Managing Blade Runners : An AI future for management

The premise of Blade Runner is that robots have become indistinguishable from human beings and having decided that this isn’t perhaps the greatest idea; the decision is made to get rid of all the robots. However, precisely because they are essentially identical it’s a tough job and because they don’t know they are robots, it’s even harder. There are a range of moral and psychological discussions which have spurred many a student conversation.

However, I’m a management consultant so I care more about the managerial and leadership implications of AI and robotics.

Let’s start with a spectrum of AI starting with me (just my brain and my experiences), and then there’s me with a knowledge base (laptop + phone), then me with some AI (Augmented Reality, AI engine, VR maybe), then there’s robot me 1985 Short Circuit version; ability to learn (input, input), process and rationalise and then there’s 2049 Blade Runner me, two of me slightly refined and programmed to be more effective and manageable.

Along that spectrum, each version of me requires different management to take best advantage of my skills and potential but for my manager, she’s going to have to change her approach by the time we get to 2049.

Individual decision making – in a world where everything happens faster and faster, there is a requirement for decision making to keep pace. As the saying goes, ‘a bad decision is better than no decision’. However,  the process for individual decision making relies on taking on board information, advice and environment and then doing what you think is best. When you have AI which assesses all possible outcomes and factors, how brave will you have to be to go against the advice? In all science fiction films ever, the role of the computer/robot is to say ‘there’s a 92% chance that we will die in a massive fireball’ but without exception, the human protagonist will say something like ‘never tell me the odds’ and then does it anyway.

The situation will be that either you have to take the advice from the AI because you yourself can’t work it all out or we’ll all need to be Han Solo, ignoring the odds and therefore the value of the advice? What does the robot do when you ignore them? Do they apply the escalation protocol or take over themselves?

Instinct and accident – there are many a good things discovered by accident; penicillin, post-it notes, the microwave, America. There is also the 400 popular motivational quotes showing how instinct is incredibly important to decision making and success. With experience, most people will make decisions because ‘it feels right’ or ‘smells wrong’. With immense AI, will we ever do anything by accident or instinct anymore and how might we direct our team. As every consultant will tell you, the greatest invention in human history is the post-it note. A 3M guy invented some sticky stuff, a church goer friend wanted to stick bookmarks in his bible and hey presto, a legend was born. Now the robots can probably do the sticky bit but perhaps not the church bookmark bit?

In the future team, how do you direct the AI what to do. It’s already happening that machine learning means that you don’t always have to in the first place but the there needs to be either a genesis for an idea or human link to do something with it. Will AI take away our need for instinct or an approach to try something without seeing the value?

Emotional connection and personalities – there is a strength of leadership which comes from supporting and developing people. Building an emotional connection, making people feel safe and valued, and contributing to their development and learning; these are requisite in an effective leader. With those things, people work harder, do better and add more value. This requirement is not one a robot has, but as with Blade runner, the robots are better when they are given the connection to a past and some emotions. You can accordingly download the ‘your manager is great’ patch and realise the same value.

If you are spending 20% – 50% of your time working with people to develop them (as you should) you will in future, have 20 to 50% more time. You will be used to managing the flow of requests and instructions which will be done quicker, will require less supervision and won’t need the pesky personal development time. (my own coffee budget will reduce by at least 80%, decimating the local economy).

Assuming then, there will be a mixed team of humans and (androids), what is already a hard dynamic to get right will be made much harder (or easier). Will your new management role as a benevolent dictator to the AI machines  go alongside the training of a smaller team of humans in how to be they too can become an authoritarian despot.

In Blade Runner, everyone is ruthless and contains their emotions as they don’t quite know what is real and what is not. It is perhaps this type of manager who will be successful in future. Life in management consultancy is to expect to work in many teams for many managers. A resource request is not for a person but a set of skills. E.g. I need a senior con with HRM experience in the public sector. This approach to resources as a commodity is only likely to become increasingly the norm.

Work structure – we essentially work 9-5 with  grey areas around starting early and finishing late. Even after 50 years of working broadly to those times to match with sunrise and sunset in the northern hemisphere, we are still following that standard. This tradition completely  changes with increased use of AI. There will be a big block of work running 24/7 so what will the role of manager be to oversee the work? Will everyone’s day be 2 hours in a block or will we all be on-call all of the time waiting for the 2 hours whenever its needed?

Now, we aren’t going to be living in a Blade Runner world immediately but you can already see the parallels in the corporate world.

Decision making is increasingly being driven into centralised buckets by project management tools which support the process.

The access to reports and information means senior people can more quickly make lower level decisions.

The focus is on efficiency and effectiveness with reduced time for making valuable ‘accidents’ and instinct is increasingly taking a back seat to information.

There’s also a reduction in direct leadership and development with inspiring leaders more readily available online and we are already working through the clock in India, the US, Europe and Asia.

We just need the androids and their electric sheep.

The Odd Couple – Getting Designers and Consultants to get along

One’s boring old fashioned, clean and tidy and wears a nice suit, the other’s messy, shaggy haired and goes to burning man. How will they ever get along? Simple answer; it’s the business model and the culture.

Throughout the years, each of the consulting firms has had a stereotype. I’ll show some tact and not describe them specifically but there was a particular clone army who used to arrive at careers’ fairs en masse; everyone in chinos and well ironed semi-casual shirts. They were very open about looking for a certain type of person to join their team and typically, you could pick the likely candidates without anyone opening their mouths. There was another company where the wearing of shoes other than black would be considered a disciplinary matter.

To varying extents, all the consulting companies up until the past few years pursued a similar approach. I knew a number of people who left my own organisation with commentary thereafter that ‘they were an _____ person anyway’. However, with the world of consulting changing so has the approach to hiring and acquisition.

