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What constitutes middle class, a growing global disruption

What constitutes middle class, a growing global disruption

Today Graeme Codrington and I are part of the London Business School team working with the leadership of a petroleum company from the Middle East. The course is being held in London and we were talking to them about disruptive forces. One of the forces that will change the world is a growing middle income population.  Our studies show that by 2050 the global GDP will quadruple, over 90 million middle class consumers are joining the global economy every year until 2050. That’s an economy the size of Germany being added to the global economy every year. By 2025, Mckinsey, a large consultancy, believe that global consumption will increase by thirty-five-trillion US dollars. In 2009 middle class was 1.8 billion, this will rise to 3.2 billion by 2020 and 4.9 billion by 2030.  Asia is almost entirely responsible for this growth. Its middle class is forecast to triple to 1.7 billion by 2020. By 2030, Asia will be the home of 3 billion middle class people. It would be 10 times more than North America and five times more than Europe.

This growth in global affluence, especially in the emerging nations is going to have a huge impact on business. Do you understand the impact it will have on your business or your industry? The change will be unprecedented. Are you thinking through what the new markets will be? What cities will you concentrate on (not what countries)? What competitors will emerge as companies in emerging nations become more cash rich, sophisticated and more competitive?

If you are not thinking through these questions and many other important one give TomorrowToday a call we can help you think through this and other TIDES of change

For more information of this shift read this excellent article on BBC News click on the link below

[here is an extract...]

The rise of the global middle class

So who counts as middle class?

According to organisations like the United Nations and the Organisation for Economic Co-operation and Development (OECD), it’s someone who earns or spends $10 to $100 per day.

That’s when you have disposable income and enough money to consume things like fridges, or think about buying a car.

As the UN suggests, the growth is being driven by industrialisation. The industrial revolution of the 19th Century transformed the economies of Britain, the US and Germany. The move from agrarian to industrial societies generated income rises that created the middle class.

Now it’s the turn of emerging economies, particularly in Asia. In Indonesia, for instance, investment now exceeds 30% of GDP, a sign that there is more manufacturing.

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The Business of Holidays

September 6, 2014 Dil Sidhu Strategy No Comments
The Business of Holidays

Summer is just about over and many of us have enjoyed a break, whether it was a ‘staycation’ or ‘vacation’. I spent 10 days on the southwest coast of Cyprus where the weather was flawless and thankfully, not a lot else to do other than sit near a pool, catch up on my reading (with many still-unopened books), enjoy family time (one reason I keep pictures of my kids in my wallet is so I’m able to recognise them when I come home after extensive business trips away!), stroll along the beach at sunset and then order another drink!

However, that wasn’t the whole story as there was another activity that took up some of my time, albeit it was my choice, which was to do some ‘work by stealth’. So while the family thought I was relaxing in the ‘laps only’ pool I was actually on the ‘iThing’ checking emails and even sneaked-in two conference calls because I didn’t want to miss out on decisions being taken in my absence.

Then I noticed it what was happening around me! I wasn’t the only one doing it! I began to see that many people on holiday were sitting with earpieces on and speaking quietly into their gadget of choice and some even taking notes!! The ‘Always On’ work phenomenon had made it to the pool’s edge. Okay, I admit it willingly that I’m also easily bored so after page 56 of the slow-burn spy novel ‘Smiley’s People’ I wanted something else to do. So, I started looking at the holiday experience from a business perspective and being an ex-consultant it didn’t take long for me to start taking note of the ‘Current State’ situation.

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A leader’s most important job

A leader’s most important job

Discovery leaders explore new ways. New business and markets are created because someone found a better way to do something. Discovery is an adventure. Imagination, design and creativity are the lexicons of discovery. It is fleet of foot, nimble and athletic. Discovery is where value is born, nurtured and grown.

If discovery leadership results in success, delivery leaders follow, most certainly if the business takes on outside investors. The delivery leader’s job is to make business more efficient, more rational and take the costs out of it. Numbers and accounting is the language delivery leaders. Delivery is where value is extracted.

