With 2.6bn people now in lockdown - more than were on the planet during World War II - it's a moment for those who are not suffering from the virus, or treating others with it, to reflect on how we could create a better world afterwards.
I co-authored a book, published in January, called 'FIGHTBACK', about how businesses need to radically re-think their business models in a world of increasing digital disruption.
The title seemed to capture the mood of leaders of incumbent organisations pre-pandemic, and the book attracted a lot of generous endorsements (from Klaus Schwab of the World Economic Forum and others, see quotes at the bottom of this article).
The title of the book and the sentiment behind it seems all the more relevant now as society as a whole tries to 'fightback' against even bigger and more immediate disruptive threats.
One of the main themes of the book is that, to mis-quote Einstein, we can't solve our problems by using the same kind of thinking that created them in the first place.
In a business context this means traditional incumbent organisations trying to create value for customers and shareholders by continuing, obstinately, to invest in business models that were invented in a pre-digital industrial era and which are now running out of steam.
In the book we describe the importance and impact of re-allocating capital and resources to more networked, platform-based business models and of augmenting existing skills and capabilities with those of digital entrepreneurs to co-create new portfolios of innovative ventures. (An introduction to the thinking behind this is in an article I wrote for the World Economic Forum).
The biggest message of the book, is that the mindsets of leaders, investors and policy makers - by which I mean their ways of thinking and acting, their guiding 'ideologies' - need to change, or let's say be upgraded, if their organisations - whether private or public sector - are to be effective in serving their stakeholders (customers, shareholders, employees, society at large) into the future.
I wanted to share here 6 of the most interesting books I've read recently that reinforce this underlying theme, from different angles: commercial, economic and historic. The authors come from China, India, France, UK, Israel and the US.
Here's a summary of what they're about and why I've found them stimulating and instructive:
1.) Smart Business by Alibaba's former Chief Strategy Officer, Ming Zeng, is the most pertinent book on corporate strategy today. Everyone looking to compete in a hyper-connected world should seek to understand the new principles it describes.
Rather than the traditional top down business planning based on extrapolations from the past, Zeng describes the secret to Alibaba's success as based on focusing on spending time to create a shared vision of how markets and customer needs will change in 5-10 years time and then undertaking a continual process of experimentation to find a match between changing market requirements and how the company can satisfy them.
Zeng describes how Alibaba operates a powerful platform-based business model to orchestrate and commercialise a network or 'ecosystem' of market participants around it. And the focus on experimentation, using advanced technology, especially algorithms and machine learning to 'datafy' decision-making, has been core to its success.
Zeng says, “The formula for smart businesses can be summarised in a simple equation: Network Coordination + Data Intelligence = Smart Business. That equation represents what is behind Alibaba’s success and captures everything you need to know about business in the future.”
There are few incumbent companies today which are driven by this equation. They suffer most as their sector digitalises and are less resilient in times of crisis.
2.) Good Economics For Hard Times, by nobel-prize winning economists Abhijit Banerjee and Esther Duflo builds on their detailed analysis of the most effective ways to alleviate extreme poverty. It describes how smart interventions can solve other difficult social and political problems, from immigration to inequality, to climate change. Their point is that mankind has the resources to address its challenges but we are often blinded by old ways of thinking and acting: out of date ideologies.
Their answer is similar to Ming Zeng's for business: rapid, data-led experimentation is the key to finding the right solutions for intractable problems.
3.) Another economist, Andrew McAfee, co-founder of MIT's Initiative on the Digital Economy, who I've worked with, presents intriguing evidence of how - counter-intuitively - in certain economies we are starting to use fewer natural resources even as our economies grow and consumption increases (we are getting More from Less).
While most of McAfee's datapoints about moving to 'post peak' in exploiting the planet come from the US and other rich countries, his view is that as economies mature similar trends will happen there too.
I hope the world has time to mature before it runs out of space and resources, and McAfee describes the 'Four Horsemen of the Optimist' as the way of enabling the transition: capitalism (as the most efficient form of allocating resources), technological progress (to enable us to do radically new things), responsive government (creating the right incentives and policies and intervening when necessary), and public awareness (so society in general can be part of the solution).
McAfee has staked $100,000 of his own money that in 10 years time, compared to 2019, the USA will consume in total fewer metals, few industrial materials, less timber, less paper, less fertilizer, less water for agriculture, less energy, use less cropland and have lower greenhouse gas emissions. (Details of his bet at Longbets.org)
He talks about the need for a 'Second Enlightenment' - a new social contract - to help guide the way, which is another way of describing the themes that run through all the books I'm mentioning here.
