Changing Shape & Big Tech

In 2019 I wrote a manifesto on what we need to do to fix ‘Big Tech’ because I was concerned with how powerful the top six tech firms were becoming. At the time Apple, Amazon, Microsoft, Facebook, Alphabet and Tesla had a collective Market Capitalisation of US $3.9 trillion dollars. It is now US $8.9 trillion (28/5/21).

Since then we’ve had a global pandemic stretching 18 months. Peoples lives, health and economic circumstances have been torn apart. Businesses the world over have pulled down the shingle, people have lost their jobs and yet these same six companies forge ahead. While the world went backwards, their size more than doubled. We need to talk.

It’s hard to conceptualise how big a number is – especially a trillion. So let me provide a couple of comparisons to show how big $8.9 trillion dollars is:

  • Bigger than all but two countries GDP (USA & China)
  • 40.5% of the USA’s GDP
  • 6.5 times the size of the GPD of Australia (where I live)

Visually – 1 million dollar stacked in $100 bills, would be 3 feet high. While a trillion dollars would stack 1015km high or 2.5 times higher than the international space station.

In Time – If a person spent 1 million dollars per day, since the birth of christ, they’d still be under the trillion mark, coming in at a cool $737 billion dollars spent.

At some point we need the wisdom to know when something has fundamentally changed. Often things change long before we realise it. The lag between reality and social sentiment can be dangerously long. But once we do realise something has undergone a metamorphosis – it’s vital we treat it differently. In my view, some of the the large scale technology firms (on this list I’d place Alphabet, Facebook and Apple, maybe Amazon in USA) – are now so important to our daily lives they’ve become utilities – critical Infrastructure. Elon is even building a private global satellite network. They’ve changed. They are no longer the quirky little tech darlings we once loved.

We simply cannot participate in the modern economy without their services. While I think we can all agree the digital revolution has been a net good for society, and we all love the products, try to live a week without your smart phone, search or tools of social connection – it would be extremely difficult. In the past when firms have become indispensable we’ve tightly regulated, nationalised, or broken them up into smaller parts. We need that to happen again to avoid our world morphing into a techno-feudal state where corporations literally, usurp nations.

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Keep Thinking,

Steve.

Channel Overload

Social researcher Robin Dunbar concluded it isn’t possible for humans to maintain relationships with any more than 150 people, with only 50 of them being close connections. Known as Dunbar’s number, this is why people drop out of your life as new people enter it. It’s easy to see when you look back. There are only so many people we can pay close attention to.

This translates very well into our media and technology consumption habits. The only difference is that the number of media we can pay attention to is actually far lower. This reality needs to be part of our business and career strategy.

Now, do this simple experiment:

  • Count how many apps you use at least once per week
  • Count how many podcasts that you listen to every episode
  • See how many email newsletters and blogs you open and read every time
  • Review how many news sites you visit weekly

Here are my results:

  • Apps = 7 (excluding functional apps like Uber and Airbnb that I use when required)
  • Podcasts = 4 (Future Sandwich / EconTalk / Akimbo / Pivot) for those who are curious
  • Newsletters = 3 (Exponential View / Wired / New Mercy – No Malice)
  • News Sites = 4 (AFR / NYT / The Age / ABC)

I’ve done a small random sample with colleagues and their numbers are similarly small. There are only so many channels we can pay attention to. Yet every brand and business wants to develop a devoted following. So we have a paradox on our hands. Habits of attention are incredibly valuable, but they are increasingly difficult for anyone or business to acquire. As the flood of content available shows no visible signs of slowing, we need a strategy that makes sense.

As far as I can tell, we have two clear options:

  1. Become a global brand or authority in your category
  2. Keep showing up every week and build a niche, yet valuable audience through compound effort.

I fit into the latter category – and it works. It’s worked for more than 15 years and the returns keep on getting greater. While only 10% of people who read this blog (it’s in the thousands) do so every post, it’s enough. It gets me more respect and work than any other commercial activity I partake in, including my books and TV show.

Like anything in life – doing the work eventually gets noticed. We can all become one of the niche players on the must-read/listen/see media channels alongside more famous brands or people . It isn’t without irony that focusing on goal number 2 gives us more of a chance of achieving goal number 1.

The immediate upside? Often it’s the more niche and personal brands we are most loyal to.

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Keep Thinking,

Steve.

Rebound out of COVID-19

I’m pretty excited!

My new TV show ‘The Rebound’ goes to air nationally tomorrow, Saturday the 14th at 12.30pm on Channel Nine. In short, the show is all about helping Australian businesses bounce back. Whether you’re an entrepreneur, freelancer, corporate climber or run a business, it’s jam-packed with useful hacks to get you on the fast track. You can watch the trailer here and follow the show on Insta here.

