This Year's 4 Keys to Growth
'A business absolutely devoted to service will have only one worry about profits,' said Henry Ford. 'They will be embarrassingly large.'
Let's get one thing clear about 2014 right at its outset. This will be the year of service. And I don't mean service in the business-as-usual fashion, as it's been done before.
I mean service on a whole new scale, built on the platform of four major new developments in the way we work, interact and think in commerce and civic life.
In the months ahead, these developments will push business (and civic groups) toward a better level of service - and therefore higher levels of success. This will be the year of, for want of a better term, Big Service.
Big Data Explosion
The continued development of Big Data systems will be a driving edge for business throughout 2014 and beyond.
Today Big Data is something of a buzzword in business (and some political) circles. The technology behind it is, after all, quite impressive.
Today's mega-computers are able to crunch, within reasonable amounts of time, data that can be measured in exabytes. Each exabyte represents 1018 bytes, or keystrokes. It is equivalent to 1 billion gigabytes.
Big Data, as the name suggests, deals with data sets the complexity and size of which put them way beyond the management capacity of normal database tools.
The plethora of internet-enabled mobile digital devices and machine sensors in today's world makes it possible for corporations, political groups and civic authorities to track everything from consumer habits and business trends to traffic conditions and developments in crime and the spread of disease.
In the world of business, Big Data is prized by marketers, manufacturers and retailers. It provides the foundation for predictive analysis, allowing companies to get ahead of the curve when it comes to changing consumer markets.
It also provides for enhanced cyber security analysis. In-house emails, social media accounts and other forms of digital communication can be checked for violations of important legal codes.
(Companies will walk a delicate line here between privacy invasion. It's one that they will ignore at their peril, especially in an age of individual, digital empowerment.)
By the end of 2014, in some regions, the demand for Big Data services will exceed the number of jobs actually filled in that sector. As more companies seek to employ a Chief Data Officer (CDO), this will be a growing area of interest for MBA and other under-graduate students.
However, once the initial buzz surrounding Big Data begins to subside, business leaders will recognise that it's greatest value lies in enhancing the customer experience.
Big Data will only serve a purpose when it meets big customer needs and answers big questions.
Prices are sure to come down as volume, demand and expertise increase, but for the moment Big Data, with its high-end computers and expert analysts, doesn't come cheap.
Until now, only large corporations have deep enough pockets to use it. Over the next two or three years, however, we will see a growing number of medium-sized companies buying into these services.
Some will do so within networks made up of other similarly sized and resourced companies.
Meanwhile, we will see much time and money invested in the development of in-house, off-the-shelf applications that will make collection and analysis more accessible.
However, while costs for data collection will come down over time, ever larger budgets will be assigned for data security, recognising its value as a global currency.
Meanwhile, regulation will increase to protect the privacy of individuals. This will add to the expense of compliance. Consumers will increasingly demand the right to retrieve the data companies collect on or from them.
Customers and clients will also demand opt-out provisions when it comes to the types of data we collect from them. Any failure to cooperate will destroy trust and breed suspicion.
The major challenge for data-reliant companies going forward will be the ability to map the data they collect in meaningful and practically helpful ways.
While analytics will become more of an exact science, relying on fewer gut feelings, there will still be a place for human intuition in the predictive side of analysis.
There is an art involved with adding value to data. Arguably, this is the part of Big Data processes that may be more suited to human beings.
Analysts will become ever more specialised in the types of data they deal with, as business and government alike strive for a greater ability to read the runes of contemporary culture.
Some, for example, may concentrate on responding to shifts revealed in social media feeds. Others will map data collected in employee surveys, to sharpen practices in recruitment and retaining top talent.
Overall, Big Data offers huge opportunities. It also poses important questions; in particular, how we can lose our fixation with the size of the numbers and remember that statistics are only abstractions for human beings.
The New Ethics
2014 will see a continued search for a new ethic within the worlds of business, economics and politics.
In some cases this will be motivated by altruism, but in most it will be driven by the need to address a trust deficit in the minds of consumers.
In October 2011, a UK study of 2500 workers in private and public firms found that less that 30 percent of CEOs in large firms were seen to be placing ethics at the heart of their business decisions.
