Cautiously, with hope, businesses are imagining a world reopened. Leaders are poised to make decisions that will reconfigure and even reinvent their offerings and operations. This is a moment to act on what we’ve all learned – and to build a more resilient, robust and relevant commercial sphere. That means leaving some old ideas and practices behind. And, perhaps surprisingly, reviving and repurposing some even older ideas.
The Covid-19 pandemic highlighted and accelerated fundamental changes that were already under way in business. The trend towards working-from-anywhere sped up, albeit with “anywhere” all-too-often being the kitchen table. Home delivery of goods and streaming of entertainment grew massively, leaving the future scale and nature of in-person services and experiences up for debate – and innovation.
Significant as these developments are, they only scratch the surface. We believe a profound shift is happening in the relationships between people and the organisations which serve them. While looking forward to enjoying a return to normality, many people are questioning how that normality should be constituted and rejecting a fixed-forever view of “the new normal”.
We don’t believe people will want to give up the benefits of an industrialised, globalised society and return to the plough. People will still want great products and services. They won’t want to pay more than they feel is fair. But we think they will want organisations to tread more lightly on the planet, avoid actions which promote inequalities, and account for their aims and activities with greater transparency.
Business needs a new approach that matches and enables people’s ambitions for a better world, authentic experiences and greater sustainability – alongside quality and value for money. The way ahead lies in an organic renewal of relationships of trust; a renegotiation of the ownership and control of personal data; and diversity and agility in technical projects.
Trust in each other
For most of human history, people lived in small communities with simple but strong trust networks. They trusted older family members and authoritative voices in the community. And they were served by distinct, regulated specialists: the butcher, the baker, the candlestick maker. As industrialisation and urbanisation progressed, these time-honoured trades evolved and in many cases became extinct. The candlestick makers saw their market erased by the introduction of gas and electricity. Bakers have seen their business change full-circle, from village and street-corner mainstay to supermarket commodity and now back to artisan outlet.
Life became more complex, faster-changing – and more interesting. Society became used to technological advances, falling prices, increasing abundance and widening choice. Suppliers with the necessary resources and vision evolved to retain their dominance while personalising their approaches.
The rise of social media and changes in attitudes have unpicked traditional trust relationships. Market entrants don’t need a century-old brand or a high-street presence to gain attention and make sales. Customers no longer settle happily into categories defined by businesses but are increasingly free to redefine themselves and live their values.
Commercial relationships have therefore become looser and more flexible. But people are paying a hidden price. They allow companies to track their online behaviour and analyse their personal data in return for ever-improving products and services. The ads we are shown as we engage online are impressively well targeted and today’s tech giants are highly valued not for their hardware or software but for their ability to command and monetise our attention.
The result is a dispersal and dilution of trust. People trust Amazon reviews, influencer videos and recommendations from friends as well as cool brands. Traditionally, only the latter source of trust – brands – was under the control of established businesses. Brands are no longer just in competition with each other: they’re struggling to maintain relevance in the diversified trust landscape.
The experience of the pandemic has accelerated the shift towards online activity and cemented its hold on the ways we work, shop and congregate. It’s clear that the pre-existing trend towards omnichannel business has become a baseline competency thanks to Covid-19. But fewer commentators have realised that the effects of the pandemic on trust relationships will be just as permanent and profound for people and businesses. Yes, your business needs to work smarter. It also needs to recognise that the meaning of “smarter” will increasingly be determined by people as they go about their lives in the global village.
The new inflection point: from right-sizing to right-shaping
How do businesses decide on their value and approach in this new world? How do they choose, verify and engage with their markets?
The way to understand and navigate these challenges is to shift from an emphasis on right-sizing to a commitment to right-shaping. When business models were well-understood, stable and served by efficient solutions, decision makers mostly focused on scale, geography and supply chains. Discover a need, find a solution – and pile ‘em high. Organisations then discovered they needed to be more agile as the pace of change accelerated. Today we can see that agility is no longer a differentiator but an essential, core aspect of any viable business. Every organisation must be a shape-shifter, with the ability to question every aspect of its rationale before it hardens into irrelevance.
For companies, this means they must see themselves as organisms living in an environment rich in data that can inform them of opportunities and threats in real time. Their ability to craft and control customer journeys will depend on continuous adaptation to changing circumstances rather than their ability to defend a brand or protect their “secret sauce”. They will have to adjust to the idea that a customer is not necessarily for life: if you want to keep your customers, you’ve got to keep up with them.
For individuals, the accent is on retaining their freedom while sharing their data in return for value. This entails a reinvention of the trust networks of the past, based this time on our chosen families, our chosen communities. The technocratic approach whereby retailers and service providers attract and nurture customers using their superior data analysis capabilities will need to be modified in the light of increasing consumer power, independence and mobility. People will recognise the value of their aggregate data as the basis of behavioural insights – and therefore the source of profit – within communities of choice.
