If you want to survive the future, you must know how to navigate it properly. But how can your company create sustainable business models? And how will you stay on top of constant changes?
3,000 people joined the Oslo Business Forum leadership conference, The Future of Technology and Sustainability.
“The digital future means that many of today's business models are going to be torn apart. Products will become obsolete, millions of jobs worldwide will disappear. But new exciting, and perhaps unimaginable, business opportunities will arise,” said the conference host, Lillian Gjerulf Kretz.
Technology, sustainability, new business models, the future...The line of buzz words never ends. But what opportunities and challenges are we going to face in the future? And how do we prepare?
Here are some of the highlights from the main stage of the conference:
"We are going to hear a lot about digitization, artificial intelligence and the cloud. But I will start by putting it in a broader perspective. No matter how good your company is, no matter how skilled you are, no matter how brilliant your employees are, it doesn't matter if the global trading environment is shit."
CNN journalist and presenter, Richard Quest, opened the conference with his presentation on the global trading trends.
"There are difficulties you cannot control, but you must be able to adapt. Let's go back to 2008, the year that is the root of so many of the problems we have today. 2008 was a disaster and we almost ended up in the financial abyss."
Have you been hacked yet? No? Then you will be. It's only a matter of time.
Quest spoke about Brexit, fake news, the oil prices, trade sanctions, the US president Donald Trump and the refugee crisis before moving on to the topic of cyber security.
“We have had some serious cyber attacks. Only a few weeks ago it was British Airways. All credit card information and passenger information was breached. We don't know much about this attack. What I know is, among other things, that my email was previously hacked, my bank has told me that my accounts have been hacked,” said Quest.
When talking about the digital economy today, it's usually about the cloud, artificial intelligence and the future.
“My advice is to keep your feet on the ground,” Quest said.
It's always been difficult
“Let's take a look at what life can look like in the future. We’re already in that future. What we experienced in the beginning of 2008, we could never imagine would be as bad as it ended up being. In 2008, we thought we had a bright future ahead of us, and we learned that it was not necessarily true.”
Quest highlighted geopolitical risks for war, commercial property and oil prices.
“I would like to end with a positive comment. I can hear some of you say, «But Quest, it's never been easy….» And you're right. Now you are armed with the knowledge and you are ready to meet the rest of the day - because the rest of the day is the future.”
Unlike the previous three revolutions, this one is completely different: «The fourth industrial revolution». During the past three revolutions, the development has taken on huge step every single time. But now, we are taking many huge steps at the same time in a world filled with technology.
New technological advances such as the cloud, the Internet of Things, robotics, drones, blockade, 3D printing, autonomous vehicles, face recognition and artificial intelligence.
“There is a lot for us to keep up with,” said Oxford lecturer Dr. Chris Kutarna.
The need to understand realities and possibilities
The main message Kutarna spoke about was that if we really want to understand the driving forces behind what is happening globally today, we have to understand two things at once: the realities and possibilities of the present.
By looking at what is real today, we see the unstoppable forces that transform the economy and society. It can be forces like automation and the possibilities of replacing people with machines and algorithms.
The incentives that each company faces when it comes to automating what they can, across the entire company, helps to eliminate well-paid middle-class jobs. These are jobs that have made it possible to enjoy a middle-class life. Yet many of us oppose this trend, but the reality is - to a large extent - that this has already happened.
The answer? Leadership.
“We already see the evidence of humanity's unquenchable fire. We see evidence of our willingness to go beyond what already exists, and perhaps risk everything we have, to achieve something new, intangible, increased justice, goodness, equity, or wealth.”
According to Kutarna, today we can see this fire in the struggles between private ownership and public regulations of technology platforms.
The one BIG question of our time is simple:
What happens when the unstoppable forces meet the unquenchable fire? The answer is leadership. With leadership, we have the courage to stand in the middle of this collision and try to find out what to take care of and what to reinvent. What must be accelerated and what should be destroyed?
What does three buckets, a triangle and a three-headed beast have to do with the future? Silvija Seres shares her advice on how to meet the future in the best possible way.
“Without knowledge of technology, you cannot have an opinion on which way the future takes,” says the investor and technology expert, Silvija Seres.
Become a three-headed beast
“The three-headed beast is what you have to become in order to be best equipped for the future. You need to know a little about technology, have a vision for where to take the company, the organization and yourself. Finally, you must be brave and have an optimistic outlook on the future.”
Fill three buckets
“The first bucket is about how to use the new technologies to create efficiency. The next is about how to create new business models and the last is about understanding your social responsibility in the new world."
Create a triangle
“The triangle combines technology, social science and business in a much closer way than before. The problem with social scientists, politicians and philosophers is that they cannot do enough technology, but they still interpret the direction and speed. You need to understand how technology works to understand how it will evolve.”
Have you heard the term HIPPO? MIT professor Andrew McAfee explains the acronym as Highest Paid Person's Opinion. But what does it really mean?
“Most decisions in today’s companies are being made by HIPPOs. You might need to make a decision, make a forecast or predict something. You have to make a difficult decision. A HIPPO became a HIPPO because they went to fancy schools, have a nice job title, and they made one right decision seven years ago - and they never let you forget that since.”
McAfee explained that what's interesting is that a team would like to have a bunch of analysts who present their findings to a HIPPO.
