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Posts from the ‘Global Trends’ Category

Staying Ahead of the Curve

August 13th, 2016

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by Ian Price

The acronym VUCA (Volatility, Uncertainty, Complexity and Ambiguity) sums up the circumstances we are living in perfectly. In their book Moments of Impact: How to Design Strategic Conversations That Accelerate Change, Chris Ertel and Lisa Kay Soloman described a VUCA world as one in which organisations face constant surprises from all directions. “VUCA world is a bit like an amusement park: it’s full of thrilling rides – just not all of them are fun… a world where a political coup or a tsunami on the other side of the planet can disrupt markets in surprising ways.”While we can all recognise that description, there’s an alternative meaning for VUCA, one coined by Kevin Roberts, Chairman and former CEO of Saatchi & Saatchi. His take on VUCA is “Vibrant, Unreal, Crazy and Astounding” and his recipe for leadership success in this flavour of VUCA is also worth repeating.

  1. Create other leaders
  2. Provide rocket fuel in the form of responsibility, learning, recognition and joy
  3. Stay ‘in Beta’ – having lots of small ideas continuously
  4. Let emotion rip – it leads to action
  5. Make things happen

During this time of unexpected change, there will also be opportunities for transformation and growth and the Academy is here to help you to navigate this path successfully. Transformation and change can best be achieved with the support of others who can advise and guide you and can help you set the goals that you need to achieve. Having a coach, mentor and peer group who can be relied upon is also an established method of helping leaders successfully navigate through times of change.


Ian PriceIan Price became Chief Executive of the Academy in February 2016. He has a reputation and track-record for growing profitable businesses rapidly. His affable demeanour and relaxed style of working hides an exceptional talent at being able to focus on what makes a business tick.

The Academy for Chief Executives is a leading executive coaching and mentoring organisation working with business leaders and their teams throughout the UK.

Member companies collectively turnover £3.5 billion per annum and on average employ 75 people each.

academy8808.com & chiefexecutive.com

To find out more about membership of the Academy for Chief Executives contact us on: 07714 246509 or glenn.watkins@chiefexecutive.com

 

 

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July Economic Update 2016

July 21st, 2016

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By Economist Roger Martin-Fagg

This update is the most difficult I have ever written. It is extremely difficult to to maintain objectivity and gain a sense of what is the most likely path for the UK economy over the next few years.

The vote and its fall out to date is certainly a Black Swan event which is defined as:

An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict.

I think we should expect quite a few of these over the next months and years. They will originate in the USA, China, and the EU. And underlying this we have the inexorable march of innovation and ageing populations.

More than ever before business owners, managers and employees must be clear and confident about the behaviours which make their business distinctive and compelling. My advice is to make sure this is fully understood before beginning to assess the impact of the external environment. And for so many SME’s market share is so small, the wider economy has virtually no impact except perhaps on confidence of the owner.

I am splitting this Update into three sections. The first looks from now until the end of the year, the second from the end of the year until the letter is sent to the EU and the third beyond this. It is all guesswork.

The Outlook until the end of the Year

I think it is fair to say that the decision of the electorate was a shock. The UK Treasury had no plan B, but the Bank of England clearly was prepared. Most City institutions and the EU as a whole did not expect the result.

The data we have to date suggests that the consumer has held off spending, and the survey by GFK shows the biggest drop in confidence for 21 years. It is likely that this is temporary and as the dust settles consumer confidence will return in the Autumn. The impact of a weaker pound will not have come through in price increases (apart from fuel and fresh food from Spain), the Bank of England will not raise interest rates, and unemployment will not be rising. I doubt too if house prices will stop rising. The rate of increase will slow, but there will be no overall drop.

We are still a member of the EU with full access, paying our subscription and receiving our agricultural support, regional fund, and joint research payments. And the EU is beginning to grow again although our vote is a shock to them too.

As and when Parliament approves the sending of the letter to quit there will be a two year transition phase. It is not clear if the UK will be allowed to begin bilateral talks with EU member states during this period. It is also not clear if existing trade agreements will remain in place. But it is likely based on mutual self-interest that a sensible arrangement will be made.

From the time the letter is sent until the EU agree the terms of our departure: assume 2017-2020

This is the period in which the uncertainty risks become magnified. Hopefully Prime Minister May will early on indicate the type of deal she would wish to obtain. This will require clarity on the control of immigration issue. If she sets points based control of EU migrants to the UK as non-negotiable then currently it is unlikely she will be able to obtain either a Norwegian or a Swiss option.

This leaves a WTO based option. To date very few WTO deals are bilateral, they prefer unilateral agreements. So it would have to be a deal with the collective EU, rather than individual members.

This will take many years to obtain. Meanwhile the UK has a significant current account trade deficit to finance. If there is a risk to our growth this is where it will originate.

 

The balance of payments are a set of accounts which measure all transactions between people resident in the UK and others. The method is double entry, so every month the accounts must balance. A country has a problem when we observe how the balance is achieved.

A deficit on the trading account must be balanced by a surplus of equal size on the capital account. Since 1984 we have achieved balance by running surplus on longterm capital inflows. These are set up when a company based overseas decides to buy a UK business, or set up in the UK. The bulk of investment comes from firms in EU member countries and the USA. EU business sees the UK as the least regulated member of the EU and given the flexibility of our labour force an easier place in which to make profits.

I do not know what EU and US firms will do, but if they reduce their investment flow, we will have to finance our deficit using short term capital. This is very volatile and consists of global liquidity which moves between financial centres in search of the best return. It is either cash, and/or the purchase of bonds and equities. To be more attractive than Frankfurt, or Paris, or New York, or Tokyo the UK needs a cheaper currency and/or higher interest rates.