The thing that really matters with the show is this: I practise what I preach. At the start of the pandemic, my work literally went to zero. Overnight, all my gigs were shut down. I usually spend most of my working hours on stage doing keynote speeches around the world. Suddenly – no travel, no large rooms filled with people, and no possibility of doing consulting with even a few people in a board room. I had to pivot and do it quickly. That’s what spawned The Rebound. Sometimes, hard constraints force creative solutions. We decided to take the ideas – many of which I’ve been writing about here on my COVID-19 series – to the screen. While it’s also true I’ve been planning to do content like this for a while, I never really had the time to focus on it. 2020 changed that in a hurry!

So the show was conceived, pitched, sold, written and delivered all during the middle of one of the strictest lockdowns in the world here in Melbourne. We sold a new TV show that didn’t yet exist – to a bunch of people we had never met – with a production schedule we couldn’t confirm with any certainty! If there’s anything you take from this post, let it be that persistence is powerful and people are more understanding than you would anticipate. Once the show was commissioned, our shoot schedule was cancelled no fewer than four times due to lockdown extensions. We had to beg sponsors to stay with us and we are very thankful they did.

The series is six episodes long and we cover these timeless topics in business:

Entrepreneurship

Branding

Innovation

Digital

Business models and

Artificial Intelligence.

It’s all done with a dose of fun and an unashamedly motivational spirit.

It has been a really tough year for everyone and we hope the show can contribute to a better 2021 for all.

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Keep Thinking,

Steve. 

How to sell ideas

A decade ago I got a business lesson I’ll never forget. A vital one for people who trade in ideas, creative output, concepts and the like.

At the time, I was working as the head of strategy in a large advertising outfit. We were in a meeting where we got briefed about a new product which we had to launch to the market with a new advertising campaign. During the meeting I came up with a killer advertising idea and copy line. I was thrilled I came up with it on the spot and suggested it to the client. As I expected they all thought it was amazing and loved it. But when I looked across to my CEO at the time – he didn’t seem very happy at all. I was a bit thrown, the client loved it, it was clearly an incredible idea – so why didn’t he like it? It all became clear when we left the room.

Driving back to our office this is what he said to me:

“You probably cost us a few million dollars in there” I was confused, he went on. “The idea you presented was amazing. But now we have a problem. Clients have a hard time accepting the first idea you present – even if it is the best one they’ll hear. Now they are going to expect something better when we go back and work on the creative. Worse, they wouldn’t want to pay us for the original idea. The fact that that we solved it immediately – to them, it’s like we haven’t done any real work. It doesn’t matter that it took you twenty years of thought and training for you come up with that creative solution. They need to feel like it has been worked on. So, now we will struggle to come up with anything better, and if we go back with our first idea as our final idea – they won’t want to ‘buy it’ because it was fast and simple.” He then went on to say. “Next time keep your powder dry. If you come up with something amazing in the room – bite your tongue. While clients should be focused on how good something is, often they align value with how long something took.”

I never forgot that. Although sometimes I still can’t help myself and give away my ideas on the future with clients in the first meeting. I just can’t help myself and I get too excited and tell them what they should do and why.

If you are in a creative field – never forget your ability to solve problems quickly is because you’ve invested years thinking about it and being in the game. And if you want to get paid for the thinking that you have done and do – remember it is Ok to have ideas and hold them back until it is the right time to share them.

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Keep Thinking,

Steve.

Three Skills Your Future Depends On

Once you’ve made it to the upper echelon of any field – you only need three core competencies:

Strategy, Finance and People

It doesn’t matter which industry you are in – these are the three definitive skills that will keep you there and take you further. This doesn’t mean that you go out and do a Grad Dip in Applied Finance or become an HR manager. It means you understand the three fundamental leadership skills. Here’s the context around which you need to think about them:

Strategy: You need to understand the shifts in your industry and consumer behaviour. You need to know how they pertain to technology and business life cycles. You need to develop a plan for steering your organisation in the right direction and be able to articulate the rationale. This will include resource allocation and organising the factors of production to make the plan possible. All of this needs to be done within the context of where you are today.

Finance: How are you going to finance the operation? How will you garner resources to make the needed shifts possible and what will your revenue sources of tomorrow be? It will require an understanding of how accelerating technology changes your prevailing business model. Is the pendulum swinging towards your business model or away from it? You will also need to make sure the current business model matches your cost base – it becomes a game of alignment.

People: Here you need to install competent people in the right places who can implement your plans at a tactical level. It’s about organising and motivating the troops, while ensuring they have the resources and compensation to keep their heads in the game. They also need to have bought into your mission and strategy. It’s also about the people outside of your organisation – you need to influence others within your value chain.

