25 Legal Tech Stats for 2020/21

This week I came across a blog post from ImpactMyBiz which compiled a list of great statistics, use cases and market data pertaining to the current state of technology in the legal sector.

In sum, there’s a lot of good progress but the sector is still subject to a lot of hype and extremely slow adoption when compared to other sectors. This is moreso in the B2B space with B2C innovation moving at a faster rate of adoption in improvement over time.

Perhaps the continued challenges presented by COVID around the world, increasing regulatory complexity, competitive pressures from alternative legal service providers (ALSP) and new entrants, remote working, client cost pressures, access to justice, and other key drivers will continue to move the needle forward.

25 legal tech stats to shed light on where where the industry is heading for in the new decade:

1.  In 2018, legal tech investments broke the $1 billion mark. That figure was topped in 2019, with $1.23 billion in funding by the end of the third quarter alone.

2. With the help of AI, a contract can be reviewed in less than an hour, saving 20-90% of the time needed to perform this work manually without sacrificing accuracy.

3. AI legal technology offerings for businesses increased nearly two-thirds in 2020 compared to 2019.

4. JP Morgan launched their in-house program, COIN, which extracts 150 attributes from 12,000 commercial credit agreements and contracts in a few seconds. This is equivalent to 360,000 hours of legal work by lawyers and loan officers per year.

5. Cloud usage among firms is 58%, with smaller firms and solos leading the way.

6. Security measures are lacking, with no more than 35% of firms using precautionary cybersecurity measures to protect their businesses. A staggering 7% of firms have no security measures at all.

7. Despite some reservations, lawyers continue to use popular consumer cloud services like Google Apps, iCloud and Evernote at higher rates than dedicated legal cloud services. Clio and NetDocuments ranked the highest among the legal cloud services.

8. The percentage of the ABA 2019 Legal Technology Survey participants answering “Yes” to the basic question of whether they had used web-based software services or solutions grew slightly, from 55% to 58%. 31% said “No”, a small decrease. 

9. When asked what prevented their law firms from adopting the cloud, 50% cited confidentiality/security concerns, 36% cited the loss of control and 19% cited the cost of switching.

10. 26% of respondents in a 2019 survey report that their law firms have experienced some sort of security breach

11. In 2018, just 25% of law firms reported having an incident response plan. In 2019, this figure had risen to 31%, and we expect the same for 2020.

12. Interest in cloud services from law firms is high, but expectations of adoption among them remain low, with just 8% of firms indicating they will replace existing legacy software with cloud tools.

13. Only one-third of lawyers (34%) believe their organizations are very prepared to keep up with technology changes in the legal market.

14. Firms described as “technology leading” fared better, with 50% prepared to meet digital technology demands in the industry.

15. 49% of law firms report that they are effectively using technology today, and 47% say they can improve technology adoption and plan to do so.

16. Over half (53%) of lawyers in the US and Europe say their organizations will increase technology investment over the next three years.

17. While over half of lawyers expect to see transformational change in their firms from technology like AI, big data and analytics, fewer than one quarter say they understand them.

18. The biggest trends cited by lawyers that are driving legal tech adoption are “Coping with increased volume and complexity of information” and “Emphasis on improved productivity and efficiency.”

19. It is estimated that 23% of work done by lawyers can be automated by existing technology.

20. 27% of the senior executives at firms believe that using digital transformation is not a choice, but a matter of survival.

21. The top challenges for corporate legal departments today include reducing and controlling outside legal costs; improving case and contract management; and automating routine tasks and leveraging technology in work processes.

22. 60% of lawyers believe their legal firm is ready to adopt new technology for routine tasks.

23. According to research conducted by Gartner, only 19% of law firms’ in-house teams are ready to move forward with enterprise-level digital strategies.

24. A recent study uncovered that 70% of consumers would rather use an automated online system or “lawbot” to handle their legal affairs instead of a human lawyer because of three important factors—cost, speed, and ease of use.

25. 70% of businesses indicated that “using tech to simplify workflow and manual processes” to cut costs was a top priority going forward.

“New Law” Opportunities for Law Firms

I recently came across a presentation I gave in April 2015 to senior partners at Eversheds LLP in London. At the time, Eversheds were proactive in starting to diversify their professional services offerings away from traditional legal and transactional work into ‘alternative’ services areas, such as business improvement consulting for in-house legal teams, and flexible resourcing solutions.

At the time, it was unusual for a major corporate firm to be experimenting into different areas.

The question for the presentation was as follows:

Downward cost pressure, deregulation and new technology are transforming the legal industry, as ‘New Law’ providers compete with traditional law firms.  What are the opportunities for large law firms in this evolving marketplace? 

I focused on 2 main themes of (a) Changing the mind-set and (b) Managing innovation.

Since then, in six years a lot of innovation has been introduced into the legal sector. However, it has been a fairly low-bar for many years with the legal sector ‘glacial’ when it comes to change and technology.

Certainly the ‘legaltech’ and/or ‘lawtech’ markets have received significant injections of VC to build next generation B2C and B2B solutions. Most large firms are now experimenting with different AI and automation solutions, running incubators, offering flexible resourcing arrangements, investing in start-ups, and so on.

To better support Fortune500 General Counsels with their efficiency challenges, the Big4 are building services and capability at scale, as are legal process outsourcers and ALSP’s.

Many of these ideas were referenced in the presentation.

However, the critical question is has anything really changed in how legal services are delivered, bought and sold? How much of this is ‘innovation theatre’ and nibbling around the edges versus real change?

For example:

  • Does the partner in the Freshfields office in HK work any differently then they did as a trainee 20 years ago?
  • Are the skills and requirements of a newly qualified lawyer any different?
  • Does the single lawyer law office in Bristol run their practice any differently?
  • Does the COO of a regional law firm run the business any differently?
  • Do consumers who need a family lawyer do this any differently?
  • Does the barrister or judge involved in a trial do this any differently?

The short answer I think is not a great deal of change across the industry as a whole. However there has been a tonne of experimentation and innovation in some fragmented areas, especially in B2C (e.g. DoNotPay). COVID-19 has certainly accelerated this, and that can only be a good thing.

I think what we are seeing is a marathon, not a sprint. In fact, it is more like the start of a triathlon where there’s a washing-machine effect as participants fight their way forward before a steadier state emerges.

We see this with most new technologies, where things often take much longer to truly disrupt. In retail and e-Commerce, it is only recently that the Internet is causing significant challenges for traditional players, almost 20 years after the Dot.Com crash in 2001.

One thing is for sure – the next 10 to 15 years in the legal sector will be fascinating.

How To Create Winning Strategies That Reignite Human Potential, Adaptability and Creativity

Yesterday I gave a presentation to a NED Forum event sponsored by Investec. It covers a topic that I think is one of the most important issues for CEOs and Boards today who continue to grapple with the challenges of COVID.

The 3 key objectives for the presentation were to:

  1. Better understand what are some of the key and complex forces at play in organisations due to COVID
  2. How organisations can be more adaptable and resilient to future disruptive change
  3. And how to do this with more humanity using some best practices of a growing new breed of organisations out there

You can view the presentation here or below including the REIGNITE! 2020 Report:

The REIGNITE! 2020 Report

For those interested on more detail, below I have pasted in snippets of the talk including the Introduction.

Enjoy!

——

Hello and welcome everyone. Thank you to The NED Forum and Investec for the opportunity to speak here today. My name is Andrew Essa, and today I’m going to cover a topic that I think is one of the most important, if not THE most important, issues for CEOs and Boards today.

And that is:

Not just about turning this COVID crisis into an opportunity

Not just about where CEOs should focus, or where to invest

And not just about what winning strategies to implement to outmanouevure the competition

But more about HOW to do all of this in a way that is also more humane, more trusting and less bureaucratic, and in a way that can unleash the potential and creativity of people to have more impact and more fulfilling work lives

So we will aim to do 3 things here today:

  1. Better understand what are some of the key and complex forces at play in organisations
  2. How organisations can be more adaptable and resilient to future disruptive change
  3. And how to do this with more humanity using some best practices of a growing new breed of organisations out there

Slide 2 – Gary Hamel quote

  • So to bring this quote which I love and also my ‘fascination’ with this topic – I’ll tell you a quick story about ABC Learning Company, based here in Gsy. 
  • Obviously that is not their real name but I came across them in some research I did during Q2 and lockdown. 
  • In the research which later became the REIGNITE 2020 Report – which I’ll introduce shortly – there was so much devastation across sectors including travel, hospitality, retail, construction, manufacturing, and so on. 
  • In fact 50% of the 439 leaders surveyed were in total despair, in terms of closures, restructuring, uncertainty and so on. 
  • However…there was a glimmer of hope!
  • About 10% of businesses were doing extraordinary things. They were using the crisis as an opportunity to reset, rethink, and reinvent. They were pivoting, quickly using technology to launch new offerings, testing new business models, and at the same time becoming more efficient, productive and reducing costs.
  • In terms of ABC Learning, it was a typical lifestyle business providing high school tutors, owned by one person with 5 tutors on the payroll. No online presence, web-site or anything. Business stopped overnight with lockdown, but by rethinking things quickly and using simple online and digital tools – google spreadsheets for CRM and bookings, zoom for delivery of live sessions, stripe for online or over the phone payments, the owner was not only able to quickly survive but doubled revenue during lockdown, hired 10 more tutors on contracts, and created a scalable solution which allowed for recorded training on-demand on popular topics. So better CX, more revenue and profits.
  • So what is interesting here is the combination of human psychology and business strategy during a crisis: so how did the leader reinvent whilst everyone was retreating, what can we learn, and how can we emulate this for our own contexts
  • This is what underpins today’s talk and certainly the REIGNITE 2020 Report which I’ll introduce shortly.

