The official theme of Davos 2016 is “The Fourth Industrial Revolution” in recognition of the range of upheavals that have begun and are anticipated driven by technological advances from robotics, genetic design, 3-D printing, Artificial Intelligence, the Internet of Things and the exponential power of connected mobile devices. A free download of the book “The Fourth Industrial Revolution” is available here
The Four Key Discussions
At the end of four days of listening to panels, attending breakfasts and dinners with businessmen, government officials, social workers, artists and scientists, technology was only one of four key discussions. The four big themes were
- China: Christine Lagarde’ of the IMF framed China’s economic challenge as how to manage three transitions in its economy from a)export to import, b) infrastructure to consumer consumption lead and c) high growth to mid growth. The decline in oil and commodity prices, currency wars and softness in emerging markets (with the exception of India which remained a shining star at Davos) were all seen as originating in China. In addition to the economic challenges, China faces a demographic challenge of an aging population , an environmental situation which is leading to significant health issues and hundreds of millions online who are insisting on change. While the range of expectations on hard landing to soft landing, big yuan depreciation to slight yuan depreciation and adjustment to environmental and demographic change ranged dramatically the general belief was that China would be alright if its leadership maintained the faith of its key internal constituencies and did a better job communicating its intentions and its numbers could be trusted.
- Immigration: Globally there are 240 million immigrants and while historically immigration has been a net positive and shows no sign of slowing it has become a huge issue due to lack of economic growth creating angry unemployed youth and resentful “natives”. The recent floods of displaced refugees (there are 60 million displaced people) whose numbers are increasing exponentially due to the troubles in the Middle East and Africa which is overwhelming Europe’s sense of self and its open borders policies (Schengen). As we have seen with the different styles of a Donald Trump (who was a big topic at Davos too and increasingly seen as a likely Republican nominee) to Angela Merkel, the quality of leadership will matter to adapt to this new reality which is transforming societies everywhere.
- Inequality Schism: Globally just 62 people have as much wealth as the bottom 3,700,000,000 (3.7 billion) and the top 1% control more wealth than the remaining 99 percent. These trends of concentrations have been growing due to a combination of government actions biased towards capital, the network economic effects of technology companies, slow growth and the ability to replace carbon based life forms with silicon based digital computers. In addition to economic inequality the inequality of opportunities and pay between men and women, caucasian and colored, connected (half the world is connected to modern science and another half lacks electricity or water or internet). The Edelman Trust Barometer shows that the top quarter of society increasing regaining trust with business and other leaders while the bottom 75% are losing trust. Society is now questioning its leadership all over the world who are seen as short term, selfish with narrow goals who are forgetting we are living in a multi-stakeholder world. As someone on a panel noted ” we have rulers not leaders”
- Impact of Technology: Many CEOs are fearful of technology with the CEO of KPMG noting that 1 in 3 CEO’s see their business being highly disrupted by outside competitors in the next thousand days . Some folks were gloomy wondering if a combination of locked in network effects ( Google, Tencent, Facebook, Amazon) and AI/Robotics/Chips would lead to even further radical inequality and mass unemployment. But overall mood was that we were about to have some of the most amazing technological advances if applied correctly could transform society and create 100 trillion dollars of new economic benefit within a few years! And most consumers see huge benefits to a digital society. These benefits would not just be in more wages and better lifestyles but better health, more immersive and empathetic story telling, wider distribution of culture and much more. The question is how will business, government, society leaders understand and adapt technology to its goals. Technology is not bad or good but it can be used for good or bad goals.
Tectonic Trio Transformations creating a Crisis of Leadership
We are living in a transformational era driven by the Tectonic Trio of globalization, demographic and technological shifts which is changing society with great force ( masses of people undergoing accelerated change). The potential for great positive change will depend on all of us learning to lead our organizations, our communities and ourselves.
The future is uncertain and uncertainty is crippling leadership. Truth is the future has always been uncertain but right now the pace of change is making one question ones very model and self confidence. The challenge is relevance and whether todays ways of working are relevant in the future.
As Marc Benioff the CEO of Salesforce yelled ” we do not have a technological crisis we have a leadership crisis”
Thus the real key theme from Davos: Leadership in a Transformational Era.
Seven Ways to become a Transformational Leader
Across the conference I kept my eyes and ears wide open for how the best leaders or thinkers had learnt or were doing to ensure an optimistic outcome from this transformative age. I went to cultural panels, health panels, business forecast panels, panels on the future of religion and to ones with government leaders convening and between meetings read the WEF blogs and reports published at the forum. Here are some key learnings
1.Be hopeful/optimistic: In reality, globally the world is much better today than 20 years ago. Over a billion people have come out of poverty around the world. Radical breakthroughs have given people “god like power” of mobile phones and search engines. We have voices and connections due to social networks and more advanced and better health care. While racism, wars, inequality, slave like work conditions remain widespread there has been considerable progress made. As someone said ” I am not afraid of the world but I am afraid of the news”. More people have more access to services and each other than ever before and increased empowerment and connectivity has always led to significant gains in societal and business wealth.