These are the three things great leaders focus on. They don’t do things, but become architects of their own future through strategy and finance, as well as managing the people who make it happen.

The good news is that you don’t need to wait for permission to start doing these things. In fact, the opposite is true. If you do these things informally, in time you’ll be invited to be the person who does it as a leader. Step up.

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Keep Thinking,

Steve. 

Inventing Tomorrow’s Jobs – COVID-19 series

The jobs of tomorrow all come from the same place, solving the problems of today. If you have a little look around, you might notice we’ve got a few. The Climate Crisis – well, that should be at the top of everyone’s list. The science is in. The science also has two clear sides to it. Firstly, climate change is real. Secondly, we have all of the technology we already need to solve it. So let’s get busy.

Here’s a crazy fact: just three hours of sunlight provide enough energy for all of humanity’s needs over an entire year. Yes, you read that right. That is 160,000 terawatt hours of energy. If only we had a way to capture, store and distribute it…Looking at the way many leaders from around the world are acting, you wouldn’t be out of place thinking a shift in our power generating structures wasn’t possible.

Ironically, that is the problem: the power structures. The other kind, though. The kind that control some of the world’s most profitable industries and influence global policy with greenbacks. If I could make only one change to the world – just one – it would be to outlaw lobbying and political donations in all their forms. If that went away, politicians would make the decisions we need them to, not the ones that fund their re-election campaigns. We just might have struck some dumb luck with the COVID-19 crisis, as governments the world over may have to start investing in large infrastructure projects to get the economic wheels turning. Please step forward: renewable energy.

The Truth about Jobs: Since the COVID-19 crisis, the USA has lost over 20 million jobs and Australia has lost just under 1,000,000, according to the ABS. Some good news is that the renewable energy sector is flying. The number of FTE’s is now 27,000 with a growth rate of 27%. The sector this year should have more people employed than coal does directly, which was at 38,000 FTE’s last year and rapidly declining, as plants shut down and fossil fuels struggle to compete with renewables becoming exponentially cheaper.

The investment in renewable energy makes perfect sense, because it reduces the marginal cost of both a major industrial and household expense. As people’s finances likely become tighter, anything that both creates employment and reduces the cost of living is a double win. In a recent report by Beyond Zero Emissions, it was predicted that practical projects to decarbonise our economy could create 355,000 jobs a year. A year! That’s almost ten times the number of people who currently work directly in coal, and yet we have a politician who became our Prime Minister bring in lumps of coal to Parliament as if it were the future. I’m going to say it straight out, regardless of which side of the political fence you sit on: what passes for leadership in this country in inventing a net positive future economically and ecologically is beyond embarrassing – it is deplorable. Where have all the real leaders gone?

The Economic Cost Lie: Another point that needs to be clarified is the cost of change. Some estimates say that adapting to climate change could cost us up to $300 billion per year. But it’s not true – it will actually generate $300 billion in revenue a year. See – here is the lie that is told by the Government and business. They act as though a shift in revenue is a cost to everyone, when in fact, they are referring to the cost to themselves, not society. It’s basic economics that every cost is also revenue for someone. One person’s wage is another person’s expense. Every transaction needs two parties, of which one always receives. It is even better if the expense is on something new, something that never existed before, because that is the process that grows the economic pie. The truth is, incumbents (think fossil fuel industry) are talking about a cost to them, not to society or the economy. It’s pure protectionism at our expense and one that creates a risk to our species. It’s a lie we’ve got to stop believing if we want to invent a new energy reality.

How Much Solar? In order to provide enough power for all of Australia’s needs – car, bus, plane, train, buildings, infrastructure – we only need an 1,200 terawatt hours of power a year. Using solar energy, today’s technology would then only require a little over 5,000 square kilometres of solar panels. Sounds like a lot, but it is just 71 x 71 kilometres. It looks like this below:

 

What we have on our hands is a choice. A choice to solve a problem and generate the economic growth that goes with it. We have the technology and we have the desire – but it’s up to us to demand it from those in charge. If they don’t want to change their minds, then we must change who is in charge. In the end, we have a democracy and we get the future we demand – not the one we deserve. It’s time to start demanding.

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Keep Thinking,

Steve. 

How to make the Gig Economy ‘Work’

Over 100 million workers around the world are hoping even harder than their peers that they don’t come down with coronavirus COVID-19. Who are they? Those working in the gig economy, where benefits like sick leave are something they can’t rely on. The worst part? If they do get sick, they might just have to keep on working, which puts everyone else’s health at risk. It’s about time we got innovative to improve the gig economy for everyone.

Let’s be clear on one thing – the gig economy isn’t going away. It is not a short-term aberration, but a long-term shift. Currently, the number of gig workers is growing more than 30% every year.