Nowhere is an enlightenment needed more than in India, where the gap between rich and poor, urban and rural and male and female, is so stark and on such an enormous scale.
4.) The Bridgital Nation, by Natarajan Chandrasekaran, the Chairman of Tata and Sons, describes the fundamental gaps in Indian society that need bridging - it's 'missing middles'.
The missing middles are: a lack of mid-skill jobs, lack of secondary-educated women, lack of basic services for all, a lack of mid-sized firms. All the things we take for granted in the West.
'Bridgital' is about building the bridges between talent and productive work, breaking down old ideologies and ways of doing things, applying new technology and foresight, and in particular the crucial importance of platforms (a core theme of FIGHTBACK) to enable this to happen most efficiently and effectively.
India has a.) an overwhelming demand for vital services, and b.) an overwhelming supply of human capital. It just hasn't - yet - created the systems to connect them together effectively. Public-private partnerships will be key.
As a country that will become more and more important over the next 10 years, the opportunity to address this issue (and the threat of not doing so effectively) is enormous. The principles from the other books mentioned in this article support the aims of Chandrasekaran's.
Next, a history book. Why study history? To avoid repeating the mistakes of the past.
5.) The Anarchy, by William Dalrymple, is a history of the English East India Company (EIC), one of the most powerful and most rapacious corporations ever created.
It's a rollicking story of greed, corruption and cruelty (by all parties involved), but the story is barely taught in UK schools because it is seen as rather shameful and not at all in line with our self-perceptions of 'fair play' and rule of law.
In fact there was no law governing the actions of the EIC, hence the title of the book, just a subjugation and looting of a sub-continent in the name of free trade at the point of a gun. At one stage the Company had a private army that was twice the size of the British army: quite a 'control point', in modern VC jargon. Its Directors and shareholders became spectacularly rich and the British government saw it as a 'national champion'.
How is this story relevant to today? There are lessons about letting commercial organisations with powerful 'business models' run rampant without effective controls. The EIC held sway over huge numbers of people who had little choice about buying goods at prices they set. Maybe data is the new musket, not just the new oil?
In the end the British government nationalised the Company when its excesses became too much. The more official British Empire continued the Company's extractive and oppressive policies, but in a different form.
The first - European - Enlightenment in the 18th Century stimulated new ways of thinking about the world that triggered revolutions and overturned systems in which power and wealth were consolidated in a tiny proportion of society.
It eventually - after much bloodshed and turmoil - led to greater freedoms (democratic and/or commercial) and to international support systems based on the rule of law. These may still be fragile, but they have led to an unprecedented period of peace and prosperity.
The notion of a 'Second Enlightenment' that Andrew McAfee proposes is perhaps needed more than ever now, for the benefit of business and society, as we wrestle with the impact of exponential phenomena in a hyper-connected world. Exponential spreads of a virus like Covid19, or exponential growth of platform-powered businesses like Facebook's, Google's, Aliabab's and Amazon's, or the exponential analytical power of technology like AI.
6.) Finally, perhaps the most holistic thinker today about the future of our political, biological, social and economic world is 'historian of the future', Yuval Harari.
His articles for Time Magazine and the Financial Times describe the need for new leadership post-pandemic. His book Homo Deus - a brief history of tomorrow - is really important about what happens to society when man (or some men) have godlike technological powers.
In summary, from whatever perspective you'd like to take, it feels like it's time to 'FIGHTBACK' against old ways of thinking and acting - old ideologies - and fully harness the power of new technologies and business models to address our challenges, at an individual, company and government level. New 'social contracts' may well be required.
Thank you again to those who have kindly supported the message of the FigthBack book. Here is a sample:
Klaus Schwab, Founder and Executive Chairman, World Economic Forum:
“The Fourth Industrial Revolution is creating a rapid, comprehensive transformation – technologically, economically, socially and politically. To shape this transformation, we must take collective responsibility. FightBack demonstrates how to embrace digitalization and how to overcome disruption.”
Linda Hill, Wallace Brett Donham Professor, Harvard Business School:
“Digital transformation too often fails. FightBack offers strategies for how to get your people to work differently and reap the benefits of your digital investments.”
Marcus Wallenberg, Vice Chair, Investor AB:
“There are so many opportunities for traditional industry to benefit from digitization. FightBack provides food for thought and inspiration as to how such opportunities could be realized.”
Anne Berner, Board Member, SEB, Entrepreneur and former Minister of Transport and Communications, Finland:
“To solve global challenges in the context of climate change and shifting demographics, we must learn to think differently. FightBack stands for a new mindset.”
Daniel Krauss, Co-founder and Chief Information Officer, FlixBus:
“Established corporations have the chance to become pioneers and actively initiate change to revolutionize entire industries. FightBack showcases how entrepreneurial thinking can help to make this possible."