Buying design

The aforementioned chino brigade like the others have bought a design agency and are integrating that into their business.  Everyone else has done something similar but the legacy company won’t suddenly change overnight. Strangely given what consultants do for a living, not everyone is managing the change perfectly. So if you are designer at a consulting firm, here’s a quick lesson in transformation with a view towards what might happen. Here are example 4 integration models. (there are many, many more)

Option 1) The Trojan horse – you set up a new team in the middle of the business with a new name or new job titles. It’s ostensibly part of the same structure and is integrated into the P&L. All the operations work the same and the design people are treated like every other consultant. A slow gradual change of bringing in the skills, starting to get projects and building the team. The team starts to grow and subsume other bits of the business until eventually, it’s no longer the small bit rather the main bit. The change to the business is to blend the skills and capabilities towards the design elements and you transform the business from within.

Problem; is getting through the first couple of years. The designers don’t want to be like everyone else and the performance management is difficult to compare oranges and apples. The culture is a big shock for the new people so they retreat into their own team a little. The rest of the team resents them for ‘getting special treatment’ and some of the designers leave. The experiment is considered a failure and the team is rolled into an existing team.

Option 2) The Mercenary force – you recognise that the skills and culture is so different to the existing business that you keep them separate. Different office, different structure and management. You integrate the services into the business with a service catalogue where you buy in resource from the ‘mercs’. You spend weeks trying to work out how to price it and end up with a compromise. The value is seen in the delivery, the people and the brand is protected and the services can be integrated into the business. The symbiotic relationship works for everyone and everyone is happy.

Problem: is the project managers in the main business who see that they get less margin from using the mercenaries rather than their own people. They see the credit for the good work go elsewhere so they start to try and resource the projects from their own teams. They’ve seen it done before so they repurpose people to do something similar. However, they don’t do as well so the quality drops. The new business gets less money and looks to sell things themselves and even competing with the main business. Either way, someone loses out in some revenue and after a power struggle, eventually moves are made to take it in-house.

Option 3) The club mascot – the business builds something shiny which looks great and has a small team. A huge force of marketing is put into the endeavour both external and internal. The new people feel special and existing staff aspire to join the special team. (needs to have an especially cool name).

Problem; is that it’s likely to be a cost centre and for it’s nice for a while whilst you invest lots in the venture. Eventually thoough someone asks what the business is getting as value and chances are that it slowly loses traction, funding and eventually people. You then go back to square 1.

Option 4)  The melting pot – you create nothing new and hire people into existing teams. The new people align with existing structures, process and performance management. The skills become embedded skills as with anything else and slowly the whole business starts to acquire the ability through training and engagement. The functions delivered are morphed to represent the new way of working.

Problem is; getting any people to join the team and stay with the team when they are likely to go through a tough time before their real value starts to be visible and rewarded. The whole business take a while to adapt to the new way of working and the pain of transition tends to lose some people.

So what

As with anything, Culture is the magic bullet for dealing with transformation so everybody needs to start there.

For the boring, old fashioned consultants. There needs to be a realisation the investment is a medium term plan and unless you change the whole business then ultimately, it won’t work. You maybe don’t share a flat with your new designer friend immediately but you have trips to their house and start to adapt your own for when they move in. You also have to realise that these skills are going to be absolutely core for your own future learning.

For the trendy new designers, you have to realise that it won’t be great as soon as you move in. It can be a long process to get used to something different and even longer before you are recognised for the value. In the long run though, you’ll get the real benefit so don’t jump ship immediately when you realise there’s no in-house barista made Turmeric Lattes.

I see a lot of commentary from designers extolling how corporates are ‘finally seeing the value of design’ and it’s true but you have to appreciate how becoming the mainstream changes the dynamic of what you have to do. You can look to your consultant colleagues and realise that whilst you’ve been talking about ‘service design’ for about 3 years, they’ve been building customer centric operating models for 10 years. The value of the two together is greater than the sum of its parts.

How to design a 1 day workshop in 10 minutes and 10 reasons why you shouldn’t.

If you work in collaboration or event design or facilitation or anything similar, you will probably recognise the following scenario; a client or a colleague arrives at your desk/office/bean bag and says ‘I need a workshop, here is the agenda, can you please deliver it’.

This is not a scenario which is repeated in many other places. You tend to ask help from SMEs based on the presumption that they are the experts. Accordingly, I don’t arrive at the dev managers start-up meeting and say ‘I’ve designed the sprint myself, can you just run it’. However, everyone has been to events and workshops so everything thinks they can do it. Everyone has also eaten a cake but they don’t tell Gordon Ramsay how to bake one.

So, if you are going to do it anyway, here is your 10 minute design guide.

1)     Pick some clear messages about what you need to get out of the session – get the most important person to give them

2)     Give people things to think about – case studies, examples, articles, quotes, videos etc. Pick some customers or employees to tell some meaningful stories to surprise

3)     Let everyone whine about the problems (then politely tell that it’s in the past, gone, forgotten, yesterday, today is about the future……pause for effect

4)     Set a new context and play a game – build, paint, draw, act. Pick some obvious metaphors which demonstrate the theme – customer, working together, value, cost savings whatever

5)     Pick the main areas you want to talk about – have a nice chat to discuss what’s important, have some ideas and then a group chat to discuss

6)     Have another go – more pointed, specific, objective driven, have another group chat

7)     Decide what to do with what you have discussed – plan, initiatives (start to work on output if you have time

8)     Group photo and everyone agrees to commit to do something


Have a go at this in 10 minutes and see how you do.

Then please throw it in the bin and go back to the start (ideally by asking someone who knows how to do it if they are available). Here is why

1)     Facilitation is an art as well as a science – if you have been in a workshop with a good facilitator, you will know the difference in how the flow and rhythm of the event works. They ask the right questions, know when to push and know when to let things run. People who do this all the time are better than you because they have experience but mostly because they put in a huge effort in preparation. They might say ‘this is probably a daft question’, if they do, you can bet they have a pre-prepared laser targeted gem ready to go.