Assume we decide the cheaper currency is the best way (the Bank of England does not raise interest rates). Then as the pound falls in value, so with a time lag domestic prices rise. As a rough guide every 10% fall puts 1% on inflation within a year. Assuming the Government doesn’t raise the inflation target (currently 2%) then the Bank of England must increase interest rates.

The combination of higher inflation and higher interest rates will reduce real income growth from the current 2% pa, to zero or minus 2%. This and falling house prices is where the recession begins. When?

 

Difficult to say, but I guess 2019.

Could we avoid this?

Unbound from the EU we could cut VAT to 10%, which would to some extent preserve real incomes. But to reduce the impact on the budget deficit the Government would have to freeze pensions for a few years ( the Daily Mail will not like that!).

The Government could get the Bank of England to buy the debt with more QE, but that would make us look a bit like Zimbabwe.

The Government could slash all capital spend which would further depress demand.

Or it could raise the money from overseas by ensuring that the currency stays weak and interest rates competitive.

We of course will not be paying 14Bn to Europe, but with interest on the national debt running currently at £48Bn, and in recession debt rising by around 110Bn each year, a good deal of this will be swallowed up in interest payments.

However if by 2019 it becomes clear that the EU is willing to do a deal which gives the UK market access and allows us to limit immigration then the long term investment will continue to flow in and there will be no recession.

Looking beyond 2022

The World will look quite different. The UK will either have engaged a Dunkirk spirit with thousands of entrepreneurs scouring the world for business (they will be flying out of Dublin because Heathrow will still have the same capacity, and Dublin will have built its third runway.) It is likely a lot of financial institutions will have set up in Dublin to get passporting rights to the EU financial services market too.

Or unable to secure trade deals with the EU and major economies we become a low growth, low opportunity country with our young bright people moving to other countries with more opportunity. Our steadily ageing population slips into sullen compliance, puts up with Japanese style low growth, and lives by the maxim, mustn’t grumble. Even though the resources going in to the NHS and elderly care are insufficient.

I think the above is unlikely.

I have reproduced below from a web site called Just Landed, their description of the British for visitors. It is not sponsored by the Government.

The British enjoy superb entertainment, leisure, sports and cultural facilities, which for their sheer variety and accessibility are among the best in the world (but increasingly expensive). The quality and huge choice of goods in the shops is excellent and explains why many people travel from far and wide simply to shop in Britain. British television has no equal, national and local radio is excellent, and the country has an unrivalled choice of quality newspapers, magazines and literature.

The UK is a caring society, highlighted by the abundance of charitable and voluntary organisations, unparalleled in any other country, all of which do invaluable work (nationally and internationally).

The UK remains a centre of scientific excellence underlined by its number of Nobel prize-winners. It’s also one of the least corrupt and most civilised countries in the world.

The British have more freedom from government interference than the people of most countries to do, say and act any way they like, something most of them take for granted.

The UK is still a great enlightened power (if a little frayed at the edges) and a positive influence in the world and London remains the centre of the English-speaking world. Whatever else it may be, life in the UK is spiritually, mentally and intellectually stimulating and rarely dull. Although foreigners may occasionally complain about Britain and the British weather, most feel they’re privileged to live there and wouldn’t dream of leaving.

Last, but certainly not least, there are the British people, who, although they can be infuriating at times, will charm and delight you with their sense of humour and idiosyncrasies. When your patience with the UK and the British is stretched to breaking point, simply take yourself off to the nearest pub and order a pint of ale or a large gin and tonic: the UK looks an even nicer place through the bottom of a (rose-tinted) glass, and, with a bit of luck, you won’t even notice that it’s still raining.

Finally what should you do if you are running a business in the UK?

1. Ensure you are clear on the market position you wish to occupy.

2. In your chosen segment make every effort to ensure you are distinctive and compelling so that you can enjoy a quasi-monopoly position and be a price maker as opposed to a price taker.

3. Employ the best and pay the best.

4. Do not sacrifice the long term for short term gain

5. Communicate, listen, communicate, listen to suppliers, employees and customers

6. Ignore the doom mongers (particularly economists!)

7. Only worry about the things you can fix

8. Assume you will be working longer than planned so get fit/ keep fit

9. Always remember your employees watch for non-verbal signs, make sure your body language fits your words

10. And finally be the change you want to see in the World

I have just heard our new PM speak on the steps of No 10. We are off to a very good start.

Exchange rates next 12-18 months if options are announced

Norway/Swiss option                                       WTO option

$-£ 1.20-1.35                                              $-£   1.15-1.25

€-£ 1.10-1.20                                             €-£   1.05-1.10

Interest rate: 0.5%                                       Interest rate: 0.5%

Real GDP: 1.7%                                         Real GDP 1%

 

Roger Martin-Fagg

rogermartinfagg

rmfagg@aol.com

The Academy for Chief Executives is a leading executive coaching and mentoring organisation working with business leaders and their teams throughout the UK.

Member companies collectively turnover £3.5 billion per annum and on average employ 75 people each.

academy8808.com & chiefexecutive.com

Post EU Referendum June 2016 – By Academy Economist Roger Martin-Fagg

June 28th, 2016

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The Prime Minister has just announced his resignation.

A Conservative MP who voted to leave said we must remember that nothing will change.

Everything will change and in ways which we cannot predict we cannot know what we cannot know. The economy is characterised by positive feedback. This means a small change in one part of the system is magnified by the systemic response.

As I write this, global stock markets are crashing, sterling has fallen to $1.30, and Moody’s have said the UK will lose its AAA rating. These are knee jerk reactions but they are destabilising: positive feedback has already been triggered.

The Bank of England has made soothing noises and will supply short run liquidity to prevent the wholesale market from seizing up. Boardrooms round the world will be trying to evaluate both the risks and the opportunities.

Everything will change, and it has already started.

