The Five Essential Discussions the World’s Most Powerful CEOs Are Having in 2019
Here’s my take on key themes from Davos 2019.
“Digital is the main reason just over half of the companies on the fortune 500 have disappeared since the year 2000”
-Pierre Nanterme, Late Chairman and CEO of Accenture
#Buidl
So much of Davos this year was about building the global infrastructure necessary to support a changing world roiling from massive demographic changes and burgeoning technologies (potentially) threatening the future of work. The Fourth Industrial Revolution and its impact on the human race was top of mind for attendees. How do we build systems to include the growing middle class? How do we build technologies that support, not just replace, human beings? And, how do we build financial and educational systems that allow everyone to contribute? During my time at Davos, I plugged in with some of the world’s leading researchers and private players. Here are my takeaways:
1. Inclusion is necessary to stay competitive
The world is getting smaller but it’s not quite “Cheers,” where everybody knows your name… yet. While Davos has been criticized recently for its extremely privileged guest list, this year “inclusion” was a key theme for discussion. Organizations are grappling with how they can continue to amass large amounts of consumers and their data. The current (increasingly defunct) model allows organizations to own consumer data and access while consumers are left with little in exchange. The model of the future will require better incentive alignment with consumers to amass the information companies need to succeed. Real estate is a great example of this evolving model of consumer inclusion. As discussed on our panel, imagine a world where tenants can own a small portion of the home they rent. Suddenly the consumer has a greater ability to access new financial products and build their wealth incrementally, and incentives are better aligned for all real estate stakeholders from managers to developers to renters.
2. Smartphones create new opportunities for financial inclusion
Growing emerging markets have yielded huge pools of smartphone usage and an opportunity to increase access to “new” populations for organizations. Organizations, as a result, are keen to build financial systems to support these entry points. But mere desire is not enough: new platforms need to be democratic to build inclusion. This means applications should be low cost or even free; financial systems should not penalize new entrants into credit; the benefits and contents of data should be equitable for all participants. Banks discussed how to shift their business models to bring down costs and introduce more technology to bring access to capital to the unbanked.
3. We are operating in the world of ‘data haves’ and ‘data have-nots’
Data privacy is no longer going to be an afterthought — it will be a requirement to exist. In order to be successful, you must be a good steward of the data you are collecting and using to make good decisions. Companies like Facebook have focused on monetizing data for short term profits and have broken the trust of their users- a cautionary case for the importance of proper data stewardship.
4. AI is critical to process workflows and to build the next generation of unicorns
This will disrupt entities from within and change their business models and their workforce. Integrating AI will require a new focus and may ultimately require hiring a new CEO or a “Chief Ethics Officer” according to Sylvain Duranton, CEO of BCG Gamma. It’s either ‘AI or die’ vs. ‘death by AI.’ Naturally, as AI replaces human labor, it raises the question: what will humans do? The answer to this is an evolving education system to support existing employees reskill, as well as building the right educational models for the next generation. Naturally, technology can assist with the perpetual reskilling and upscaling of employees and the future workforce.
5. Decentralization is necessary for best execution
Ironically, Davos is a meeting of leaders with centralized power and yet “decentralization” was a hot topic during the conference. Organizational leaders shared that the best decision making often comes from the edges and throughout the layers of an organization, from people who aren’t always empowered to execute. Decentralized systems solve for this and the role of governments was considered as a potential case study. New governance models that incorporate the voice of the individual are increasingly becoming popular. These models can potentially help governments like that of China which is struggle to ensure local compliance with national policy.
So what?
Davos is often criticized for a group of people that are thought to be thinking in silos. At first glance, it certainly seems true. However, after a closer look, it becomes clear that the problems being discussed are ones that we are facing every day. Don’t take my word for it - check out a panel that took place in ConsenSys’ Ethereal Lounge with Richard Bloxam (CEO of Capital Markets — JLL), Jeff Schumacher (CEO and Founder — BCG Digital Ventures), and Duncan Mavin (Managing Editor — Dow Jones Media Group) and see for yourself. Whether the group in the mountains has the right answers, who knows?
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