2)     You have to go slow before you can go fast – you will think that it’s wasting time to talk about different things, or to go in circles for a while. You do so because you can’t get straight to the heart of the value without taking people through a journey. It’s then much quicker at the end than at the start.

3)     Creativity needs to be applied correctly – anyone can name film titles and suggest that the event is themed with pictures of Disney characters or the all time classic ‘a mountain’. This misses a huge trick if you don’t spend the time connecting a theme with the program or the organisation etc. Likewise, during the session, you have to recognise that people create and imagine in different ways and you can’t force a one size fits all e.g. everyone have 50 ideas on these post it notes……..

4)     Every hour of an event needs a day of preparation – you have to respect the time being taken out of the business and the potential for the event. Unless you can sacrifice some people to (at a rough scale) commit 1 day per hour of session in the preparation, then you are missing an opportunity.

5)     Managing people is on a logarithmic scale – a 100 person workshop is 1000 times harder than a 10 person one. It’s like managing babies 1 is hard, 2 is harder, 3 is nightmarish. The logistical challenge alone going from 10 to 50 people is a huge difference. Please don’t start with a 20 person event, announce that 53 are coming and wonder why the design team are in tears

6)     You don’t know how long things take – if you have an agenda with ‘process redesign session’ which has been allocated 20 minutes, you are going to struggle. You have to recognise that rushing to an answer isn’t worth it if it’s a bad answer. Take direction on how long things take.

7)     Pretty pictures and graphics are lipstick on a pig unless they mean something – people engage really well with visuals/graphics but it’s like anything else shiny, it needs the substance beneath. Rubbish beautifully scribed on a board with hand drawn pictures is still rubbish.

8)     Unless you are extremely clear about what you are trying to achieve then you won’t get there – you need to apply some critical thinking to event design as with anything else. You usually get a view of ‘what’ you want to achieve fairly quickly – a strategy paper, an aligned plan etc. That’s not how you build a great workshop, you need to peel back layers of ‘why’ or the whole thing crumbles at the first challenge. The preparation needs to make sure you answer these questions in advance.

 9)     You need to know the psychology about who is coming and know how to handle them – fundamentally, a workshop is about people, if it wasn’t then you wouldn’t need it in the first place. You could get some strategy consultants in a room, throw them some expensive peanuts once a week and read whatever they give you. So, you need to take the time to understand who is coming, what the dynamic of the group is and work through how to manage them individually. 

10)  You need to think differently – some independence of thought and some disruption in how you would normally run things is of huge value. A different perspective adds immensely to the process and will generate questions that you’ve likely not thought of.

There’s a whole lot more to the above and I’ve missed a pile out but hopefully you can appreciate my message namely; respect the value of a workshop and consider the possibilities. Running a bad workshop is easy. Running a good one takes time, thought and imagination. If your organisation has skills and support available, you’d be mad not to use them.

Leadership in 2017: The end of corporate leadership and the Machiavelli matrix.

The changing dynamics of how and where we work, are changing what people need in a leader.  Leaders used to inspire, inform and create an atmosphere. Do they do so now, and do you even need them to?

At some point as you go through your career, you have to make a decision about what type of a worker and what type of a leader you are going to be. The learning process is to understand more about people and different cultures, and to work out how you get the best out of those people. There are a million books and random motivational messages to support you in the process but that is all nonsense unless you can apply what they say.

As Machiavelli said you can choose to be ‘loved’, collaborative and engaging or ‘feared’ directive and imposing. Everyone ends up on that spectrum but if you are at the extreme, you won’t be effective or happy. I.e. everyone takes advantage of you or everyone hates you. (see any leadership textbook anywhere for 500 pages on variants of this).

This has not generally changed but the context around it has. To summarise the change; consider a view of distance to people. Not just emotional but physical. You can be close to your team sat in the trenches under fire from the enemy (insane client requests and visiting leadership) or you can be sat behind the lines sending instructions from headquarters.

Machiavelli matrix

Line yourself up against the model being honest about who you are and what you enjoy the most.

Me, I love being in trenches close to the people and applying the iron fist in the velvet glove approach. It’s all smiles and laughs until a line is breached and then it is fire and brimstone (not for long, then it’s back to the laughs). I’ve trained myself over the years to adapt my approach and my mindset to be good at doing that and I’m pretty happy with where I am.

Big, massive however…….

If you look at where things are going at corporates. The fundamental dynamics of people working together are changing which means that the role of leaders I think is changing too.

Change from experience to efficiency – most if not all corporates are moving towards some type of activity based working with the addition of collaborative spaces. In addition, there are multitude of articles and surveys showing the changing preference towards working from home.

The foundation for all of this is built around people becoming more efficient, better use of space, and more effective allocation of resource.  To me, this goes against a core principle that I have worked to, namely you want to enjoy yourself at work. It’s not a question of the time spent but a value judgement about what you can create in the team. I’ve got more value in the osmosis from being next to people than I ever would have getting my work done an hour earlier and going home. The 30 minute coffee discussions, the Wednesday afternoon cake competitions, the side conversations have all contributed to knowing people better,

I grew up in consulting where you would often work away from home; breakfast in the hotel, you would leave as a group in taxis to go to the office, you would leave as group and commonly all go for dinner. It was a 14 hr a day engagement with the same group of people. I probably worked for 7 of those hours but I learned more in the other 7.

The role of a leader in that context was to create an atmosphere over the whole day where everyone could contribute to more than just the work. Think about graduates in particular, if you only see them in the course of their work during the day, you miss the opportunity to see their richness of knowledge and way of thinking in other ways. I know more about the people I worked with 10 years ago than I do about the ones I did last year.

Ask yourself now in the workplace in 2017 why so many people have large noise cancelling headphones? How much time do your leaders spend engaging you outside of core working? This is a skill and an environment which is disappearing. I can completely understand the opposing argument but we haven’t replaced that old fashioned approach which an equivalent and so the skills are becoming redundant.

