HD THINKING AND MEANINGFUL CONSUMPTION

From the Ten-Speed Economy and the Speculative Economy to the Global Grid.

Professor Luiz Moutinho

Foundation Chair in Marketing

University of Glasgow Business School

SCOTLAND

• We are living in exponential times

• There are over 2.7 billion searches performed on Google each month.

• The number of text messages sent and received every day exceeds the total population of the planet.

• It is estimated that 40 exabytes (4.0 x 10) of unique new information will be generated world wide this year (2012). That is more in the previous 5,000 years.

• Predictions are that by 2013 a super computer will be built that exceeds the computation capability of the human brain.

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…. And while technical predictions further out than about 15 years are hard to do….

Prediction are that by 2049 a $ 1,000 computer will exceed the computational capabilities of the entire human species.

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A NEW APPETITE FOR RISK?

Accelerating financial market panic, has since late 2009, gradually pushed the euro towards the point where today an increasing number of observers openly question the survival of the common currency. During the crisis, it has been evident how the European political response has been reactive, timid, and first and foremost, too slow, to successfully restore confidence.

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POLARISATION

In a world in which so much bring us together, we are tearing ourselves apart. Europe is mirroring the shit with increasingly extreme politics thriving in challenging financial times. Across countries and within nations, the gaps risks increasing between haves and have not’s. Out future depends on greater integration.

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SPECULATIVE ECONOMY

• It is estimated that today’s learner will have 10-14 jobs… by the age of 38!

• The top 10 in-demand jobs in 2010 did not exist in 2004.

• We are yet to exist… using technologies that have not been invented…. In order to solve problems we do not ever know are problems yet.

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GLOBALISATION IS UNDER FIRE (declining)

Corporate strategies under pressures of globalisation: Global Focusing

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But there is…… the GLOBAL GRID

• Every company is now a global company and the most innovative ones are building the global grid into their DNA.

• Near-shoring, homeshoring and crowdsourcing.

• Imagine the power of four billion connected minds – are you prepared for the innovation about to be unleased.

• Expect a bumpy ride – a connected world will be a volatile world.

• Globizers and locazers

• Global simplicity and commoisseurship

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LIVING IN OPEN SOURCE TIMES

Brand management, distributed business, citizen marketing, co-creation, community-drive innovation, connected marketing, consumer-driven business, market driving strategies, consumer driven innovation, creation nets, crowdsourcing, customerism, listening-centred marketing, mass collaboration, open source communities, open innovation, open source marketing, peer production, product development 2.0, wikinomics,…..

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INSTITUTIONS IN QUESTION

Institutions that have lasted decades or centuries are being put into question, with soaring people power in some cases bringing their demise. Financial structures and institutions, central to our economic systems, are shifting from esteemed establishment to despised deadbeats. From the early seeds of occupy Wall Street far broader movement (Los Indignados, Spain), question institutions and structures, fragmenting social opinion, and flowing through to significant change.

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“The concept of the ‘gift economy’ is where the whole culture works on a Framework

of natural giving”.

- Mark Zuckerberg (2011)

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Business as unusual: Sustainability, in every possible meaning of the word, is

the only way forward.

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• Consumer grappling with the fallout from the emotional recession are driving the trend towards meaningful consumption.

• A new breed of companies creating products with the aim of making the world a better place; seeking not to create biggerm better, more profitable products, but products that meet more meaningful goals (i.e., SOMB, TOMshoes etc.)

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Many orgnisations are based on mechanical processes, the result of management thinking employed over the last 60 years and of ideas

that were created in the age of the factory.

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LITMUS TEST – ARE COMPANIES RESPONDING TO THE NEW NORMAL?

Are then companies intensely customer-centric, facing the future in parallel with customers, in order to thrive in the reset economy and the “new normal” – less financial leverage, sustain… agility, structural breaks, trajectory of glocalisation, insourcing, shareholder-driven metrics, community based innovation, shrinking planning cycles, defying the “sea of sameness”, game changing posture, redefining the value equation, finding your “purple cow”, embracing the age of conversation, etc?

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95% of senior executives say that they doubt their companies have the right operating

model (of which structure is a key component) for today’s…. (let alone, future…) world.

- Accenture Study (2011)

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Marketing is becoming increasingly a tax that is paid for being…. …

unremarkable.

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WHAT IS AN ORGANISATION?

An organisation is a legal fiction created to solve an ill-defined problem with an ill-defined solution.

An organisation neither has a conscience on soul, only the people in the organisation have them.

An organisation is a series of conversations on dialogues in context (= environment), external and internal in pursuit of the solution.

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WHAT IS ENTERPRISE 2.0

1.The application of web 2.0 mobile and other emerging technologies to enhance organisational performance.

2.Establishing the organisational structures and processes that will drive success in an intensely competitive connected economy.

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HIGH DEFINITION THINKING

• The ability to spot patterns in diverging information, or the fusion of multiple data streams into a coherent whole. Truly inspired thinking relies on more than observation and identification - it demands illumination.

• For example, do not start a consumer dialogue at a point of mentality, start at a place of passion or tension. Subversive research.

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A SINGULAR COMPANY

• A company that ignites the market…

• Hit beyond imagination – find ways to make offerings relevant to a new, extremely short-term demand.

• Understand timing, network and buzz effects

• Connect customers around employees, not the company

• Use technology to anticipate shifts faster than competitors

• Implement daily change. The company has to reinvent itself on a daily basis.

• Circles are becoming square

• Technology allows to separate content and structure.

• Remember… The old model is dead!

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The new agenda is concerned with: overcoming resistance to change; reinventing marketing strategy for a new market environment; prioritising market sensing; innovating radically in product strategy; re-thinking marketing communications; developing value-based competitive advantage; and replacing damaged value chain relationships. The challenge is to prepare for the post-recession environment by re-examining the fundamentals of their business models and core capabilities to deliver the superior value which will be demanded by post-recession customers.