Slide 5 – The Modern Org is Under Attack

  • So the modern organisation is clearly under attack from so many angles. 
  • The pace of change now is exponential and only will increase as further technological convergence happens through digital, AI, automation, analytics and so on
  • Today’s orgs look and feel very similar to how they have always been – command-control, top-down consistency, coordination and standardisation- which is the classic bureaucracy 
  • In US 1983-2019 the bureaucratic workforce – managers and overhead – has doubled in that time-frame VS growth of 50% in all other job categories
  • At same time productivity per OECD has gone down since them
  • Mental health, burnout, anxiety, stress, bullying, politics, discrimiation, harassment etc has skyrocketed 
  • Do we know anyone who is a leader, manager or worker and genuinely feels inspired, trusted, valued and engaged by their organisation every day??
  • We can’t afford it anymore!
  • So the question becomes, is it possible to build organisations that are big and fast, disciplined and empowering, responsive to market shifts yet resilient, efficient and entrepreneurial, and bold and prudent?
  • Many examples of new breeds of organisations successfully operating with 1/2 of bureaucratic load of traditional org
  • Case study – Buurtzorg (page xi)
    • Dutch firm Birdszaard home-health employers 16,000 nurses and home-carers with 2 line managers with a span of control of 1-8000!
    • They do this with dividing into small teams, give them the data they need to be self-managing, connect with a social platform to collaborate to solve problems and collaborate and share best practices, hold deeply accountable with P&Ls
    • Gives all the advantages of bureaucracy with control, consistency and coordination with no drag or overhead

On Digital Business:

  • Speed and scale: Digital and cloud has enabled adaptability at speed and scale;
    • The crisis has shown that rapid change at speed and scale is possible using digital and cloud in the short-term.
  • Increased adoption: Increased adoption of back-end cloud and front-end productivity tools, from e-signature to VC to MS365 to Dropbox etc
  • Effectiveness and benefits: Focus now on what is working, what isn’t, benefits realisation, productivity, efficiency, training, 
  • Complexity: So much going on…..managing capacity, cybersec, managing the complexity of the new IT estate, ensuring greater resource allocation with 2021 budgets, investments and leadership commitment to that 
  • Scaling and Transformation: The best firms – probably not many – are:
    •  firmly putting digital at the centre of corporate strategy
    • looking whether to build vs buy
    • aligning leaders on digital acumen so every CXO is a Chief Digital Officer for their function
    •  looking at wider opportunities for upskilling and digital adoption across the firm – so beyond infrastructure into more advanced worker productivity tools – automation, AI, analytics, superior Customer Experiences, New Business Models and Products/Services, Ecosystem Collaborations/Ventures
    • As well as more strategically, how to better organise and transform to become a digital business
  • Caution! Digital laggards will get left behind due to external forces and competitive intensity

On Trust + Safety:

  • So this is such a critical, complex and often overlooked dimension, mainly as it requires leaders to be empathetic and emotionally intelligent, and unfortunately many aren’t  
  • The BIG opportunity is that for the firms who get these complex dynamics right, will differentiate themselves from a talent retention and hiring perspective and become the new employers/brands of choice 2021+
  • But first we need to look at the state of play before COVID
  • In a nut-shell, there is very little trust, just need to look at amount of oversight, rules, policies, rule-choked processes and employees get this and know they aren’t trusted and even that their managers don’t think they are very capable
  • UK amount of discretion people have in jobs has been going down in last 20years
  • Only 1 out of 5 believe their opinions matter at work
  • Only 1 in 10 have the freedom to experiment with new solutions and methods
  • Most people can buy a car or house but same people in organisations can’t order a better £150 work chair without going through crazy internal hoops and hurdles
  • The way organisations are organised it is a caste system of managers and employees of thinkers/doers which causes disengagement of people from their work
  • Gallup surveys show only 20% of those highly engaged in their work – this is ALARMING so something needs to change
  • So against that backdrop you introduce a health and economic crisis of proportions never seen before, which impacts the human psyche in many different ways, and for most orgs you have a widening trust gap
  • Key impacts:
    • The “psychological contract” between employer/employee has also shifted for many
    • Traditional work assumptions have been challenged, firms must now not assume ‘old’ practices were the right ones
    • Acceleration of complex issues around safety, mental health, inclusivity, belonging, empathy, EQ, culture and behaviour, power dynamics, and expectations on leadership styles

The Power of Language To Communicate Strategy & Change

I used this slide at a presentation yesterday.

For me its purpose was to contrast current/future states and link to best practices.

However one of the participants (Banking senior executive) said he loved how it simply showed how powerful ‘language’ can be to communicate a new strategy, initiative or change.

He said they have been stuck for years using the same old terminology from the ‘old’ column.

This was brilliant.

An unexpected but simple example showing the power of fresh #perspectives #diversityofthought #customerdevelopment #userfeedback

An Interview With Gary Hamel

I recently listened to the Eat.Sleep.Work. Repeat podcast where Bruce Daisley interviewed Gary Hamel about his new book Humanocarcy. I posted about my excitement to recieve the pre-order of it here, and am really enjoying working my way through it.

If you are a leader, manager or worker in ANY job, this book (or notes below) is a must-read.

Whilst I rarely (well, never) take notes of the podcasts I listen to, after the first 5min it was clear I needed to capture the content. There was just so much unbelievable value Gary Hamel was providing.

And so the below represents my rough notes of that interview (which includes the below quote – so simple, yet so powerful):

Cannot assume that low-skill jobs means low-skill capabilities! – Gary Hamel

Enjoy!

What is the impact of COVID on the world of work?

  • Remote work and flexibility is possible, that will continue
  • Power moves to the periphery. Front-line people have had to use their ingenuity along with more freedom and autonomy so these people will not want to go back to traditional roles
  • Institutional and political resilience has come up short. Organisations are poorly suited to fast-moving, demanding problems and challenges beyond COVID such as racial injustice, income inequality, environmental change, automation impacts will need everyone to turn on everyone’s creativity

What is going on with the state of trust?

  • Yes very little trust, just need to look at amount of oversight, rules, policies, rule-choked processes and employees get this and know they aren’t trusted and even that their managers don’t think they are very capable
  • UK amount of discretion people have in jobs has been going down in last 20years
  • Only 1 out of 5 believe their opinions matter at work
  • Only 1 in 10 have the freedom to experiment with new solutions and methods
  • Most people can offered to buy a car or house but same people in organisations can’t order a better £150 work chair without going through crazy internal hoops and hurdles
  • The way organisations are organised it is a caste system of managers and employees of thinkers/doers which causes disengagement of people from their work
  • Gallup surveys show only 20% of those highly engaged in their work – this is ALARMING so something needs to change

What is the impact of bureaucracy?

  • A 1/3 of wage bill goes to managers, supervisors and administrators
  • A 1/3 of all hours/activities in organisations goes to bureaucratic tasks
  • In US 1983-2019 the bureaucratic class has grown by 200% (doubled) in that time-frame VS growth of 50% in all other job categories
  • It’s not about more regulation but the proliferation of new functions
  • At same time productivity per OECD has gone down since them
  • We can’t afford it anymore!
  • Many examples of post-bureaucratic vanguard of firms operating with 1/2 of bureaucratic load of traditional org
  • Dutch firm Birdszaard home-health employers 16,000 nurses and home-carers with 2 line managers with a span of control of 1-8000!
  • They do this with dividing into small teams, give them the data they need to be self-managing, connect with a social platform to collaborate to solve problems and collaborate and share best practices, hold deeply accountable with P&Ls
  • Gives all the advantages of bureaucracy with control, consistency and coordination with no drag or overhead
  • Can cut the bureaucratic drag by 50% would produce 10T gain in economic output across OECD (in UK £900B) and would double productivity growth rate over next 10 years
  • No other proposals on the table eg improving education, more incentives for capital investment
  • Economic reason, competitive reasons, social reasons as ethically the reason to do this

How do we get there?