Information and insight – it is the same for the tools and methods which enable collaborative working. The potential is huge to improve engagement and alignment in co-production of documents or in the sharing of information.  However, the increase in volume in information does not always equate to equivalent quality and value. Look even at Linkedin and consider how much original content you see produced vs content shared. I know a huge range of people who I’ve never seen write a single thing themselves. Spend a week reading and liking only an article that was written by the poster and see how you behaviour changes.

Sharing a link to the Harvard Business Review with no comment or insight is not entirely valuable. Should I get any credit for knowing something because I’ve shared it. This is translated into corporates too. Leaders now with access to a huge range of material don’t have to produce anything or promote their own thought leadership. Even more than this, because everyone has access to all of the information, younger people no longer are turning to leaders to see what they think in the same way.

Consider, when was the last time you were asked by a junior person what you thought about something or when was the last time you shared something that you did yourself to a colleague?

Inspiration –   a role of a leader was always to inspire the people that worked for them. It was a ethos that anyone would be happy with what they were doing if they felt inspired by the leadership. There’s a great but possibly apocryphal story of someone asking a janitor in 1967 what their job was with the response being ‘I’m putting a man on the moon’. The role to inspire was essential to building that connection with the organisation.

Now with twitter and LinkedIn etc . you can connect with very important global leaders and experts. You can listen to Richard Branson’s thought of the day or assess Justin Trudeau’s utterings on foreign trade. A bit closer to home, you can see the CEO of your own companies account, what she thinks, is reading or is listening to. Younger people in particular therefore, don’t need the inspiration as much from the lower tiers of management because they think they’ve got what they need elsewhere. I don’t need to know what Keith Logan thinks about AI because I can read what Mark Zuckerberg thinks all, of, the, time.

Ask the junior people in your organisation who their business role model is. 10 years ago who would have been given a name in your organisation. Now, it’s likely to be a global CEO or a superstar TEDx er.

So then, the fundamentals for how we work have changed and we are perhaps becoming a industry of managers. So, have a think about your own organisation and look at your leaders. What is being valued and rewarded higher up and even more importantly, think about what’s important to you in a leader and think about the leader you want to be?

Customer experience; the Japanese way: Hyper-specialisation and what Kanazawa’s tiny, tiny whisky bar might mean for the future.

The Japanese know you have to be authentic, you have to have knowledge if you want to look like you care and you have to respect the crowd.

People naturally want to be a little different, they want to feel special or be special. As the world is getting more connected it’s actually becoming more homogenous. Teenagers internationally are all taking selfies, using social media and shopping at Zara. Whether you are in Beijing or Brisbane, you are going to be doing a lot of the same thing.

At the same time, you might all be using Facebook in the same way but you can link with people with really specific interests and ideas. The old fashioned equivalent is the difference between a city like London and a city like Brisbane. In London, you can find from amongst the 9 million people, a Star Wars absinthe bar with enough people who like Star Wars and absinthe, to be able to fill it. In Brisbane, you are more likely to see a range of different people in the casino or in the RSL; every taste in blended into something which is more generic and more middle of the road.

As regards products, services and experiences for customers; the progression is towards wanting the Star Wars Absinthe bar experience even though you live in Brisbane.  How do you build your service and product catalogue to meet that demand?

To do that, we can look to the land of the rising sun for advice.

I was recently in Japan on holiday (and it’s great) and we visited a town on the west coast called Kanazawa. (Until recently a 4hr trip from Toyko before the launch of the new bullet train service.) The town was busy because of their huge annual Oktoberfest celebrations (you haven’t lived until you’ve seen organised Japanese conga lines to oompa music). In this town was a bar called Machrihanish . It is named after a very small town in Scotland with a lovely golf course but it is obscure for Scotland never mind a town in Japan.

Anyone who has been to Japan will notice the incredible range of small bars and restaurants with really specific themes, you’ll see tiny shops selling unusual things. Even if you haven’t been to Japan you’ll have seen their levels of super-fandom and you will also have seen how most crazes- Pokemon, cosplay, tamaguchi etc tend to start over there. It’s a remarkable place to look at customer experience.

But why……how do they approach things in Japan?

You have to be small and specific – with so many people in Japan, you have to differentiate yourself to stand out. People are actively looking for things which are unusual and special. People look for experiences which are away from the mass market whilst at the same time everyone buys commoditised products like iPhones etc. Japan has an amazing dichotomy whereby for some things, everybody is the same and for others, hugely different. The owner of the Machrihanish hadn’t named his bar the Scottish Bar or even the Edinburgh tavern. He went to the depths of something unusual and specific to create an experience.

The logic is, you have to go the whole way to create authenticity and therefore engage people in your product.

Consulting bit

The capability exists for us to use digital to enable the build of these specific products, services and experiences but to what extent do we do so. We also have the capability to understand what are the small and specific things that will interest our customers. As an example in an Australian context; why not produce an insurance product very specific to surfers – bundle up life, car, travel insurance into one experience product which pays out double for surfing related claims.  You have to support the product by showing authenticity by knowing what a surfer really needs from an insurance product. (see design thinking, empathy interviews, CX design). However, specific insights if they are applied generically aren’t that helpful. E.g. the product and the service need to be specific enough to take advantage. I can tell you right now that customers like transparency, simplicity, speed, personalisation and accuracy but that’s not enough for a customer experience strategy.

Knowledge and attention to detail – If you are going for small and specific you really have to look like you understand or you lose the authenticity and the credibility.  My bar in Kanazawa had real menus in it from the clubhouse at St Andrews, it had pictures of golf clubs in Scotland which were put in alphabetical order on the wall. I ordered a whisky and tried to explain it was from the most southern distillery in Scotland. The owner then explained in some detail how there were five further south and I had missed the Mull of Kintyre (a common mistake he said). He then explained how he was a member of St Andrews golf club (showed me his membership card) and described the relative difference between the types of seaweed on the west coast (no joke).

