet of the relationship journey. Our afections wax system 2 all the way, for decades. The industry has those with whom we deal. Using tin from illegal and wane, depending on the last interaction relied on self-analysis and linguistic reporting of Indonesian tin mines? Not paying your corporate or shared anecdote. The tide endlessly moves. careful thoughts in both qualitative and taxes? Or, for every pair of shoes sold, donating a What was a predictable, linear conversion quantitative research. pair to children in need. Everything a brand does is model has become a dynamic pinball of surges Marketing has so long been the renegade today weighed and measured as part of that Eddies and flows of Propositional Pull and and withdrawals. models and approaches Activation Push analyses for function for CEOs to manage. Using better ‘inclination to interact’. Broadcast-obedience has granular guidance towards In the world of market research, where the value growth in brands measures and better data (Seduction and become meritocratic-eXchange. Worldwide, now, chief purpose is to make marketing more Persuasion, via System 1) we are also able, finally, we see value through values. efective, conversion has underpinned every to separate the value of a brand’s propositional If you’ve been feeling, as you read this, that it model, for every decade of the industry’s pull from its activation push. This makes it rings true… Stop thinking. Act! existence. It’s no longer fit for purpose. It does perfectly possible to identify how powerful the not reflect real life. What is the point of evaluating ‘DNA’ of a brand is, in terms of its correlation with Nadim Sadek is CEO of TransgressiveX, an insights ‘awareness’ or ‘advertising efcacy’ when you value growth in its category, and therefore to make agency that delivers brand planning, through system 1 measurements of brand-consumer eXchanges

OBSERVE 3/15 Data distributed in set-pieces, Where clients interact with @odgersberndtson OBSERVE 3/15 48 vulnerable to subjective calibre better, swifter data interrogated 49 of advisors at will, receiving added value as they wish and require The age of disruption The age of disruption

CARBON NANOTUBES Golden Hammer 2.0 A synthetic material, carbon nanotubes ofer the combination of great strength, light weight and excellent electrical conduction and have uses in fields as diverse as hydrogen storage, electrical shielding and next generation lithium-ion batteries to name just three. The ramifications for business are significant and the potential for disruption in many fields is strong. US Secretary of DISRUPTIVE Energy (and Nobel Prize winner) Steven Chu made headlines when he addressed the United Nations Climate Change Conference in Cancun in 2010 and noted that an electric car with a next generation lithium-ion battery which could be recharged in two minutes could be a realistic TECHNOLOGIES replacement for one powered by fossil fuels. Such an advance could turn electric cars from impractical curiosities to the next big thing, and the The age of disruption has led disruption this would cause would be major indeed. to the creation of some quite From an investment perspective, the carbon nanotubes industry is also an interesting opportunity. One study by Grand View Research breathtaking technological projected that global production will quadruple between 2014 and 2022 advances ranging from 4D to US$3.42 billion, with 40 per cent of that growth in the Asia-Pacific

ALAMY region alone thanks to demand from the region’s electronics sector. : © printing and carbon nanotubes Nanocomp Technologies: nanocomptech.com/what-are-carbon-nanotubes

to automation and robotics. PHOTO New Materials News: newmaterialsnews.com Report by MIKE WATERS

AUTONOMOUS VEHICLES Reinventing the wheel You’ve probably seen headlines about self- driving cars and perhaps they were even in 4D PRINTING Dave Coplin’s exploration of them in this very No assembly required NOL TECH issue. Estimates on precisely when self-driving TECHNOL You’ve heard of 3D printing? Good, vehicles will hit the market vary widely and it is but you’re already behind the times. rare to find two observers in agreement: Audi’s Head of