Getting more efficient is seductive; it’s targetable, quantifiable and delivers quick results. But as the delivery strengthens, it overwhelms the discovery gene, pins it down and mutes discovery’s voice. The discovery muscles grow weak, untrained and unfit. Then business wakes up one day asking the question: How come we don’t know how to compete any more?

The most important role of the leader is as chief discovery officer, because that is where the value is created.

Financial success is a by-product. Leadership’s aim should be to focus on competitive advantage. The leader’s job should be to get the company ready for the future, keep the discovery gene fit, well trained and amplify its voice.

Protecting discovery by understanding what matters for customers and community. Explore new ideas, experiment, fail fast and tell stories of the future that inspire people –  The French poet and explorer Antoine de Saint-Exupery  said, “If you want to build a flotilla of ships, you don’t sit around talking about carpentry. No, you need to set people’s souls ablaze with visions of exploring distant shores.” – that’s your job.

Discovery, that’s how to be a successful leader, that’s your most important job.

 

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Insights on Beer, Vinegar and Customer Experience

beerI have come to believe that we are all spinning our wheels in our efforts to change until we learn to understand and embrace our irrationality.  I watched anotherDan Ariely talk this weekend and he shared an analogy that really helps illustrate why we are so irrational about understanding our irrationality.  Humans by nature are irrational beings, so how can we become rational about our irrationality?  He speaks about a study where they provide two types of beer and ask the participants for their preference.   One group is told they are tasting one beer with vinegar added and another beer without; in this case the participants all prefer the one without.  Then they offer the same two beers to a second group only this time they don’t share that one has vinegar in it; and in this case the participants prefer the one with vinegar.  Turns out that vinegar enhances the taste of beer but our preconceived notions of what vinegar would do to beer trump how we experience it.  In other words, our preconceptions shape our experiences and trump reality.  Which highlights that we don’t even have a clue when we are being irrational.

So how can companies design products and services that account for what we are unaware of?  And how can we advocate change when we are neurologically wired by our preconceptions that inhibit us from embracing what we really would otherwise prefer.

I think it is fair to say that most companies are finally focusing on Customer Experience as a key imperative.  But they are doing this with little to no regard for how we human beings actually experience products and services.  These days data and rational strategies are typically the drivers behind most Customer Experience initiatives, with high rewards.  But with this approach we are only scratching the surface of the opportunity to maximize the value and returns of our efforts.  If we layer in mechanisms to interrupt or disguise our preconceptions that block us from a positive experience than I believe we can exponentially impact outcomes both for our customers and financial stakeholders.

Ariely gives a powerful example of this in context of social conflict.  An example I see time and again in business is when companies deliver a new message, or create a new product or service that they are certain is of great value for their customer.  Yet it gets received with reluctance, caution or even rejection.  Typically the response to this is to either push harder, re-engineer, or to abandon the change altogether.  When really what is needed is to better understand the preconceived beliefs that are in our way.  To complicate this challenge further, our own personal preconceived beliefs about what our customers needs are may be in our way too.  Bottom line is that we need to invest in a sophisticated understanding of human behaviour.  This awareness needs to begin academically, and once we begin to understand the nuances of it we will see, hear, and experience everything differently.  Only then can we really begin to expand on the rewards of designing meaningful experiences for our customers.

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The Mindfulness Circle

Mindfulness CircleConceptually understanding the Cycle of Self is key to maximizing our potential.  It explains our “why”. Why we believe what we believe, why we think what we think, and why we do what we do.  We can leverage Simon Sinek’s Golden Circle to help illustrate the “why”, “how” and “what” of mindfulness.  Simply put, Sinek’s Golden Circle is based on the principle that great leaders take an inside out approach.  Starting with the “why”, then the “how”, before getting to the “what”. More commonly leaders focus on the “what”, which does not motivate or inspire us to act.  The “what” informs people with rational, logical information but it is the “why” that ignites purpose, emotion and instincts that motivate us to act.