Consulting bit

If you look like you care about something, you have to understand it as it takes a differentiating factor into one of advantage. For the insurance company selling the surfing product, if it looks like a gimmick it will be treated as such. If you hired even one surf expert, he/she could manage the whole case load regardless of where the people are located. If it’s popular and you need more, then great.

The impact is on how you design your service (operating model to handle the traffic). The design in the fabric of your CRM is how to create better routing to your operations. A first line AI engine (with the surfing add-on dude?), 2nd line service to Brad from Bondi or even a sales discussion via Skype at the beach (surfing tinder). It’s an old tactic powered by new technology.

Crowd power – recognise the power of changing demand and waves of interest. The power of social media can generate hype in an incredibly short space of time with the capability in the background to build things quickly (consider the immediate and overwhelming supply of fidget spinners). When I was in Tokyo, I saw a huge line for a tiny food stall and then about an hour later I saw another one. The reason; both were selling Maine Lobster rolls which was the ‘big thing’. My guess would be that it’s no longer the case and everyone is eating ‘Haggis balls’ or something. The capacity for people to wait for something ‘hip’, the speed of change and the scale of demand was remarkable. Just as soon as it came though, it would be gone so if you were a lobster roll only specialist you would be stuffed. (pun intended)

Consulting bit

Any time lag in meeting the demand or any inflexibility in being able to scale would have represented a huge loss in potential revenue. The local McDonaldsshu wasn’t selling lobster rolls because it couldn’t get there quickly enough. They were nonetheless doing some good trade in their usual fare. What you need then is the ability to have that two-speed business where you can maintain your core but you give yourself the capacity to change to meet specific needs which might come quickly from nowhere.

Where I’ve seen Japan mentioned, it’s not usually in the terms of it being a leader in customer experience it’s usually about efficiency, manufacturing, knowledge, accuracy, product design and creation. However, it’s possibly because they think about the latter ones so that they can deliver the former.

Arigato gozaimasu

See more blogs from Keith Logan san @

History for the future: Bitcoin and the 1781 Bank of North America Act of Congress – Bitcoin might be special but it’s nothing new

There is no argument that bitcoin has the potential to be revolutionary and is already starting to be. However, to predict what might happen in the future, we can look to the past.

In a nutshell; in the 18th century different banks and currencies were everywhere and popped up to launch frequently (most failed), the need for banking was pushed by the industrial revolution to fund investment and growth, a lot of the origins and the development were in China, there were several crashes and ultimately, governments saw the potential for profit and the need for regulation and took overall control. If you swap the 21st century for 18th the century and Information revolution for industrial, does it make you think of anything?

History (you can skip this bit if you are well read or easily bored)

The origin of banking and money is a fascinating one and well worth a read. (See below) here is a very rough history for you. The origin of paper money comes from China in AD 700ish where they also came up with the word cash. It didn’t take off in Europe until much later where promissory notes started to replace hard currency in the 18th century, this happened at the same time as the creation of stock markets, a number of bubbles (Tulips, South Sea) and a change in the way governments funded war (i.e. the British needed a way to get money to fight the French).

In the US, the desire to have separate currency was a cause behind the wars of revolution and the post war years led to the creation of a large number of banks at state and federal level, several of which were fraudulent or corrupt with people swept away with the potential for profit. Alexander Hamilton (of the Musical fame) even ended up losing a duel to the vice-president of the US (Aaron Burr) built on a hatred gained from the creation of Banks. The 1781 Bank of North America lasted 6 years before corruption destroyed it and after another wait, there was a second and more successful federal attempt.

In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one.” Benjamin Franklin

The Chinese created paper money as part of millennia long campaign of innovation and ideas growth, the British created a state monopoly (Bank of England) to ensure the money and control stayed with Britain and the Americans were hugely entrepreneurial, had a fight about it and ultimately settled on the government option (which importantly meant tax revnenue.) (see below for further reading)


What does this tell us about today?

Drivers for development and success – the development of central banks and paper money were driven by in particular, the industrial revolution which required a new method of finance to fund and support growth in technology. In a period of huge disruption and change in industry (which can be strongly argued is much larger in scale to the disruption of this age. i.e. think of the impact of a horse ride of day being reduced to an hour on a train.) The underlying drivers supported the development of the system and the fundamentals of finance changed towards debt and investment without which the progress would not have been as quick or as ‘sticky’. Britain at the time as the leaders in industry and war, become the leaders in finance too.

Skip to 2017 and look at the drivers in today’s market.

Global disintermediation – like the Americans in 18th Century who didn’t want to be beholden to the British to run their finance, the unstoppable force today is towards a reduction in intermediaries and the closer connection globally between any two points. The power of globalisation is both driven by and enabled through Blockchain and Bitcoin.

The fundamental disruption of the information age is doing what the industrial revolution did, providing huge change and therefore growth opportunity. One of the biggest constraints to global trade for small business is risk/confidence and efficiency in transfer costs (FX etc). If you remove that then there will be a huge change – what does Blockchain/Crypto do again??

There was no stopping central banking once they got going and there’s every evidence showing the same now for Crypto.

Boom and bust – any new wave in finance is usually met by some aspects of a bubble. Namely, there are some first movers who know enough to profit which builds as demand grows, the less informed public jump in pushing the price higher until it’s unsustainable and then collapses. If there is value in the product then there is a return to a more sensible long run price.

There is the example of the East India Company who in the 18th century tried to convince the government to convert government debt with the Bank England into shares in the East India Company. It came close to tying the British nation’s finances to a bubble. Consider the range of ‘Initial Coin Offerings’ today mirroring the myriad of new banks and ventures in the US and UK at the time.

Have a look at these graphs below, one is the classic view of a bubble, another the the price of bitcoin in the past 5 years, and finally the last 15 years of Amazon.