  • Foundation for building a post-bureaucratic organisation is everyone thinking and acting like an entrepreneur, owner
  • Pre-Industrial era most owners/employees 4-5 people, all customer-focused and knew each other
  • As organisations scaled in line with Industrial revolution that was lost and no longer have the information to be self-organisation
  • Firms that do it e.g. Haier, Nucor ensure the front-line people have the information, skills, incentives, and freedom to think/act like owners
  • Still have to have coordination and tie the org together, instead of top-down it can be via collaboration
  • Some organisations have ESSP but that’s not what an owner – autonomy, right to make key decisions, right of participation in the financial upside of the business

Have we over-valued consistency and scale?

  • Bureaucracy invented to enable control and efficiency at scale with a top-down model
  • Replicability required to do things properly at scale
  • But that makes it very hard to change 
  • Control is important in most industries! 
  • But what else is important and what other ways to achieve it?
  • Orgs at heart are built to maximise control
  • Today we need orgs to maximise contribution with free to experiment, free to respond quickly to customer needs, free to solve local problems, not waiting for permission 
  • In bureaucratic model everything comes top-down which makes it hard to change fast
  • By the time an issue is big enough to attract CEO’s attention, often too late by then
  • E.g. Intel CXOs only would go after $1B Opportunities – but how do you know what is this at this scale? Only way is if someone else is already doing it i.e. not original, innovative. Nothing starts out as a $1B opportunity VS Amazon which experiments with all sorts of opportunities at different levels VS waiting for someone at the top to say ‘this is a strategic priority’ which will rarely happen

Experimentation is part of the new Org DNA

  • Pace which anything evolves is limited by the amount of experimentation that takes place e.g. humans today
  • Worrying that vast majority of employees say it’s virtually impossible for front-line employee to get a small amount of time and budget to try something new
  • More than ⅔ of employees say new ideas are greeted by hostility or skepticism 
  • E.g. central collaboration platform at a global tech retailer to share ideas and issues and real-time and treat the stores/orgs as a laboratory
  • Bezos says his goal is to build the world’s biggest lab, best place to create break-out success or fail with ideas vs if know it will succeed as have data it will likely be incremental innovation 
  • Intel hires goes through ‘Design To Delight’ programme teaching ‘design thinking, rapid prototyping, agile, experimentation’ 

Is the moment now a great opportunity to experiment?

  • We’ve had the tools/tech to enable remote working for over a decade 
  • Whilst tech becomes more available, also enables orgs to exert more control! Due to analytics. 
  • But data is not context and is historical 
  • We can assign every worker a detailed rulebook on what they need to do and somehow it aggregates into extraordinary performance. But does not reflect reality 
  • Battle of forces pushing decentralisation and autonomy and remotely, enabling lateral communications VS vertical challenging managers top-down
  • Same complexity to drive decentralisation is also pushing to exert control especially with the old guard 
  • One of the ways to ‘soothe’ a leader is to go to bed at night is that there is a policy to guide everything! I.e. squeeze the complexity of the chaos and world by creating appearance of uniformity and control but reality is far from it

The paradox of forces at play:

  • Consistency does matter – when I got to Apple store we expect certain things
  • But we do need this and creativity on the front-line with ability to tweak and change to make the real-time trade-offs
  • E.g. Nucor – unleashed the everyday genius of workers 
  • Tension between adaptability vs consistency 
  • Even if irreconcilable the eco value from scale is not what it used to be VS demand now for customised, personal experiences 
  • It will be a long slog
  • Over 70% say the prime way to get ahead is to be a good bureaucrat! i.e. horde resources, politics, climb ladder, attain positional power
  • But requires political challenge to redistribute power which no-one will like to do that 
  • System is working for anyone – workers, managers, leaders 
  • It all grows to accumulate power! We have to change that game 
  • Power needs to be fluid in orgs
  • If adding value people or a mentor or inspiring people will follow

What;’s happening in politics?

  • There’s a belief that the system is not working for them – income inequality, low wage jobs, equity
  • Workers treated like commodities, resources VS opportunity to use all competencies, skills, grow etc
  • Cannot assume that low-skill jobs means low-skill capabilities!
  • Stop talking about low-skilled jobs!
  • US Bureau of Stats – 70% low-skilled jobs are designed so people cannot use their originality 
  • Economically indefensible that we haven’t done more to given front-line people the opportunity to grow and use ingenuity

Can all orgs make this change away from bureaucracy? 

  • If you are a smaller business, what are the principles to hold scared as you grow the org
  • Founding principle – humanity vs bureaucracy 
  • From the start highly alert to the signs of bureaucracy to stay vibrant 

US Airlines example

  • Needed to kick-off some people to allow crew on
  • Staff did not have authority to offer correct incentives
  • Passenger carried off and became worst PR disasters ever
  • The CEO said workers did not have the procedures, guidelines, rules to use their own judgement! But it was the existence of too many rules that did not allow the local staff to use their own judgement 
  • Manual at UA is 60 pages VS manual at Southwest Air 5 pages

Haier Case Study

  • Hair Chinese domestic appliances
  • They wanted to build a network company
  • They divided 80k organisation into 4k micro-enterprises
  • All businesses had rights and flexibility akin to start-ups with significant incentives
  • Tied together with internal contracts for services e.g. HR or can go outside
  • Everyone’s performance – including internal contracts – is tied together on the success of the product in the market so everyone is aligned
  • Make it easy to start new businesses, if new idea post it online internally and others can join, Haeir can give you access to their VC network and they will co-invest and you can leverage the Haier network
  • Haier to make the journey redeployed 12k middle-managers to the micro-enterprises (or left), today three is 1 level between front-line and CEO, most firms have 8 levels

 

 

 

4 Major Post-COVID Megatrends

This week I came across a great report and visual from market intelligence firm Luxinnovation. It focused in on the major megatrends that will impact the economic recovery: digitalisation, sustainability, resilience and new business strategies (see below):

The study “Post COVID-19 Market Trends” is based on information from three sources:

  • National recovery strategies that have already been published by European countries, as well as the European Commission’s recovery plan and position papers issued by international organisations such as the OECD and the World Economic Forum
  • Technology and innovation market studies taking into account the impact of the COVID-19 crisis
  • Articles published by specialised press on topics related to current market trends in the post COVID-19 period

As the report aligns with recent research I conducted into strategic responses of a range of organisations across the world (REIGNITE! 2020 Report), I’ve summarised the key points below as highlighted by Sara Bouchon, Head of Market Intelligence at Luxinnovation.

On digital:

  • Even though the crisis brought some parts of the economy to a near standstill during the lockdown, it has strongly accelerated some trends, such as digitalisation
  • A large proportion of the workforce had to switch to remote working with almost no advance notice, for example, and many shops had to very rapidly start selling their products online
  • Digitalisation also turned out to be a success factor for some industrial companies with a high level of automation, which allowed them to continue producing even when the staff could not be present on site. This will speed up the development of the factories of the future that are based on Industry 4.0 principles

On resilience:

  • The huge impact of the current health crisis has raised people’s awareness of the potential consequences of a future climate-related crisis.
  • Many governments have recognised the need for a sustainable recovery and the opportunity to “build back better”, to use the words of the OECD
  • Recovery plans will include dimensions such as achieving the transition to renewable energy, shifting to a circular economy and rethinking food value chains to make them more local and environmentally friendly. There is also a will to invest in sustainable infrastructure
  • The ability to absorb and adapt to external shocks is vital, for countries as well as for companies and individuals. This crisis has highlighted vulnerabilities in the way our society functions of which we were not aware. It is essential that we work on lessons learnt and define what we can do to become more resilient.
  • A main focus in obviously on the healthcare system that is some places has been pushed to the very limits of its capacities. Other key issues include the building of regional supply chains, the development of new skills that help the labour force be flexible and agile, and ways to stimulate an inclusive democracy

On business strategies:

  • While businesses are now dealing with the severe short-term impacts of the crisis, many of them will have to reconsider their strategies in the post-crisis period, taking into account the “new normal” situation.
  • Some companies that adapted their production in order to respond to the urgent needs for disinfectants, face masks and visors, for example, are considering whether to stay in those markets or not.
  • Others, who changed their business model to offer online shopping or home deliveries, ask themselves the same questions
  • COVID-19 has been a strong driver of new forms of business innovation
  • New partnerships have been formed that would not have happened otherwise, and we can see much more of open innovation. This, in turn, challenges the current regulations of intellectual property as many innovations stem from cooperations involving several organisations
  • The health crisis has created new consumption and working habits, new needs to ensure that sanitary measures are being respected in offices, shops and other public areas, and new demands for entertainment in a context where large gatherings and face-to-face contacts are difficult. These are some of the areas in which we expect to see a lot of innovation in the near future.”