By applying the same inside out approach to ourselves we can mindfully design our life experiences.  Starting with our “self”, then tuning into our “awareness”, before trying to “change” ourselves.  Most of us set goals to change or add habits without understanding why our habits exist.  Few of us examine what false beliefs we have that are keeping us stuck.  Trying to change ourselves without understanding our motivations assumes we are rational and logical, but the fact of the matter is we are not.  We are human first.  That is why most New Years resolutions fail, along with all the other attempts we make to start or stop our habits.

My last post examined “self”.  But how do we move beyond conceptually understanding the significant of self?  We do this through “awareness”.  Awareness is tricky business.  It has cyclical complexities similar to the Self Cycle.  It takes discipline to become and remain aware and it takes kindness to ourselves to own ourselves with empathy and without judgement.  And we need to accept ourselves as we are, unconditionally, with the discipline to pay attention to when we act on our false beliefs.  And when we do, we must be kind to ourselves.  Meditation, yoga, golf, walking; essentially any activity that brings us closer to nature and our spirit will help us mindfully navigate through awareness.

Then as we become aware of the parts of self that do not serve us, the parts that get in the way of what we want, we can begin to explore how to create meaningful change in our life.  Our “self” + “awareness” will inspire our intent.  And our intent will take lots of practice.  Quite frankly we will fail (many times) before we succeed.  Which is why we need to reward ourselves each every time we succeed.  This will reinforce the value of our new habit(s). We must keep reminding ourselves or our intent, with discipline, kindness and acceptance, trusting our beliefs and thoughts will design the experiences we desire.

This journey will feel a lot like taming a wild horse.  We need to have patience with the parts of ourselves that like to run free, fast and wild.  But we will also need focus and concentration to  have the discipline to resist distractions that are not aligned with our beliefs and intentions.  This is a life long journey, not a destination.

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More quests needed – Celebrating 45 years since the moon Landing

More quests needed – Celebrating 45 years since the moon Landing

Exactly 45 years ago today, Neil Armstrong walked on the moon achieving one of humankind’s greatest quests. With his words “One small leap for man, one giant leap for mankind” Armstrong captured the essence of a quest – endeavours taken by an individual or group of individuals to enhance and further the lives of others.

The world is in need of a many bold new quests. We need to recapture the spirit and adventure. If individuals and organisations do not step up the 21st century has the potential to be our last. By 2030 an individual using a bio-pathogen will have the capability to end it all. There are deep pressing issues that need organisational and leadership refocus.

Regulators in the US have imposed fines of over $35 billion this year and there is more fines to come. $7 billion of this was a fine imposed on Citigroup for knowingly selling toxic mortgage-backed securities. Bad business does not pay. Quests do. Geoff Immelt, the CEO of GE is on a quest to improve the world by 1%. IBM is on a quest to create a smarter planet. ITER, a global organisation with the backing of 35 countries, is on a quest to create an energy source that uses an element in seawater called deuterium to power our planet for the next 100,000 years. Deuterium has a natural abundance in the Earth’s oceans, one cubic kilometre of the ocean is vested with more potential fusion energy—hot or cold—than that of all known oil reserves in the world.  The process will produce zero pollutants and not contribute to global warming.

ITER’s funding is $14 billion, politicians argue this cost is too high. What is their quest? The US approved funding of Lockheed Martin’s new F35 fighter jet is $400 billion. Fighter jet versus the quest to power the planet – with an abundant, eco-friendly energy, why is there even a debate?

The dream to go to the moon is one of our greatest quests, it inspired a nation to achieve the unthinkable within a decade. The challenges facing our world are graver than the cold war that inspired the space race. It is also full of countless opportunities – Never before have we stood at such a golden era of change, unprecedented change. The world needs leaders who refocus their mindset (and key stakeholders) on what matters most for communities and society. Embrace a new era of exploring the uncharted – Leaders have been told: “the world is flat!” and “there be dragons here” Be brave sail over the edge. Discover a new world of riches.