“The HIPPO says afterwards: «Thank you, analysts. I'm going to take note of the numbers and put them into my HIPPO process. My HIPPO process is based on expertise, experience, judgment, intuition and gut feeling. That's how we're going to make the decision». And the team says: «Thank you very much HIPPO. We look forward to seeing what your wise decision is going to be».”
This is the HIPPO's enemy
McAfee told about the enemy of a HIPPO - what he wants to call a nerd.
“A nerd is someone who totally reverses a HIPPO approach to make an important decision, prediction, judgment or whatever it may be. What a nerd does is that the person begins with an intention, a clue, and a guess about what is happening. This is where it gets different. What a nerd does differently than a HIPPO is that the nerd tests the intention, the prediction, and the idea of what is happening. They conduct analysis and expirements to collect data."
Go where the evidence takes you
According to McAfee, this is what becomes the critical part: If the evidence does not match the nerd's intuition, they will try hard to abandon the intention and follow the evidence.
“The nerd's motto is, «Go where the evidence takes you» whereas the HIPPO's motto is: «Trust the gut feeling.» These are incompatible styles for getting things done, and making decisions in companies. What I think is fantastic is that we accumulate very good research with evidence of what happens in competitions between the HIPPO’s decision-making style and the totally nerdy style to make the exact same decision."
RELIABILITY & SAFETY
Both products and services are constantly on the go. But how can one create sustainable business models equipped to meet future challenges?
Sveinung Jørgensen and Lars Jacob Tynes Pedersen research how the business community can create sustainable business models.
“Common to the companies we work with is that they try to find ways and methods that allow them to combine sustainability and profitability through new innovative business models," said Pedersen.
We can learn this from the front runners
According to Jørgensen, this may seem somewhat abstract for many, and highlights an example:
“What is more harmful than a cruise ship that cruises in a small Norwegian fjord? Did you know that a 5,000-passenger cruise ship has the same footprint as a 25,000-city? It can be tempting to think that the cruise industry and passengers have to be the problem. However, we are of a different opinion,” said Pedersen.
According to associate professors, people are the problem
“We are all passengers on cruise ship «Norway», or cruise ship «World» for that matter. If everyone were to live like us Norwegians, we would have needed four globes, yet we only have one. Although this picture is depressing, it is also a picture of massive innovation and business opportunities,” Pedersen said.
Wrapping a business model around a problem
With the challenges facing the globe, there are also opportunities to build new, sustainable business models. "We often talk about wrapping a business model around a problem,” said Jørgensen.
They are mentioning the company Scanship, which in recent years saw garbage as a problem in the cruise ship industry, and has now created solutions to turn the garbage on ships into new resources.
“Scanship managed to create a circular business model. They realized that in order to grow, they needed new customer segments and new markets. They ended up using various technologies, business models and other markets such as the aquaculture industry. It turned out to be profitable,” Jørgensen said.
Future business models
But what will the future business models look like?
“The gap between existing and future business models must be explored. Many companies are trying to solve one or more of the UN's sustainability goals. How can one create, deliver and add value value in new ways? How can you look at the products and services you provide today? Is it possible to do this in new ways - to new markets and segments?” Jørgensen asked.
Looking for loans in the future? Then you may end up having to prove how sustainable the project or company is to obtain the necessary funding.
“In the financial world, investments and investors have changed a lot in the last 1.5 to two years. They are much more aware of the values of your company,” said Saltvedt in the conversation with the conference host, Lillian Gjerulf Kretz.
Investments are about to change
According to Saltvedt, the criteria for securing financing are changing.
“When giving a loan or helping a company that needs to fund a project, you have to look at how sustainable the company is. We will, among other things, look at factors that say something about how your company takes care of the environment, what kind of company you run, how can you compare with the rest of the industry: It can be anything from how the company is managed, gender equality and water use.”
Saltvedt believes that these factors will have a greater value in the future because companies have to be more transparent as they evolve.
“It is among these that investors are asking for, but also for the financial institutions as well.”
Is it possible to create circular business models for business?
“I think we have to change our values. It's nothing new, because there are many who have already done so long ago. But we must be aware of how we use our resources.”
Saltvedt spoke about the circular economy, and how we are used to producing something, using it and throwing it either when buying something new or being destroyed.
“Now you have to look at how your products can become part of a circular society. It already applies from the start of a project, or starting to develop a product. Think about what kind of resources you need. How can you reuse these resources? Instead of producing something, using it and throwing it away, you have to think circularly from the beginning when you start designing a product. This is interesting because it can also create good business opportunities.”
Saltvedt highlighted 22 companies working together in something called "Byggfloken" and because of that, will have larger circular business opportunities.
“This sector is accountable for 40 percent of the emissions in Norway on a yearly basis. They have not had productivity growth over the last 20 years. But now, by working together, these 22 companies can look at the entire value chain in the construction industry and find out how to better recycle materials. How can we make the entire value chain more efficient? And thus also reduce costs and emissions, and on the other hand increase productivity.”
How can you influence the futrue of business? Watch the interview with Thina Saltvedt here!
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This article was produced using
Text: Kristine Masdal Aadne, Daniel Gauslaa & Emily Northway
Photos: Alexander Eriksson / Oslo Business Forum
Videos: Edvard Moseng, Mikkel Fjærvik Press, Daniel Jacobsen, Sondre Formo Lindheim & Fredrik Hinsch
Layout and design: Lars Erik Fjøsne