(Piercy, Cravens and Lane 2010).22

Change is often seen as a threat but to an entrepreneur it’s oxygen. It’s what being alive and enthusiastic about business rests on. When the established ways of doing things are in turmoil, new energy has the best chance to step in and succeed by doing things better than they have always been done before.

(Sir Richard Branson 2012)

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The new economy is built ion information technology and the sharing of knowledge and intellectual capital. In such a knowledge based economy, competitive advantage will be with those countries that have the capacity to deliver fast and have innovative forms of work organisations that raise productivity. In such an environment, small and medium-sized enterprises (SMEs) have tremendous opportunities. Implicit promises include access to work markets, low-cost entry into new markets and the ability to gain efficiencies in business processes.

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THE RISE OF THE MICRO-MULTINATIONAL

• Economic and employment crises.

• At the forefront of this seismic shift is a new type of company – the micro multinational.

• Self-starting, service-drive, with the emergence of new internet-based business platforms, openness of the global economy, these companies can enter markets with an minimum of bureaucracy and overheads. A collaborative DNA.

• In the past you had to be large to gain global reach; today, this is no longer the case.

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MICRO BUSINESS

Almost anyone can turn a possession (home, car, ipad, etc.) on skill (making a cappuccino, riding a unicycle) into a bit of cash, enabled by peer-to-peer room, car or product. Rental sites like Air???, Zilok and Neighbourgood s and experience trading sites like Skyara and Blink Collective. More people will start seeing opportunity in micro-business

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ACCIDENTAL ENTREPRENEURS

…There are 20 million businesses – out of the 26 million businesses in total in the U.S. – that have no employees. There is a tremendous wealth of economic activity happening in these sole proprietor, home-based businesses.

• The triple play of the internet, entrepreneurship and individual capitalism is brining first world living conditions to people who previously were given aid and never encouraged to dream big dreams before.

• The Confluence of influence

• Empire of ONE

• Breakthrough performers manage to accomplish great things because of a decision to focus on innovation right in the middle of an economic challenge.

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ENTREPRENEURIAL ECONOMY: Small Business of the Future• More diversity – woman, immigrants, baby-boomers.

• Rise in the “Personal business” (a new term). A business with no employees. Accidental entrepreneurs. Growth in numbers and in economic influence – 20 million. “Free agent” working relationships now seen as more attractive by younger and older workers.

• Entrepreneurial Education Grows- University level, with over 1,600 higher education institutions offering entrepreneurial courses/degree.

• 55-64 the age group showing the highest rate of entrepreneurial activity. Surprisingly, the 20-34 age bracket has the lowest rate’ 50% of all US businesses are home-based – 13 million people are employed by home businesses (USA,2009)

• More than half of the largest and fastest – growing companies were formed during economic tough times (USA, 2009)

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66% of entrepreneurs claim they were inspired by innate desire, not education or

training.

(Northeastern University, 2010 USA)

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FROM POSSIBLE TO PROFITABLE

The most successful entrepreneurs are those who don’t follow the herd but anticitpate the needs of the market earlier than the competition. Of course, such anticipation is not without risk, but the payout can be considerable.

So what are the small businesses of the future, and where will we find them? The field of energy and cleantech seem to be among the ripest areas for growth, as do nanotechnology, entertainment, and the growing demands of adapting the planet to accommodate its burgeoning population-even if they

might strike some of us now as being a bit far-fetched.

1.9 billion or 35% of global workforce will be mobile by 2013.

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SMALL BUSINESSES – 2020 – WHERE DO WE STOP?

Small businesses will proliferate, and many of them will move away from the old-fashioned “pile ‘em high, sell ‘em cheap” retail model to selling high-quality local brands and products. People shop in a variety of new places, from new local cooperatives to online exchanges (for home-made and home-grown goods).

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A NEW BREED OF ENTREPRENER….• There will be many more transient businesses. There will be pop-up companies.

• Innovation not infrastructure.

• Small businesses are reclaiming manufacturing

• Using Haas/Saas – Hardware-as-a-service; software-as-a-service. Computing Solutions. Monthly payments. Utility computing, not just leasing…

• In the next 10 years we are going to see five generation together in the workforce… (i.e. SeniorPrenerurs)

• New business models are facilitating the outsource of a design, a project or a whole employee ( a new entrepreneurial business ecosystem).

• The Knowledge Economy – we are expecting a shift from logical to conceptual and creative work.

• Crowd Funding allows a community of stakeholders to invest in projects in which they have a personal interest.

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KEY TRENDS FOR ENTREPRENEURS (1)• The Free Market of Open Source

• The Move of Applications to the Cloud

• The Network Orientation to Business

• Business is Network – orientated – more than just a social networking fad.

• The Diaspora of Talent from Emerging Markets are going home and cultivating the home markets.

• The speed of Innovation is changing the way companies are built and invested in (e.g., less capital required).

• Supply Chains become Supply Networks

• Social Entrepreneurship – the future of capitalism?

• Micro Entrepreneurship. Micro Franchising

• Mobile Innovation33

KEY TRENDS FOR ENTREPRENEURS (2)

• Software as a Service (SaaS).

• Digital Dashboards and Aggregation of Data Points. Vertical Search Engines, Data Mash Ups and Net Impact Blogs.

• The cloud will continue to gain a share of all things computer.

• Social Media Overload will driver users to the best content and sources and filters.

• Agile – Based Manufacturing

• It is all about connecting the dots…

• Post-Recession entrepreneurship Surge.34

“The greatest danger in times of turbulence is not the turbulence. It is to

act with yesterday’s logic”

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