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The Self Cycle

July 16, 2014 dawna Change, Leadership, Strategy No Comments

self cycleI like taking notice of the patterns of my thoughts.  It’s not coincidence that my thoughts draw me towards experiences that reflect my thoughts.  Which also means that what I think about , both consciously and subconsciously, shape my experiences.  So why then would I ever entertain thoughts of fear and insecurity knowing that I would be manifesting experiences to reflect my worries? To answer this we need to first explore what shapes our thoughts.  Our thoughts are a  reflection of our beliefs and each and every one of us have numerous false beliefs that can sabotage our mindset.  Our false beliefs usually reveal themselves through our biases and irrational choices.   And our beliefs are mostly shaped by our life stories which in turn develop from the beliefs we form from our previous experiences… which are formed by our thoughts, which are formed by our beliefs.  The cyclical nature of this is what forms our patterns of thought. It’s a challenging cycle to deconstruct and change.  If we focus on awareness of our beliefs and ensuring they are aligned with truth and our core values then we can begin to re-architect our thoughts, including our thoughts about our past experiences.

Patterns of thoughts are reaffirming which then strengthens their hold on us.  This reoccurrence becomes our comfort zone, even if it is a negative pattern, the familiarity of it feels comfortable.  This is the nature of being human.  The challenge is to both embrace being human and to develop the self awareness to grow beyond the limitations of our patterns.  A big part of this is becoming comfortable with the uncomfortable by challenging and mindfully choosing our beliefs.  I would like to propose that there is nothing more important than developing our self awareness.  The fact of the matter is that the only thing in the way of what we want in life is ourselves.

The affects of this are pervasive.  The most challenging pattern I see with every company and leader I work with is the lack of recognition that the biggest thing in their way is themselves.  Companies are made up of humans and it is our collective beliefs, thoughts and experiences that shape our ability to prosper.  Smart leaders recognize this and invest in self awareness for themselves and their associates.  There is no more powerful competitive advantage than self awareness.  I dream of a world where kids are explicitly taught about self awareness both at home and at school.  A world where companies explicitly invest in developing the self awareness of their leaders and associates.  And my dream is more attainable that you might think.  You do not need to be a leader to be a part of making this happen, you just need to begin to invest in your own self awareness and encourage others to do the same, it really is that simple.

“Be the change you want to see in the world” Gandhi

 

 

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Peugeot unveils a new car that runs on air.

Peugeot unveils a new car that runs on air.

We are living during a era of great technological innovation. At TomorrowToday we love technology that has the ability to disrupt not only products but entire industries, even countries. Peugeot Citroën  appears to be doing just that . The car manufacturer has unveiled a new hybrid drivetrain that uses compressed air instead of electricity to provide a secondary source of propulsion. They call this innovation Hybrid Air and it’s a technology they claim will be available in their compact models (Citroën C3 or a Peugeot 208) by 2016 for a price of £16,000. The company claims that the car using a hybrid system emits as little as 69g/km of CO2 i.e. 2.9l / 100km. Peugeot aims to reduce this to 2l/100km by 2020 

 An innovative full-hybrid gasoline solution. An important step towards the 2l/100 km car by 2020 

The car travels on compressed air propelling it to speeds of 43mph where after the petrol or diesel system kicks in. 60-80% of journeys can therefore be completed, in an urban city environment, using just air!

A car that runs on compressed air has the potential to not only disrupt the motor industry, but the massive oil industry too. This is great news for environmentalist, but not for those who invest in the future of fossil fuel. Understanding the impact of this disruption needs to be a boardroom topic for energy companies. TomorrowToday is partnering with London Business School and our facilitators are working on a leadership programme for Kuwait Petroleum Company. We’ve learnt that 80% of the Kuwaiti economy is depedent on the oil industry. What happens when an abundant, cheap and pollution free source of propulsion replaces or reduces significantly the demand for their liquid gold? It’s a question we will put to them at the next session with KPC senior leaders in Spetember. The answers should be interesting.

