Podcast by Gerd Leonhard for MGI Worldwide, 23 JULY 2020

Here. Really great pleasure. Great to be back with MGI and all the partners in this network. Yes, these are crazy times, right? We are essentially looking at the fact that the future is less certain now than ever before. And my job is deeply impacted, as I'm sure as yours. And we're all wondering what the future is going to bring. So I'll tell you a couple of things that I found out in this sort of last three months. You know, in 2019, I took roughly 350 flights to get to engagements and speaking all over the world, roughly 800,000 miles. I know, it sounds crazy, right? This year it's a complete pivot. It's all in here, right in there. It's all in a digital environment. So everybody's pivoting to different things. And I think professional services and being a professional, whether you're lawyer, accountant or in the professional services business, there's going to be a lot of pivoting, a lot of re understanding how the world could work. And I say in the context of this, sometimes I think the crisis is bringing out really good things in us and in others and sometimes also really the worst things. And we have to be careful about where it's taken us and what it does in general. But I'll elaborate a little bit on later and I will discuss also the questions. So first, on my job, this is not what I do. I don't do this sort of prediction idea. It was a great article in New York Times yesterday talking about how fruitless predictions are. Really what I do is I look at scenarios, good ones and bad ones, and I call this heaven or hell. And in many ways you could say the future post or with pandemic could be heaven or it could be hell. There's many things that are actually quite positive, like work, home, like getting support by the government. And there's other things that are quite scary. And I think what we need to do is when we talk about the future, we have to say, well, what kind of future do we want? I think it's fruitless to predict what future will happen because there is no such thing. The future doesn't just happen. We make the future. It's very important when we think about the future that this is not a fixed point. It's not something that's going to happen for sure. Every action we undertake every single day changes our future. So it's important to remember that we are in charge of this rather than somebody else being in charge of it. The other thing that's really important is the People tend to have a sort of black or white scenario, default, right? So the future will be bad or will be good, economy will be really bad or really good. But the reality is it's a constant, fluid scenario and everything is always changing. Which means that we have to be above all agile, innovative, collaborative, entrepreneurial. The world isn't black or white. And what was true today may not be so true tomorrow. I mean, you know, think of other famous futurists and science fiction authors. Asimov, Arthur C. Clarke, Alvin Toffler. They got a couple of things really, really spot on. Complete prediction, 100% and other things utterly wrong. So I think we have to live in a world where it could be both or it could be this. We have to be flexible enough to make those changes. Let me start with a great quote from Milton Friedman, who I don't usually quote, but this quote is really good. He says only a crisis, actual or perceived, produces real change. And when that crisis comes, the actions that are taken depend on the ideas that are lying around. Now, it's interesting to see now, for example, if you're looking at the response of the US to the coronavirus, the ideas that are and were lying around in the US is that everybody for themselves, and not much so in the healthcare system. And the US response has been pretty much above everybody's understanding, has been one of the worst in the world. And what we have now is responding to this brings out the weaknesses of countries and of people, of course. And so in this crisis, people are going to look back at your company and yourself and me, and they're going to say, well, what did they do during the crisis? You know, like we used to say, what did they do during the war? It's kind of like a war now in so many ways, except for hopefully a lot less people did. But this is an important point. You have to do the right thing now because people are going to look at you later and say, well, did they help me now? Did they go the extra mile? I can tell you right now, for your clients, like all for my clients, you got to go the extra way. You have to show solidarity, you have to be compassionate, you have to solve problems and you have to get out of the way for new things. That's so important because keep in mind, ultimately business is all based on trust. And trust isn't in here in this computer or in that camera. Trust is in here. This is why we trust each other. And you know, downloading something from a website doesn't create trust. You know, you can't download relationships or have. It's very important that we build trust because that's the only thing that's going to bring business to us in the future. So the recession, Right. Many people have said, what is the shape of this recession? You're familiar with the recession shapes. I know you can't really see them here, but it's just for illustration purpose. The V shape goes up, goes down very quickly and goes up very quickly. That will be lucky. That's not happening this time. The U shape means goes down, stays down for a bit, goes back up. The W or triple U shape means it goes up and down. That's kind of what we have