If you are interested in more context on the future implications of COVID, check out my recent report called REIGNITE! 2020 Report

OneTrust: How A Privacy-Law-Compliance Tech Start-Up Became America’s Fastest Growing Company

Today I came across an incredible story of OneTrust, a privacy-law-compliance start-up based in Atlanta.

OneTrust landed at No. 1 on this year’s Inc. 5000, with more than $70 million in 2019 revenue and a staggering 48,337.2 percent three-year growth rate. It is among the global leaders in privacy-law-compliance technology with a suite of digital tools that gives companies a clearer view of all the user data they accumulate.

This enables them to comply with privacy laws, like the European Union’s General Data Protection Regulation (GDPR) which gives consumers greater control of how com­panies can use their data.

Whilst Enterprise B2B SaaS and analytics isn’t the most sexiest space, in many cases, firms that play there can be the fastest-growing, most scaleable and profitable (and do good things at the same time). 

In an age of Big Tech monopolies, increasingly intelligent AI and API-powered platform business models, growing regulatory oversight and appetite, and increasing consumer-awareness, OneTrust and others are clearly riding a tidal wave. 

Read the full story here 

 

 

3 Big Digital Priorities for Leaders

After analysing the data of over 439 senior leaders at global organisations in the recent REIGNITE! 2020 Report, it was clear that the use of technology for 95% of the majority had been to maintain business operations, whether that was survival or business continuity in facilitating remote work. 

This is not surprising per se in response to a major emergency. Before the tectonic shifts caused by COVID-19, some organisations were executing on multi-year digital transformation plans, with others focused on fighting other fires with digital not even on the radar. 

The ongoing pandemic, economic, social and health crises continues to raise the stakes for leaders on digital priorities, underscored by three major opportunities:

#1 Increased digital adoption enables adaptability at speed and scale

For many firms this has involved a combination of accelerated back-end cloud, front-end software tools, and new ways of working. Many of those digital initiatives quickly became make or break—for example restaurants, cafes, and retailers enabling digital orders and connecting seamlessly with delivery services. 

Other firms however continue to have core (or hybrid) infrastructure set-ups based on outdated tools, processes, and assumptions which need to be re-envisioned for the evolving landscape, continuing remote workforce requirements and leadership appetite to maximise the full potential of digital across the firm.

The focus for leaders should be to build on the momentum of change the crisis has caused (‘it can be done!’) and adoption by moving beyond ‘getting back to business’ and understanding the full set of digital opportunities for customers, internal processes, workers, and organisational capabilities. 

#2 Digital acceleration increases the widening gap between the ‘laggards’ and transforming leaders 

COVID-19 has accelerated this trend and has firmly planted digital and innovation at the top of most CEO’s (and CXO’s) agenda. Whilst many of the worlds large and small companies went into tailspin or survival mode once the pandemic took hold, a handful of digital-powered and platform-enabled companies have instead added billions to their market capitalisation and top-line revenues. And they won’t stop (even likely break-up by the US government will not slow them down). 

In other words, if COVID crisis hasn’t shown you the burning platform (i.e. how fast change is moving, and how digital can help you adapt), then nothing will.

Here are the 3 rough categories of organisations today:

The Leaders: 

A business or brand, which has invested heavily (monetarily and otherwise) into a digital transformation strategy that goes far beyond ‘remote work facilitation’. Integrating key technologies and talent (up skilling existing and augmenting with external expertise) to elevate customer experiences, exploit new business models and ventures, and optimise business processes. Not to be confused with those who have attempted digital transformation, only to implement a new email system and hang up their hats.

The Laggards: 

Those who, for whatever reason, have failed to incorporate new technologies and/or invest in up skilling their talent, leaving their business to rely solely on manual or traditional forms of operations, business models, go-to-market, and communications. While you may be inclined to think of this group as pure traditionalists, grasping on to their old standards, assumptions and ways of working, this group has grown to include a much broader range of organisations. 

In talking with many leaders and employees across the world, it is surprising how many leaders have gone straight back to this way of working after Q2 2020 lockdown. In some cases, they have retreated even further. 

The Middle-Ground Mavens:

This may be the point in which you find yourself asking, but what about those in middle? Not quite a leader, but definitely not a laggard. In our post-COVID world and given the pace of change, the space taken up by these ‘middle ground mavens’ you could argue is increasingly dwindling, giving way to a landscape in which we can only find ourselves as laggards or leaders. Those who have mastered the art of transformation and innovation, and those who have not. 

(NB This is obviously hugely simplified and far from black or white, but the sentiment remains).

For non-tech large incumbents with some tailwinds and the appetite to transform, there is significant opportunity to use the scale and resources to digitise processes for efficiency, and at the same time, investing in future growth and innovation portfolios, new business models, and up skilling. PingAn’s transformation is a brilliant case in point. 

Whilst this is not easy and requires the right leadership, the alternative is arguably worse: a slow death-march toward extinction or significant value-destruction. 

 #3 Digital acceleration enables more advanced and integrated human and digital combinations

In other words, digital adoption will enable the workforce of today and tomorrow (e.g. remote, virtual, distributed, agile, flexible, gig etc) to become more productive, effective and efficient (‘smarter’) utilising automated workflows (enabled by cloud, analytics, AI, automation, software) of both repetitive and higher-order tasks.

The Boston Consulting Group call this the ‘Bionic Organisation’ which at its core will combine more advanced and integrated human/software combinations (see below):

The-Bionic-Company-of-the-Future_Exhibit_tcm-233419-1024x829

According to BCG, what the company of the future will look like is becoming clearer. At the centre is purpose and strategy: the reasons it is in business and how it brings those reasons to life. Four enablers allow companies to operate as bionic organizations: two have to do with technology and data, while the other two address talent and organisation.

What’s next?

To better understand these issues further or explore our range of digital business advisory offerings, get in touch here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

Humanocracy: Creating Organisations As Amazing As The People Inside Them

It is rare that you come across a business book that makes you scream “YEEEESSSS!” when you haven’t even read it yet. In fact, I don’t think that has ever happened to me before.

Just a few words in the blurb from author Gary Hamel did it for me:

“Our organisations are failing us. They’re sluggish, change-phobic, and emotionally arid. Human beings, by contrast, are adaptable, creative, and full of passion. This gap between individual and organisational capability is the unfortunate by-product of bureaucracy–the top-down, rule-choked management structure that undergirds virtually every organisation on the planet” – Gary Hamel, management guru and author of Humanocracy

humanocracy-cover-2x

This quote, COVID-19 and first-hand experience of these issues over the past 20 years provided the inspiration for me to want to better understand what is going on inside large and small organisations around the world across 15 dimensions including leadership, strategy, culture, processes, and technology.

This led to a multi-month project producing the REIGNITE! 2020 Report, numerous new tools and frameworks including the COVID Response Index (CRI) and REIGNITE! FLYWHEEL, a forthcoming ebook (wait list here), and new set of offerings at REIGNITE! Global. 

I doubt Gary Hamel realises what he has started and the impact he is going to have with this book. Actually, he probably does.

Humaocracy is out soon and on pre-order now. Obviously, I have signed up. Book review to follow in September I think.

#covidresponse #covidimpact #leadership #strategicresponse #organisationalbehaviour #organisationalchange

First And Second Order COVID Impacts

Every day there is a new story or report on how COVID will impact X, whether business, industry sector, country, health, your brain, and so on. This has been going for months, and obviously will continue for a long time.

In fact yesterday I posted about this in relation to the island I live (Guernsey).

I’ve since started a very basic list of these impacts. I’ve divided up into first order (direct) and second order impacts (indirect). I haven’t done so but I will need to categorise them.

Over time I’ll aim to build up in a database and post updates here. In the meantime, please feel to comment or add your perspectives here or on the socials.