 

Screen Shot 2014-07-09 at 09.55.00

Cut away view of the hybrid air compression propulsion system

 

Ray Massey became the first UK journalist to test drive the new car in Paris. Here is an excerpt on his driving experience:

Driving feels a little different to a conventional automatic car. It’s nimble. A visual display on the dashboard screen tells you when you are in zero pollution or petrol mode. It chugs happily along in town running only on air. It certainly didn’t run out of puff and giving the accelerator a quick burst — vital on Parisian roads to keep you out of trouble — meant the combined force of the 82bhp petrol engine and the 40bhp air motor kicked in together to put wind in its sails.

Screen Shot 2014-07-09 at 10.37.52

Ray Massey test driving Hybrid Air

You can read his full review of the car at the Daily Mail

 

 

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The Future of theft…okay bye bye now.

The Future of theft…okay bye bye now.

According to the website Stolen Bike Statistics over 500,000 bikes were stolen in the UK over the past five years. This figure is also understated. According to John Moss who compiled these stat  “It is largely accepted that only 1 in 5 bike thefts are reported to the police, therefore the bike thefts figures can be considered 5 times higher than reported.” 

These numbers are about to plummet. Designers at Jawbone and Boeing have developed a solar powered bicycle lock, called Skylock, that works via Bluetooth connectivity to your phone – and the phones of friends you select. One hour of sunshine provides a weeks power and should your bike be noticably jarred Skylock will emmediately send you an alert to your smartphone. The lock uses military grade material giving you enough time to get to your bike before it’s nicked. And, as if that’s not enough should you get doored by a carelss driver or loose it on a rain-slicked road, Skylock will notify friends and family so they can come to your aid. The best thing of all is the price, at around £90 for a lock it compares very favourably with traditional high-end locks!

Two things for the future.

  1. Skylock is benefting from the fast growing shareconmy. Bikes are one of our most under-utilised assets, by allowing friends easy and secure access to your bike you can park it and let approved people share your ride. Skylock allows for instant ride sharing
  2. By linking your bike lock to the Internet of Things, bike theft fast become a thing of the past. We are entering a world were our assets will tell us when dubious people are tinkering with them. They will be able to alert authorities. In the future products like Skylock will make theft a pointless pastime!

Screen Shot 2014-06-23 at 11.22.13

 

 

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Sharing Your Secrets: What Elon Musk’s latest move at Tesla means for you

Sharing Your Secrets: What Elon Musk’s latest move at Tesla means for you

I’ll admit it: I have a huge man-crush on Elon Musk. I like everything this guy does. From his passion for space exploration and madcap vision of a one way trip to Mars, to his recent announcements about building both flying and submerisble cars, Elon is the very eptimony of a swashbuckling hero for the modern age. He’s also a South African – land of my birth too. Yet, in between the media hyped pronouncements there is some serious thought going on about the future shape of the world. Every industry he touches he also changes.

Yesterday, Elon’s electric sports car company, Tesla, announced that it will release all its patents to the world for free. Now anyone can build an electric car like they have.

There is some sanity behind this madness. In order for Tesla to grow now it really does need an entire electric car around it. Elon has seen that instead of protecting the slice of the pie he currently has (which is quite big), it’s going to be better for him to build a bigger pie. I think he’s spot on. Too many businesses spend too much time and effort protecting their piece of a pie, rather than building the pie. Lesson #1 right there.

But the bigger lesson, and the more important issue for everyone else is that Elon and Tesla understand that we’re increasingly living in a world where information is no longer power and everyone will know everything anyway. Many industries are currently built on what I call “knowledge arbitrage”: you and your company know things that other people (very often including your customers) don’t. By 2020, this will not be true. Good examples include investment banking, financial planners, pharmaceuticals and law firms.

What would your industry look like if everyone knew everything that everybody else did? What would your business model look like if it could not be based on having a corner on a set of information no-one else has? How would you add value to your clients if they already know everything you know? You may not need the answer to these questions this year, but you will need them by 2020. So you might as well start now.

Elon Musk is already one step ahead of you.