The question is, is the Bitcoin one like Amazon which went through a correction (couple of spikes and drops) and then run into a sustainable period of growth? Or is it going through the mania phase before a real drop?

It was only after a period of adjustment and a few false starts that the systemic, controlled and stable banking system came to pass. Which takes us to;

 Government regulation – there came a point where the government stepped it to take charge of the banking system. Partially as a response to the range of newly created banks; the risk of fraud, boom and bus, in order to protect its citizens. More importantly perhaps in order to take control and ultimately build in taxation to create revenue. Central banks use a range of levers to steer the economy which includes the management of money supply, debt, interest rates etc. At the point that Crypto reaches (or threatens to reach) a scale that it can influence economies, there will most certainly be a desire to bring it under the wider banner of the government. However, because it is decentralised like the internet, there will be a need to have a international joined up approach.

However, power talks so whoever takes the initial control in regulation will take the lead in better leading its adoption. It may be most prominent in Japan but it’s the Chinese interesting pushing the Americans into regulation. This was not the case with the Internet.

For all you Brexit fans out there, this is type of thing that Britain used to lead a couple of centuries ago. It is demonstrably not the case now. For all the America First Trump fans; it’s time to start getting a bit worried that it’s China leading the way.

So then…

All in all, if you are betting on an outcome. You can put your house on Crypto being a huge part of international finance and business in the future. If you want to consider what might happen as part of that trans, it’s worth turning to history.

“Let me issue and control a nation’s money and I care not who writes the laws.” Mayer Amschel Rothschild, 1790

Further reading

The 20 second option –

The great fiction but still informative option –, History of paper money and the stock market (with some sex and violence) History of US banking (with some sex and violence) – both books are brilliant, ask me about my money back guarantee

Crypto trading – have a chat to my good friend at VANAM

Background to blockchain –

Harry Potter and the Organisation Design of Destiny; we are increasingly segmenting customers by behaviour but why not your own people? What you need is a sorting hat.

Consultants are now designers, designers are now consultants, an operating model is now a service design, are you a technologist or a CX delivery consultant? It’s all getting wonderfully mixed up so maybe it’s time to recognise that putting people in teams based on what they do might be yesterday’s thing. What would they do at Hogwarts?

Once you’ve been discovered as a wizard (HR recruitment process) and you’ve bought your wand (your area of SME), you arrive at Hogwarts (induction week). The first thing that happens is that you are allocated into your House (service line). Hogwarts has the benefit of a mystical Sorting Hat who allocates you based on what’s in your heart.  It’s nothing about how much you know and even what you know, it’s about who you are.  How about a corporate equivalent?

harry potter

Imagine a scenario; everyone you work with leaves the company tomorrow and goes to a new one. Do you choose to stay with the company or do you go with your colleagues? It takes an incredibly strong brand or corporate culture or level of success to ensure that you stay. Much more likely is that you would choose to go with your colleagues. People power is absolute in maintaining the culture, the performance and ultimately to get the best out of the individuals.

So pick your heads of house; if you don’t have a blend of leadership personalities and approaches then you have bigger problems so assuming that you do. Select people to be the marquee personality types to align people with. They don’t have to be the smartest or most successful but they don’t need to be, they need to be people you can look up to and see yourself in them. Maybe a Slytherin type; all confidence, cunning and black magic or a Ravenclaw type; thoughtful, intelligent and balanced.

You then allocate people based on suitability with these people; personality types, approaches, ideas and connections.

You all still go to classes together; as with the pupils at Hogwarts, you still go the same classes with each other. Your knowledge is separated from the House you are in. There are experts in Potions in every house who end up together, but they go back to their common rooms to get support and build their personality.

The work you do and the projects you are in can be kept away to your house and managed in a more procedural numbers driven way. When skills are becoming increasingly connected, it’s already a challenge to distinguish teams and the structures are becoming increasingly arbitrary anyway.

Create a house competition; it’s human nature that you are not going to like everyone in your organisation (there will also be people who don’t like you). Rather than try to fix the unfixable, embrace the competition between different teams. Gamification often hits a wall when it’s kept in a small group of people or where it’s not visible enough. Perhaps the Slytherin team needs a strong individual competitive environment with league tables etc whilst the Hufflepuff gang would hate that. Perhaps they would prefer collective incentives. To give you an example; ask yourself, would you rather have a competition in your team where everyone gets a $1000 bar tab if your team hits a target or the top two performers get a $1000 Michelin star 12 course degustation menu?

You can build the right incentives for individuals within the teams because people are fundamentally driven by different things.

Sounds magic right but it’ll never work

It’s already happening, have a think about the current graduate recruitment process where experience and content is loosest. There are lots of conversations about bringing together grads into a single group or having them rotate. Even the process tends to pick the grads first and then you allocate them into teams. This is a very small step from Hogwarts.

How about performance reviews, we are always trying to connect qualitative and quantitative measures. Why not separate them completely? You get you exam marks from your classes (quant) and you get a report from your house master (qual) and the overall success of the business is measured by the house competitions (your numbers).

Disruption is everywhere for clients but we’ve not necessarily changed enough about how we structure ourselves to deliver that disruption. Tacking on a design bit, blending tech teams with non tech, carving out bits and pieces. Why not something new?

PS As regards enabling services, I am wary of making to suggestion but how about ‘house elves’. Effective, efficient, loyal and actually much more magically proficient than most of the wizards and witches. Comments about remuneration are also worthy of discussion………

Donald Trump’s unofficial guide to customer engagement.

Donald Trump’s unofficial guide to Customer Engagement: you may have all the best products and be so smart, so smart but….you have to keep it simple, you have to find what the individual wants and you have to think about the customers you normally don’t. Anything else is fake news.

A lot of people have been saying that Donald Trump isn’t necessarily the best president that ever lived (fake news) but I think he’d make a great Chief Customer Officer and it’s possible he might be available soon. The Donald has much to teach us about building great customer engagement so here are his top tips.

