Weekly Digest #7 [ Education, Branding, Startups, Sustainability, Blockchain & Automation]
A snapshot of article summaries that we enjoyed reading ( Dec 17 — Dec 22)
“As all these trends happen, the winners will be those who are able to participate fully in innovation-driven ecosystems by providing new ideas, business models, products and services, rather than those who can offer only low-skilled labour or ordinary capital.”
— Klaus Schwab (The Fourth Industrial Revolution)
Finnish education system: Many private and public schools run on the same antiquated systems and schedules that were conducive for an agrarian society. Education delivery needs to change. Finland’s education system has outranked the United States and is gaining momentum on Eastern Asian countries. Finland does not have standardized testing of students. All children are graded on an individual basis through a grading system set by the teacher. Tracking is done by the education ministry through random sampling of groups across schools. No accountability for teachers. Teaching programs are extremely rigorous and selective across the entire country. All teachers are required to have a Masters degree. If a teacher is not performing well, it is the individual principal’s responsibility to do something about it. The Finnish believe in an environment of cooperation and not competition. There are no lists of top performing schools or teachers and they don’t worry about artificial and arbitrary merit-based systems following the motto “Real winners don’t compete”. Finnish education focuses on prioritizing basics like individual guidance, free meals to all students, psychological counseling, access to healthcare. Education is viewed as an instrument to balance out social inequality. Finnish children start school at an older age when they are 7 yrs old with a further 9 yrs of compulsory education. Children are given free reign in their developing years. Research has shown that early start times are detrimental to students’ well being, health, and maturation. Students in Finland also start school late at around 9–9:30 am and end by 2–2:45 pm with long class hours and even longer breaks in between to facilitate an environment of holistic learning. Finland provides professional options past a traditional college degree. There is the upper secondary school that determines acceptance into a university and there is vocational education which trains for various careers. Both are equally professional and fulfilling as a career. Finnish students receive consistent instructions from the same teachers for a long period of time. Different needs and learning styles are incorporated in teaching on an individual basis as both develop trust and understanding for each other with time. A more relaxed atmosphere in Finland with less stress, less unnecessary regimentation, more caring and fewer classes where students have time to socialize, relax and operate at the best of their abilities. Less homework and more outside work. Finnish students complete everything in school without added pressures of excelling in a subject. The core task is to learn and grow as a human being.
Building a consumer brand: Brand creates a powerful moat for your organization and improves your ability to attract customers in the market. As many aspects of business become commoditized, brand proves to be a key differentiator for emerging consumer startups. A brand is not a company’s reputation but it’s a company’s character which is defined by how one acts when no one is watching. As information is ubiquitous and brands are engaging directly with customers, character and reputation are converging however they are not the same. This is why large consumer brands fail to attract the attention of the younger generation. In order to build a good brand, one method is staying consistent. Different teams creating mission statements, websites and packaging at different times lead to inconsistent messaging. A strong brand isn’t a good brand, this is just hygiene factor. A beautiful and unique visual identity is the fastest way of communicating brand value. Trends are an indicator of what consumers consider beautiful and it’s important for visuals to stand out from the crowd. Do hard things well and challenge yourself to stand out in today’s competitive market. Tackling challenges build credibility to the ethos of the brand. The best way to turn the character into reputation is to build a community and encourage customers to talk to each other. Activating social media, strong customer service team, creating a referral incentive program and hosting localized events are few ways to nurture a community. Having a purpose and a mission beyond your own business can serve as a great rallying point. A brand’s mission unifies all stakeholders from investors to employees to customers and press that solidifies the brand. Brand building is not an overnight exercise. Fine tuning the visual design, fostering the community, and proving your commitment to the mission takes years. As brand equity is increasingly valuable, it is worth the effort to invest time and get it right. “A brand for a company is like a reputation for a person. You earn reputation by doing hard things well” — Jeff Bezos