The World Economic Forum completed a land mark global survey on Digital Media and Society and its Implications in a Hyper Connected Age which indicates that significant majorities feel more empowered, more connected, more productive and have more access to learning. The only significant but a huge concern regards control of privacy and identity in a big data age. Should we own, monetize and control our own data? This is an issue we will be soon discussing but even data well used is hugely enabling.
People do not follow pessimists or stay in companies with tyrannical, scared, inward looking leaders. Hope matters, and realistic pragmatic future based growth plans make people hopeful. Technology is going to allow for major new ways to innovate, service and benefit people across every industry. A hundred trillion dollar opportunity said some at Davos.
2 .Think Longer Term: Some of the biggest challenges we face is because leaders are focussing on the urgent versus the important. Growth which is a challenge requires investment and innovation which takes time. Culture, talent growth, impact of acquistions and change management does not happen overnight with edicts and vision statements but is an iterative process of years. True leaders do not do only what the numbers tell them to do but think higher and feel deeper. If you manage by the numbers one of the new AI robots is poised to replace you since they can compute faster than you can. Mark Benioff wondered whether Governments should not have a Minister or Ministry for the Future so they could prepare their societies for tomorrow and not just today. Many company leaders are so busy putting out Client and Market crises that the future melts away in the heat of the present…
Technology and Transformation are long term sustained investments and initiatives and press releases on partnerships and deals or hiring a digital officer or two is worth a hill of beans. The key is how to remain relevant, lead the change and transform.
3. Manage & Constantly Communicate with Multiple Stakeholders: We are living in an interconnected and networked world and leadership will be balancing between multiple constituencies. In business, a new word of quadruple bottom line which measures not just how a company is doing for it stock holders but also the environment, its community and its employees. Often these run at cross purposes but simplistic thinking of maximizing shareholder returns for business despite short term pressure of financial markets is an era that is passing. A key is to identify key stakeholders, communicate with them on setting goals and then measure and adapt based on performance. Constant communication is a key otherwise others hijack the narrative.
4. Build a Collaborative and Creative Mindset: The lines between industries is being dissolved due to the acidity of digital technology which does not recognize analog or industry borders. Consumers expect quick access with minimal friction. Clients expect seamless and fast deliveries and punish balkanized firms whose inner dysfunctions lead to heat but little light. Superior performance at competitive prices on unrealistic timelines is now the digital reality and only highly networked and collaborative leaders and companies will thrive.
This often requires creative new ideas, new ways of telling stories, new ways of developing and delivering products and services. Creativity and Innovation become critical.
5. Question your organization design and skills: The future does not fit in the containers of the past and most current successful organizations have been optimized for yesterday. If you were to launch a competitor to yourself today what would it look like. It is unlikely to look the way your firm or school or business does. Re-inventing their structures and investing in talent and skills.
6. Earn Trust through Purpose, Authenticity and Empathy: Key themes again and again were the best firms, the best governments, the best leaders spoke to and delivered to a higher purpose, were authentic in their behaviors and listened, felt and understood others in an empathetic way . Millennials in particular are looking for purpose driven companies. They compare notes constantly and inauthenticity is a huge fail. They want their point of view and their hopes and dreams to be understood. This is not just true for millennials but for all people. One of the most admired recent leaders is Pope Francis who embodies Purpose, Authenticity and Trust. The key is to be genuine. People ask is my leader, is my company the real thing?
7. Grow yourself: A key struggle among all constituencies was remaining relevant in changing times. The challenge was often personal. Could they learn new skills or appreciate new models. Could they re-invent themselves? Some of the ways leaders were growing themselves that seemed to work were
a) Going on learning tours: These tended to not just be to Silicon Valley but could be to consumers, new competitors or other travels that would create a sense of disorientation and therefore questioning of the status quo.
b) Finding reverse mentors: Get younger folks to mentor them on different topics, create junior boards that presented to the real boards and go to lunch/drinks with folks many levels outside of the corporate headquarters confines to get the real scoop.
c) Learning to communicate better particular using newer platforms: In an always on world blogs, social media, online video channels, and “all hands” meetings are the new way forward rather than long memos, press releases and corporate message massaging. The problem with these new forms is one has to do it oneself or be deeply involved and not have some one do it for you ( authenticity matters) and there is always talk back (not always nicely and respectfully). But in a battlefield of narratives the leaderships voice cannot be intermittent or delivered by carrier pigeon.
d) Stepping outside themselves: Oddly ,the busier and more harried the best leaders should be what was clear is that they did more than work. Two common additional goals were giving back via charities or causes or education and the other was a deep involvement in some form or art, literature or culture. This stepping outside seems to have made them more authentic, purposeful and empathetic but also synch to a more longer and harmonic time spans.
So if we are to truly leverage the data driven, silicon based, digital possibilities it is us emotionally complex, carbon based, analog lifeforms who will have to make it happen.
A harmony. An alchemy of technology and creativity. Of silicon and of carbon.
Davos as usual was incredible and illuminating and is a place for dialog and interacting which both makes one feel smaller and leave bigger.
You can experience it increasingly virtually here…