Keep it simple – people like simple, the Facebook generation is both hugely capable at research and is connected to a huge network of information and influence. Paradoxically, they are also much quicker to believe things that they read and only apply their capabilities to things they are interested in. For example, if you asked a range of <30 year olds if they would rather have their superannuation divested from Fossil fuels, they would say yes. If you ask them if they are invested in fossil fuels; they don’t know and if you ask if them if they’ve taken steps to move their fund…. you get a very low number. At the same time, there is an assumption that things are just easier now. I’m to used to having to try and flag a cab at 1am in the rain but not many university students do the same now.

The objective is to find a way to connect the simplicity with something people care about. I would bet you my own superannuation that a link to Facebook with the banner ‘One touch to divest yourself from Adani’ would get some serious traffic and it’s pretty much possible already. Donald is way ahead of the game of this one. His message is; don’t worry about the details of what it means or the practicality. Here is something simple that you care about and here is something good.

Find out what the individual wants –the fascinating trend at the moment is towards hyper-personalisation where everyone can essentially get exactly what they want. This is also a core tenet of economics where there is perfect price discrimination – e.g. I pay the exact amount I am prepared to pay for any given good or service (which is not what everyone else pays.) The essence of behavioural economics is to do the same for behaviour namely; how can we influence behaviour to reach a particular outcome. ‘Nudge’ is essentially about targeting messages or engagement that lead to the desired outcome for an individual. For example, the most effective thing to say on a sales call is generally meant to be ‘Most people choose this package …….’. But there will be a line that will work on everyone, it’s just a question of finding it. ‘Your brother in law couldn’t afford this package’, ‘Every CEO in Australia does x…….’ ‘only someone very different chooses……’

The way you get to this is with data and insight. The more you know about how someone acts and thinks, the better you can target messages. This is not more so the case than with politics and voting. Wins for Trump and Brexit, and even Macron in a way reflect a huge change to how voters (customers) are targeted. You might not like Donald Trump but you have to recognise the way his potential ‘customers’ were laser targeted and mobilised based on behavioural insight. The right messages in the right place however unpleasant, were very effective.

Find the customers you usually don’t – There was a remarkable insight from Trump’s victory that suggested that people knew he was bad but given that people never got a break regardless of the party they chose. They thought that choosing to annoy the people who’ve benefited in the past was still preferable even if it was worse for them. They would rather burn down their own house if it led to the destruction of their smug next door neighbour’s. The conventional wisdom was to go after the same kind of people in the same way. Not for the Orange one.

This is hugely applicable to a customer context. You don’t have to position yourself as the best, you can be the anti-option. Commonwealth Bank has had some publicity challenges recently so rather than try to be the best bank in the market, you could try to be the absolute opposite of CBA. Contrary to the example of the fossil fuels above, there remains enough support for coal etc that you could take advantage. If all the mainstream banks are edging towards more carbon balance, why not create the Queensland Coal Bank: Resources and tradition (anything else is un- Australian.) If you worry about the long-term, surely Trump shows that people have an incredible capacity to forget when you change the narrative a little. For example, with very little research you can see that one of the world’s largest producers of organic food is very connected to one of the worlds biggest cigarette sellers.

So, when you are hiring your next Chief Customer Officer, think about the Donald. As regards opening slots in strategy, operations, finance and especially HR; it might be worth broadening the search away from the Whitehouse.

I’ve got all the best websites –

Believe me (Cambridge Analytics it’s coming to Australia)

Many people have been saying that Nobel prize winning economics is interesting

Be a disruption seagull; you don’t need to know where the fish are, you just have to follow the boat.

Some companies are making the disruption and some are benefiting from it. They aren’t mutually exclusive, so in a period where there is some big stuff happening, how do the little guys line up behind it?

Rather wonderfully, driverless electric cars are almost certain to be the way of travelling in what could be less than 20 years. This means my hoverboard should be ready shortly after. Have a look at this article from a former colleague Jack Basley.

Now, where Jack has really got me thinking is in positioning driverless cars in the context of public transport. The price point for Uber vs the cost of public transport is already not miles away from parity – per passenger trip in Sydney it costs around $15 for the government. Public transport relies on scale to be profitable so small, rural towns in particular could make real savings. They already are in some places (including this one in Canada Driverless just removes another constraint which makes it even more efficient.

However, this mostly benefits councils, Uber, the car companies etc. You perhaps need to go a level deeper to identify opportunities around the main disruption where ripples in the pool lead to all sorts of opportunities. The initial wave is easy is to see and to guess the value. The real opportunities are in the waves which follow and the changes they cause. You just have to look at the use cases and reimagine what might be possible. For example:

Travel is about point to point?? – most cafes and restaurants are based in urban areas or especially beside main roads where there is parking. If that is no longer a constraint then you can take detours to anywhere you like. You can normally assume people want to get places quickly but if you aren’t driving, you can be working, or having fun. So if the restaurant doesn’t have to be on the main street, it can anywhere you like.  So here is my business idea number 1; taking a leaf from Indian colleagues with their wonderful looking home cooked lunches; I would create a network of domestic lunch makers at which you could stop on your way to work to get. The disaggregation and democratisation of lunch. A sort of Uber eats run by your granny. The same Granny could also provide a cleaning service for the cars, she pushes one button and fleet of Googlemobiles arrive for a spruce-up.

However, even this idea is based around a fairly standard view of transport so I maybe need to think a little differently. The mindset is to see travel as the means to an end rather than the means itself, therefore everything is a factor of time or distance. If you change the mindset, you start to see the opportunity. Here are three such ideas.