now. But the research has shown that roughly 50% of people, business people, think that we are in L shape. The L shape is the absolute worst, which means down, down, down, down, down, continue, down. And I think the reality really is that we're looking at the next two or three years as a combination of W's and L's, and we have to be prepared. The way that we can prepare for this is to create offerings that fit in there, that are flexible, that acknowledge the situation. And again, my situation, I'm grounded, not flying. And I think many of us are experiencing this really for the first time short of a global war. This is a reboot. We can't go out to eat, we can't fly, we can't travel, we can't meet. Will that go back to normal? Well, very much doubt that we're going to go back to normal in any sort of way. Definition of normal. Yeah. We're going to go back to pubs and restaurants and maybe we'll go back to the beach with the plexiglass in between. But the fundamental understanding of the world has changed, and there's many good things and many not so good things about this, but the narrative, Think about the narrative. We are now, the first time, I think, in 50 years, we are realizing how important other humans are and what we have to do to keep close to them, how much we want them to be close, how much the Internet can do and how much it cannot do. I mean, clearly, when you watch me like this, you know, it's nice, I enjoy it, talking to you like this. But clearly not at all the same than rubbing shoulders, sitting in a conference hall or having some donuts and coffee or beer or whatever, later on, a whole different thing. But we have to get used to that in our mind, because our minds are, you know, humans are basically. Yeah, they like to continue with things that. That we've done before. So this is a really tough change for us if you have kids. One thing we can teach our kids, be prepared. Get ready to flip direction, come up with new solutions. Don't take so much for granted and go easy on the fear. I think that many people have developed a fear, especially now, that will lead us to some bad conclusions in the long run. But here's my recipe for the future. The world is kind of coming to a standstill now. It's cranking up again a little bit, but we're definitely slowing down. Slowing down the economy, slowing down globalization. So here's my four tips for all of us to think about a better form of survival. First, we're going to spend this year, 2020 pretty much looking at survival, cash flow, loans, co organization, reinvention, thinking up new things. It's really interesting in Italy. I just did a seminar on Italy yesterday and somebody told me in Italy now they are blocking off the roads in Rome and Florence and other places in the city center to move the restaurant into the street. I mean, what a creative solution to say, well, you have to sit five meters apart. So that means you can't go to the restaurant, not enough people, or push the restaurant out in the street, just close the street because the restaurant is more important than the drivers. Very creative solution. So that's survival. That's number one. Second one is collaboration. We are not going to go through this crisis without extensive collaboration. So that even goes for your competitors. I mean, look what's happened to the airlines. I mean, clearly this kind of idea of how we're going to overlap and help each other. We have to hyper collaborate, not hyper compete. That's also the only way we're going to find a therapeutic and ultimately a vaccine by hyper collaboration. And this is really becoming much more important. The third one is adapt. Change our business model. Just like we're doing this now, we're not meeting in a location. Will we ever meet in location yet? I think we will, but it will be different and we have to transform. So here's important question that you have to ask yourself. Whether you're a lawyer or accountant or bookkeeper or whatever you do in the professional services arena, what is the next edition of my work going to look like and how can I create value? I think this may be difficult now, but now is a good time. I think there's a great saying from Greece, when the fish aren't coming, you mend your nets. And I think many of us are doing that now. Just make sure you use the time to think about transformation and collaboration and where that will take us. Today, great announcement finally by the European Commission, led by Merkel and Macron, about how there's going to be 500 billion euros for grants for the Southern European countries to come out of the crisis, and also the Eastern European countries from the rich countries like Germany, and how finally the thought of having a United States of Europe with really almost unlimited solidarity has taken hold. Has taken them four weeks to think about this. That's probably the kind of time frame that the Commission needs. But here's the thing about Europe. I think many of you are from Europe. The number one thing is either we're going to collaborate and work together and become kind of a United States of Europe, you know, by having independent countries and regions. And just like we have here in Switzerland, where I live, you know, it's very autonomous, but still together. Either we're going to have that or the future will look bleak compared to the US and China, of course. So the US of Europe, yeah, that's our reality. That's our way out. I think in Europe, that is painful, clearly, but sometimes it's more like the question of asking what is the least pain rather than no pain. So, big discussion about