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Smaller difference and different reasons for buying

Smaller difference and different reasons for buying

One of TomorrowToday’s best associates is Markus Kramer. Until recently, Markus was Global Head of Branding at Aston Martin and before that worked for other luxury brands, including Harley Davidson. He is a true world expert on luxury brands, and the lessons all industries can learn from how luxury brands operate. You can see Markus’ profile here.

One of the sessions Markus delivers is on these lessons from luxury branding. It’s a powerful insight into how any brand can use some of these techniques. In his daily blog today, Seth Godin wrote eloquently on why this is becoming more and more important in a world where differentiation is becoming harder and harder.

All good and thought provoking stuff. If you’d like Markus to come and speak to your team about this, please contact us for more information.

Small differences, looming large

As we get more technologically advanced, more civilized and more refined, differences get smaller.

The Nikon SLR was in a different universe than the Instamatic. Just about anyone could instantly see the differences between pictures taken with these cameras. Taking pictures for online use with the Sony RX1 and the 80% less Canon pocket camera–not so much.

The rough peasant wine available on your table at a local restaurant was a totally different experience than a vintage Burgundy. Thirty years after that vacation, it’s pretty tough (in a blind tasting) to tell the difference between a bottle that costs ten dollars at the local store and one that costs $200…

The speed difference between a Mac IIfx and a Commodore 64 was no contest. One was for professionals, one was a game for kids. Today, there’s no dramatic functional difference for most users between the speed of the cheap Android tablet and the Mac Pro.

But of course, for those that care, the difference matters more than ever. For those that care, the premium available to be paid for a better camera, wine or computer is actually far greater than it ever was before.

As the differences get smaller, the purely functional reasons for premium goods fade away, and instead they are purchased for the reason we’ve always purchased luxury goods: because of how they make us feel, not because of what they actually do. The fur coat is not warmer than the down jacket, it’s merely harder to acquire.

Source: Seth Godin

See Markus’ speaker page at: Markus Kramer.

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Consiglieres, astronauts and rocket science!

May 27, 2014 Dil Sidhu Strategy No Comments
Consiglieres, astronauts and rocket science!

Consiglieres, astronauts and rocket science!

Imagine a scenario where you are purchasing a house. It’s in a great neighbourhood with superb schools, with all the entertainment and service amenities close to hand. As you can imagine it’s in much demand and other interested parties are also expressing a desire for it. The owner of the house suggests the following process to determine who will get to call this property their new home. The steps are as follows:

1. Each interested buyer will submit a sealed ‘bid’ with their best price along with the answers to many questions set by the seller. The questions are about you, your family, your finances, successes and your lifestyle

2. No one is allowed to contact the owner or anyone else living in the property at any time

3. You’re not allowed to visit the property but must rely on the pictures available online and details sent to you by the owner

4. Potential bidders must provide details about themselves and anyone that may ever visit them at the new house including financial and personal information

5. Each bidder will pay a fee to enable them to submit a bid and this is not refundable whether your bid wins or not

6. The seller can decide not to sell the house at any time they like without any explanation

How many of us would decide to bid for the house under these circumstances?

Consider the same scenario but this time we’ll call it a Request for Proposal.

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Primary Blog contributors

The main contributors to this blog are:

Dr Graeme Codrington, co-founder of TomorrowToday, author, speaker and expert on the changing world of work
Dean van Leeuwen, co-founder and CEO of TomorrowToday UK & Europe, speaker, consultant and Chief Intellectual Adventurer
Keith Coats, co-founder of TomorrowToday South Africa, leadership development guru, speaker and author
Professor Nick Barker, director of the Asia Pacific Leadership Program at the East-West Center in Hawaii, leadership development expert
Markus Kramer, marketing director for Aston Martin and brand building expert
Keith Holdt, Visionary Enabler of business growth and change, currently works for LDC as an investment executive.
Dil Sidhu, Chief External Officer, Manchester Business School; Executive education specialist.
Dawna MacLean, expert on fostering meaningful change and creating authentic experiences through transparent and trusted partnerships.

Click here for a full list of contributors


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