Successful Startup Habits: Startups that grow into great companies do two things: they nail the basics and they cultivate the right habits. Basics are ethics, fundraising, customer focus, growth, EQ, etc. The right habits are similar operating principles which make them revolutionary. Have flexible curiosity. Founders must have flexible passion — they can’t be tied down to a single, immovable set of tactics. Learning, adapting and acquiring new diverse interests is a key mental leap for the founder. Make it a network — Single-player products increase their value to the user at a linear rate. Multiplayer, networked products can become more valuable at an exponential rate. Finding ways to move from single player to multiplayer is vital for growth. Tell a compelling story in creative ways, and adapting that story to the audience and the moment. Your story drives your motivation, speed, and excellence. A story is an account of what you’re doing and not an exact reporting of the chronology of events. The 11 of 13 rule — there are 13 ways of doing something, 11 of them will work, pick one and do it. Avoid overanalyzing and execute decisively. Go full speed because rapid products beat competition leading to rapid results which generate interest and increase valuation. Start with language. Language is at the core of your company, even before the product. The most high-impact companies think about language first and features, second. You can build a whole company on the power of a phrase. Test and iterate continuously as a startup is a learning machine. In order to learn, you have to love your data. No data, no learning. Early stage CEOs should obsess about metrics. You must be committed to measuring and analyzing everything. Look for significant changes in the metrics. Don’t settle for incremental changes. Always be looking for the 10,000% changes that can take your business on a breakthrough growth trajectory. Adapting these habits can help in building a transformational organization.
Sustainable Business Model: Business and Sustainability must go hand in hand else the end results can have serious environmental and social disasters. Business leaders must recognize that in global value chains, there is no way to outsource environmental/social responsibility. On the contrary, MNCs can and must use their extended supply chains to drive change and improve the quality of life in the markets where they operate. There is a need for cooperative effort on a global scale to change our current trajectory. And, given that many of the toughest sustainability challenges the world faces are linked to how it does business, the only prudent way forward is to change how business is done. United Nations Sustainable Development Goals (SDGs), adopted in September 2015 by 193 countries, are designed to achieve a “more sustainable future for all” by 2030, which, by extension, will enable a better business environment. The Business and Sustainable Development Commission has estimated that meeting the SDGs could add some $12 trillion and 380 million jobs to the global economy by the end of the next decade. With so much to gain — and to lose from inaction — the private sector is beginning to focus on the connection between profits and sustainability. Global finance is inching toward sustainability as many environmental, social, and governance assets under management are estimated to be as high as $22 trillion dollars; $32 trillion is pegged to carbon pricing, and even the market for “green bonds” is growing exponentially. And yet, to sustain this progress, businesses must recognize that even in a global value chain, it is impossible to outsource corporate responsibility. On the contrary, MNCs must use their market power to drive social change. Companies like Unilever which touch 2.5 Billion lives each day through their products use such a scale for precisely this purpose. The Unilever Sustainable Living Plan is a blueprint to bolster their social, environmental, and economic performance. This approach allows them to be more strategic in identifying the challenges & opportunities that the business faces. By using their resources and brands, they have also addressed key development challenges like poor nutrition, sanitation, climate change, human rights, skills training, and workplace equality. All of this with nearly a 300% return over ten years and a 19% return on equity, demonstrating that it is possible to employ a development-focused agenda that delivers for shareholders and stakeholders. The author believes that the key to addressing the world’s social and environmental challenges is using the power of markets and building coalitions to improve effectiveness. The future of the global economy is no longer dependent on whether we act, but on how long we take to do so. The world we want for our children will arrive only when we choose action over indifference, courage over comfort, and solidarity over division.