that. I would put my bet on this. We're going in this direction. I'm quite hopeful that we can make all the practical things happen. Like we're going to have water policy, energy policy, technology policy, research together in Europe, creating a market of roughly 1 billion people. I think that's going to be pretty amazing. So the future, the immediate future, is really this, right? Big tech, big health, big state in a nutshell. So I'm giving you something that's not a video for a change. Clearly, technology is the winner in this crisis. I mean, technology is exploding with power, and without technology, we'd be useless now. We couldn't work from home. And this is a trend that's going to go on. We're not going to go back to the office unless we have to, unless we want to. Unless, of course, there's human reasons, which there are plenty of. But working from home and doing these things is staying. Now, many of us are already used to this big health. I mean, all the money that used to go into the military and maybe to oil and gas subsidies, they're moving to health care because we have to be prepared. There's going to be more pandemics, there's going to be more things that we need to do together with health care. And finally, big state means that the Government is mingling with everything now. I mean, basically most of us are getting support from the government one way or the other. And there's going to be more taxes because of that. So the state and government is going to be big in every possible way. And this also means a lot of responsibility for government not to get too big and overpowering. So that really depends on the country. Here in Switzerland, we're in a good position in that regard because it really comes down to trust. So on that note, technology, the first point, big tech. Everything around us, we move out of the cloud here, everything around us is becoming technology. Everything is moving to the cloud. Our healthcare records, that will be huge if we can secure it. But that's inevitable. Just like our books have moved to the cloud, our movies are on the cloud, our films are in the cloud, our travel is in the cloud, our food is going to be in the cloud. So this is vastly efficient, but we have to think about how we control it. And this is one of the key issues. I sometimes call this here you may have seen the Vitruvian Man. Da Vinci. I call this the Neoluvian man. This is the man Woman, of course, surrounded by technology. And this can be very overwhelming, I think, especially when you're not 15 and a gaming expert. I mean, all the game changers. I talk about this a lot in my work. Just Google for game changers and Gert, you'll find all that. The Internet of things, connected devices, 3D printing, quantum computing. This is all coming in the next 10 years. If you do not understand technology, you are in trouble. And this doesn't mean, of course, that we should obsess with it, but we should clearly understand what it does. Like take a simple fact like cloud computing or 3D printing. I mean, we're going to be able to do things that were unheard of. Printing our iPhone covers. Printing our shoes. Printing ice cream, printing food, artificial meat. So this impacts all of our discussions about the future. Basically, you're moving into completely digitized work. Now, here's important for us as humans, what we do isn't data. Well, people would argue that some people, and I say, if it's data, at least it's not binary. It's not just zeros and ones. Your computers are good in zeros and ones. And they can look at 1 trillion of them. We can't. But we are actually many times, not just yes or no. We have many things in between. We are what's called multinary. It's important to remember that the real asset in Business in life is not going to be prescribed by data. It can be analyzed, it can be looked at. It's a fantastic tool. But analytics isn't the same as intuition. Analytics is a powerful tool, but intuition, imagination, that's also a very powerful tool. But Jeff Bezos, great example, he talked about this for years, saying that basically every decision he makes is going to be based on data and intelligence. And then just six months ago, I saw one of his speeches. He said, you know, the way I decide stuff, I take the data, but really in the end, it's my intuition, my imagination, my desire. Like, okay, so that's kind of the path forward for us. Clearly this here, you know, artificial intelligence coming in and telling us what to do. That's amazing. When it's about, you know, Google Maps, it's amazing. When it's about simple diagnostics, it's amazing. When it's about scanning your skin and giving you a tip of what it could be. But we have to be also a little bit careful here and say, you know, are we going to ask the right questions? Are we going to be skilled? Right. So AI is going to be a fantastic tool, but at this point, AI is not. It's only a. It's not. I. It's not really intelligent like we are. And that will change. Yes. Some people say the singularity, roughly 20, 30 years, 2050, where computers can simulate humans much more than today. But I think at this point, let's dial down the fear a little bit. I prefer to use a different word than AI. I use ia Intelligent assistance. This is really what's happening. And that's, I think, for you in your business, that's. That's what it comes down to. Optimization, productivity, efficiency, power tools, basically, but not anything that's close to our sort of existence. The other thing is what's happening here with data is that in many ways, many countries and also companies are using the Corona