First Order Impacts

  • Reduction of in-bound and outbound business and leisure travel
  • Increasing shift to online business development and sales
  • Increased e-commerce and local delivery needs
  • Increased demand for flexible and remote working
  • Increased home office improvement needs
  • Shifting social and psychological contract for workers and consumers
  • Increasing focus on mental health, wellbeing, worker and customer safety, trust
  • Office rationalisation due to safety measures and demand for flexible working
  • Smarter, frictionless offices with more automation, smartphone ID, facial recognition and refit for more experiential work e.g. client meets, collaboration, workshops, creativity, training
  • Increased demand for more use cases beyond shopping for contactless payments and frictionless ordering e.g. restaurants, cafes
  • Commercial real estate, higher education and executive training, and hospitality models upended

 Second Order Impacts

  • Trust, safety, culture differentiator for certain workplaces in areas
  • Potential migration away from over-populated major cities (e.g. UK) into second cities, regional or coastal areas
  • Universities unlikely to open meaning a significant number of ‘gap’ years for 18 year olds
  • Existing older leaders aim to cement positions and hold on to ‘power’ or a changing of the guard for new perspectives
  • Changing mix of workforce with more comfort for a ‘talent anywhere’ model
  • Requirement for more flexible resourcing with demand for more specialised contract and freelancers
  • New sectors developing hybrid on/offline business models for smarter, more relevant customer experiences e.g. education, gyms, training, retail
  • More public and private infrastructure development
  • Talent anywhere to hire the best wherever they are
  • Smarter, frictionless, reconfigured offices which may be provided as a perk
  • Smart phone use cases in-store increase e.g. digital ID, office access, ordering in-store
  • Privacy issues around any contact tracing services
  • Retail high-streets and commercial workplaces continue to transform with more residential housing

Google Home Working Until July 2021

After I saw the Google announcement in the NY Post I posted this comment on LinkedIn and Twitter earlier today:

“Big tech tend to be the test bed for new HR practices although many do not go mainstream. Even with the pandemic I still don’t think this will hit mass market either mainly due to powerful old school bureaucratic orgs, entrenched work practices, and many baby boomer leaders holding on for control”.

As a glass-half-full-guy I hope I am wrong here, but having worked in and consulted to many large and small organisations on almost all continents, I can’t see a majority of businesses following suit.

It will be fascinating to track what happens on this issue (and all other organisational behavioural) issues over time.

 

 

4 Key Takeaways From The US Big Tech ‘Monopoly’ Hearings

The House Judiciary Committee’s Democratic chairman, Rhode Island Rep. David Cicilline, concluded today’s daylong hearing by hinting at what might lie ahead as lawmakers ponder federal regulations to hold the four companies — worth nearly a combined $5 trillion — to account.

In summary, Rep. David Cicilline, D-R.I., says Amazon, Facebook, Google and Apple operate like monopolies and need to be broken up or regulated.

“These companies as they exist today have monopoly power. Some need to be broken up. All need to be properly regulated and held accountable,” said Cicilline, adding that antitrust laws written a century ago need to be updated for the digital age.

“When these laws were written, the monopolists were men named Rockefeller and Carnegie,” he said. “Today the men are named Zuckerberg, Cook, Pichai and Bezos. Once again, their control of the marketplace allows them to do whatever it takes to crush independent business and expand their own power. This must end.”

This power has been obvious for many years (and accelerated in 2020 due to COVID) however the political will has never been there until now, and agreeing the exact nature of the ‘stick’ or remedies to sort out the issues is never an easy task.

According to NPR, 4 key takeaways from today include the following:

  1. Bezos “can’t guarantee” Amazon never used seller data to make its own products
  2. Hurting the competition emerges as Democrats’ primary charge against Big Tech
  3. Republicans sidetrack hearing to air complaints over anti-conservative bias
  4. Missing from view? Zuckerberg’s reaction (when Bezos described social media as a “nuance destruction machine”)

NPR do a great job filling out the details and you can read the full article here

The REIGNITE! 2020 Report

“Many have compared the COVID crisis to armed conflict … Once this war against an invisible enemy is over, our ambitions should be bolder – nothing less than to make a fit planet for our grandchildren to live on”Mark Carney, Former Governor, Bank of England

After a few months of research, analysis and writing during lockdown, I am pleased to be able to finally share insights from one of the largest single studies of strategic responses of Guernsey firms to the COVID-19 pandemic (“crisis”) conducted to date.

You can access the full report here, or below I have pasted in the key sections.

Background

Between April and June, I surveyed 439 senior leaders across Guernsey, UK, EU, US, APAC using a 15 question open-ended online survey (see below):

Strategic-Response-Roadmap-(SRRM)

Why?

Given the nature and scale of the pandemic, this really is a once-in-a-lifetime opportunity for organisational behaviouralists to understand what is going on in terms of how firms, leaders, employees and other stakeholders are responding over time.

Specifically, for leaders and firm the findings hopefully help with the following:

New Insight: Leaders and teams can better understand the strategic responses of large and small firms across many different sectors to the crisis, and the complex consequences, behaviour, and implications it has had on firms, people and customers

Priorities: Leaders and teams can learn about the priority focus areas and big opportunities for leaders to better structure and get to work to rebuild and reignite performance

Behaviours: Leaders and teams can learn the new leadership styles, cultural behaviours, mindsets, and ways of working needed to turn crisis into opportunity

Key Findings:

We identified 6 areas of insight for leaders and firms:

  1. Evolution AND Revolution

  • 5-10 years of change in 5 weeks for many sectors
  • Rapid acceleration of many pre-existing structural trends (e.g. cloud, flexible work, e-commerce, up-skilling) and new behaviours likely to endure
  • For many change will likely be evolutionary but for others it will be revolutionary with increasing pace of change e.g. retail.
  • Leaders must continuously identify, evaluate and scenario plan for the right market signals, trends and new consumer behaviours
  • Firms who don’t do this, get it wrong or go too slow risk disruption, market share loss or other business risks

OPPORTUNITY: The top 5 key trends impacting your firm today will provide the investment roadmap for your next 24 months

2. Trust As A Differentiator 

  • There are complex dynamics at play and business and moral imperatives for leaders to assess the impact of the crisis on the human psyche which has affected people in many different ways
  • The “psychological contract” between employer/employee has also shifted for many, and firms must now not assume ‘old’ practices were the right ones.
  • Traditional work assumptions have been challenged, as as well complex issues around safety, mental health, inclusivity, belonging, empathy, EQ, culture, power dynamics, and expectations on leadership styles 

OPPORTUNITY: The firms who get these complex dynamics right will become the new employers/brands of choice 2021+

3. Digital Acceleration 

  • The crisis has shown that rapid change at speed and scale is possible using digital and cloud in the short-term.
  • Rapidly advancing and converging technologies combined with increasing human capabilities, new business models and ways to organise and lead are needed.
  • Digital laggards and firms with limited customer-centricity will get left behind due to external forces and competitive intensity

OPPORTUNITY: Put digital at the centre of your corporate strategy, align leaders on digital acumen so every CXO is a Chief Digital Officer for their function, upskill workers, and prioritise the top3 digitising opportunities beyond back-office operations into more advanced worker productivity tools (e.g. automation, AI, analytics), superior customer experiences, new products/services and ecosystem collaborations/ventures

4. New Skills, Mindsets and Ways of Working

  • As a shift to ‘smarter working’ means different thing to different firms, it is important to define what it is, what it means for the firms and employees, and what are the expected behaviours, required, skills, mindsets, and ways of working.
  • Continued experimentation is required to engage with workforce, test models, gain feedback, learn best practices, and repeat, but the risk is many firms will likely revert to old habits and practices which will jeopardise trust with their talent
  • This process is critical as learnings will likely have firm-wide impacts to entire workforce and processes, practices, culture and strategies e.g. training, performance management, corporate values, recruitment, rewards, policies, agile methods

OPPORTUNITY: Whilst firms who prioritise and commit to this will adjust more quickly to the landscape, those who use intentional cultural design as the agent of change will build a stronger platform than peers for longer-term success

5. Resilience And Adaptability 

  • Whilst many firms are making cuts to ride out the storm or shutting down permanently, our research identified many entrepreneurial firms who adapted quickly with new business models AND in parallel also focused on financial restructuring (e.g. loans, capital raising) and enhancing productivity (e.g. software, up-skilling), better utilisation (e.g. re-deploying staff), or improving customer experiences (e.g. online ordering via Facebook Commerce).

OPPORTUNITY: The firms who get the right but very difficult balance of resilient best practices, innovation for growth with longer-term exploration, and agile/new ways of working will be well-positioned to outperform peers and last for the longer-term

6. Increasing Leadership Complexity 

  • Given the nature of the crisis, for many leaders it represented a call to action to adopt both crisis management AND people-focused behaviours such as empathy, self-awareness, openness, vulnerability, and EQ
  • The best leaders will also now spend more time on longer-term growth and innovation planning and exploration

OPPORTUNITY: Self-awareness is critical for leaders to start addressing skills gaps. Those who do and forge more trusting, purposeful, inclusive, authentic, and empathetic workplaces will retain (and be able to hire) the best talent and rebound faster then competitors

Survey Results

The survey results showed that the crisis has impacted organisations in many different ways over time. Some have had headwinds and tailwinds, but many have been caught in the middle.

