Image of the day

Just been cruising around Lynda Gratton’s blog on the future of work and found this gem of a picture. Question is, of course, is this an indication that Apple has peaked and one should sell shares or an indication that the company is still going up and one should buy shares? The other question, perhaps, is whether or not anyone in the picture is paying attention!

Afternoon update. Just found this too – the world of work that awaits…

 

Happiness

There’s a good daily stat available from the Harvard Business Review. Here’s one that caught my eye last week. No doubt it will end up in brainmail at some point.

“Between 1985 and 2005, the number of Americans who said they definitely felt satisfied with the way their lives were going dropped by about 30%, and the ranks of the most dissatisfied rose by nearly 50%, according to a study involving thousands of people by Chris M. Herbst of Arizona State. The reasons appear to be related to Americans’ declining attachments to friends and family, lower participation in social and civic activities, and diminished trust in political institutions, Herbst says. The only good news: The rate of decline in satisfaction appears to have slowed during that two-decade period.”

Ref: ‘Paradoxical decline? Another look at the relative reduction in female happiness’ by Chris M. Herbst.

Celebrate Failure

Just been in the car on the way back from a meeting. Listening to Leonard Cohen’s album, Old Ideas, and in particular a line about “a manual for living with defeat.” It reminded me about this, which I wrote for Fast Company magazine many moons ago.

You don’t read about failure very often. And I’m not just talking about ideas that don’t see the light of day. I’m talking about people too. Why is this? What are we afraid of? After all, it’s not as if it’s unknown. Most companies — indeed, most people — fail more often than they succeed. It is the proverbial elephant-in-the-boardroom. And yet by being scared of failure, we are missing a great opportunity.

The point about failure is not that it happens but what we do when it happens. Most people flee. Or they find a way to be “economical with the actualite” as a former British Government so elegantly described it.

“We launched too late.” “Consumers weren’t ready for it.”
No. You failed. Own up to it. Own it. This is a beginning, not the end.

The problem is this: Most people believe that success breeds success and they believe that the converse is true too, that failure breeds failure. Says who? There are plenty of people who fail before they succeed, some of whom are serial failures. Indeed, there is rumoured to be a venture capital firm in California that will only invest in you if you’ve gone bankrupt twice.

Take James Dyson, the inventor of the bag-less vacuum cleaner. He built 5,127 prototypes before he found a design that worked. He looked at his failures and learned. He then looked at his next failure and learned some more. Each adaptation led him closer to his goal. As someone once said, there’s magic in the wake of a fiasco. It gives you the opportunity to second guess.

None of this is to be confused with the mantra of most motivational speakers who urge you not to give up. Success is 1% inspiration and 99% perspiration they say, and if you just keep on trying, it will eventually happen. And if it doesn’t, you’re just not trying hard enough. This is a big fat lie. Doing the same thing over and over again in the hope that something will change is almost the definition of madness. What you need to do is learn from your failure and try again differently. All of which brings me to my first point. It is what you do when you fail that counts.

Remember Apple’s message pad, the Newton? This was a commercial flop, but the failure was glorious. Indeed, who is to say that the tolerance of failure that is embedded in Apple’s DNA is not one of the reasons for Apple’s success with the iPod and iTunes?

Does this mean you abandon your failures? Yes and no. Your idea could be right but your timing, delivery, or execution could be wrong. Who could have guessed that the one-time AIDS wonder drug AZT had been a failed treatment for cancer or that Viagra was a failed heart medication that Pfzer stopped studying in 1992?

As Alberto Alessi once said, anything very new often falls into the realm of the not possible, but you should still sail as close to the edge as you can, because it is only through failure that you will know where the edge really is. The edge is also where real genius resides.

So what I’m interested in promoting are the people whose ideas never get off the ground or rather get somewhere other than where they intended. These are the people who fail on our behalf. The unknown innovators that push things so far to the edge that they fall off. The unlucky or naïve few who open up a new trail — and get scalped — before someone else can see a way through with the wagons. (How’s that for a new historical definition of second-mover advantage?)

So here’s my idea. Rather than putting up statues to people who did something that was successful, let’s build a monument to the people who didn’t. Let’s celebrate the lives of people who invented things that didn’t work or tried to do something that was just plain crazy. A monument to the unknown innovator in pursuit of an impossible dream. The people we watch with perverse envy when we are too scared, too self-conscious, or too constrained to fail ourselves. Because without these wonderful people, there would be no progress or success.

Here are my top five tips for failing with greater frequency and more style:

• Try to fail as often as possible but never make the same mistake twice.
• Set a failure target as part of each employee’s annual review.
• If projects are a failure, kill them quickly and move on.
• Create a failure database as part of knowledge management.
• Set up annual failure awards.*

*If this gets too successful, stop it. Stephen Pile’s Book of Heroic Failures spawned the Not Terribly Good Club of Great Britain. Unfortunately the club received 30,000 membership applications and had to be closed down because it was a failure at being a failure.

