Costas Markides - How Technologies of the Social Era Are Changing the Way We Do Business
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Transcript of Costas Markides - How Technologies of the Social Era Are Changing the Way We Do Business
The New Future: How the Technologies of the Social era are Changing the Way we do
Business
Professor Costas Markides London Business School
A Simple Exercise:
• In sixty seconds: Add all the numbers from 1 to 100 and tell me the sum total (without using a formula)…
An Amazing Transformation:
• How you tried to solve this problem…
• (in particular, how many of you did not even try to solve it!)
An Amazing Transformation:
• How you tried to solve this problem…
• Compared to how people used to solve this problem in the early 1990s (when I first started using it…)
An Amazing Transformation:• How you tried to solve this
problem…
• Compared to how people used to solve this problem in the early 1990s when I first started using it…
• Compared to how typical teenagers do it today…
The First Change:
• The new technologies are changing your employees as people: how they think, how they behave, how they work, what motivates them, what their values are…
Your Employees Are Now:
• Less attentive
• More Informed
• Less Loyal
• More Connected
• Less Patient
• More Demanding
For Example: Research by Professor Gary Small, UCLA
1)Surfing the internet can physically rewire our neural pathways
2)Just 5 hours of exposure to the net is enough to change the structure of our brain.
3)The internet is altering our brains:Cursory readingHurried and distracted thinkingSuperficial learningAttention span reduced to seconds
More Connected: Facebook
• 845 million monthly active users
• 2.7 billion Likes and Comments every day.
• 250 million photos uploaded every day.
• 100 billion friendships
More Informed:
• 72% of Europeans take their mobile phones or iPads to bed!
• The last thing they see before falling asleep and the first thing they check when they wake up is news…
More Informed Workaholics:
• 93% of executives take their blackberries on vacation.
• 47% tell their partners that they left it at home
• (data provided by RIM)
Global Citizens:
• Get to learn what is happening around the world fast…
• More likely to engage in a “cause” far away from home.
• Have become more sensitive to other cultures…
More Culture Sensitive:
Informed Choices:
• Not only do we get the necessary information on the Internet…
• But increasingly “word of mouth” from anybody around the world is becoming our source of information.
Less patient: The “Now” Era
• Instant Messaging
• Instant Feedback
• Instant Gratification
• Instant Information
Decentralised Workaholics:
• When do you stop work?
A New Employee
• I could go on here…
• But the key point is: You are now dealing with employees (and customers) that are fundamentally different from us or our parents.
Your Employees Are Now:
• Less attentive
• More Informed
• Less Loyal
• More Connected
• Less Patient
• More Demanding
What is the Implication #1?
• Generation X managers trying to manage Generation Y employees…
• It’s as if they come from Mars!
Are we out of our depth?
What is the Implication #2?
• How do you “control” such a decentralised, informed and demanding workforce?
The Wrong Thing to Do:
• You cannot “control” the new employee…[for example, how do you know if they are working or are
“wasting time” on Facebook?]
• And you certainly cannot “control” them with rules and regulations.
The Only Way Forward:
• Strong shared values that act as the parameters within which people can operate with autonomy.
• Think of what you do with your children…
But Note:
• They are strong because you actively “sold” these values to them and won their emotional commitment.
• Move your values from the wall to people’s hearts.
The Second Change:
• Not only are the new technologies changing our employees as people, but they are also changing how they work.
The Hierarchy is Dead:
• Decentralised: Work from home, at the airport, at Starbucks…
For Example:
• In 2009, it was estimated that over 50 million US workers (40% of the working population) worked from home at least part of the time.
• The forecast is that this number will jump to more than 75% by 2020.
The Hierarchy is Dead:
• Decentralised: Work from home, at the airport, at Starbucks…
• Virtual Teams, Geographically-dispersed giving rise to the Network Organisation…
The Hierarchy is Dead:• Decentralised: Work from home,
at the airport, at Starbucks…
• Virtual Teams, Geographically-dispersed giving rise to the Network Organisation…
• From employees to Co-Creators: working with outsiders (non-employees) on common projects
Some Examples:
• Singularity University
• TEDx
• McAfee
What are the Implications?
• How do you keep them all focused and motivated?
• How do you avoid chaos?
• How do you promote innovation?