Twenty-five percent of public sector employees and 10 percent of staff in private firms said that their organisations operated less ethically than they had just three years before.
Generally speaking, business still faces a huge challenge in learning to think of ethics as a central part of its discussion about economics.
Potential trading partners and clients are looking for this as they search for strategic alliances that can prove reliable in the long-term.
There is no long-term trade without trust; it is a commodity which must be earned but which is so quickly and easily depleted through the convenient cutting of corners.
A restoration of ethics and trust will be central to economic renewal and maintaining a competitive edge, especially in an age where people only have to consult their tablet or phone to discover what competitors have to offer.
Confidence, not paper or digital money, is the key currency in any capitalist system. This is perhaps best seen in the rapidly emerging world of Web 3.0 online commerce.
Trust is the currency that drives eBay-style retail, micro-lending services such as Grameen Bank. It also underwrites crowd-sourcing, which in some quarters is replacing traditional venture capitalism as a way of raising large sums for entrepreneurial ventures.
Crowd-sourcing is also being applied to solve scientific problems and to the building of social enterprise campaigns.
A Trust Revolution lies at the core of almost all internet trading, which forms the growth edge of retail and trade. Yet public confidence is a fluid thing. It is subject to all the vagaries of human emotion and subjectivity. Trust is viral, as is the lack of it.
In 2010-2011, at the height for the recession, British society went through a house-cleaning operation the like of which it had not seen for perhaps a generation.
In the wake of various scandals and inquiries, almost every major institution, from Parliament, to the courts, the police service, the news media and the business sector – particularly the banks – was held up to unprecedented scrutiny.
British people experienced a maelstrom of public unease and a growing distrust of institutions which had traditionally provided the foundations for a stable social order.
Even now, public trust is not yet fully restored. Once lost, trust is hard to regain.
A culture of trust in leadership encourages positive risk-taking and the investment of people’s money and talent. A culture of suspicion is anathema to innovation and therefore stifles economic progress.
Interestingly, during the recession, a study by one of Britain's leading healthcare providers found that 14 million people were looking to change one or other of their major service providers.
Their major reason for doing so, they said, was that they found no mutuality in their relationship with the company concerned. In times of rapid change people need to feel they have more than a manager at the bank - they need a friend.
If companies are to establish trust, they must demonstrate trustworthiness. This is why ethics must become a core part of decision-making; as much as economics, market share and the usual metrics of everyday business.
At its core, ethics as a discipline asks just two questions: What is the right thing to do? and How do I apply that in a given situation?
In the next two to three years, more business boards will look to bring in professional ethicists, to help win public trust through responsible and civic-minded practice.
More R&D and technology companies will hire ethics graduates, to help weigh up the proper uses of new techniques and tools.
Companies will work harder - and will be seen to work harder - on consumer empowerment, particularly when it comes to data collection, retention and analysis.
The ethics of data usage will become a growing industry in its own right over the next few years.
Cities are natural hotbeds for innovation. New ideas are born out of connections between old ideas.
If ideas are going to connect, people must connect, and they tend to do that much more readily and more often in cities than in spread-out rural communities.
It has been estimated that 100 cities now contribute to 30 percent of the globe's economic output and perhaps as much as 90 percent of its innovation.
Increasingly, local city governments are taking on much greater responsibility for and authority over the provision of local services, and doing so with less money in the bank.
In order to promote the common good at lower cost, they're experimenting with social innovation.
Individual businesses, business networks and local enterprise partnerships are working with civic authorities to find solutions for major local needs.
Together, they're creating cross-sector innovation, providing better local employment and training opportunities and improving public health, transport and social facilities.
Bloomberg Philanthropies have brought the Mayors Challenge approach to Europe. They've launched a competition inviting European cities to come up with creative solutions to major urban challenges, to improve city life.
Cities of Service UK is another new initiative, which supports cities as they develop fresh ways of mobilising volunteers to engage with local problems and challenges.
At present, the EU is boosting its funding assistance for cities which are trying to embed this type of social innovation in their work.
2014 will see a growth in the number of business networks getting involved in social innovation programmes, working alongside civic governments for the common good.
This will take companies beyond their normal CSR roles, into an engagement at a much higher and more strategic, decision-making level with solving local problems.