Download the Roger Martin Fagg – Post Brexit Article

rogermartinfagg

Roger Martin-Fagg

rmfagg@aol.com

The Academy for Chief Executives is a leading executive coaching and mentoring organisation working with business leaders and their teams throughout the UK.

Member companies collectively turnover £3.5 billion per annum and on average employ 75 people each.

www.chiefexecutive.com

 

White paper: Brexit – EU In or Out

April 8th, 2016

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Download the white paper by economist and Academy for Chief Executives speaker Roger Martin-Fagg on the scenarios and potential implications of the forthcoming Brexit vote.

 

** Extract **

The possible Brexit scenarios

The market for goods

The principle of non-discrimination requires WTO members not to treat any member less advantageously than any other; grant one country preferential treatment, and the same must be done for all others. There are exceptions for regional free trade areas and customs unions like the EU, but the principle implies that, outside of these, the tariff that applies to the ‘most-favoured nation’ (MFN) must similarly apply to all.

In practice, this would prevent discriminatory or punitive tariffs being levied by either the EU on the UK, or vice versa. The maximum tariff would be that applied to the MFN. The EU’s MFN tar- iff has fallen over time, meaning that in this particular context the ‘advantage’ of membership has declined. On a trade weighted basis the MFN is 1.5% (please view this as an average).

However, given that MFN tariffs would be imposed on around 90% of the UK’s goods exports to the EU by value, it would necessarily mean many exporters becoming less price competitive, to varying degrees, than their counterparts operating within the remaining EU, and those within countries with which the EU has preferential trading relationships.

Similarly, because the UK has negotiated as part of the EU at the WTO, it is likely that it would inherit the EU’s tariff regime at the time of leaving, meaning, at least initially, higher prices would be faced by consumers buying imports from the EU and those countries with which the EU has a trade agreement.

Without any change, a 32% tariff would be levied on imports of wine (surely this is a reason to vote in!), and a 9.8% tariff on motor vehicles. The implications of a move to an MFN trading ar- rangement for exporters and domestic consumers would vary considerably by sector.

For instance, without a trade agreement, a tariff of 4.1% would be applied to liquefied natural gas exports from the UK to the EU; a tariff of 12.8% to wheat and meslin (a type of flour), and a tariff of 6% to unwrought aluminium, all items which the UK currently runs a trade surplus with the EU. There would be a 12.1% tariff on goods vehicles, and 3.8% on car components. In all, 1200 types of goods would be affected to varying degree.

The market for services

Obstructions to services trade are usually in the form of non-tariff barriers, such as domestic laws and regulations, also known as ‘behind the border’ measures. In general, services markets are more highly regulated than the market for goods. Often, regulation is intended to meet so- cial objectives, or to correct failures in supply, rather than to directly restrict foreign suppliers, but the effect on market access for foreign companies can in some cases be highly restrictive.

EU Member States retain considerable national discretion over services regulation and supervi- sion. Just as a fully level playing field in services trade does not exist within the EU, so exporters from outside the EU face different levels of market access in individual Member States.

However, the level of market access would generally be far more limited for UK exporters under a General Agreement of Trade and Tariffs (GATS ) arrangement than it is currently for a number of reasons:

1) Many restrictions that are forbidden within the EU remain applicable to firms outside the EU because Member States have made no commitments under the GATS schedules in those areas.

2) The EU (unlike the GATS) has pursued the harmonisation of regulation and supervision in several large services sectors, thereby taking away the justification of Member States to insist on national regulation in this respect.3) The right of commercial establishment is guaranteed under EU treaties, significantly fa- cilitating trade in services provided via the commercial presence of a foreign firm. Simil- arly, the free movement of labour facilitates trade in those services provided through the presence of people in the territory of another economy.

4) EU competition policy prevents, to an extent, barriers to services trade arising from in- cumbent firms benefitting from excessive market power.

5) The Treaty rights with respect to free movement of services, freedom of establishment, and free movement of labour are enforced supranationally by the Court of Justice of the European Union, underpinned by extensive case law on services exchange.

Under GATS, an independent panel can be appointed to settle and enforce disputes, but there is no presumed right of market access; the job of the panel is merely to assess whether the barrier in question is non-discriminatory. As well as affecting cross-border trade in services, these re- strictions could also have implications for UK companies providing services through a commercial presence (effectively outward direct investment) in other Member States.

The EU treaties require that a service provider from one Member State be legally free to estab- lish in another, while continuing to regulated by the authorities of its home country. A UK com- pany that provides services through establishments in other Member States may find, if Britain is no longer a member of the EU, that it has to comply with the requirements of a foreign regulat- ory authority.

The Transatlantic Trade and Investment Partnership (TTIP)

This is a trade deal between the USA and the EU which has been conducted in secret. The ongo- ing discussions are about market access, specific regulation, and broader rules for cooperation. The biggest concern which has gained much publicity is the proposed Investor-state dispute set- tlement (ISDS). This is an instrument that allows an investor to bring a case directly against the country hosting its investment, without the intervention of the government of the investor’s country of origin. The fear is a US health services company could be awarded a contract to sup- ply e.g. the NHS, and then the US investors claim the return is less than promised and so sue the NHS, or indeed the government, with any fees payable by taxpayers. But as so much of the deal is still confidential, this cannot be proved.

What will happen if Britain votes to leave?

The following scenario is my opinion based on history and current institutional arrangements. It is not written to be deliberately alarming, rather it is designed to be a reasonable economic analysis with some political consequences. But as you know economists are famous for getting things wrong!

As soon as the vote is announced and it is to leave, the forex dealers will sell sterling (they may well have been doing this in the weeks before the vote). The hedge funds will see the decline as a one way bet and very quickly sterling could hit $1.25 and €1.08.

