(Credit:
Learning by Connecting)
"The difference between the optimist and the pessimist is that the pessimist has more facts," said Jean-Paul Betbèze, Chief Economist and Head of Economic Research Department, Crédit Agricole S.A., in a panel at the Millken Institute's Global Conference 2008 in Los Angeles a couple of weeks ago. True as this may be, his statement stood in sharp contrast to the overall vibe of the event: Yes, we can, was the prevailing sentiment, and the overwhelming majority of attendees would probably have outed themselves as fervent optimists, despite an abundance of fact-featuring PowerPoint slides supporting each of the panel discussions (I've never seen so many pie charts in my whole life). In fact, the gathered crowd was comprised of optimists with lots of money to spend on the world's most pressing problems (poverty; terrorism; population; resources; energy; environment; human rights; social justice; etc.) and may well have the power and means to solve most of them if they wanted to. Muhammad Yunus, Nobel Peace Prize laureate and micro-lending pioneer, pointed out: "We wanted to go to the moon, and we went to the moon. If we really wanted to end poverty, we would have ended it a long time ago."
After listening to him and some other brilliant minds, I felt over-inspired and under-accomplished, ready to change the world or at least my life. It was indeed a humbling experience. And yet, it stunned me to realize that many members of the powerful elite are struggling to cope with the new realities of business and society. The difference between being on top and being ahead, between being innovator and pioneer, became obvious in several of the panel discussions, particularly those that addressed the changing media landscape, the ongoing digital revolution, changing consumer behavior, and the new business paradigms that come with it.
These trends include:
- A surge in broadband penetration enabling ubiquitous content distribution and hyper-social connectivity
- The explosion of user-generated content: every minute 10 hours of video are being uploaded to YouTube
- The collection and the friction-less, platform-independent distribution of content as the next big challenge for media and communication companies
- Mobile as the new container and memory device: 85 years of video (a whole lifetime) will be able to be stored on any new iPhone in a few years
- The power shift from content providers to media distribution platforms (Comcast, Hulu, etc.)
- The consumer consuming on his own terms
- The "prosumer" as a market force to reckon with
- The wisdom of the crowds as a source of innovation ("we are smarter than me")
Lex Fenwick, the CEO of Bloomberg LP, exemplified the old guard's awakening almost in real-time. First he boasted that he invented email and created the world's most valuable user community (of 350,000 customers) "by mistake," then he warned of giving users too much control ("they may join forces to challenge your prices"). Barry Libert, CEO of collaboration software provider Mzinga, nailed him on this: "If you have something to hide from your customers, or you are afraid of giving them too much power, you have a problem." At the end, Fenwick had converted from Saulus to Paulus, from "From Me to We," and, in a cathartic turn of events, he admitted he had learned quite a bit from the panel: "Thank you for your insights. I am inspired to make a few changes to the Bloomberg community based on this discussion."
Other companies have made this leap before him: Amazon, Netflix, Virgin Mobile, P&G, Dell, and recently Starbucks are all moving from a firm-centric to a network-centric organization, building and leveraging their community of users by giving them a voice in strategy, product development, and marketing decisions. They understand that crowdsourced and peer-to-peer business intelligence helps them overcome the "not-invented-here" syndrome, reconciling "inside-out" and "outside-in" innovation. Libert: "If customers cut the red tape and re-connect with customers, that's making it easier for them to find out what they really need." Of course it's always easier to proclaim a new paradigm than defending an old one, or as someone noted on another panel: "If you're a futurist and you think ten years ahead, by the time you're wrong, no one will notice."
Jason Calacanis, founder and CEO of Mahalo and in-character as enfant terrible, thrived in the devilish charm of the futurist. In a panel on "The New Rules of PR," he joyfully exposed the insecurity of his audience. It was not so much his co-panelists -- some old-school PR pros who bravely defended their profession against his "PR is dead" claim -- but rather the ensuing Q&A that demonstrated how disturbing the new rules still are for many who have held the power in organizations for decades and find it difficult now to grasp and embrace some of the earth-shattering changes happening these days. "Should our CEO blog?" -- Yes. "How do I stay in control of my brand if our CEO gets critical comments to his blog posts?" -- Well, the truth is, you don't. Just let go. Brands are assets in the public domain. With production capabilities and financial assets off-shored and out-sourced, brands are ever more important as the only remaining indispensable value of a company, and yet they are ever more volatile. In this open-sourced, hyper-transparent economy, your customer owns your brand, and no brand platform, no brand book, no rigid compliance guidelines designed to protect your idea of your brand, can change that. Brands are social funds. Your mission is to raise their intellectual and emotional capital. The creation of brand equity is a cooperative act based on the values that you share with your customers. And, by the way, marketing's job is to promote these values, not to invent them.