The challenge now will be for leaders to be ‘open’ to understanding ‘what is going on’ inside and outside the firm, evaluating the degree to which each is relevant and to what extent, and then planning and executing an appropriate response.

Confidence

Whereas 92% of international respondents were confident of being able to get through the crisis, only 64% of Guernsey respondents felt confident

Speed                                 

96% of respondents indicated that their firms were able to respond to the crisis fast (52%) or extremely fast (44%);

Impact          

22% of firms were unable to operate due to the crisis

Change

Smarter working (34%), new technologies (33%) and new offerings (22%) were pre- planned changes that were accelerated due to the crisis

Work     

47% of respondents saw no changes to their work (i.e. work remotely) with the remaining undergoing disruption including job losses (15%). Adapting to virtual meetings (26%) and new ways of working (27%) were the major changes to jobs/skills

People

Employee safety and well-being (31%) were the major areas of people focus

Leadership                       

Empathetic leadership (25%) with strong communications (23%) were the major leadership behaviours demonstrated

Technology  

Desktop and mobile video-conferencing (VC) tools (46%) and cloud-based document and collaboration software (28%) were the most valuable technologies

Culture

Supportiveness (30%) and team spirit (20%) were the most valuable cultural attributes

Processes

New ways of working (18%) and new technologies (18%) have been the most important processes to improve

Innovation + Growth

 Interestingly, only a small number of firms  innovated with new channels or offerings (7%), with 12% engaging more with clients/partners (12%), and 14% indicating ‘no innovation’

What survey respondents said about the impact of the crisis on:

 IMPACT:

“Categorisation of business critical role and function for immediate, should and medium term. Anything out of above scope, amended, reduced or halted. Focus is on surviving the immediate challenge and preparation for reopening” – Hotel Owner

 SMARTER WORKING:

“The crisis has enabled more working from home flexibility, more focus on work life balance in times like this where stress and anxiety are a big part of many employees’ lives”Director, Training Firm

CHANGES:

“More areas of focus needed include managing mental health and wellness during and after the crisis; planning for the ‘new normal’, whatever that may be, and likely to be different in many ways to how we worked before COVID; and reintegration – thinking carefully about how we transition back to face to face after a sustained period of disruption, easily underestimated and ignored as a potential challenge”Management consultant

LEADERSHIP:

“Empathy, transparency, and authenticity. For example, our MD did a WebEx from his daughter’s bedroom for all to see”Sales Director

CULTURE:

“Agility, flexibility, ability to make quick decisions” – CTO

TECHNOLOGY:

“The crisis has sped up the utilisation of tools such as Microsoft Teams for meetings, e-signature software and other tech which will assist both with internal and external customers moving forward” – Investment Banker

GROWTH + INNOVATION:

We have built industry specific thought leadership and points of view that have historically fallen down the list behind client work; digitising our many face to face interventions, essentially helping us build out a whole new suite of assets that are now deployable in a virtual environment now and beyond COVID; more time for training and personal development – Learning and Development Manager 

Conclusion

In summary, the crisis presents a significant opportunity for all leaders and firms to reset and lean-in to fully understanding what is going on in terms of how the crisis is impacting organisations in the short-term, what this might tell us about longer-term impacts, and where and how to focus efforts and investments across the operating model.

The Post-Crisis World of Work With Adam Grant

As people and businesses plan for pandemic recover and rebuilding, experts such as organisational psychologist Professor Adam Grant of Wharton are a great source of inspiration.

He gave a recent interview with Ross Chainey at European Business Magazine which provided a tonne of insight into the future of work in light of the ongoing crisis.

It was so good that I had to provide an edited transcript of the conversation below. Enjoy

First and foremost, this is a global health and economic crisis. But, for many millions of us, we’re battling a loss of normalcy in our daily lives. How well-prepared do you think we are to deal with a situation like this? Does it play to any of our natural strengths or is it more likely to expose our weaknesses?

It’s a little bit of both, like everything else. The challenging part is, as human beings, we don’t like uncertainty and unpredictability. There’s even some evidence that if you’re highly neurotic, you actually prefer experiencing pain over being in the dark about what you’re going to experience. That’s a part of the crisis that’s really a challenge.

On the flip side, we’re highly adaptable. Darwin wrote when he was building his theory of evolution that natural selection favours a sense of flexibility. It’s not always the strongest species that survives; it’s sometimes the most adaptable.

I think one of the ways we can cope with the uncertainty is: when you can’t imagine the future, you can actually rewind and think more about the past. You can recognize hardships that you’ve faced before. You can learn something from the lessons of your own resilience and then try to figure out “what did I do effectively before that might work for me today?”

I still hear a lot of people complaining about FOMO – the fear of missing out – even though there’s nothing really going on. Has COVID killed FOMO or exacerbated it?

I prefer to think about this less in terms of FOMO and more in terms of what’s often called JOMO, which is the joy of missing out. I actually made a list of all the things I’m thrilled that I don’t have to do, and that includes changing out of sweatpants [and] having to commute.

This is a practice that’s pretty useful for people. We have a lot of evidence that marking moments of joy can actually create those moments of joy because we’re more likely to notice them. We’re more likely to savour and share them. Being able to capture a few things that are really joyful about getting to stay home seems like a productive step.

We’re all separated from our teams. How can we maintain a sense of belonging while isolated at home?

I don’t know that it’s easy. In one company, they did a virtual tour of their home offices. That gave them the chance to talk about some of the mementos that they keep nearby. They were showing off pictures that their kids drew for them. And it was a great moment of personal connection in a way that never would have happened if everyone was in the office.

I’m not suggesting that’s the perfect fit for everyone, but it seemed like a small step that can make a meaningful difference in feeling like I learned something new about my colleagues, [that] I see them more as human beings as opposed to just achievement robots.

Every team has its introverts and extroverts. Do you think this crisis has levelled the playing field between them?

I wouldn’t go that far. I think the reality of the current situation is we’re still catering to extroversion. We’re now sitting on video calls all day, as opposed to saying: “You know what, maybe we should have fewer meetings”.

We’ve known for a while that that introverts’ voices tend to get overlooked in a group setting. This would be a good time to experiment with moving towards some more independent individual work, which we know is the best approach if you want to generate lots of good ideas in groups.

One of the simple practices I would recommend to make sure that introverts don’t get drowned out is to shift from brainstorming to brain-writing. So brain-writing is a process where you [ask] all the people in a team to come up with ideas independently, then submit them. Then you review them. That leverages individual strengths around coming up with original ideas and allows the group to do what it does best, which is to begin to evaluate and refine. That’s probably one of the most effective ways to make sure that introverts are heard.

Through this crisis, managing expectations has become even harder. All of a sudden, we’re workers, we’re teachers, we’re providers, we’re cleaners. Should we try and keep up? Is this good for our sanity?

This is a time when leaders need to be flexible and compassionate. This is not an experiment that any of us opted into, but as long as we’re stuck with it, as a leader, it’s an opportunity to say: “If I impose less control over people’s schedules and plans, that’s going to teach me whether I can trust them or not”.

We’ve known from a couple of decades of research on management and monitoring that when people are monitored too closely, that signals distrust and they respond by saying, “I don’t really feel obligated to act in a way that you might consider trustworthy”. Whereas when you allow [people] to make some choices, they start to feel a greater sense of loyalty and they reciprocate the trust that they’re shown. Given that we don’t have a lot of options anyway to control people, this is the ideal time to do a little bit less of it.

Is this a particularly challenging time for managers, and what advice would you have for them?

I think this is a great time for leaders to be more hands-off when it comes to scheduling and planning. Where leaders may need to be a little bit more hands-on is in figuring out how their people are doing on a day-to-day basis. This is one place where leaders have an opportunity to learn.

Imagine if you’re a manager, how awkward it would be in year two to sit down and say: “I’d love to find out what you’re finding interesting in this job; what aspects of your work you find meaningful; and are there changes we can make that would make your job a little bit more exciting?”

This is a moment when leaders can take a step back and say: “I haven’t always learned as much about my employees’ values, interests, strengths, motivations as I should have, and what better time than now”.

How does work/life balance work in a crisis like this?

Work/life balance has been a myth for a long time. If you care about your family, and you care about your job, and you also want to prioritize health and friendships and hobbies, the idea that you might have even a day where all those things are in perfect harmony to me is hysterically funny, if not just wrong.

What I always strive for is balance in a week, where I might have two days where I’m pretty focused on my work and I don’t get as much time with my family as I want, but then I’ll have two more days where I’m in family mode and work takes a backseat. That’s probably the most realistic way to manage this crisis – to say [that] instead of work/life balance, we ought to think about work/life rhythm.