In the past, the reason we became employees was because the place of work was centralised – all the tools to do our jobs resided only in factories and offices. It was also difficult to find, train, ratify the skills and organise the work of people who weren’t under a company’s direct control. But the trajectory of technology today tells us that this is no longer the case. The traditional employee is no longer required and lower paid gig work is just the start of a freelance future for all. Sure, companies will still need to get things done, but they don’t need employees. The latest ABS data shows that 30% of adults participated in freelance work this month. Additionally, it is predicted that by 2027 there will be more independent workers than PAYG wage earners in Australia.

At the dawn of the industrial revolution, the major tools of production (think factory), became centralised. Before this, the large majority of labour was undertaken independently, either on the farm or as a craftsman. When we industrialised, people came to the cities en masse to partake in higher-paid work for large firms. To remove the friction of finding and training every week, workers became employees of the firm. This quasi-permanent engagement between the parties extended into office work as we entered the information phase of industrialised economies.

Fast forward to today and the friction of labour is being removed rapidly. The technology in our homes is as good as any office. Most forms of information work can be done anywhere, with NASA-powered computers in our pockets. Disparate labour can be organised around the world too, in real time. In the future, I believe that most people won’t be employees, but ‘digital craftspeople’ who hire their time to one, or many organisations. I’ll go as far to predict that within 50 years we’ll see global multi-billion dollar corporations with exactly zero employees. All their work will be performed by independent contractors – Uber on steroids. This will happen not only because it’s logistically possible, but far more profitable.

Problem: The current situation for gig workers is sub-optimal. Workers fought hard over decades for access to safe workplaces and fair remuneration, but these rights are now being eviscerated. Benefits like annual leave, sick leave, training, OH&S standards and superannuation have conveniently become the responsibility of the worker. This is a problem when we have economic shocks like the coronavirus. We don’t need to ban gig work, or make gig workers employees. We can be smarter than that. All we need is structural innovation and we only need look as far as superannuation to find an answer.

Gig Worker 2.0

It wasn’t until 1983 that employee superannuation contributions started with The Accord and became mandatory in Australia in 1992. Prior to that, superannuation was a benefit bestowed on only the fortunate few and workers with strong unions. What we need now is a new kind of gig worker benefit scheme akin to superannuation. This benefit scheme would provide a form of security for gig economy workers. For example, a simple percentage loading on labour fees could go into a fund to create employee-style benefits (annual leave, sick leave, superannuation etc) for gig workers, paid for by the firms hiring gig labour. Gig workers currently forego these benefits many of us take for granted. This way, gig workers can maintain their living standards and dignity while they are making their economic contribution . Governments the world over would do well to implement such a policy.

While the numbers would need to be verified, I would estimate the gig worker loading should be around 20%. While that might sound quite high, studies show that employee on-costs are anywhere up to 50% of their wages. If firms employing flexible labour say it won’t work – then I’d argue they don’t have a sustainable business model in the first instance.

The fund would need be in the worker’s name and ported wherever they perform gig labour. If we managed to pass such a law, our economy would be better placed to cope with the long-term shift to independent labour gigs, remain flexible, but also be able to cope with periodic shocks to the economy. It could also invent an entire industry for Australia – one whose model could actually become an export.

A New Industry

At some point in the near future, a smart government somewhere will implement such a policy (which is better than forcing gig workers to become employees), and lead the world in inventing an entirely new industry. In Australia alone, our Superannuation industry (which was spawned by the union movement) is now a $2.7 trillion industry and the 4th largest pension fund asset holder in the world. We’ve led the way. If we are first to set up this kind of a policy structure, we could export the financial management model of gig support the world over. However, this takes foresight, courage and political will.

Unions & The Gig Economy

Union memberships are in steep decline – it’s now less than 15% of workforce. In 1960, it was 60%.  It is difficult to see a future for unions. unless they reinvent themselves and pivot to offering non-union workers something they need in the future. Fighting for gig economy workers is the perfect innovation staring the union movement in the face. Unions should start focusing on representing new types of labour, who have powerful forces (like Big Tech) exploiting them. Enter, gig workers. Fuelling the erosion of the union member base is a myopic view of the type of labour that fits their model. They have an opportunity right now to go beyond traditional blue collar work, start a movement and become relevant again. Instead of using standover tactics to create profit share and inordinate wage rises, they can focus on what gave them relevance over 100 years ago, and that is fighting for fairness and a sustainable workforce.

If there’s anything we need in our economy, it is regulatory innovation to match the rapidly changing technology driven labour market. Yes – governments need to innovate too.

I spoke about this topic on ABC radio yesterday – click here to listen.

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