In a panel on "Business Innovations that are Changing the World," Google Chairman and CEO Eric Schmidt said: "Let's not forget that the fundamental goal of any corporation is to change the world and not just to satisfy the interests of particular stakeholders." Indeed, this was the overarching theme of an economic summit that was all about social: social innovation, social media, social networks, social web, and social capitalism. What once was a noble mission is now a mandate for CEOs: the future of business is social, both in terms of raison d'etre and modus operandi. Companies that open themselves up to promoting and fully leveraging the social dimension of human beings in order to create smarter and more effective solutions for social problems will be the winners of this new social economy.
"In the past two weeks, I had the opportunity to attend two very interesting conferences. The first one was Fortune's Brainstorm Green, followed by the Milken Institute's Global Conference. Both of these conferences attract the who's who in the financial and business world. What struck me at both events was the rallying cry that innovation is key in solving many of the world's problems. I continued to hear that change is needed for people to think and behave differently.
(Credit:
Time Inc.)
The Fortune conference featured the usual suspects who have championed the environment long before it became a cause célèbre. One surprise twist was the number of investors in attendance. I met more financiers who had funds to invest in sustainability-related areas than I thought possible. There were also a large number of CEOs in attendance. Their interest in sustainability largely stemmed from the pressures they felt from their employees and customers. Will there finally be new green products and services that will meet the increasing demand? Will they be adopted by a larger segment of the population? It's clear that there is enough money ready to be spent and corporations ready to commit to finally make a significant impact in green innovation.
From a personal perspective, the best part of the conference was a short speech delivered by a 16-year-old high school sophomore, Avery Hairston. Avery has started a foundation called ReLightNY that raises money from individuals and corporate sponsors. He uses the money to buy low wattage CFL light bulbs that he then distributes to those in need. Everyone is a winner. People use less power and it also saves them money. A double whammy winning strategy. The closing line of Avery's speech was poignant: "Most of you probably will not be here in 2060, but I will, and I need to do something now." Young people like Avery will not let complacency and comfort get in the way of solving problems.
(Credit:
Conferenzablog)
At the Milken conference, the message calling for innovative ideas to solve problems was much the same. Panel topics were diverse and covered the fate of the newspaper and music industries, the environment, world hunger, poverty, mobility and healthcare to name a few. It seems that a conference such as this one, filled with so many powerful people in the financial and business world, would easily embrace and fund innovation as a means of helping to solve many of the issues that were so hotly debated. I talked with several "idea" people and heard consistently that although there was no lack of enthusiasm for great ideas, it had been difficult to move forward and secure commitments.
This lack of definite progress is likely due to one familiar symptom related to innovation: it usually makes people sick to their stomachs. It is unfamiliar, unknown and untested. It is a risk. This thought was echoed in what I felt was the most enjoyable panel of the conference which featured the 2006 winner of the Nobel Peace Prize, Muhammad Yunus, currently Managing Director of Grameen Bank based in Bangladesh. He is recognized worldwide for his successful application for the concept of microcredit, the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans. His hard work has lifted millions of families out of poverty. He was awarded the Nobel Peace Prize "for efforts to create economic and social development from below." His idea was so simple and so humble, yet when people initially heard it, they told him that it would never work. Muhammad used $27 of his own money to fund the first loan. Clearly the naysayers were wrong and his success has changed an entire country. My take-away from his speech was that innovation takes courage.
I hope that a year from now, I can return to both of these conferences and see how the changes that were proposed have been implemented. We need to give innovation a chance to be nurtured and to flourish. To make this happen, we all need to get over our fears and follow our heart."
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