Karthik Suri, Senior Vice President and Chief Operating Officer, GE Digital:
“By highlighting the complexities and opportunities of the platform economy, the authors bring much-needed attention to the nuances of the computing challenges facing Industry 4.0.”
Gunnar Groebler, Senior Vice President, Renewables, Vattenfall:
“A must-read for every company that wants to stay ahead of disruption. Boards and executives will learn to leverage new sources of growth by partnering with entrepreneurs.”
Dr Rahmyn Kress, Chief Digital Officer, Henkel:
“Digital transformation is one of the biggest changes of our time, and we cannot escape it. Traditional business models are being turned on their head. FightBack helps leaders to constantly reinvent themselves.”
Dr Wanli Min, Former Chief Scientist, Alibaba Cloud:
“The authors deliver clear and succinct messages to big corporations in a compellingly readable book. Corporate venturing with technology entrepreneurs through platforms is a proven and actionable proposition for new growth. Disruptive technology may traumatize big corporations thanks to obsolete cultures and organizational inertia – and digitization is no exception. To those reluctant corporates, it is time to fight back!”
Markus Fuhrmann, Co-founder, Delivery Hero:
“Established companies have all the necessary resources. [The authors] bring entrepreneurship to large corporations, unlocking their potential and turning it into competitive advantage.”
Mark Spelman, Head of Thought Leadership, World Economic Forum:
“FightBack is for those leaders who recognize the exponential pace of digital change, as real-time information, AI, 5G and ubiquitous connectivity continue to disrupt business models. Staeritz and Torrance have produced a perceptive, well researched book with a wealth of insights, a handbook for platform-based reinvention in the digital age. An excellent introduction to business model change, digital leadership and how to turn digital intent into tangible results.”
Gisbert Rühl, Chief Executive Officer, Klöckner:
“Digital transformation, platform-based business models, innovative corporate culture – that's what we are working on every day. This book addresses these key challenges and illustrates that traditional companies, in particular, must proactively shape digital change in order to be successful in the future. A must-read for everyone working in a traditional industry.”
Michael G. Jacobides, Sir Donald Gordon Chair of Entrepreneurship, London Business School:
“Corporate innovation requires a radical rethink as we enter a new world increasingly mediated by digital ecosystems. Western industry, in particular, needs to create a new dialogue with investors, look to the longer term, adopt new metrics and co-opt new entrepreneurial talent. FightBack provides a coherent blueprint for doing this.”
Ida Tin, Co-founder and Chief Executive Officer, Clue:
“Using data-driven insights to radically improve lives is one of the biggest opportunities of our time. FightBack shows that collaboration is key for innovative start-ups and proactive corporations to become the drivers and the winners in this digital transformation.”
Dr Mathias Kammüller, Chief Digital Officer and Member of the Group Management Board, Trumpf:
“Digital transformation is a significant opportunity for Trumpf to accelerate, becoming more flexible and thus more competitive. It is our goal to further expand our technology and market leadership on the basis of digital technologies.”
Rolf Schroemgens, Co-founder and Chief Executive Officer, Trivago:
“To have a chance of survival, corporates need to embark on a learning journey, willing to fail fast. FightBack shows how to embrace such a mindset.”
Dr Ralf Belusa, Chief Digital Officer, Hapag-Lloyd:
“A must-read primer for leaders of big companies and society considering taking an entrepreneurial journey and creating new sources of growth from existing assets."
Brigitte Mohn, Board Member, Bertelsmann Foundation and entrepreneur:
“Corporations and society must harness entrepreneurs in order to bring forward game-changing innovations that are humane and environmentally friendly. [FightBack shows how]”
Taavi Kotka, Estonia’s first-ever Chief Information Officer:
“FightBack showcases that, as an established organization, you need the brightest minds and the greatest visionaries to fight back against old ways of thinking.”
Andreas Gall, Chief Innovation Officer, Red Bull Media House:
“Get the founder’s DNA from the early days back into the corporation. Giving wings to new ideas and pursuing new growth is the key to sustaining a long-term competitive advantage.”
Nicolas Brusson, Co-founder and Chief Executive Officer, BlaBlaCar:
"We need to harness the ingenuity of tech entrepreneurs to solve pressing global issues. FightBack fosters readers' entrepreneurial spirit, sharing learnings on how to create significant sources of growth with positive impacts."
Peter Borchers, Former CEO, Allianz X and Founder, Hubraum:
“Current digitization efforts have been largely fragmented, untuned and lacking consistency and persistency. FightBack pushes leaders to stop being over-cautious and start boldly innovating.”