4D printing is what happens next, Product and Technology Communications Stefan Moser

and it can be best defined as 3D has argued for 2017, Tesla CEO Elon Musk has speculated OGY printing plus stimuli. A 3D printed unit on 2018, Ford CEO Mark Fields and Nissan CEO Carlos OGY may still need some assembly before it Ghosn both think 2020 more likely and Daimler Chairman is finished, but 4D printed materials Dieter Zetsche has predicted 2025. That all of the above modify themselves on the fly – clothing are global names is no accident: this is the future of that becomes a looser fit when it gets warmer, for example. transport, and whoever holds the right patents wins. MIT’s Self-Assembly Lab is a major player in 4D printing research The logistics sector is one of the world’s biggest and they are clear on its promise, arguing that: “Using only water, employers and the domino efect caused by disruption heat, light or other simple energy input, this technique ofers to this sector – can the US economy survive 3.5 million adaptability and dynamic response for structures and systems truckers abruptly becoming unemployed? – is of all sizes.” As research scientist Skylar Tibbits puts it more simply too huge to be anticipated and, when poetically: “This allows us to give materials a life.” magnified to the global scale, the instability The business environment, unsurprisingly, stands to gain. will be immense. Are you ready? ➝ Inventory is a constant concern for the modern business, but RAND Corporation (Autonomous Vehicle equipment that can change itself to suit the task and circumstances Technology: A Guide for Policymakers): can streamline almost any process. rand.org/pubs Institute of Electrical and Electronics Engineers: MIT Self-Assembly Lab: selfassemblylab.net spectrum.ieee.org/static/the-self-driving-car Stratasys: stratasys.com

50 OBSERVE 3/15 @odgersberndtson OBSERVE 3/15 51 The age of disruption The age of disruption

HYDROGEN FUEL CELLS SOLAR POWER Engine for change Come for the sunshine, The hydrogen fuel cell promises to be stay for the people the biggest disruptive development Has solar power’s moment in the sun to transportation since the internal come at last? With the cost of solar power combustion engine replaced the falling to the point where it can now begin horse, and the transition to a to seriously compete with established coal, hydrogen-based economy will oil or nuclear options and projected costs force a once-in-a-century disruption of a mere US$1.60 per watt by 2020 to the energy market and knock-on according to research by McKinsey (as efects for anyone connected to it. opposed to coal’s current rate of In practice, that’s every business approximately US$2.10 per watt according to to varying degrees and the US Department of Energy), the next big shift the disruption could be in energy could be solar power taking a truly gigantic. For one thing, competitive or even dominant place in the market. how exactly is a huge What does this mean for business? On the one hand, a change in transport solar panel or two on the ofce roof taking the sting out of infrastructure away from a energy bills will doubtless be welcome news to any CFO and keeping petroleum-based economy carbon footprint under control is a routine part of many a modern to a hydrogen-based economy to be business strategy. On the other hand, disruption in the energy market achieved? Perhaps the most cutting famously spreads to other areas and a shift in infrastructure away ALAMY summary came from Tesla CEO ALAMY from traditional models won’t happen overnight, cheaply or easily. : © : © (and, incidentally, the Chairman McKinsey Quarterly: mckinsey.com/insights of solar energy company SolarCity) PHOTO

PHOTO Clean Technica: cleantechnica.com Elon Musk: “Hydrogen fuel cells are the energy of the future – and always will be.” Altenergy.org: www.altenergy.org/renewables/hydrogen_power.html Forbes – ‘The rise of the Hydrogen Fuel Cell’: www.forbes.com/sites/ billtucker/2015/04/29/the-rise-of-the-hydrogen-fuel-cell/ NET-ZERO ENERGY BUILDINGS One hand gives, the other takes Net-zero energy buildings ofer a ROBOTICS disruptive new take on architecture that Spanner in the works NOL TECH could see huge savings in facilities costs. TECHNOL Advances in robotics and artificial intelligence have Simply put, energy used in a building’s seen steady improvements to the point where a operation is matched by energy generated

disruptive expansion of robots’ involvement in through renewable means onsite, cutting

