Part III — A New Economic Era

“Market positioning and the resource-based view — have dominated how we think about competitive advantage for 40 years. I think a more apt metaphor for these ecosystem firms may be the logic of the turnstile: They want to get as many players involved in their ecosystem as possible, and to get them interacting according to rules they have shaped”. Julian Birkinshaw — Ecosystem Businesses Are Changing the Rules of Strategy.

The evolution of the Media landscape — Graphic by Recode and Leichtman Research Group

The change in Western values, especially in the U.S., will also mark the onset of balancing industrial democracy with corporate authoritarianism, the rethinking of capitalism in a democratic state. It’s the reconfiguration of the workplace by creating a more equitable organization while optimizing the elements of capitalism that help fuel innovation and advancement. Movements such as B Corporation and Public benefit corporations begin to illustrate this shift from top-down profit-driven to a more holistic approach that includes its employees, local communities and environments into its corporate purpose, voice, and success. It’s also the increased sense of responsibility by corporations to take a position on societal matters during divisive and unpredictable times. Fundamentally, corporations are moving from linear to ecosystem-based business models.

The rate of innovation and the proliferation of AI is forcing organizations to continuously transform themselves, and workers to increasingly become lifelong learners (whether they would like to or not) in order to keep up with the pace of change, or face an uncertain future. According to a recent white paper by BCG, “reinventing the organization for the next decade will require embracing five imperatives: 1. Integrate technologies for seamless learning, 2. Migrate human cognition to new, higher-level activities, 3. Redesign the relationship between machines and humans, 4. Nurture broader ecosystems, and 5. Rethink management and leadership accordingly”.

Harvard Business Review — The Culture Factor, Jan/Feb 2018

Rethinking the value of apprenticeships, encouraging employee-owned cooperative organizations, holding corporate boards responsible, creating successful corporate sustainability models, integrating with innovation ecosystems, and understanding the global nature of today’s corporations are promising opportunities to seize on. As the new hire manual for Valve indicates, for these organizations to succeed, each worker needs to be empowered to become a driver of change.

Harvard Business Review — The Culture Factor, Jan/Feb 2018

Moreover, in an era where governmental action is stagnant and policies are outdated, corporations are becoming activists. Whether it’s A. leadership in addressing climate change as seen through the corporate coalition after the US pulled out of the Paris accord, B. Walmart and Dick’s sporting goods establishing stricter gun purchase rules, C. Google and Facebook offering extended parental leave opportunities, or D. Chick-fil-A and Equinox being boycotted due to their executives’ political beliefs, organizations are at the center of driving change in a democratic capitalistic society.

At its core, this transformation will be driven by the needs for inclusivity, equality, innovation, and sustainability. These needs reflect a world that is becoming increasingly interconnected, automated, diverse, climatically unpredictable, technologically decentralized, and resource scarce.

While many of these ideologies are alive in many European and Anglophone countries, the United States, due to its sheer size, diversity, and position of influence, will make them mainstream. Moreover, within the U.S. itself, individual states and cities act as incubators and lead the charge for change from climate change adaptation to progressive economic development to social justice.

Inclusivity — Mapping all the points

Bringing people together and breaking bread has been a unifying mechanism in societies across the world and across generations. Exposure to diversity of thought helps improve how we interact by integrating social adaptation with communication. Diversity of people brings a fuller representation of society by ingraining different cultures into the conversation. Diversity enables corporation to become more interdisciplinary. Inclusivity helps with diplomacy, and as a result, creates a smoother decision making process and a more reliable innovation pipeline. Our increasingly global society requires multi-lateral compromises and collaboration that can unify and bring together diverse set of cultures and perspectives; in today’ society, promoting chaos and divisiveness instead of collaboration and inclusiveness creates increasing polarization and further fragmentation.

Equality — Identifying the greatest levers for change

In the 20th century and prior to that, we mostly defined society in binary ways. As we’re evolving and further understanding our environment, we’re becoming more aware of who we are and our impact. Our current understanding of our world makes binary thinking increasingly obsolete and, in its place, a spectrum of possibilities each with its own set of characteristics.