Classic counter-trend

 

 

 

 

 

Apparently sales of fountain pens are on the rise. For instance, according to Amazon, sales have doubled this year compared to last and are up 400% on 2010. But why?

I suspect the reason is that this is a counter-trend. Things have swung too far in the direction of email and texts and people want something more tactile and ‘special’.

A tweet or text saying “Sorry for your loss ;-( ” doesn’t carry the same weight as a handwritten note. As they say (well, as I sometimes say), ideas come and go, but often they come and stay. The serious point here is that very strong trends tend to create weaker counter-trends moving in the opposite direction. These are either growth opportunities or risks depending on your orientation.

More on this from the BBC here.

Some impacts of ageing on business

 

 

 

 

 

 

 

“Over the next couple of decades nothing will impact OECD countries more profoundly than demographic trends.” Jean-Philippe Cotis, Chief Economist at the OECD.

We all know the numbers: People over 65 will grow from 7% of world’s population to 15% by 2050; 1/3 of US workers now aged 50+; More than 1/3 of the babies born in the UK today will live to 100+; This year there will be 14,500 contrarians in the UK. By 2035, there are expected to be 110,000

What does this actually mean going forward?

The interesting thing to me is why most organizations have only just noticed this. It is not like demographic data is highly unreliable or that we cannot see this coming from a great distance. It’s the classic elephant in the boardroom.

I think the reason for business blindness is twofold:

First, it’s a classic case of something that’s important, but not urgent. Second, most organizations are run by relatively young people and they struggle to come to terms with what ageing really means. It’s not just ageing either. It’s shifts such as the decline of the nuclear family, ethnic diversity, blended families, extended financial families, same sex couples and single person households too.

Perhaps people think that because demographic trends move slowly it’s something someone else can worry about later on. That’s true, up to a point, but they are missing a growing segment (a segment with pretty much all of the money) and they are also falling into the trap of thinking that ageing is about ‘them.’ This is, of course, utter nonsense. Ageing is about ‘us.’ Ageing impacts everyone eventually.

With the constraint of time in mind, what are some of the key trends coming out of changing demographics that business can respond to?

Let’s briefly consider 3 trends:

Trend #1: Simplicity.

I offer myself up as a sample of one here. I am confused. I am perplexed. There is too much information, too much choice and too much complexity everywhere. I would like things to be simpler. I want supermarkets to stop trying to sell me 40 types of toothpaste and edit their selection to 10 or perhaps 15. I want my bank to stop selling 20 types of loans and filter it down to 5. I want a washing machine that doesn’t give me 100+ ways to wash my socks. I want to stop people saying that if I don’t want choice I can’t have it. I was happy with 3 TV channels. I don’t want 200. I feel I am not alone.
Apple is on to this. So is Philips. But I struggle to think of many others.

While I’m on the subject of simplicy, will retailers please start to produce packaging that people with older hands can actually open? Also, pack sizes that are friendlier to older people with smaller appetites. Some retailers are quite good about this. The Co-op is one. Morrison’s is another. The rest are rubbish.

Remember also that smaller pack sizes are not just about ageing customers. In the UK, 34% of households contain just one person. In the US it’s 28% (up from 9% in 1950). This is reality now, although, many retailers still have in their head the idea of a nuclear family – hence the ‘family pack sizes.’

 

Trend #2: The changing workplace.

When are employers going to wake up to what’s going to happen here. The biggest trend around is ageing. People aren’t dying like they used to. This means people consuming for longer, but it also means working for longer to pay for the things we consume. But there’s a twist. Younger people tend to buy goods. Older people tend to buy services and guess what? Services are people intensive. The problem is that as well as people not dying like they used to, they aren’t being born like they used to either. We are facing a fertility crisis, which means significant shortages of skilled labour going forward, especially labour to provide services for older consumers.

The good news is that older people will keep working (Actually that’s one of the biggest questions around– will we work for longer?). We’ll do this to pay for the fact that we are living and consuming for longer. However, we won’t do this if employers make working longer too difficult. Older workers need extended periods off for health reasons. They also require workspaces that are designed for ageing bodies. Some companies woke up to this long ago. Ford and BMW have designed factories to attract older workers.

Meanwhile, Wal-Mart, HSBC and McDonald’s have all found that older workers are friendlier and more loyal that younger workers and have a natural rapport with their older customers (the ones with all the money remember!). B&Q have found much the same thing, re-hiring retirees that have skills in various trades that intersect with the DIY market.

Older employees like a nap too. Finding and keeping talent is job #1 going forward so companies should act now to ensure that they’re not missing out on people due to inflexible contracts or poorly designed workspaces.

 

Trend #3: Remote monitoring

As I’ve said, one of the key consequences of societal ageing is more people living alone. This is problematic on one level because elderly singles need care, which is expensive. One solution is to allow people to stay in their own homes for longer, but how can we do this? One solution is home-based monitoring and telemedicine.