This will be seen not just as an exercise in humanitarian values, but as a way of practically promoting the wellbeing of the company, as part of a healthy, thriving and innovative community.
The growing pace of social innovation projects will complement the growth in social enterprise projects. Universities and other training facilities will do more to equip social entrepreneurs.
Wise business leaders will look to align themselves with these highly motivated, focused individuals to create answers to previously intractable civic or global problems.
As the digital revolution continues its inexorable march forward, companies will find new ways to explore people-empowerment through personal gadgets.
Alternative energy advocates have long pushed for more individual empowerment when it comes to lifting levels of renewable energy usage.
2014 marks the start of the UN’s Decade of Sustainable Energy for All. The goal for the UK is to see renewable energy producing 15 percent of our energy demand by 2020.
Campaigners and government departments want to see renewables becoming a backyard industry. They aim to use technology to empower individuals and small groups of people for the cause.
Projects like Solar Schools are helping UK schools to finance their own energy sources. Under this scheme, St. Bede’s High School in Lytham has become one of the UK’s first carbon neutral schools with the help of renewables.
Meanwhile, the medical service sector is attempting to lift levels of empowerment. Some practitioners are exploring the possibility of collaborative consultations between doctors and patients.
In this scenario, patients might arrive with data on their smartphones. The data has come from personal Google explorations of such things as symptoms and disease management options.
The consultation becomes a planning session between medico and patient. The doctor's expert knowledge and experience are matched with insights and data from the patient.
A care plan is then drawn up, featuring both the clinical side and the personal management side.
(In the near future, the same process will be expanded to include remote readings taken from biometric devices. These may be attached to the patient's skin or injected as nanobots into the bloodstream.)
The same type of thinking will be applied within the business environment. More companies will experiment with ways to empower clients and customers, so that purchasing becomes a collaborative effort rather than a pitch-and-respond exercise.
Companies will set out to facilitate a greater level of customer understanding about how processes and services work - and how they can be best tuned to meet needs.
In the age of almost ubiquitous mobile internet connection, many customers come to the point of purchase with an established base of online research. Many customers are well versed in the science or technology behind a specific product or service and have very specific questions.
Instead of fobbing them off with a one-size-fits-all approach, companies will seek engage the customer's interest. They will take time to engage the client in an ongoing, trust-building conversation.
Better still, they will develop online apps or sites that will do this for them.
Good companies have long taken this approach with major, high volume customers. In 2014 and beyond, companies will look for ways to do this with smaller clients, too.
The age of digital isolation has given rise to the need for iSolutions. This is a term I coined a couple of years ago. It describes a process of engaging with the needs of individuals or small groups of people through unfolding conversations over time.
iSolutions represent a break from the traditional mass marketing approach, which chooses a demographic and then pitches at that group en masse.
Social media have led to a world in which customers want to feel they're actively involved in a tailor-made conversation, not passively listening to an off-the-rack monologue.
This more conversational approach, driven by social media, can also be seen in the way people look for and are recruited for jobs.
People have always used their friendship networks to find work, but digital connection is now taking this to a new level.
Specialised sites have sprung up which use social action to help people locate work and, just as importantly, hook them up with online collaborators who can sharpen their pitch.
Backr, for example, recognises that perhaps 80 percent of jobs aren't advertised in the first place. It allows job seekers to link with people who will can refine their goals and widen their contact networks.
The Discoverables site provides a platform through which young people can demonstrate their skills to employers, through involvement in practical projects.
Networking for Work trains job seekers in how to use social media to search for employment, matching them with peers who can support them in the process.
These and other jobs-focused social sites reflect a growing sense that finding and maintaining a job should be about having a conversation, rather than merely enduring a job interview.
All of this has huge implications for companies that want to expand their market share by boosting their levels and quality of service.
In short, such companies will use social media - and other technologies yet to emerge - to launch conversations rather than pitches.
The goal will be to produce a collaborative effort. The company (expert) and the customer (interested, engaged amateur) will work together to devise a plan for meeting the customer's needs, using the company's best products and practices.
In 2014, one axiom will prove more vital to success than any other: a company only has value to the degree that it adds value to people's lives.
As Henry Ford recognised, the bottom line is only the bottom line. It's people that count.
Click here to hear Mal Fletcher radio interview on this subject.