There is something special about entering a new decade. It is an excellent time for making predictions.
What will the world look like in 2030? Will we finally see the breakthrough of self-driving cars? How much closer will we get to the singularity? How close will we get to Mars?
I like to think about and predict what will happen in business. Will the Big Tech companies still be around in 2030? Which streaming service will succeed? What will be the best investments this decade?
Let’s focus on business.
It is tough to foresee the future, particularly in this time and age. Established brands disappear quickly. Wall Street has become a casino. Speculative investments abound. Investors are confused. Herd behavior and the fear of missing out drive most investment decisions.
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When a friend of yours uploads your new beach-body photo on Facebook and the platform suggests to tag your face, it is…
Still, I dare to make one prediction. We will witness the breakthrough of decentralized business models and ecosystems.
Only companies that can make a successful transformation will remain relevant and survive. Only companies that understand the new digital world are worth investing in over the next years.
The Building Blocks of a Decentralized Future
I could now come up with a list of companies that I invest in, but it makes more sense to start with my checklist of things I am looking for when I make an investment. The checklist is not only based on investments I have made, but also on my research work at a university, my experience at a multinational, and being a business owner.
So, how can we recognize the companies that get it?
Of course, emerging technologies, such as artificial intelligence, 5G, the Internet of Things, and blockchain, must form an essential part of the business strategy of every company these days.
Surprisingly, however, most companies tend to look at these emerging technologies in isolation.
This is wrong, possibly even irresponsible. Emerging technologies are accelerating each other, amplifying each other. This trend is accompanied by faster adoption rates, shorter innovation cycles, and disappearing industry boundaries.
So, look for companies that understand the importance of integrating multiple technologies, modularity, and interfacing.
Also, companies must look beyond the technologies and their applications. Something else is going on. It’s more than a social movement. We are witnessing the reinvention of doing business. And here I don’t just refer to the importance of digital presence (which now matters so much more than physical location) or the transformation from a product-oriented (and supply chain) economy to a platform business model.
No, there is so much more going on.
The “why,” the “what” and the “how” of business (and many other things in life) have started to change and will continue to change rapidly. We are experiencing the breakthrough of the decentralized business model.
Think about it. In the last decade, five main principles of the decentralized business model of the future already started to crystallize. It has become very clear to me that sustainable investments should be made in companies that do the following:
The keyword of the 2020s will be decentralization.
The decentralization trend cannot be stopped. We already see it everywhere in society. The many protests we witnessed all over the world in 2019 speak for themselves. People are longing for flatter organizations. They want to be heard.
We can see the same development in business. The years in which active centralized and corporate management knows, shows, and leads are over. Also, managers who solely focus on short-term profit-making and a higher stock price will be history. It will be the end of the quarterly-managed corporation.
Flatter models are replacing centralized management. In these new models, management provides the necessary context in a mostly chaotic ecosystem. Rewarding the best idea wins culture helps bring some structure in this chaos. Let’s call it a powershift from top management to the customer, and eventually the consumer.
(2) Be Inclusive
We can observe a new kind of worker activism.
Workers aren’t the traditional followers within a business organization anymore. They want to be included and recognized. They want to be part of the decision-making process.
They must be able to identify themselves with the company. Learning opportunities and work satisfaction have become determinant factors in a company’s culture. And it is this culture that determines whether a company can eventually attract and retain talent.
The appointment of chief culture officers and equivalent executives could be the first sign of a company taking the transformation seriously (but beware of window-dressing).
Investors tend to put a premium on transparent companies (so they claim).
But transparency alone isn’t sufficient anymore. In the new decade, companies must engage with stakeholders. They must communicate and start a dialogue.
Social media will be more and more viewed as a business tool. Being open and honest (also in turbulent times) will lead to respect and loyalty.
And here I don’t talk about brand loyalty. Brand loyalty is being replaced with “identity loyalty” (a feeling of belonging to a certain brand or company).
The companies that use technology to facilitate co-creation will likely create more and sustainable value.
Think co-creation platforms, but also the use of algorithms to make decisions about future products and services.
The reason for embracing a co-creation strategy is simple and straightforward. Customers want to be involved in the design and creation of their products and services of the future.
The purpose of a company has become an integral part of the products and services it offers.
The boundaries between the inside and outside of the company are disappearing. They are becoming more and more blurred.
Also, the winners of the future know how important it is to “de-silo” the organization (meaning get rid of clearly separated departments). Only then will they be able to introduce an authentic and personalized experience to their customers and consumers.
Personalization and authenticity are becoming essential factors in the “purchase decisions” of customers. And the products and services shouldn’t only offer purpose/pride (a sense of belonging). They should also protect the users of the products/services and value what matters to them.
Looking at the five principles make the conversation kind of ironic.
Companies that understand how to use emerging technologies to transform themselves from soulless and profit-oriented corporations to people-driven organizations will become the winners in the coming decade.