Increasing equality and moderating hierarchy = increased diversity of thought

To optimize our decision making, we need to treat a range of options with the same level of consideration until clear favorable choices emerge. Instead of promptly eliminating, it is important to expose the problem at hand into different settings and levels of thinking (e.g. focus groups, meditating, white-boarding, explaining out loud). Patterns will eventually emerge which will allow the elimination of unfavorable options. To be effective, one needs to be “close to the action”, or have a very clear understanding of the details. In the 21st Century, for corporations to adapt to the increased rate of innovation and societal change, less hierarchy and more data-driven decision making at the front lines of the organization is key.

Innovation — Optimizing the design

“Inventing is a lot like surfing: you have to anticipate and catch the wave at just the right moment.” — Ray Kurzweil

From an advancement perspective, democracies permit disruptions and tend to leapfrog innovations while autocracies tend to build iterative innovations more rapidly. The Moon-landing race of the 1950s and 1960s represents this dichotomy quite well: Russia was better suited to improve their rockets to become the first country to send a human into space, but it was the leapfrogging and adaptive ingenuity of the U.S. to figure out how to land humans on the moon. The iphone vs. other smartphones in 2007 is a more recent example.

In the 21st Century race for AI dominance and sustainable living, democracies, and those who reside within them, will need to become more holistic in their problem solving, foster tolerant creative environments through diversity and transparency, build modular solutions, balance short-term needs with long-term benefits, and bring together top-down quantitative decision-making with bottom-up subjective input.

Despite of this, we must also balance and regulate our rate of innovation with the social tolerance to advance society; we are in an age where we need to moderate man-made evolution into order to ensure our survival as a species: Too much progress too fast, and we risk to make mistakes and alienate part of the population, resulting in a lasting backlash. It seems as if biological evolution and sociological evolution tend to happen at a slower rate than technological evolution.

Each individual is driven by one type of control. Pairing individuals of different types creates an amplification effect

We need to spend more time understanding who we are. Whether it’s fame, power, or authenticity that we seek, we all have internal desires driving our external actions. If we understand our place in society, the more likely we’ll succeed and make an impact.

Similarly, having the ability to better understand the impact of new technologies can help prevent unintentional consequences or even the potential for abuse. Under democratic rule, one would expect a series of checks and balances to prevent such a scenario. Under authoritarian regimes, however, there is a clear path in sight for a future where people are increasingly managed digitally and structurally from the top down. The accelerated rate of innovation has made it a necessity to have a societal framework of checks and balances in order to continue and improve upon the innovation marvels from the 20th century into the 21st century. It also has become crucial that governments and organizations become more agile and experimental, adopting many of the successful product development methodologies from the tech sector.

Sustainability — Adapting for longevity

Will being on the verge of an ecological collapse lead humans to change their ways?

There is an existing battle in approaches to creating a sustainable tomorrow. Can the planet, and humans, survive once we hit 10 Billion people in 2050? On one side, there is a school of thought based on conservation and using natural methods to solve our growing world. On the other side, there is the belief that technology and innovation will solve all our future problems and needs. The former approach requires discipline but is proven, while the latter is potentially more transformative and effective but also undoubtedly risky.

In both cases, nothing is absolute and everything should be viewed on a time-traveling spectrum. On this spectrum, the progressive extreme predicts the future causes of concern, while the conservative extreme advocates for a return to more traditional values. For instance, Dark green NGOs, such as Greenpeace, are on one end, radically sounding the alarms for environmentalism while fundamentalist religious organizations, on the right, pressure a return to the societal values of their worshiped prophets.

Systems can be completely transformed — Tipping into the Future

Similar to a continuous wave, the complex nature of society requires a constant balancing act to adapt to change as it occurs or commit to outright renewal (e.g. Preventing climate catastrophe vs. migrating to Mars). It’s the shift from linear thinking to systems thinking.