In July the Government will fail to sell £10Bn of gilts at 2% (in January the gilts sale was only 1.1 x oversubscribed – normally it is covered up to 6 times). This will raise the long run interest rate to around 4%. The mortgage rate will respond immediately and mortgages will increase by 2% overnight. The housing market will shudder to a halt and prices will stop rising. It is possible but unlikely that prices will crash.

Assuming sterling does not recover from the rates predicted above, the UK inflation rate will rise to 3% by Jan 2017. The Bank of England will raise base rate to 2% by March 2017.

Cameron will resign. Boris, Gove and Duncan-Smith will claim the moral high ground, and one supposes a bid for the leadership.

By September 2016, retail sales will have stopped dead and the papers will be full of misery. Finance directors will begin to conserve cash as a recession begins. As government revenues col- lapse there will be an emergency budget in November with much deeper cuts in public spending than anyone expected, due to the soaring interest bill on the national debt.

As the Balance of Payments deficit continues to widen to 5% of GDP (due to a weak currency) the Treasury will argue that domestic demand must fall further as exports are not responding to lower prices.

In May 2017 unemployment will begin to rise and there will be a mass exodus of EU workers to a strongly recovering Europe.

This recession lasts three years. By the end of 2017 the Tories lose their working majority. Scot- land demands another referendum and in 2019 they vote to leave the UK and apply to join the EU.

Out of desperation, the UK is forced to do deals with the EU which are against its long term in- terest, but access to the market is regained (with the abolition of controls on EU workers). The Conservatives lose the 2020 election, the incoming Labour government has a majority of 5 with the SNP holding the balance of power. Yvette Cooper, the first female Labour UK PM, causes con- cern by appointing her husband as Chancellor of the Exchequer.

Points to bear in mind

It is companies not countries which trade with each other. Almost all countries have at least one world class local company, but it is like to be small and selling into global niches.

British companies prefer to trade with the old colonies or where culture and language is com- mon. We have only a few large manufacturing businesses which possess a comparative advant- age. We have many smaller companies with price premium niches (but whose owner-managers often avoid countries where the food is poor, or there is no sailing or skiing which they can com-

bine with a business trip). These companies depend on highly skilled engineers, designers and IT specialists from around the world.

British exports are mostly premium priced, a lower exchange rate does not increase volumes by much if at all. It does however increase the profit margin.

We have significant comparative advantages in services. After the US, Europe is the biggest global market for services.

It takes a long time to establish a presence in new markets unless you are selling clearly differ- entiated goods on the internet.

So what should you do if you run a UK based business? If you are exposed to currency risk, buy forward now.

As a precaution make sure you have banking arrangements which will allow you to survive a cash shortfall. Or begin to build a cash position.

Distribute this paper to all your employees; do not tell them how to vote but emphasise how im- portant the vote is.

Try and avoid getting angry with the political debate (that is unless the quality improves). If you find that you disagree with this paper then do your own research and see if you can refute its content. The first place to start is fullfact.org.

Sources:

The House of Commons Library The FT The Economist The Bank of England

The ONS https://fullfact.org/ I fully recommend this site. It checks the veracity of political utterances.

Published March 17 2016

rogermartinfagg

Roger Martin-Fagg

rmfagg@aol.com

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Download the white paper by economist and Academy for Chief Executives speaker Roger Martin-Fagg on the scenarios and potential implications of the forthcoming Brexit vote.

100 Jobs of the Future

March 29th, 2016

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A new report from BrightHR, a ‘A Future that Works’ , investigates how workplaces will evolve in the future and key trends that are likely to emerge to affect all of us. Its key findings include the claim that a fifth of workforce tasks are expected to have an element of robotics in them by 2020 and that a third of UK jobs are under threat from automation.

But while job substitution by machines is always alarming for those caught up in it, we have always been able to adapt and find new roles for ourselves.  So looking forward, what sort of jobs can we expect to see in two decades’ time? A Future that Works suggests 100 new roles – some inevitable, others perhaps more fanciful. But all of them should give us food for thought about the opportunities these might represent.

Information &  communications

Personal Entertainment Programmers

Complexity Analyst, Gaiantologist

Psycho-Customizer

Human to Machine Interface Controller

Narrowcasters

Data Miner

Waste Data Handler

Social Network Analysts

In-House Simplicity Experts

Global Work Process Coordinators

Privacy Protection Consultants

Complex Security Integrators

Chief Networking Officer

Virtual Clutter Organizer

Machine Linguist

Off-the-Grid/off-the-Net Facilitator

Mind Reading Specialist

Quantum Computing Specialist

Media Ethicist

Designer of Advanced Interfaces for Ambient Intelligence systems

Knowledge Guide

Knowledge Broker

Professional VR Citizen

Virtual Lawyer

Virtual Property / Home Owners’ Association (HOA) Managers

Intelligent Agent Designers

Avatar Manager / Devotees

Network Relationship Counsellors / Therapist / Designer

Virtual Police

Virtual Personal Shopper

Cybrarians

Holographer

Virtual-Reality

 

Robotics

Robot Designers / Trainers

Robot Mechanic

Robot Counsellors

Dirigible Pilot

Alternative Vehicle Developers

Teleportation Specialists

Solar Flight Specialists

Infrastructure Specialists

Monorail Designer

 

Space

Spaceline Pilots

Spaceport Designers

Space Tour Guides

Space Architect

Terraformer of the Moon and Other Planets

Astrogeologists, Astrophysiologists and Astrobiologists

 

Demographics

Population Status Manager

Personal Learning Programmer

Societal Systems Designer

Social ‘Networking’ Worker

Intelligent Clothing

Designer / Engineer

Ghost Experience Assistant

Personal Branders

Socialization/Culturalisation Therapists

Enhanced Games Specialist

 