You’ve written a lot about givers, takers and matchers. Does this period of self-isolation when working remotely magnify or reduce these qualities?

Giving, taking and matching are just different styles of interaction that we bring to the workplace. Givers are people who by default want to know, “what can I do for you?” Takers are the opposite. They’re interested in figuring out “what can you do for me?” And then matchers hover in the middle of that spectrum and say, “I don’t want to be too selfish or too generous, and so I’ll do something for you if you do something for me”.

The takers may feel like they have a little bit more licence to shirk, maybe to steal credit for other people’s ideas. I think though, we’ve seen an incredible outpouring of generosity in this crisis. The givers really see this as a situation where they need to step up. They feel a sense of responsibility to try to help. My guess is that matching gets weeded out a little bit. I don’t think that most people operate like matchers because it’s their core value. I think people match because they’re afraid of the risks of over-correcting on either side. In these situations, people probably gravitate more toward fundamentally, am I more of a selfish or generous person?

One of the big frustrations for givers in a situation like this is they don’t always know where they can help. A couple of years ago, I cofounded a knowledge-sharing platform called Givitas, to make it easy for people to seek and give help in five minutes a day or less. I would love to see more of those kinds of efforts to make sure that we can make people’s needs and requests visible, so that the people who have the motivation and the ability to contribute are able to direct their energy in the way it’s needed.

You said recently that interruptions are part of our new reality. Many people are struggling with distractions and procrastination. Are there ways to make ourselves more resilient to this?

I don’t know that that resilience is possible when it comes to interruptions, because the problem is less that they’re a source of hardship; it’s more that they’re distracting and it’s hard to get back into the task. Probably one of the best things we can do is try to find a sense of self-compassion.

Psychologists like Kristin Neff say, “think of the kindness that you would show to a friend who was in a situation like yours. What happens if you apply that same kindness to yourself?” When we get interrupted, instead of getting frustrated, I can say, “okay, this is a really difficult time right now”.

Interruptions are part of the human condition. They are an intensified part of the human condition during a pandemic. I know I’m not the only one facing these. Let me just see if I can get through today without losing control. If I don’t succeed today, I’ll try again tomorrow. When we don’t beat ourselves up like that, it’s a lot easier to move forward as opposed to wallowing in the challenges we’ve faced in the past.

Is there anything positive that may come out of this crisis?

We’re going to see a lot of employers embrace more flexibility around working from home and having virtual teams. They’re going to find out that it wasn’t as impossible as they thought it was, and there are some productivity gains that come from not having to commute, and getting to work where you want.

On an individual level, unfortunately, there are some people who are going to face post-traumatic stress. The encouraging news psychologically is over half of people report a different response to trauma, which is post-traumatic growth. Post-traumatic growth is the sense that, I wish this didn’t happen but, given that it happened, I feel like I am better in some way. It might be a heightened sense of personal strength; it could be a deeper sense of gratitude; it could be finding new meaning, or investing more in relationships.

Being so eager to get back to normal, having gone through this long crisis, how do we make sure that we learn from this experience?

Learning from an experience like this comes from reflection. As people come out of this crisis and start coming back to work, the first thing that I would do is have a discussion about what everyone learned from the experiments they ran. Some of those experiments were by force, others were by choice, but we’ve all had to test out different routines and the way we work.

I’d want to hear what everyone tested out, what worked and what didn’t, and then keep evolving what we thought were our best practices in light of that. That would be something that you continue doing. Last I checked, experiments are the best way to learn.

Presumably there’ll be some powerful insights for you to learn from this whole experience?

There are going to be some incredible natural experiments that are already being run. They’re going to be analyzed, and we’re going to be able to see what’s the effect of having to work from home on productivity at a scale that’s never been tested before. We’re also going to learn something about what happens to people’s creativity and connection when they can’t interact face-to-face with their colleagues.

There’s a whole group of organizational psychologists, as well as sociologists and management professors, who are going to spend the next five, 10 years studying the effects of this pandemic in different places. In a way, another form of post-traumatic growth is we gain new insights about how to work together effectively from a distance that we wouldn’t have had access to otherwise. And I wish we didn’t have access to it. I’d rather not go through this crisis. But given that we’re stuck with it, we might as well try to learn from it.

Facebook Commerce

Facebook have finally followed in the footsteps on their Asian competitors (e.g. WeChat) and just announced their big play to grab a slice of the accelerating global e-commerce market yesterday. And critically, provide some level of competition to the Gorilla out there (i.e. Amazon). 

Shops started rolling out on Facebook yesterday in the United States and they are set to come to Instagram this summer. With this launch coming during COVID-19, it means commerce and community can finally play nicely together and enable SMEs to better respond to any e-commerce opportunities presented by the pandemic. For many, the online and mobile channel is the only hope for survival.

According to a survey conducted by Facebook and the Small Business Roundtable, a third of SMEs have stopped operating and an additional 11 percent say they could fail within the next three months if the current situation continues.

Here are the highlights (according to Facebook directly):

  • In a live stream, CEO Mark Zuckerberg said expanded e-commerce would be important to begin rebuilding the economy while the pandemic continues. “If you can’t physically open your store or restaurant, you can still take orders online and ship them to people,” he said. “We’re seeing a lot of small businesses that never had online businesses get online for the first time.”
  • Businesses can now turn Facebook and Instagram pages into online shops. They also joined forces with Shopify, who recently released their Shop app, to allow merchants to leverage their shipping, inventory and fulfillment features. The aim is to help new shop owners and small businesses to leverage their existing audiences to compete with Amazon.
  • Shops can be found on businesses’ Facebook pages and Instagram profiles, and they can also appear in stories or be promoted in ads. Items that businesses have made available for purchase will appear within the shop, and users can either save items or place an order. (Some businesses enable users to make purchases directly on Facebook, while others will take you to the business’s website to complete the transaction.)
  • According to Facebook, Shops will improve on the standard web commerce experience by storing users’ payment credentials in a single place that they can then use on any Facebook or Instagram storefront.
  • Businesses can handle customer support issues through Messenger, Instagram, and WhatsApp. Eventually, the company plans to let you browse store catalogs and make purchases directly from the chat window. It also plans to enable shopping from live streams, allowing brands and creators to tag items from their Facebook catalogs so that they appear on the bottom of live videos.
  • The e-commerce ecosystem around this will hot up to help store owners. For example:
    • Elliot creates simple product landing pages with one-tap checkout 
    • Storr is for mobile commerce, so you can set up a store from your phone 

A few initial thoughts include the following:

  • While Shops are free to create, they could create significant new business opportunities for Facebook in advertising, payments, and other services. Businesses will be able to buy ads for their Shops, and when people use Facebook’s checkout option, it charges them a fee.
  • This shopping rollout will no doubt have big algorithm implications on Instagram and Facebook. Early reports are showing how a “shopping” tab might interact with the “activity” tab on Instagram to increase the focus on commerce for businesses and their followers. Soon I suspect you’ll see Shops appear in stories and promoted ads.
  • Facebook Shops will eventually be integrated with WhatsApp, Messenger and Instagram DMs, so you can browse store catalogs and make purchases through chats. The influencer marketing industry is set to benefit too as live streaming and shopping will be pairing up. 

Facebook has been dabbling in commerce for years. In 2016, it introduced Marketplace, a destination within the app for peer-to-peer buying and selling. Two years later, Instagram began working on a standalone shopping app, though it was later abandoned. Instead, last year, Instagram added in-app checkout.

Given the devastation caused to many traditional physical retailers by COVID-19, hopefully this announcement makes it easier for SMEs to reach existing or new markets (or better serve existing customers).

With billion+ global userbase of the Facebook ecosystem and ongoing pandemic, you would think it will be a slam dunk. That said, I don’t think Jeff Bezos will be having any sleepless nights. But it will be interesting to see how it goes in these E-Commerce Wars. 

Rethinking Education and Learning

“Direct to learner” (DTL) business models and start-ups that leverage online, mobile, AI and other technologies have been an area of much focus within the ‘Edtech’ sector for over a decade.

The late Professor Clayton Christensen had made the topic one of his core areas of focus in the last decade of his life with books including Disrupting Class and The Innovator’s University

Companies like Coursera, Udemy, DuolingoQuizletSkillshareCodecademy, Outschool and Lambda are just a few examples. 

Just this sample reaches hundreds of millions of learners all around the world each month. Many learners use these products for free. A small percentage of learners pay. And yet this portfolio will generate close to a half a billion dollars of revenue in 2020.

Another interesting thing about this portfolio is that none of these companies have spent a lot of capital building their businesses. They have all been very capital efficient and most are cash flow positive at this point.

So, what?