various industries is getting closer by the day. the need for external power OGY Professor Ayanna Howard of Georgia Tech and making energy bills a thing of the past. OGY explains: “Everything’s starting to line up… Interestingly, net-zero energy buildings are already experiencing The actuations, electronics and motors that a very promising growth in market share and industrial construction you need to make robots function in the real – a sector ever-conscious of the bottom line – is particularly fertile world are getting cheaper. Everything’s kind of coming together.” ground for net-zero energy approaches when conventional Manufacturing, construction and transportation are the sectors power options are cost-prohibitive or unreliable. Tesla, for where robotics will likely replace human workers first – physical tasks example, won headlines the world over when their net-zero that are difcult, dirty or dangerous or where boredom or distraction energy Gigafactory in the solar-power-friendly Nevada is a serious issue. Kawasaki, Yaskawa and Lincoln Electric, for example, Desert was announced in September 2014. As net-zero all ofer robots that can weld and thus replace a human worker who energy becomes more practical and economical with could become tired, make mistakes or just be inconsistent. each technological advance, net-zero energy assets However, the other side of the coin is huge unemployment as entire may become a routine sight in real estate portfolios sectors of the economy become permanently post-human. Is society for tomorrow’s businesses. ready for such upheaval? Forbes – ‘Net-Zero Energy Buildings Are Coming’: Fast Company – ‘Autodesk’s Robotics Lab of the Future’: forbes.com/sites/justingerdes fastcompany.com/3047927/exclusive-inside-autodesks- Institute for Building Efciency – robotics-lab-of-the-future ‘Perspectives on the state of the market’: Robotic Industries Association: robotics.org institutebe.com/Green-Net-Zero-Buildings

52 OBSERVE 3/15 @odgersberndtson OBSERVE 3/15 53 You are charged with growing Facebook’s Nicola Mendelsohn, advertising revenue. How in a disruptive and Vice-President EMEA for rapidly evolving marketplace are you tackling that challenge? Facebook, tells us why Mobile has fundamentally changed the way we live our lives. It gives us freedom to do the things she took on her role and we as humans have always done – connect, share, what challenges she faces discover – but in new and exciting ways. Today people have an infinite supply of content and total control of where to spend their time and attention. This has profound implications for businesses and advertisers, who have to really push the boundaries of creative content to capture the WHY I interest of their audiences, and at scale. We believe that the content shared by advertisers should be every bit as engaging as that shared TOOK by your friends and family. And today that means video. We are continually optimising the platform to provide a creative canvas that enables brands to deliver much richer storytelling through video, THE JOB combining sight, sound and motion, which – in So why did you take the job? turn – provides a bigger opportunity for brand Facebook connects 1.5 billion people from all building, emotional resonance and loyalty. over the world in one amazing global conversation. To be part of something that has become an What type of ‘talent’ do you look for to join your intrinsic part of our lives in a relatively short space ranks at Facebook? of time is very special. But what always really Facebook is an open, progressive culture that excited me about Facebook was how it is champions talent. We encourage people to be relentlessly innovating to keep up with the inquisitive and restless, and aim to create an incredible pace of change around us. People environment that empowers and inspires our are at the heart of everything we do and as colleagues to be the best they can be. Sometimes they continue to evolve, so will we. that might mean trying and failing, but failure isn’t frowned upon at Facebook – learning is You have been in post for two years now, what a far better outcome. Mark [Zuckerberg] believes was the first major issue or problem you strongly in surrounding himself with passionate, encountered and how did you deal with it? exciting and inspirational people, hiring those I wouldn’t say there have been major issues, rather people who he himself would want to work for – new challenges to face and overcome. What these which I personally think is a brilliant mantra. two years at Facebook have shown me is that trying, failing and learning is a process you need to How would you describe your management style? go through. It makes you better, more motivated When I was at school, teachers told my parents and more willing to shake things up. that my questioning and inquisitive nature would be a barrier to having a successful career. In How has your own role evolved since you arrived? response, my father explained that this was My role is constantly evolving. Whether it’s precisely what would take me far in life. That creating new advertising products for small voice in my head has always pushed me to ask business owners or expanding our physical questions and think creatively; this is the attitude footprint – we recently launched Facebook’s new I try to encourage at Facebook. Disrupt, speak ofce in South Africa – Facebook is not a place to out and don’t be scared to disagree with people. stand still. When I first joined the company, As long as you do it in the right way, discussion Facebook had only just acquired can only make us think harder and deliver Instagram, we hadn’t yet bought better and more original results. WhatsApp or Oculus and the separate I’m also a big believer in collaboration. Messenger app didn’t exist. In just I’m not really an advocate for hierarchy; two short years we have created a rather I think we do the best work when family of apps and services that work we come together, learning from each both together and independently to other and challenging ideas. Now that connect more people all over the I’m at Facebook, I’m lucky to work with world. That pace of change is some of the most impressive and incredible and, with Facebook inspirational people around, and still only one per cent done with I take every opportunity to learn achieving its mission, I can’t as much as I can from them, as well wait to see what the future as trying to share from my years will bring. experiences.

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