Energy

Biorefinery Operative

Wind Farmer

Battery Technician

Insect-Based Food Developers, Chefs, Nutritionists

Chlorophyll Technician

Fusion Engineers

 

Environmental

Resource Use Consultant

Vertical Farmers

Climate Change Reversal Specialist

Drowned City Specialist

Quarantine Enforcer

Experimental Petrologist

In-Company Sustainability Coordinator

Weather Modification Police

Consumer Energy Analysts

Water Traders

Desert Land Rights Trader

Climate Change Compliance Auditor

Business Consultant for Climate Change Compliance

Recycling Analyst

 

Medicine, biology and biogenetics

Genomics Developer / Architect / Baby Designer

Body Part Maker

Personal Enhancement Advisors

Nano-Medic

Synthetic Life Designer / Scientist / Engineer

Chief In-Company Health

Enhancement Officer

Telemedicine Technician

Farmer of Genetically Engineered Crops and Livestock

In-Company Gene Screener

Biometric Identification Specialist

Bioinformationists

Geomicrobiologists

Experimental Therapy Experts

Old Age Wellness Manager / Consultant Specialists

Personal Body Weight / Obesity Consultant

Memory Augmentation Surgeon

‘New Science’ Ethicist

Genetic Hacker

Longevity Providers

Cryonics Technicians

End-of-Life Planner

 

Download the report:

https://pages.brighthr.com/afuturethatworks-v2.html

About the authors

Lynda Gratton

“The Hot Spots Movement is a specialist research and consulting team founded by Professor Lynda Gratton of the London Business School, a leading expert in organisational behaviour and a world-renowned speaker on the future of work. The team works to identify where companies can future-proof their working practice, in order to foster innovation and enhance performance.”

David Smith

“A futurologist, and Chief Executive of GFF – a strategic futures research organisation, David Smith’s 30 year diverse business career has made him recognisable as one of the world’s leading futurists and strategic thinkers.David prepares views of the future on many topics including the Travel and Tourism industry, the world Insurance markets and visions of the future for government, the food, real estate, information technology and communications industries.”

The Rise of the Robots

March 29th, 2016

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by Leslie P. Willcocks

Too many organisations have chosen to displace workers rather than think through how technology and humans can work together symbiotically, a set of choices described as the automate or informate dilemma. In practice, automation can be deployed by either “automating”, “informating”, or both.So in the not-too distant future, we may come to see robots and automation as a way of augmenting human skills, with the ‘smart machines’ operating as collaborators in solving business problems and delivering service. We also see the future of operations as less pre-determined than many think. The big takeaway from our work so far is that automation will increasingly create workgroups comprising both human and robotic workers, and each will be assigned tasks for which they are ideally suited.

Robotic Process Automation (RPA), the automation of service tasks that were previously performed by humans, is just one technology that is changing the future of operations. Cognitive intelligence tools, like IBM’s Watson, are other soon-to-be game changers. In the near future, knowledge workers in the middle of a task could request a multi-tasking robotic co-worker to help — a robot on request. Contrary to today’s worst fears, robotics could facilitate the rise, not the demise, of the knowledge worker. But much depends on the imaginations of managers expanding as rapidly as their automation toolkits.

The economic implications of RPA are difficult to assess because the world does not sit still. But if clients are using robots for low-level tasks, fewer people will be needed for those jobs. What new job categories may emerge is a very interesting question. In Lights in The Tunnel and Rise of the Robots, Martin Ford writes about the drastic job loss that will accompany automation. We suggest a more nuanced future, and are testing this in present research, and a follow-up next year.

On a horizon of 1 to 5 years, we anticipate a mixed scenario:

1. Robotic Process Automation will begin to seriously change the delivery of services, substituting technology for people, which will alter the economics of service delivery, causing labour to be less of a factor and making labour arbitrage, which allows companies to switch between international sources of labour, less important.

2. The domestic/re-shoring/in-house tides will rise, with the superior “ease of engagement” and the need for the remaining humans to be near the action to handle exceptions, complexity and new services. Re-shoring (bringing production back to the home country) will rise. This will make domestic production more advantageous vis-à-vis most forms of offshoring, whether outsourcing or captive (through a subsidiary of the company abroad).

3. We predict a backlash against the impacts of automation, especially in terms of threatening jobs — which will become a symbol for the workforce and economic health generally, in both domestic and offshore locations.

4. Domestic and offshore outsourcing will continue to grow globally at anything between 5% and 12% a year depending on the function or process outsourced. Leading providers will increasingly seek automation as a core capability for delivery of services. Advisory firms will shift capabilities from assisting clients with outsourcing decisions to optimizing service delivery that will increasingly rely on automation and may or may not involve external sourcing.

On a horizon of 5-10 years these factors will kick in and be game changing in impact:

5. Through automation, there will be much more in-house, domestic outsourcing and re-shoring of IT and business services. Automation will move from routine manual and cognitive tasks to non-routine manual and cognitive ones. Automation will breed further automation, as humans will no longer fit into the new systems and processes.

6. Through automation, providers competing against clients (in-house sourcing) and other providers (outsourcing) will use automation to reduce costs and improve process metrics – e.g., responsiveness, timeliness, quality, defect levels, ease of use.

7. Through automation, issues around socially responsible sourcing/outsourcing and work design will rise in importance and profile, raising internal issues of management ethos and external issues of reputation management in the marketplace.

8. There will be changes in client-supplier relations and types of contracting.

9. At the same time, automation will not stop the rise in offshore and domestic outsourcing, as there is still so much work that will be open to outsourced options. Providers will work hard at making these options attractive. We anticipate a continued growth in the global outsourcing markets for information technology and business processes.

