third wave of the digital revolution is when everything changes, when digital is transformational, when power really shifts.
Whilst the last 20 years of technology has inspired us, it is only now that the game really changes – when the ‘gamechangers' shape the future. Mass production is rapidly becoming obsolete, 3D printers are already replacing factories, companies work in virtual networks, products are bought on demand and customized by default, whilst personal channels are replacing stores which used to second guess what people wanted.
In the past we created average products for average people. We made the products ourselves in big factories that absorbed significant capital investment. We needed to sell on a huge scale to secure a return on investments. Markets were largely homogeneous because every competitor was close to average, therefore we could measure results by market share. We used mass-market, broadcast advertising with average messages, at times to suit us, pushing people to buy more of what we wanted.
This game doesn't work anymore. That was the industrial age. Soon we will see the end of factories, shops and advertising.
Digital is by its nature not about size or geography, capability or experience. It is borderless and democratized, enabling anyone to have an impact. Mikael Hed sits in Espoo creating games like Angry Birds that entertain the world; Eric Magicovsky could be anywhere raising $10 million from 69,000 people on Kickstarter to launch his Pebble smartwatch; Vicky Wu flies between LA and HK building ‘prosumer' demand for her latent fashions with ZaoZao.
This is the third wave of the digital revolution, where ideas can change people's lives, where anybody can change the game.
WHERE THE FUTURE BEGINS
The value of business lies not in what it does today, but in what it seeks to achieve tomorrow. That might seem a little idealistic, given the short-term obsession of many organizations with operational performance, yet it is the future that most interests investors and private owners who now dominate the business world, hoping to see their investments grow through future profits.
Most business leaders are ‘heads down' in a relentless battle to survive, to hang onto the status quo. But that can only lead to diminishing returns. The more enlightened leaders are ‘heads up' looking at where they are going, making sense of how the outside world is changing with every day, identifying the new needs and expectations, the new competitors and challenges, opportunities and possibilities.
The best businesses go to where the future is.
They disrupt before they are disrupted. They sell before they are worthless. They recognize that existing success is increasingly driven by out-dated beliefs, a once-profitable niche that has now become the mainstream, a previous innovation that has been widely imitated, an economy of scale that has become irrelevant, a temporary monopoly that is no more.
As we explore the shifts and trends, the white spaces and technological breakthroughs, the new attitudes and behaviours, we need to learn to think in a different way.
The change is exponential. So we need to jump on whilst we can. Catch the new wave, or better still, learn to ride with the successive, and ever more frequent, waves of change.
When we look around us at the companies who are challenging established positions, shaking up conventions and waking up tired consumers, they are not the big companies but the small ones. They are the speed boats, fast and flexible, rather than supertankers, steady and stable.
The challenge is extreme. It demands that we rethink where we're going, and how to get there, rather than hanging on to what made us great before.
In a fast and connected world, complex and uncertain, a winning business cannot hope to keep doing what it does and do better. It has to do more, or different.
WE ARE ALL IN THE IDEAS BUSINESS
In Hong Kong there is a great 100 year-old business that explains our future potential. For much of the last century Li and Fung was focused on low-cost manufacturing of textiles. That was until salary levels grew, and places like Indonesia were able to achieve much lower cost bases. The business reinvented itself as a virtual resource network, helping brands to find the right partners for the business, in terms of expertize, quality and price.
Walk into a Li and Fung office in Sao Paulo or Istanbul, Barcelona or Toronto – or any one of their 300 offices in over 50 countries – and the small team of sourcing experts will help you find the best designers, manufacturers and distributors for your brand. Every pair of Levi jeans you buy is made with the help of Li and Fung, and around 40 % of the world's textiles. If you need finance, they'll find you an investor, and if you need merchandising, processing or customer service they can find the right partner for that too. Their business model can be based on fees, on commissions, or on an agreed mix.
Actually, all you need is a good idea. Take it to Li and Fung and they can make it happen with you.
Those ideas are not the product of years of experience, of big organizations with thousands of employees, of rigorous ‘big data' analysis and scientific labs. Those things can help, but they can also hinder. Fresh perspectives beat conventional wisdom, youthful insights connect with millennial markets, right brain intuition is an equal to left brain intelligence, and collaboration can achieve this even better.
And we haven't even started on Steve Jobs. From the revolutionary Apple Mac that transformed computing. The iPod, the iPhone, the iPad. Not just incredible products with beautiful designs, but new business models creating entirely new markets, changing the world.
Or James Dyson, with his bagless vacuum cleaner. Ratan Tata, with his dramatically affordable Nano car. Amancio Ortega with his ready baked Zara clothes. Or further back in time … Henry Ford, Marie Curie, Thomas Edison, Pablo Picasso, The Beatles, Nicolas Hayek, Ted Turner and many more.
Great ideas are the result of better thinking.
We need to think – to see things differently, and do different things – to open our minds to new possibilities, to outthink the new competition.
• Think bigger.. redefine the markets we are in, reframe our brands in more useful contexts, recreate the strategies for success.
• Think smarter.. refocus on the best customers and categories, reinvent every aspect of our business, realigning with new partners.
• Think faster.. reenergize people with new ideas, resonate with customers' new priorities and aspirations, and achieve more together.
Beyond the connectivity and applications, the social networks and artificial intelligence, we now live in a world that is more equal and accessible, where people are more knowledgeable and capable, than ever before.
It really is a world limited only by our imaginations.
Back at the moonshot factory of Google X, they have a mantra which says ‘Why try to be only 10 % better, when you could be 10 times better?'
Ten times better provides much more than a temporary competitive advantage, it has sufficient capacity to change the game. The effort required to think in a bigger frame, to innovate things more radically, to deliver them faster, is relatively small compared to the benefits.
But that requires one more thing. To think different.
Apple, or rather its ad agency Chiat Day, conjured up that phrase, but it matters more than ever. The best companies today don't just play the game, they think bigger and better, smarter and faster, in order to change the game.
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CHANGE.. CHANGE THE GAME
WORLD-CHANGING, GAME-CHANGING
WORLD CHANGING
The future is not an