Tim Berners-Lee, who gave us the World Wide Web, sees this clearly. He believes technology giants have too much personal data stored in their silos. He says the information enables them to act as surveillance platforms and gatekeepers of innovation. His startup Inrupt aims to return control of their data to individuals, with people using a single sign-on for any service. Berners-Lee believes this will enable the kind of sharing and collaboration which has made social media successful while re-empowering users.
Questions of trust
At Silxo we believe trust will be created and sustained partly through a focus on provenance: the traceability, authenticity and safety of the chains which bring people goods, services and information. The ability to guarantee provenance will help people identify the businesses they choose to patronise and form the heart of successful brands. Validated provenance will enable organisations to be local, tangible and accountable even when they have no physical presence.
But provenance is just one factor in how people will characterise and calibrate their ideas of trust. The growing importance of non-economic factors in business has been highlighted by the introduction of the UK government’s social value model, introduced in January 2021. Companies bidding for public sector contracts are now scored for social value as well as traditional economic criteria. The model includes supporting the pandemic recovery, tackling economic inequality, fighting climate change and driving greater inclusion. With the public sector effectively mandating a level playing field for social values, there will be pressure on other industries to follow suit. And as organisations step up to these new requirements, there will be many opportunities for missteps. How forgiving will customers be with companies that falter in their obligations or standards? How can companies successfully monitor their trust relationships beyond measuring likes? How can they develop the right kinds of agility and resilience in their processes and practices?
There are no easy answers to these questions. Businesses need to be compiling their query lists now. Confident action must be based on a close and deep understanding of how trust will evolve in your sphere and how you want to influence that evolution. Your ability to right-shape depends on your ability to understand how, where and when your customers need you to change.
Technology – fresh every day
Once you understand the emerging and mutating trust models which impact your business, you can decide the shape of your business operating model going forward – and build in the ability to flex that shape in response to changes in your aims or environment.
Big, comprehensive and slow-to-deliver IT solutions and services aren’t going to cut it in this new world. Instead, organisations need simple, affordable IT solutions that are good enough for specific tasks. IT strategy should proceed from a short list of basic tasks required to operate the business. The key value-add of IT must be a robust and reliable method of both recognising and replacing each task on the list. The fundamental operating ethos of the business must be a dedication to the constant optimisation of its tasks.
This means gearing IT to deliver temporary solutions with a defined shelf-life. The business defines how long a solution needs to deliver value. Business and IT collaborate in a continuous process of reviewing shelf-life and value delivered. There’s a positive, deliberate activity to retire poor and end-of-life solutions. The funding model enables ongoing delivery of small, targeted replenishments.
We call this approach Fresh IT, based on an analogy with fresh produce. All fresh food items have a limited shelf-life during which they can be delivered to stores and purchased. Customers buy fresh food items with a specific purpose in mind – maybe to cook tonight’s family meal, or to prepare something special for a party. Purchases depend on an ever-changing mix of needs related to occasions, affordability and appetite. A customer might choose food items to prepare a dish for freezing or canning and that dish will also have its own effective shelf-life.
The old way of doing IT could be called Formal IT. Here, every meal is a lengthy, stodgy banquet. Banquets need impressive facilities, experienced staff, professional kitchens, signature recipes, memorable entertainment, obsessive attention to detail and intense orchestration. With all management focus on the next big event, it’s hard to see that attendance is reducing, tastes are changing, costs are growing and yet quality has disappeared.
Right-shaping for life
The Fresh IT approach has a strong echo in the emerging portfolio economy, with people pursuing multiple occupations and relationships in a context of lifelong learning and a more flexible tax and social security system. We can all be butchers, bakers and candlestick makers, and we can take roles and build businesses as yet undreamed. People will be actors rather than passive consumers; co-creators of experiences; ultimate definers of the social reality we share as human beings.
Together with the organisations with which they interact, people will create new forms of trust that increase value for all, engaging in flexible commercial relationships which offer real, consistent and reliable experiences in an economy geared to the way we want to live. The normal we need must constantly reshape and refresh so that business continues to flourish in harmony with people. And we must rediscover and invest in the villages – real and virtual – that give us our senses of belonging and mattering. Closeness, interaction, common interests and uncommon wisdom – it’s qualities like these which will drive profitability, sustainability and longevity in the post-Covid era.
Coming soon: Data is your jail – who will save you?
The traces we leave online help organisations to characterise and influence us. People are only now realising the wealth of data they generate and the uses to which it may be put. From the right to insist that Google forgets a youthful indiscretion that proves to be career-limiting, to the Glassdoor reviews that clash with corporate narratives and the insistent ads that follow us around like flies, our opinions and interests have serious consequences. At Silxo, we believe that data freedom is central to a tech environment that works for everybody.