Wilcox

Leslie P. Willcocks is Professor of Technology Work and Globalisation at LSE’s Department of Management. His research interests include technology, work and globalisation and social theory and philosophy of information systems. Mary C. Lacity is Curators’ Professor of Information Systems and an International Business Fellow at the University of Missouri-St. Louis and a Visiting Professor at the London School of Economics. They are the authors of the forthcoming book, Service Automation Robots and The Future of Work (SB Publishing).

They are the authors of the forthcoming book, Service Automation Robots and The Future of Work (SB Publishing).

 

Top Tips: Surviving the Future

March 29th, 2016

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by Patrick Dixon

Here is a five step guide to future-proof any business, based on my new book The Future of Almost Everything.

 1) Bring in outsiders to challenge your world view

The greatest risk to any business is institutional blindness.  The greatest risk to any leader is being seduced by one’s own world-view.  The greatest risk to any marketing department is believing your own slogans.

When too many bankers spend too much time with bankers, the result is a sub-prime crisis. Too many generals playing too many war games with too many other generals in the same nation, and the result can be disaster.

So seek out advice from experts, consultants, innovators – people who think very differently to you and others in your company.  Take them out to dinner. Include them in key strategy discussions.  Hire them into your teams.

 2) Listen to your customers – but don’t believe them

Always take what your customers tell you seriously. Fix their problems. Make life easier. Thank them for their feedback. But don’t believe them when it comes to predicting the future.

Get to know your customers well, with deep insights into how they think and feel, and then try to imagine how they may behave in a very different kind of future world.  Take online banking for example:  in many nations most customers told banks a few years ago that they were not interested in online banking or making payments using a smartphone – and if banks had listened to them, they would have missed one of the greatest transformations in retail banking for decades.

One of the best ways to find those insights is to pretend to be a customer in your own business as a “mystery shopper”. Every senior manager should do that at least once a month.  Mystery shopping is often shocking to business leaders – not so much how they are treated as customers, but what it feels like to be that customer.

3) Read widely – and be curious about all you meet

I wrote The Future of Almost Everything as a one-stop guide to the future of every industry, region and market. Many of the insights came from reading everything I can get my hands on – unfamiliar magazines in airports, blogs by influential people, newspapers like the Financial Times, and other key publications like the Economist.

The key is to challenge your own views on the future, rather than just absorb the forecasts made by others.

When did you last have a conversation with someone that really changed how you think?

One of the fastest ways to stay ahead of change is to be constantly curious about the lives of those you meet. For example, when you arrive in a new city, talk to your taxi driver who will likely be a very reliable guide to what is really going on, if the local economy is picking up, who is spending what and where.

Every person has unique insights and personal experience. Their own way of viewing the world.  High school students, mothers with children at home, people who are retired, shop assistants, bus drivers, car mechanics, journalists, pharmacists and so on.  And in each town or city, in every nation, the answers such people will give will be different.

4) Review your strategies every year

The world is changing faster than you can hold a board meeting, which means that you need to have more than one strategy. Bring your team together regularly to think again. Develop contingencies to stay ahead of constant change. What are you going to do if….

The smartest corporations and teams all have multiple strategies. They already know more or less exactly what they will do if a particular event takes place.

Focus on major long-term trends, which change relatively slowly and you already understand most of your future. Things like demographics, growing life expectancy, the relentless fall in price of most technologies, rapid pace of globalization, rise of emerging markets and so on.  These things form the foundation stones of every corporate strategy or government policy.

The rest will be driven by Wild Cards – low probability, high impact events – but there are a huge number of them, and in a hyper-connected world, their combined impact can be awesome. Remember that in every risk or challenge there is a new business opportunity.

5) Be agile!

And finally, prepare for rapid change, by developing more agile teams. That means simplifying decision-making, giving more power to local teams to innovate, diversify and respond to events rapidly. Recruit and promote leaders who cope well with ambiguity and uncertainty, who enjoy taking initiative, have courage and are great collaborators.

It is shocking how many organisations still have a very top-down culture, where managers basically do as they are told, and where many leaders are reduced to mere implementers of someone else’s business plan.  Part of agility is encouraging innovation:  creative thinking, new solutions to old problems, radical steps to serve customers better.

Agility is so much easier when you have completed steps 1-4 above. When you have a dynamic view of your future and have mapped out different possible directions depending on what happens around you.

Patrick Dixon

Patrick Dixon is a futurist, keynote speaker author and adviser to boards and senior teams on strategic impact of global trends, innovation and risk.  His latest book, The Future of Almost Everything, describes hundreds of key trends which will impact your business and personal life, and explains what it all means for our wider world. http://www.globalchange.com

 

Into the Wild, Motorbikes & Mindfulness

May 7th, 2015

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As a child I can remember from around 8 years old the feeling of excitement and happiness of “going into the wild” (adventures in the countryside!) The anticipation of hearing or seeing something unexpected, experiencing the pure beauty of his natural environment made me feel – and act – care free, creative and curious.

Around the same time I also loved fishing – I think it took me a couple of years to catch my first fish! (It didn’t help that I was using a huge sea fishing hook I found on a beach while on holiday,  I thought it important I use large hook to ensure I caught a large fish(!) I lived in Birmingham at the time so not too many coastal lines to hook a sea monster…)

I also fell in love with motorcycles a year later, I was taken to the Isle of Man TT races with my best friend and his dad – the speed, noise, crowds, excitement was everywhere! Having ridden motorcycles for over 40 years, other words such as freedom, beauty, art, peace, absolute presence, balance, unity and happiness are all my experiences on two wheels – the same as I feel when “in the wild”.

These are experiences I have enjoyed all of my life, yet on some level the two are apparently poles part (slow and fast, safe and dangerous), yet for me, both enable the same feelings of being fully present, content and blissfully happy – especially when riding in the wild!

Discovering and practising mediation 15 years ago has enabled me to enjoy many other, differing, aspects of my life and business – feeling as I do when sitting, walking or riding in the wild. I love the feeling of calm energy, deep creativity and “connectedness” enabled when I choose to practice regularly and live a more mindful existence.