Innovation: Physical proximity is important
• Study by Isaac Kohane at Harvard Medical School.
• He analyzed 35,000 peer-reviewed papers mapping the precise location of co-authors.
• He related the quality of the research (by counting the number of subsequent citations) to how close the co-authors’ offices were.
What he found
• When co-authors were closer together, their papers tended to be of significantly higher quality.
• The best research was consistently produced when scientists were working within ten metres of each other.
• The least cited papers tended to emerge from collaborators who were a kilometre or more apart
Physical proximity is important
• If you want people to work together effectively, these findings reinforce the need to create architectures that support frequent, physical, spontaneous interactions.
A Couple of Examples:
• Steve Jobs at Pixar: a central atrium (with the only set of bathrooms in the entire building)
• Building 20 at MIT: More innovations coming out from this building in 1942-45 than in the previous 100 years.
Even More:
• With employees working anywhere and/or with outsiders in a decentralised, dispersed and virtual way, how do you avoid chaos?
The Only Way Forward:
• Strong shared purpose that unites and galvanizes disparate people towards the common goal.
For Example:• Facebook: Give People the
power to share and make the world more open and connected.
• Apple: We will change the way people think of computers (or music or TV or news…)
But Note:
• It is “strong” because you actively sold this purpose or vision to them and won their emotional commitment.
HOW TO WIN EMOTIONAL COMMITMENT
I KNOW
I UNDERSTAND
YES, I THINK I CAN
I WILL
The Third Change
• The new technologies are changing how we interact with customers.
For Example:
• Customised Products
Shared platform 25%
Shared parts 15%
Design 5%
Marketing
Shared platform 30% Kontakt Support Salg
Shared parts 30% Memberoffers
Design 15% Banks
Marketing
SystemBanks – B2E
DJØF
EsF Bank
Politibanken
DTS-Bank
SPOR-Banken
IDA Bank
DFL-Banken
DADL
Gl
OfficersBanken
CS banken
DM
PoKoBank
Ældre Sagen
Safu-Bank
For Example:
• Customised Products
• Customised Marketing
For Example: KLM
For Example:
• Customised Products
• Customised Marketing
• Customised Promotions
For Example: Target • Store Loyalty card
• Online purchases
• Coupon redemptions
• Email click-thru
• Online browse behavior
• Online cookie
• InfiniGraph (that “listens” to shoppers’ online conversations on message boards and internet forums)
• Rapleaf (that sells info on shoppers’ political leanings, reading habits, charitable giving, what they like…)
• Analyse your photos and statements on Facebook, Linkedin, etc…
And then What?
• Centralise and Analyse all this data per customer
• Develop “customized” product offerings; delivered in a “customized” way.
• Tricky part: how do you offer something specific to a customer without them knowing you are “spying” on them?
Not All Positive:
• Here are three examples of how our changing relationship with customers is affecting HR…
For Example: United
For Example: Comcast
• Every single interaction with a customer has the potential to be either a global PR disaster or a PR triumph for us.
• How do we ensure that every employee (not just Marketing people) deliver excellent customer service, anytime, anywhere, all the time?
The Question Is:
The Only Way Forward:
• Customer-centric behaviors have to be institutionalised in the culture of the organisation…
The Fourth Change
• The new technologies are changing the internal processes of the organisation.
For Example:
• From internal R&D to Open Innovation…
Open Innovation
• P&G: Connect and Develop strategy
• Developing software at Netflix that can predict what movies a customer is likely to enjoy.
• Streamlining the R&D process at Roche
An Example of Open Innovation:
Changing Our Processes:
• From internal R&D to Open Innovation…
• From centralised financing to Crowdfunding…
An Example of Crowdfunding:
Changing Our Processes:
• From internal R&D to Open Innovation…
• From centralised financing to Crowdfunding…
• From fixed pricing to dynamic pricing…
Dynamic Pricing at Amazon
Changing Our Processes:
• From internal R&D to Open Innovation…
• From centralised financing to Crowdfunding…
• From fixed pricing to dynamic pricing…
• From top-down strategy to democratic strategy…
Lots of Changes!
• I do not want to give the impression that the new technologies will change everything!
• Some things will stay the same…
What Will Stay the Same?
It’s a new World
• Not everything will change…
• But hopefully I have challenged you enough to start thinking about the many things that YOU need to change in your companies.