The Future and how to survive it

As part of my monthly reading I catch up with the Harvard Business review and this month I found an article 'The Future and how to Survive it, by Richard Dobbs, Tim Koller and Sree Ramaswamy really interesting. Whilst is it focussed on big macro themes and the long term prospects of large multinational companies I think the responses they outline are equally valid for companies of all sizes so I thought I would set them out. 

1. BE PARANOID. Companies of all sizes tend to focussed internally or on their home market. However, current and future competitors frequently play by different rules. A lesson I have learned is never underestimate your competitor. Assume they are behaving rationally and know what they are doing. Assume they will get their act together quickly and will exploit your weaknesses like you try and exploit theirs.

2. SEEK OUT PATIENT CAPITAL.  My version of this is to make sure you focus on what sort of investor you want as not all money is equal. If your vision is to build a great company over ten years or so then don't get investment from a fund with a three to five year exit horizon. If you want to target capital growth then don't promise a running yield. If you want expertise as well as money seek out the people and funds that can give you the advice you need.

3. RADICALLY SELF-DISRUPT.  To quote "in this era of technology disruption, companies need to be willing to disrupt themselves before others do it to them". Large companies with legacy assets and vested interests find this difficult but small companies can be too wedded to their first idea or product when the market is saying it wants something different. 

4. BUILD NEW INTELLECTUAL ASSETS. Again a quote from the article to illustrate. "Half the world's most valuable brands are in idea intensive sectors......assets such as data, alogorithims and software are also becoming more valuable" I would add assets such as business model innovation, insight on customer behaviour and contact networks.

5. GO TO WAR FOR TALENT. This is true for businesses of all sizes and will lead to radical changes in organisational structures and patterns of working. Two specifics spring to mind. Firstly many small businesses suffer from a shortage of hard sales skills and should prioritise sorting this quickly. Secondly, as a society we need to get better at using the knowledge and experience of people engaged on their 'second career'. We will want or need to stay economically active for longer but business needs to think about how it uses people as they wind down their careers. We have graduate programmes and mentorships for the 20+ year olds. What do we need for the 60+ and 70+ people?

As the article concludes 'vigilance, agility and optimism have always been prized assets of successful companies' to which I would add innovation and forward planning. The future may be challenging but challenging is what brings out the best in the best businesses. 

Restless disposition in energy policy

In preparing for a conference on energy policy I came across this quote from Walter Bagehot. "If you keep altering your house, it is sign either that you have a bad house, or that you have an excessively restless disposition- there is something wrong somewhere" As a constitutional expert he was talking about the problems of Government in the 1800s but his comment is so true today. It was the phrase 'restless disposition' that caught my eye, as it is theme that Professor Anthony King uses in his book 'Who governs Britain' to describe one of the problems with 21sr century politics. All new minsters want to make an impact; want to be seen to be doing things; want to make announcements that attract headlines. They are always in a hurry. 

Energy policy has been a notable victim of this syndrome. This century we have already had 9 Ministers with cabinet responsibility for energy (counting both DECC and the various forerunners to The Department for Business). It's even worse at Minster of State level where we are on number 14. All this change means that the new minister who arrives with a restless disposition is also in a tearing hurry as they only have one to two years to make their impact; less time than it takes to build any assets in the energy industry. This timescale precludes thoughtful consideration, proper consultation and assessment of the impact of any change on the whole energy system before action and completely rules out any learning from the results of previous activity. The civil service used to act as the brakeman to the ministerial Bobsleigh but senior officials change almost as often as Ministers and rarely build up expertise in one policy area seeming to need to switch departments to get promotion. It is no wonder that we have such a patchwork of interventions and plethora of changes and amendments and no wonder that we do not have a joined up, robust energy policy. We are getting what the politicos system is designed to produce- 'something wrong' to quote Bagehot. 

If we are to have a thought through, robust and enduring energy policy we need a fundamental change to the governance and political arrangements that determine this policy. The stability, longevity and independence of the Governor of the Bank of England is the sort of role we need.  And no; I am definitely not interested in doing that job!

The importance of good design

I've been on the Board of the Maggies Centres cancer charity for quite a time now and over the years have come to appreciate that good design can make a real difference. For someone whose idea as a child of a Lego building was one of lots of straight lines using bricks of the same colour, this is a real progress. 

 Maggies uses well known architects such as Richard Rogers and Frank Gehry to design purpose built drop in centres based at cancer centres throughout the UK. These buildings are all deliberately created as a contrast to the medical institution they sit next too. They are all different and demonstrate creativity that is beyond an accountant like me. However, they all share some common characteristics; they are all set around the kitchen table, they are all loved by their local communities and they all facilitate the social, emotional and practical help that Maggies offers. It was well summed up when I visited the centre in Oxford. A group of ladies who had meet during their treatment for Breast cancer said that the new Maggies Centre 'made them feel well'.

The importance of design and architecture was brought home to me when I read about the history of the UK Houses of Parliament. Apparently, it's architecture and design is a matter of history as in 1547 King Edward VI gave parliament a disused chapel for use as their debating chamber. Although it has been rebuilt since then, the original design features were maintained. It means that we now have a chamber that is far too small for the number of MPs and one that deliberately encourages confrontation by sitting MPs from different parties directly facing each other across the aisle. It does not faciliate dialogue and debate but encourages aggression and confrontation. No wonder it is likened to a bear pit at times.  It also looks and feels old fashioned with the Speaker propped up on a platform that looks suspiciously likes an altar and where voting involves walking through a series of doors to reach the right room. No wonder people feel that politicans are out of touch. 

Maggies was founded by Charles Jencks and in his book Architecture of Hope he says "Architects have designed us good buildings that last, which sustain our staff and ethos. They have raised the fighting spirit of many patients, lifting their hearts at a time of desperation." In our efforts to bring a Maggies centre to other parts of the U.K we are continuing in this spirit with Norman Foster designing the centre in Manchester and Thomas Heatherwick working on the one in Leeds. As the UK parliament faces the challenge of repairing and refurbishing the Palace of Westminster I hope they take the opportunity of using great design and great architecture to produce a building fit for a 21st democracy. I am not hopeful.