crisis as a sort of Corona washing. It's called Corona washing, giving us an excuse to collect more data. And I think in an emergency, is tracing and tracking everybody important? I think it is. And that creates an exceptional situation that we have to solve. But should it prevail afterwards, I think that's a very bad idea. We can only see what happened in the U.S. you know, after September 11th, the Patriot act, the visa courts. Now this has become the new normal. It's actually the same law since then, hasn't changed. It's probably not a good idea to bring that into law that we can track and trace everybody Just because we, you know, we worried about the next iteration of the virus. It's a good idea today because this is an emergency. And I think we also have to be careful to make companies responsible for what they're keeping. You know, if they're tracing us now, that data should be deleted. Very important I think also for your own practice and looking at what the future brings. Because this is a reality, right? I've talked about this many times. Data is the new oil. But recently I've said, well, data is the oil, that's true, it powers everything. But it can also be used as plutonium as a weapon. And that we have to be extremely careful with because without data we can't do business. I mean, it's like what happens if you can't use Google Search or Bing or whatever you're using? It's like hard to find things and not using data is not an option. So what we have to do is we have to make safety measures around data. And this is why social media has to be curbed in and be made responsible. I mean, it's basically our realization that goes into this kind of scenario. We have the future on one hand. Sorry, let's look at the right hand here. It's a present, right? Technology can be a present, but when it gets too big, it can also be a bomb. I call this too much of a good thing. And I think in your business technology is a fantastic tool. But don't make it too much of a good thing to destroy the basis of trust or to abuse the use of data or to outmode yourself to Deskill yourself to stop learning how it works. This is clearly going to be a challenge. I think the more technology we have quickly on what's happening in the immediate future with globalization and business. The virus in COVID 19 and the corona crisis is disturbing the entire setup of globalization. The more globalized you are now, the more in trouble you are. Like myself, my business is completely global and global is zero right now. No flights, no going. So this is a huge thing because now people are saying, well, maybe we should be more self sufficient, maybe we should close the border. I don't think de globalization is a major trend, but it does make us think for example about supply chain. How can we be more opportunistic? How can we create a backup system that is not relying on if China can deliver or not? I mean clearly that makes us think about different future. For example, the medical supplies. Should we have our own way of medical supplies that's not based on the Huge supply chain. The answer is clearly yes. So that's going to open up a lot of discussion about globalization, de globalization. I think, however, the future is really this. We are moving towards the world. In the next 20 years, we're going to have 10 billion people on the Internet. So we're completely connected world. This is moving into this connected world. And so many issues can only be solved together. Water, food, equality, energy, artificial intelligence, geoengineering. I mean, the next 20 years will bring more change than the previous 300 years. Imagine how we're going to collaborate if we're not actually together, if we're creating our own little planets. Planet Europe, planet China, planet America, Planet Brazil. I don't think that's a good solution. I think we need to be independent for many reasons, for other things. But global correlation is going to be absolutely crucial. So in this world, this is one thing that we have to watch out for, is that we don't use technology to dehumanize ourselves or our work. Because here's the fact, basically any routine job, anything that does not require human ingenuity, will eventually be done by a machine. And you'd be surprised, you know, how many, for example, a call center, roughly about, I think the latest numbers are like 20 million people working in the entire global call center service industry in that regard. How many of those people will end up working there? And how much computers are we going to use to answer phone calls? So what we need to do is in our own business, use technology to be faster and quicker, but don't use it in a place to where it should really be. Humans making decisions. I call this a rehumanization. And I think we're now in that phase because of COVID We're looking at this and saying, okay, maybe we can talk online, maybe we can learn online. We can work from home, we can do all the virtual stuff. But yeah, it's going to be important to reconnect to that, what we are as humans, and to pay respect to it. Also to the limitations that we may have. So this working from home, sharing from home, yeah, that's here to stay. We have to get used to that. I think it's hard when you don't have that personal contact. You know, when I see you guys in an audience, you know, in front of me, that's completely one thing. When I see you in here, it's like, okay, I have to imagine that you're there. You know, that's the hard part. And I think we will ever, always cherish this contact Will not go away. But this affords really interesting possibilities