  • Direct to learner businesses are obviously very attractive for consumers and investors
  • They can serve a very large number of learners very efficiently
  • They can lightly monetize and yet produce massive revenues because of their scale
  • They don’t require a huge amount of capital to build

As they are competing with a sector which broadly, looks exactly the same as it did 100 years ago (schools, universities, training), the current pandemic will massively accelerate significant structural changes in the way people and companies learn, train and educate. 

The University segment in particular is in for a massive shock. I can’t see as much change happening in junior schooling (e.g. ages 3-7) mainly as the main job that these bodies do is child-care. I’m currently parenting a 3 and 4 year old and this is the main reason why I’m sweating on schools (safely) re-opening soon. 

I’ll share further thoughts on these topics in later posts.  

 

Turbocharging Legal Industry Transformation

“COVID-19 will produce a thinning of the herd and a reimagined legal industry” – Mark Cohen

Last Thursday I watched a great online webinar run by LegalGeek entitled ‘An Uncertain Decade’. Legal sector experts Mark Cohen and Richard Susskind ran the sessions. Whilst I have read various thought leadership from each expert, it was the first time I had seen either speak. Not surprisingly, they both were very impressive in both domain expertise and thoughtfulness around their points of view.

Here are some key takeaways (along with my thoughts):

  • Disruption: COVID-19 will dramatically turbocharge legal industry transformation which has been slowly accelerating since the 2008 Financial Crisis. This may not be that surprising to many outsiders, however many lawyers – including those in Generation X – still tend to be conservative when thinking about competition, new technologies, business models, and structural market changes. Transformation and disruptive models and services will continue to come from outside traditional law firms. Whilst Disruptive Innovation theories of Professor Clayton Christensen were not referenced, his work on how established firms often are disrupted by low-end entrants who move up-market over time, will provide insight as to why and how this is happening within the legal sector (click here for his articles from Harvard Business Review).
  • Innovation: Enterprise clients and consumers will continue to drive the shift away from bundled services toward a more productised, customer-centric mode of consumption at scale which leverage new technologies, business models, and regulatory changes. This has already been happening to some extent ‘around the edges’, and facilitated by ABS models in the UK (whereby retailers (e.g. Co-Op), real estate agents, insurers and other firms can compete head-on with traditional legal practices with their own legal services ventures). DoNotPay in the US was cited as a recent example of a start-up which has over 100 use cases of dispute resolution services (e.g. fight a parking ticket). A new and current use case in the US for them has been to make it easy, cheap and convenient to file unemployment and other worker claims.
  • Unbundling: The impending depression driven by COVID-19 and resultant cost pressures for clients will accelerate the shifting of lower value, high-volume work to more flexible, alternative providers (e.g. LPOs, ABS Licensed Firms, Big4, Axiom, UnitedLex etc) and digital platforms (e.g. DoNotPay). This will continue to enable these players to move further up-scale into higher-value, more complex work and jobs. This is how the Indian IT outsourcing firms managed to make significant in-roads against Accenture, IBM and others in the 2000s, and how Toyota managed to become a US car manufacturing leader with its low-cost model US market strategy. Over the coming years, the legal industry will continue to rapidly fragment beyond traditional structural boundaries to incorporate a much bigger share for alternative providers (which will grow rapidly at the expense of incumbents), but significant new markets will be created especially for those consumers (i.e. non-consumers) who historically have never able to access low-cost, convenient legal services;
  • Business Models: A next generation of technology-enabled service providers (e.g. FisherBroyles) will gain rapid scale over the next decade in the same way as FinTechs have within Retail Banking. Continued experimentation by established law firms (e.g. non-legal services diversification, in-sourcing IT, new product development etc) and further consolidation within and amongst traditional law firms and alternative services providers, vendors and legaltechs unable to re-capitalise or scale. Large traditional law firms with the foresight and capital to invest over the coming years will likely continue to struggle to properly allocate resources and organise these innovative models efficiently and effectively within the established firm.
  • Online Dispute Resolution: COVID-19 has provided an MVP to as legal systems and courts globally have had to re-think how to deliver this. According to Mark Cohen:

The inaccessibility, cost, formality, abstruse rules, and protracted processes of courts in their present guise is misaligned with life in the digital age. The urgency of modernization is unprecedented. Courts around the world have ground to a halt when demand for accessible, efficient, and widespread administration of justice is desperately needed.

  • Education: Law Schools have not really changed their content, formats or approach to skills in over 40 years. Combined with EdTech disruption, providers will be under significant pressure to change in line with industry and client demands. Traditional JD/LLB’s offered by mid-market schools in the short-term will see massive disruption and closures, whilst the degree as it stand may become a more commoditised requirement, augmented by other specialty courses run by others or industry. Clearly, now is the time for online law ‘degree’ or course models, assuming the solicitor/lawyer regulatory boards provide approval (if they haven’t already)
  • Training: Traditional insistence of a junior being trained up or supervised by a senior lawyer/partner will be turned on its head. Assuming a longer-term shift to more remote working for a large number of the workforce and demand for more multi-skilled lawyers (e.g. project management), training for juniors (and all staff) will need to be redesigned.

In a recent Forbes article here, Mark Cohen concludes the following:

The old guard will cling to the hope these are temporary changes. They will point to the recession precipitated by the 2008 global economic crisis and suggest the current one will take a similar course. This time  is different. Technology and new delivery models are far more advanced than they were in 2008. Consumers have a different mindset and a greater urgency to solve a growing list of complex challenges. The potential of technology and its ability to support new models, processes, and paradigms is already on display. The genie is out of law’s bottle, and it will not return.

Opportunities for Law (and other) Firms

Interestingly, there wasn’t too much discussion on this during the webinar. For me, Disruptive Innovation theory might provide some guidance for any progressive law firms who wish to take on the inevitable structural and business model disruptions described above. I’ll save this analysis for another post soon.

 

HelloFresh

It’s an exciting day today. Our weekly HelloFresh order of 5 tasty meals for the week has arrived..

Prior to lockdown we had started to experiment with HelloFresh. Perhaps a few meals per week every few weeks. Any service which can make preparing tasty, healthy meals easier and more convenient for busy parents will be a winner. Especially in a location (Guernsey) where online food delivery is very limited.

Since lockdown, we are now power-users moving to 5 meals per week, every week. I doubt this will continue, but for now it is our treat given that we can’t easily access supermarkets, restaurants or bars.

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Mental Health Impacts of COVID-19

On Friday I caught up with a friend who works at WhatIf (now owned by Accenture). We were talking about the impact of COVID-19 on the future workforce. He mentioned an interesting point around how the crisis could drive increased mental health impacts as employees (and companies) grapple with the future transition from ‘work-from-home’ to whatever is the ‘new normal’.

Some firms may stay as is, some may adopt a hybrid model, and some may go back to offices full-time. Whichever the model, each presents its own set of unique short-term challenges for staff and firms.

Gartner have a great article here discussing these issues further. It is called ‘Leading Your Employees Through The Emotional Side of COVID-19’. If you are leading or managing teams, I suggest you take a look.

The Challenge for Video-Conferencing Vendors

Yesterday I participated in a 4hr virtual symposium called ‘Disruption 2020’ run by the MIT Sloan Management Review. If you are interested in disruptive innovation and strategic management, this was a brilliant session with experts including Scott Anthony (Innosight), Amy Webb (NYU Professor and Founder, Future Today Institute), and Rita Gunter McGrath (Professor, Columbia Business School).

They have an edition dedicated to it which you can see here.

The VC session was run on GoToWebinar, one of the traditional VC incumbent firms founded in 2004. Unfortunately, the technology didn’t work that well. If I had to rate the user experience of the technology on a scale of 0-10, with 10 being perfect, I would give it a 5.

Every speaker and host (there were 8 or so speakers and 2 hosts) had issues. One had to drop out then come back in. A few speakers could only speak as the VC wasn’t working. Some had constant cutting out or freezing throughout.

It is unclear why these issues were occurring, and who exactly is responsible. Whether it is GoToWebinar, internet bandwidth, home wifi, 4G, human error or something else, this shouldn’t be an issue in 2020. For me, this feels like what dial-up internet was in the early 2000s.

Clearly these are the fundamental CX issues which have enabled a young start-up (Zoom) to rapidly scale across B2B and B2C with a powerful value proposition focusing on the B2B SaaS Playbook: ease of use, integrations, free or flexible pricing, and better performance. I wrote a post recently on how impressed I was a few months ago in being able to easily host a global conference hosted by Seth Godin with many hundreds of people.

Whilst Zoom is facing other challenges right now (e.g. security, privacy etc), from what I have seen with competing vendors, it will be around for a long time to come (and the others, won’t be).