There’s a huge movement now taking place – we appear to be really “waking up” to the benefits of Meditation and Mindfulness, see the Huffington Post’s:

Mindfulness Meditation Benefits: 20 Reasons Why It’s Good For Your Mental And Physical Health

and watch the video The scientific power of meditation

Last month I was on the panel of London’s first ever Mindfulness Summit for business leaders, I was pleasantly surprised by the mix of the audience, there were Directors from the BBC, IKEA, Harrods, Pret a Manger, Bacardi Martini Corp, Google Ventures (here’s a great article (and video) What’s it like to take Googles Mindfulness training), mixed with leaders from the charity (Marie Curie, Just Giving, Jewish Care) and health sectors, along with business owners and entrepreneurs.

There’s some great photo’s of the event which demonstrates the emphasis on the experiential learning for ongoing and accelerated personal and leadership development.

The overriding message from the summit was “just do something – make a start!Here’s a useful and simple guide.

It’s a bit like gym membership (after all, it’s fitness for the mind) – it’s about participation! Tough at first to get into the habit, though once you’ve started you soon feel the benefits when done regularly, little and often.

It doesn’t mean you have to meditate every time either, being mindful means you are aware to simply pause, to look around, take notice with a few deep breaths and smile 🙂

I’ve experienced these techniques producing insightful thoughts, questions and outcomes when we’ve practiced mindfulness meditation when running my experiential Academy for Chief Executives peer groups. As leaders we tend to “dive in” to solve issues and create more opportunities, taking time to enable silence, to  create some space, before working together has proved very beneficial.

I believe all successful leaders have an ongoing thirst for learning and an appetite for sharing, I am discovering when this thirst is also directed inwardly to pause, to be still, to de-stress, to be in a more creative space, this enables better knowing and understanding of oneself.

Over time this develops an awareness, feeling and experience of “being in flow”, which when happens on a regular basis, the path of least resistance unfolds.

After all, without peace, where is happiness?

 

About Glenn Watkins

17124482109_dc4ab20f8e_qMy passion for leadership development and entrepreneurial business growth have resulted in my business as Academy for Chief Executives Chairman where, having “walked the talk” as a CEO member, I’ve created select London peer groups – Academy 88 and Academy 08 to focus on holistic leadership development, thus business and personal growth for progressive leaders.

 

Love Leadership – Love Learning – Love Life

Mindfulness Summit for Leaders in London

March 4th, 2015

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London’s business leaders explore and debate the impact of the fast-growing field of mindfulness on growth, innovation, culture and happiness at work.

Mindfulness Summit

16th April – 9.00am – 12.30pm

http://www.mindfulness-summit.com

There is a mindful revolution under way.

Leading companies like Google, eBay, Twitter, Deutsche Bank, TfL, IBM and Unilever are implementing mindfulness programmes to improve performance and employee wellbeing.

TfL reported a 71% drop in days off related to stress, anxiety and depression after introducing mindfulness at work.

At this half-day summit:

  • Explore and debate the impact of mindfulness on self-awareness, growth innovation, culture and happiness at work.
  • Hear from senior executives who have adopted mindfulness for their teams.
  • Experience different approaches to mindfulness practice.
  • Participate in a unique Mindful Networking experience – with over 100 senior business leaders.

Speakers include:

  • Michael Acton Smith, Founder of Mind Candy and Calm.com who will be speaking about the ups and downs of entrepreneurship and the role of mindfulness in times of rapid growth.
  • Neuroscientist and clinical psychologist Dr Tamara Russell, on the science behind mindfulness.
  • There will be a series of panels: one which focused on challenges for growing companies and the other aimed at issues for senior executives in larger organisations.

Panelists include:

  • Nic Brisbourne, Managing Partner of Forward Partners.
  • Glenn Watkins, Chairman with the Academy for Chief Executives.
  • Former Goldman Sachs banker Rohan Narse, who now hosts mindfulness programmes for CEOs and leadership teams.
  • Alex Rickard, HR Consultant working with CIMA.
  • Journalist Hannah Prevett who writes for The Times, Sunday Times and Elite Business and will be moderating one of the panels.
  • Further contributors will be announced shortly…

Why should I attend?

Mindfulness is the topic of the moment but there is little information on how it is being adopted in the workplace. This event will share experiences from business leaders and experts on why they have adopted mindfulness practice for their organisations:

  • Find out which successful companies are investing in mindfulness practices, and why.
  • What the challenges to adoption are.
  • What impact mindfulness practice is having on their business.
  • Learn how mindfulness could improve the performance, health and happiness of your team.

Leading companies are implementing mindfulness programmes to improve performance and employee wellbeing:

  • BlackRock has a meditation programme that went from 20 to 1400 people over the past few years.
  • At Eileen Fisher (the global fashion brand) they start every meeting with a one minute pause to drop-in and bring all of their attention and presence into the room.
  • Google has put 3,000 employees through their mindfulness and emotional intelligence leadership programme called Search Inside Yourself.

The annual cost of stress to the UK economy is £6.5bn – discover how mindfulness can offer a meaningful antidote to the stresses and challenges of the modern workplace.

Finally:

  • Meet and connect with London’s influencers and thought leaders in the world of work.

Who will be there?

Over 100 CEOs, founders, executives and leaders from sectors including technology, finance, media, retail, fashion and real estate.

FAQs 

What does it cost?

Full price tickets are £299, but for a short period we can offer 20% off the early bird ticket price.

*Enter the promotion code ACE to receive a further 20% of the ticket price*

When and where?

Thursday 16th April. 9.00am – 12.30pm

The Trampery, 239 Old Street, EC1V 9EY (5 mins walk from Old Street roundabout)

http://www.mindfulness-summit.com

What’s the agenda for the morning?