that don't exist in real life, like sharing documentation and instant communication, things like that. And of course then we have stuff like this. Holograms. This is Microsoft hololens. And very shortly he's going to pop out this virtual keynote speech in Japanese using a hologram. I think this is pretty much a demo state at this point, but hololens is pretty amazing in general to take a look, good look at this. But yeah, I think I bet you in three to four years you're going to go to London airport and you're going to travel in a hologram to go to Shanghai for a speech or for a seminar and British Airways will sell it to you. So that's all coming. I think this is good. Is it going to change our world fundamentally? I think yes, eventually. But here's the big thing about what is important for our business. I call this the andro rhythms, the human things, the things that only humans can do. I mean, an emotional machine, a compassionate machine, a machine with intuition, yeah. Based on data, yes, of course, but algorithms, machines know the logic of everything, but the feeling of nothing. I think, you know, look at this this way. And I'm saying, okay, what do I teach my kids? Right? Should you teach? Learn how to program? Yes, that would be good asset to have. Is it important? Not really. What's important is this, unless your kids are naturally inclined to be data scientists or programmers, this is what's important, is for us to learn what it means to be human. In hr, they say basically they want people with EQ with emotional quotient, not just with iq. And this is part of the reason, by the way, why internationally speaking, the countries with the amazing response to the virus, lots of those are led by women because allegedly women have more EQ to be debated later, I'm sure, than men. New Zealand, Germany, Iceland, Finland, Belgium. So that's Taiwan. The story goes on. So something you talk about and discuss later. So here's the bottom line of this. When we are in this global world, connecting with each other and doing things differently, this is going to make a vast difference if we have this down. The more that we connect, the more we must protect what makes us human. Protect what makes us human also means mystery, mistakes, imagination, being offline, pondering boredom. I mean, these are the things that make us human. We should not take them out just because we're connecting. And ultimately that's of course what your customers will like about you. So put the human back inside this is crucial. Use technology, but put the human back inside of your relationships, inside of your offerings, because that is the only thing that machines can't be. They can't be human. They can pretend to be human, but they're doing a lousy job at it for the time being. This is going to be really important. Example, Jacinda Ardern, New Zealand Prime Minister, her speech about bringing in the COVID restrictions and the stay at home order said that we have to do this. But here's the good thing is the Easter Bunny and the Tooth Fairy are exempt from the restrictions of leaving the house, talking to kids, showing compassion and also showing humor in a very difficult moment. This is why, of course, that the most successful handling, of course, New Zealand is all the way down there, but clearly has happened in that regard here. So I'm going to wrap up by saying we're going to a future that is basically going down this road that is accelerating very quickly into what I call the game changers. I mentioned that earlier. Artificial intelligence, cloud computing, genetic engineering and 3D printing and virtual reality and so on. We have to learn how to navigate that road, especially now. We have to be fast at it. We have to understand it. You should spend 10% of your time at understanding what isn't already here or what is about to get here. Like I said earlier, this is not about prediction. This is about understanding, developing intuition and having what's called foresight. Foresight is basically imagine you're driving this car down the road and you're going 10 miles an hour. That's one thing where you go 200 miles an hour, like we do in Germany, you got to have a lot more foresight, right? This is the crucial part of how we're going to interact with each other in the future. So on a final note, professional services, yeah, we're going to collaborate with machines a lot. We're going to collaborate with software. We're going to do a lot of things that were previously unthinkable. But the bottom line is we still need to figure out how we're going to keep the relationship going. We have to embrace technology, but not become technology. When you become technology, you become a commodity. And that also means you can't charge, right? Which is kind of a bummer. So embrace technology, but don't become it. Let me wrap up here with the final slide. I said this earlier. This is the strategy for the next two years, during and after Covid. Survive, collaborate, adapt, transform, open things up again when it's possible. Be careful about surviving, develop possibilities of doing these things in an entirely new way. I think this is kind of the recipe for the next two years. And stop asking for definitive guide to the future. There's no such thing. Very important. Develop foresight. Understand what's coming. When you have that, you will always find a way forward. So that brings me back to my beginning, and I hope it wasn't too much and too quick. And I hope you guys are still there hiding behind the camera. Thanks very much for your time. And let's take questions and debate. Thank you.