Future of Parking – is generally considered to be an economic and environmental disaster in that the efficiency of parking spaces is typically very low, it paves over space which could be better used to generate utility (happiness or money) and it’s not good for run-off of nasty chemicals and even the reflection of heat. There is also a huge use of space alongside roads where cars are not moving for the vast majority of time and accordindly serve no purpose. Where then are the opportunities to reformat, repurpose and rethink parking when you don’t need the space? Urban gardens, markets, micro-distribution centres or hubs for commerce An investment now in parking might be brilliant move.

Future of Education – Sydney in particular is renowned for a huge migration of children every day going off to schools all over the city. With driverless cars, you would unleash all sorts of potential for mischief making. Why not then build the first lesson of the day into the commute. Facial recognition knows what children are where, whether they are looking and you can deliver a lecture, homework, verbal exams whilst they are on the move. A bespoke language learning course would do just the trick, AI bots to have conversations, immersion in the language, connection internationally with kids overseas. You could have the whole population of Australian children speaking Mandarin without ever having a teacher know a word.

Future of healthcare –  a typical Doctor’s surgery and pharmacies require a range of stock to support the different Doctors with different specialities. There is a company in Mexico; Cemex who revolutionised cement delivery by putting geotagging on their trucks and then sending them out into cities with no specific orders to fulfil; when the orders came in, the trucks would be directed to the need. Why not apply the same principle to Doctors, ignore a base location and send them around in a driverless car going where they are required. A much more efficient use of resources. A series of pharmacy vehicles does something similar roaming around the city waiting for the orders to come in.

The driverless car industry will be a $1trillion business over the next 50 years. Not everyone is going to be able to get much from the big disruption bit; the first half of the money is going to go the tech companies, the next chunk to the car companies, the next chunk to insurance companies and government etc. But even being left with a wee tiny bit at the end, it’s still a lot of money. The objective today is to start to imagine the future and take the first steps towards the potential opportunities. There is nothing above which can’t be done today in some format, the real money is just over the horizon.

There’s plenty of fish to go round if you go looking.

The Icelandic Football team’s guide to Digital Transformation

Yesterday, the Iceland football team qualified for the World Cup in Russia ahead of Croatia, Turkey and the Ukraine and in doing so became the smallest ever country to achieve that feat. Iceland has 330,000 people, almost non-existent football league, a very small number of recognisable players, weather that could be considered ‘not ideal’ and an economic legacy of near Armageddon. They have continued on from the European championships where they not only qualified but managed to beat England 2-1 (TV rights for English football $18b AUD). 10 years previously they were ranked 120th in the world and their best ever result was a 1-1 draw with Turkey.

In summary; they have very little money, huge restrictions in their talent pool, conditions which don’t provide a natural advantage for success, no legacy of success and they exist in an area of huge competition. They have nonetheless, achieved a transformation so remarkable as to be quite unbelievable. If the situation sounds similar to many corporates, that’s because it is.

So what would the Icelanders recommend

1) Have a plan and stick to it – on the field Iceland have a style of play which is entirely based around what their players can do, they play on the counter attack and don’t try to take on the bigger teams at their own game. They are rigorous in training, coaching and managing players to fit to that system. In a recent game against Turkey (a 3-0 win), they had the ball for only 25% of the time but still managed to score three goals. Their game plan is based around every single player knowing the job they have been given to do and executing it well.

Off the field it is the same, they designed the transformation of the game which required players, coaches, the leadership and even the fans to buy into an approach and a design and every decision was taken to support that. For example, they had a long term coach who built a succession plan to the current coach which started 5 years ago. They resisted the temptation to change the structure or the resources after a few bad results. Their 10 year plan was to create a new system to support the the game overall, invest at all levels, pick the style and the approach for playing and build everything around that.

How often do we change around structure to fit to a new direction and how often does your company build a strategy or transformation plan?

2) Change needs to be everywhere – the problem was not viewed as simply as the Icelandic national football team being bad. The approach was not to spend lots of money on the team itself rather, to see the challenge as football in Iceland as a whole. Much of the investment has been on coaching young children, providing facilities and a system to support everyone. Women’s football, youth teams, children’s teams are not treated as anything different.

For example, young children in the system are able to go and train with a professional club and anyone is allowed to apply to be a coach. Accordingly, Iceland has the highest number of coaches per capita of anywhere. The investment and the engagement is spread across the whole organisation.

How often do we in organisations think about how to transform the whole business? The view is that scale of the challenge is so big that it needs to split into boxes, new teams are created or devolved from other parts. The strategy process and the planning sits with the higher levels and the steps to get there are communicated down rather than built up. The England Manager is on a salary of $5m AUD, but that’s not where they should necessarily be putting the money.

3) Change the dynamic of your constraints – one of the biggest challenges for Iceland is that the winter is cold and extremely dark and at other times, they have huge amounts of rain and low average temperatures. Manly Beach in the Spring it is not, and their beach volleyball team is extremely ropey. As a Scotsman, I can appreciate the astonishing natural advantage Australia has for playing sports outside but you have to imagine Sydney with the weather of Glasgow. It would be a different place and would need a different response.

Iceland though have changed the dynamic completely. The have built a series of huge, heated indoor halls with full football pitches rather than small practice ones. They have made access to these easy, cheap and have put investment into ensuring the experience of going to these halls is as good as it can be. There is actually an incentive to go to training when the weather is bad.

To add to this, they have taken a very small player base relative to other countries so they’ve applied a real ‘hothousing’ approach to manage and nurture talent. They have a learning pathway for development built off the range of coaches and the successful ones are managed into programs overseas. One of their players recently sold for $70m AUD (Glyfi Sigurdson).

The lesson here for corporates is to not to try and be something that you aren’t. I’ve had this conversation with a number of corporates; ‘we need to be customer centric’, our ‘customer experience needs to be best in class’, ‘we have to be agile’, ‘we have to get best use from our data’.

The trouble is, everyone says the same thing and everyone is trying to do the same thing. It therefore becomes a factor of investment or commitment. What would be the Iceland Football team answer?