Written to support an upcoming debate - keen to get people's views on this topic.
As we all know we have entered (casually strolled) into the era of the dominant ecosystem drivers (Amazon, Alibaba, Apple, Facebook, Google. Microsoft, Tesla <upcoming> etc.) with their emerging "anti-fragile" business models, sometimes full ownership of the interaction ecosystem as well as the supply and distribution ecosystems and more recently the technology ecosystems in which others need to play (often forcing the more progressive value chain businesses and more niche based internet business into the role of modular producer at best). And this came about through a relentless focus on relationships - or true customer first thinking.
However, the mindset and culture of these organisations hasn't been completely virtuous in my opinion, and it has ultimately been about selling more to people - and doing their best to make us even more consumptive (Amazon sell over 100m products on Prime day alone). This is unsurprising, and in some ways it can be forgiven, as they were born of an industrial based economic model, and the value drivers were implicit, money, money, money - and "lunch is for wimps"! This business model has worked well in the internet build out era, as we traded our data for convenience and increasingly wasted our time in ever expanding entertainment based environments. And as these businesses evolved they realised they had created infrastructure, environments and solutions and that they had become prime market makers, destroyers and dominant wherever they applied themselves. They now seem invincible, set to take over the world, and apparently above regulation in a lot of cases as well.
This isn't a "how do we stop them" or "they will die despite success" post. I do, however, think they will need to change, and this needs to be more transformative than the adaptive path they have been on to date. So their biggest test is coming. And there are emerging signs that they see the same. Which is good!
The challenge I think that's coming to them is that as dominate points of consumption they will soon be much more directly tasked with solving (or supporting the development of the solutions for) some of humanities biggest problems - instead of just benefitting from often accelerating them! At least I hope they will. Despite calls to governments and through UN Climate Change policy etc. we see a lack a real wholesale change. Consumer behaviour change and choice IS constrained - economics, education and environmental imperatives all playing their part in this. What we are now seeing is initiatives from within the ecosystem drivers to operate their businesses in a planet positive way, but less so in how they provide their services out, in particular where they are more direct to consumer. And more will need to be done on this, and fast if we are to be successful.
The challenge I think that's coming to them is that as dominate points of consumption they will soon be much more directly tasked with solving some of humanities biggest problems - instead of just benefitting from often accelerating them!
What interests me a lot about this challenge is - how do you take an economically thriving business (a lot of them prospering further still in the face of recent shocks) and convince it that its new future lies in a path of very different value creation? How do you take large wealth extraction vehicles and make them less so? The only time this happens, when things really transform, is when the stakes are high enough and the incentive is clear. Most of us understand that the stakes don't get much higher than survival - but for most it's also impossibly hard to accept that this is actually what we are facing. The Biopsychology is more complex than we thought in 1977, and Lawrence Palinkas and Susan P. Kemp took a lot of this forward with their 3-level framework. What I am referring to though, is the true internalisation of the reality. It's still too enormous, and it often doesn't feel like we (as individuals) can do much about it. This is the same when we face the large organisations we work in or lead, they're big, complex and reliant on making money, so it becomes incredibly hard to see that this level of change is possible.
So, whenever I face this level of complexity I break the problem down. Into chunks of value. Each chunk is a value point which has clear imperatives (commercial, planet, customer) is supported by insight and the success criteria (which we can determine and iteratively realised). They are also chunks that in their collective form add up to transformation success. The problem in this case is knowing how you do this when facing the environmental challenges we see today. I think this is where I have got to with this. What we are in large part facing here is an upcoming economic crisis - or crisis of the economic model we are all so wedded to. So we need to transition through this revolutionary jump. We are still growing the human population, so even if something is, say, more carbon efficient (or truly carbon neutral to make and consume), it is still probably going to net continue to be a problem when you look at associated factors of consumption. And this is typically down to offsetting carbon, plastic etc. production to other industrial countries and not talking accountability for this impact in things like the carbon production through moving goods, and carbon based energy consuming distribution chains. So, we need the data to understand the net impact of supply and distribution. This intelligence is starting to emerge with things like SAP's new product to help firms track greenhouse gas emissions in their supply chains. We need to be able to accountably take decisions about our choices, so this interim answer is to further shift the dial on consumer choices and hope the demand to supply model drives some of the change faster (e.g. hit the "Green" button on Amazon to filter). Other answers will need to go much deeper, and will involve direct action from these businesses taking accountability for the outcomes.
Facebook is a good candidate for transformation, the now overly ad driven business model needs to do a lot more to stop propagating social injustice, the interference in political decision making at scale and so on. It also needs to be a lot closer to its mission (...to give people the power to build community and bring the world closer together). Its role in this could be to drive collective wisdom and action, driving and supporting communities in this. Whilst their are examples of this happening within the platform it isn't often driven by Facebook itself. Currently it's a long way off where it could be in driving action associated with climate change and generally being more responsible.
This is only a small part of the answers to the emerging challenge they face, and I look forward to debating this tonight (30-07) with the likes of Nancy Roberts, David Cushman, Jessica Yates, Dean Corney, Andrew Caramba-Coker to name a few.
Comments