Industries, Automation & Disruption: Emerging digital technologies have increased productivity and developed new ways to serve customers. Airbnb, Uber, and LinkedIn have changed the lodging, taxi and recruitment industry. Tech titans like Amazon and Google are planning to disrupt healthcare and grocery. It is often difficult to foresee which industry is susceptible to disruption and which is safe. After observing common patterns of business model innovation, the authors have arrived at three early warning signals that indicate that the industry is susceptible to disruption. Sign 1: The industry is heavily regulated. Heavily regulated industries have a long tradition of protecting companies from new entrants. However, the new technologies are not well regulated. Industries with high regulation suffer from complacency leading to customer neglect. None of the regulations applied to Airbnb, Uber, telemedicine and even autonomous cars because of the nature of technology. As the regulators catch up with the disruptors, they may have already taken your market share and customers. Sign 2: Customers have to work at managing their costs. Handoffs in the supply chain often increase cost without adding any value and contribute to poor customer experience. One or more points in the value chain and complicated cost models increases disruption risk. Selling products directly to consumers through the Internet as a distribution medium is an example. If the product requires a great deal of work for the customers to manage their cost through haggling, the industry could be at risk. Sign 3: Customer experience is not positive or even neutral. It’s a spillover of the first two signs when the industry is not optimized for modern customer expectations and where customers don’t have lot of choices. Air travel is an industry at risk because of high regulations and poor customer experience. The author believes that driverless cars could bite into the air travel market as people would prefer sleeping in their private vehicle as opposed to the gauntlet of air travel. Real estate is another industry at risk as the process of buying a house is complicated, lengthy and has many steps in between which add little value to the consumer. Automation and robo advisors can thrive in the mortgage and home buying business. Healthcare is an industry that is also ripe for disruption as the cost of healthcare is unpredictable and finding a good healthcare provider is difficult. The nuances of what insurance companies cover are inscrutable and cost of medical procedures varies widely in hospitals. Ownership of customer experience, clarity in costs, simple and consistency helps in gaining attention. Failure due to complacency can lead to innovation exploiting that flaw causing disruption in the industry.
Trends in Blockchain: The recent years have seen a few new tech terms that are revolutionizing the industry. Post the 2008 financial crisis, Bitcoin came into existence and gained a lot of prominence. While mainstream viability of cryptocurrency is still speculative, Blockchain has emerged to be one of the prime technologies and is expected to do big things — solve problems and open a plethora of opportunities across industries and is gaining in popularity. Looking at 2018, here are some key observations on how Blockchain fared and what is expected to change for organizations. The first trend is of Traditional Companies Looking into blockchain technology. Organizations are now building capabilities that are needed to push blockchain into mainstream adoption. Industries that are seeing increased adoption of Blockchain are Banking, Financial services, insurance, supply chain management, healthcare, e-commerce, gaming, and academics. Cost reduction and process simplification are strategic values that blockchain brings to the table. We’ve seen the adoption of blockchain in payments, remittances, provenance, and traceability in the early days which is consistent with the expected returns. The second trend is of Real-World Use Cases of Blockchain Technology Beyond Financial Transactions — we are now seeing some proof of concepts being rolled out in other industries. To name a few topline benefits, Blockchain helps prevents perjury in supply chain management as it allows the record of transactions to be maintained in the form of an immutable ledger. From Healthcare, seeing a rising traction of blockchain providing doctors with relevant patient information by bringing the entire information online in a much secured manner to Academic Institutes like SP Jain Global providing certificates which are live on the Ethereum blockchain allowing prospective employers and other parties to verify the authenticity of a job seeker’s educational qualifications without having to contact the business school. Blockchain enables secured transactions becoming a great alternative in areas of identity management. The third trend is for Innovative Startups. Disrupting the Industry with Blockchain Tech — The emerging disruptors, have business models inspired by blockchain. They are experimenting and building without the constraints of legacy business processes. They focus energy on what is possible and then deal with any challenges as they arise. The fourth trend is of Government Bodies Starting to Implement Blockchain-Every technological innovation has to be backed by the Government in some form or another and Blockchain is no exception! A number of initiatives have been taken across jurisdictions both at federal and state/provincial levels to implement blockchain to improvise on services and transform inter-governmental and citizen transactions. Areas like titles transfer and identification have gained maximum traction for blockchain in the Government sector. These are all exciting trends can take the blockchain revolution to the next stage.
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The link to the original articles is hyperlinked in the title of each summary.