The full agenda will be shared later but we’ll be hearing from a number of speakers on mindfulness for business and the science behind mindfulness, as well as panel sessions from companies that have already adopted mindfulness for their teams. There will also be an opportunity to experience some mindfulness practice for yourself. As well as time for networking.

Who else will be there?

Over 100 CEOs, founders, executives and leaders from sectors including technology, finance, media, retail, fashion and real estate.

Is there a dress code?

No dress code – we suggest business casual.

Who are the organisers?

Mindfulness Summit is a Calmworks event (www.calmworks.com), produced and curated by Forgather (www.forgather.com). La Fosse Associates are pleased to be partnering on this event.

http://www.mindfulness-summit.com

Women in Business – Predictions for 2015

December 30th, 2014

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By Neela Bettridge

Next year is the reckoning date for the Davies report, which called for a minimum of 25 per cent female representation on FTSE 100 boards. But what about the state of play for women working for the countries SMEs and growing businesses – how will they be impacted?

Whilst a CBI report found that the growth of female managers was stable, but not rising, in the UK, leaving companies short of leadership-ready women. If we reflect on the debate around women in business over the past 12 months, the key trends for gender diversity in 2014 and beyond emerge.

More flexible career cycles for women

There’s been a lot of focus around the twinned issue of returnships and the so-called ‘mommy track’, widely acknowledged as the biggest single reason for women’s careers being derailed.

Then there’s the uncomfortable truth about so-called ‘mother guilt’, as highlighted by Indra Nooyi, Pepsico’s first female CEO, who confessed that while her career flourished, she may not have made the best mother.

A female PwC partner recently observed that no-one will ever love leaving their children for work. But there are more practical ways of addressing the guilt question: maternity coaching, ‘keep in touch’ days, or, for the energetic, a whole new career. And what about the notion of embracing a longer-term, cyclical career arc for women?

Next year: It’s been a long time coming, but we need a far more visible commitment to flexible working practices and an acknowledgement that working mothers will have a different career cycle to the ‘norm’. Each business has to do what works best for it, but to take a wholesale ‘no flex’ approach of Yahoo! is to limit your chances in the war for talent.

Mind the confidence gap

Are women naturally less confident than men? According to Katty Kay and Claire Shipman, authors of The Confidence Gap, nurture, rather than nature, makes women more prone to ‘the imposter syndrome’. Of course, not everyone agreed with this, but it certainly raises the issue of how to deal with women’s under-confidence.

Next year, I’d rather see more effort put into addressing the potential causes of under-confidence, starting in education, through sponsorship and mentor programmes. But at the same time, remember that the financial meltdown proved just how dangerous rampant over-confidence can be, so a little self-doubt is no bad thing.

Changing tracks

Science, technology, engineering and maths remain staunchly male bastions, and with them the so-called STEM industries. With the exception of Marissa Mayer at Yahoo, just about every other cutting-edge digital business looks like a dinosaur when it comes to board-level equality, while tech startups seem to positively encourage frat-boy behaviour.

The problem, of course, starts in the education system. And while some tech firms have actively sought to rectify hiring and promotional prospects for women, women still seem to be reluctant to study STEM subjects beyond school.

Campaigns such as Like a Girl and the sterling work of the likes of Girl Geeks should go a long way to helping the next generation of girls to see engineering as a viable career path.

Next year: Needs are likely to trump prejudices here: as digital knowledge becomes a pre-requisite for new hires, companies will have to look beyond the usual white men for their geek contingent. As more female entrepreneurs such as Elizabeth Holmes make successes of STEM-centric companies, girls will have more and diverse role models to emulate.

Mindful leadership

2014 was the year the mainstream media embraced the notion of mindfulness as a leadership tool. Let’s hope this is a sign that the aggressive, charismatic, command and control stereotype has finally outlived its welcome.

Businesses are increasingly acknowledging alternative styles of leadership – perhaps influenced in this by women and men from different cultures. Mindfulness training has become common in large businesses, while Carol Dweck of Stanford talked about a ‘growth mindset’.

Next year: ‘Soft power’ brokers may have begun to influence leadership behaviour in some sectors, but there’s a way to go before our default ‘masculine’ image of a leader changes.

Stereo-types have had their day

Bias experts highlighted for us the subtle but important influence of language on how we perceive ambition in women and prompted Sheryl Sandberg to launch a ‘ban bossy‘ campaign. Why, when a little boy asserts himself, he’s called a “leader”, yet when a little girl does the same, she risks being branded “bossy”?

Meanwhile, you only have to look at the corrosive effect of Twitter trolls to see how damaging language can be.

Words such as ‘empathy’ and ‘humility’ have crept into the leadership lexicon, but we can’t seem to agree on ‘gravitas’ – is it indicative of white, middle-aged men or a necessary quality for ‘executive presence’?

Equal means the men too

Finally, remember that our failure to include men in workplace diversity initiatives has proven a mistake. If a certain tick-box weariness has begun to creep into gender diversity initiatives, it’s probably because half the workplace wasn’t included. As the 30% Club has demonstrated, having male allies who want the same things as women is all the more powerful.

Next year: Let’s face it, millennial men and women want largely the same things from work – chief among them being flexibility. Their expectations may help re-shape career arcs for both sexes. But we can’t just wait till the ‘old guard’ retires: workplaces need to focus more on inclusive behaviour for all and less on an ‘us and them’ mentality.

 

neelaNeela Bettridge is an executive coach & sustainability mentor who blends sustainability, materiality, strategy, integral leadership, megatrends and strategic vision into a technique she calls “conscious leadership”.  She coaches leaders of all kinds, be they men or women, who need to increase presence, impact and communication to help them step up into their next role. More at: www.neelabettridge.com