I’ll give you some examples: MIT Media lab has developed a ‘Smart bin’ that reads the barcodes of items that are thrown away. It can tell how much someone is eating and send a message to a carer if someone isn’t. Similarly, in Japan, there’s a kettle that learns when it’s usually picked up and can send a message to someone if it isn’t. There is even clothing that knows when someone has fallen over, and possibly why, and calls for help. We’ll see more of this kind of thing, aimed not only at seniors, but at kids too.

But beware. There is the strong possibility that these kinds of technologies will create further isolation. Technology alone cannot solve these problems and we must stop sending ‘them’ off somewhere else, out of sight and out of mind. People need other people, especially when they get older. They need to be loved and to know that they are not alone and machines, even cuddly robots, cannot do this.

We need to properly integrate old and young alike into society and also banish the idea that older people are somehow a burden. This is pure nonsense. For example, people worry that ageing will impact negatively on growth. Nonsense. We are on the cusp of various technologies that will see growth explode. Furthermore, expenditure on healthcare is rising fast, but surely increased expenditure on health will grow GDP, so what is everyone worrying about? (There might be an answer to this I haven’t seen, so answers on a postcard please).

Virtual vegetables, time on screen and Call of Duty.

 

 

 

 

 

Some things that I read about last week…

1) 31% of Americans aged over 18 years-of-age spend 5 hours per day on a computer, tablet device or smartphone.

2) Anders Breivik, the man responsible for killing 69 people in a shooting and another 8 in a bomb attack in Norway, ‘trained’ for the attacks on ‘Call of Duty’

3) Want to grow your own food with almost no effort whatsoever? Then try out iGrow, a virtual allotment being offered by a farm in the UK. You pick what you want to grow using your iPad or other device, get someone else to plant it, water it and look after it and grow it and tell them when you’d like it harvested.

Yes, very convenient, but surely this misses the whole point about growing your own food, gardening or life in general. If everything is instantly available then nothing has any meaning. If something requires no effort then it has no value and if something is too easy there is no pleasure to be gained from it.

The Prosperity Paradox

 

 

 

 

 

 

 

Having just got back from Hong Kong this rings true. Have you noticed how ‘Bling’ is booming in developing countries such as Russia and China whilst at the same time ideas such as frugality and sustainability are taking hold in other parts of the world?

Well the reason is that consumption patterns change significantly as economic prosperity develops. A few years ago two economists called Kerwin Kofi Charles and Erik Hurst at the University of Chicago found that, all other things being equal, African Americans tended to spend more of their income on cars, clothes and jewellery. Now a new study has put a figure against this. Typically, an African American family will spend 25% more on cars, jewellery, clothing and personal care compared to a white counterpart, with the difference being made up by less expenditure on education.

This isn’t just a lazy racial stereotyping either. Looking at countries similar patterns emerge with lower income groups spending lavishly on luxury goods. So what’s the explanation? According to the economists what’s going on is that poorer people spend on luxury goods to prove to others in their immediate peer group that they are not poor. Hence what a gold Rolex says is not “I’m rich” but rather “I came from a poor background and did well”. As individuals (and nations) get richer this spending shifts from ostentatious products to more discrete services and experiences. A shift also occurs towards spending on goods that are externally directed (cars and clothes for instance) to goods that are less visible to the outside world.

In other words countries, like people, want to show off how wealthy they are but eventually this need wears off. This finding obviously has significant implications for luxury goods companies although one suspects that they know this already. As for what’s next, expect time and space to become the ultimate luxuries along with goods and services that are only available to a limited number of people that fulfil certain non-financial criteria.

Some Worrying China Statistics

Some worrying data coming out of China. Electricity output slumped last month, up a mere 0.7% over 2011. State investment in railways is down 44%, road building is down 2.7% and 8 out of the country’s 10 largest ship builders have not received a single new order in 2012. Housing sales were down 25% during the 1st QTR and home construction was down 28.3% last month. This last figure is a real concern because housing employs 10% of the Chinese workforce while land sales make up 70% of local authority tax revenue and 30% of central government revenue. Loans are also down significantly too. Of course this could all be planned in the sense of it being meant to slow the economy down, but it’s worth watching very closely.

India and Russia are having much the same trouble too in terms of industrial output, lending and bad loans. The big concern here is not just the BRICs going bust, but the BRIC wall of global credit collapsing before the rest of the indebted world recovers from the worst of the recession. If you have any spare cash stick it under the mattress now.

Quote of the week

The main lesson of thirty-five years of AI research is that the hard problems are easy and the easy problems are hard. The mental abilities of a four-year-old that we take for granted – recognising a face, lifting a pencil, walking across a room, answering a question – in fact solve some of the hardest engineering problems ever conceived….As the new generation of intelligent devices appears, it will be the stock analysts and petrochemical engineers and parole board members who are in danger of being replaced by machines. The gardeners, receptionists, and cooks are secure in their jobs for decades to come.”

– Steven Pinker, psychologist, cognitive scientist and author