Full keynote: Creating Value in a Connected World – Ericsson Services Forum in Mumbai, India

Below is a video of Ross Dawson’s opening keynote at Ericsson Services Forum in Mumbai India on Creating Value in a Connected World. He shared insights on the future of mobile phone usage and markets with an invitation-only audience of top executives from India’s leading telecommunications companies and mobile operators.

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Full Transcription

MC:

A world renowned author. A futurist and an engaging speaker with the ability to get people thinking beyond tomorrow. He spells out what it’ll take for business to succeed in the knowledge based economy of the future. Providing a practical framework that is easy to comprehend. Ladies and gentlemen, please welcome on stage, Mr. Ross Dawson, as he talks about value creation in a connected world.

Ross Dawson:

We are connected like never before in human history. I believe this is the single thing that is driving the most value to humanity. It have taken us for the furthest and all of our endeavours. Yeah, that’s a rapidly changing world and amongst all of that we’ve already heard, the shift from voice to data. We’re seeing the shift more and more to…. We’re seeing the whole shift now with the smartphones. This means that elements of what the economy has been, or what this world has been, have been shrinking and narrowing, commoditized, whereas others are opening up.

We need to look at how do we create value in the connected world, which is so rapidly evolving. For absolutely the citizens of India, for your organizations, for the communities, for these collaborations, which we see between Ericsson and Cisco, which is fantastic. Now if we look at the connected world. I think that what we can see is the birth of what we can think of as the global brain. The people on the planet, now that they have connectivity in their hands, in their pockets, are like the neurons in the brain. We are collectively becoming something beyond ourselves. Something which is really becoming participating and what is the higher order life form. This is where value is created between us, through this connectivity, as we participate in these networks as they come to life.

At the same time, we’re seeing one of the most fundamental shifts, is the power to the individual from the institution. This happens from the organization to the customer. We’re seeing that from governments to citizens, we’re seeing that from institutional healthcare. Through the patients. We’re seeing that from employers through to employees. In this connected world, we are seeing that power is flowing to the individual, and that is a lot of your mission. That is a lot of the value that you are creating…..I want to look through just a few themes to help understand this creating value in the connected world.

First, looking at connectivity. How expectations are increasing, thus changing structure of the economy in this world. Look at how this idea of the flow economy and the sixth element of that world. Disruption and how that is coming to play. Then transformations, that’s required in organizations. Finally, the leadership that you must demonstrate in order to be able to move forward, to be able to create value in this extraordinary world moving forward.

Let’s begin by looking at the world of connectivity, a world which you know well. And absolutely you’re well aware of the massive rise in connectivity individual. We’ve seen already, it was just in 2008 when the iPhone 3G was released in around 14 developed countries in the world. There were just 200,000,000 people on the planet, who had access to broadband in their pockets. Today there are 3,000,000,000 people in the world and in the next five years there will be 3,000,000,000 more, of which 2,000,000,000 in Asia. This is this gift of connectivity, going to the individual, and more and more, not just, this is all data connectivity and the explosion of the capabilities of how fast that is going.

But it’s not just individuals, now is the next layer of every single thing around us. What did we drive, the things in our houses, everything that connects it. This is a vast new explosion of the possibilities of connectivity, where all of the things around us start to become connected and turn. Of course, the cloud is where the data resides. Now, ever much storage we have in our pockets. We would need to synchronize that between all of the devices we have in our home, where we travel, where we work. This constant synchronization and re-synchronization of applications, of data, of music, of videos. Again, creating this exponential growth in what is required to be able to support this extraordinary, connected world.

We’ve seen the rise in technology, but I believe that social change is as fast as technological change. If we look at change in society today, the one fundamental driver is expectations. What we are seeing is that we expect more on every single front, in every way that we can imagine, our expectations are rising. They’re never going backwards. Our expectations are always going forward, on every front. Absolutely in terms of opportunity. And whilst there are several hundred thousand people in India with over $10,000,000 in assets, we’re still seeing that there are many in India, that are participating, those that are still earning less than $1 a day. But what is changing? One of the things that is changing, is that all of those people can now see, that there is the possibility to be able to create better lives for themselves and through others.

This expectation, and the scene of the opportunity, the ability to rise that, is a lot of what is creating the growth in the global economy, moving forward, of which India arguably is at the forefront today. We expect immediacy. It was back in 1998, that the 56k modem came out. We’re using dial-up, you could download a web-page in less than a minute. Now, our expectations are rising faster and faster, where seconds can actually be too slow to be able to pull up a page on a mobile phone, as we are going. Our expectations for immediacy are rising and never going back. 10 seconds, people are already gone long time ago.

We expect to participate. We expect to be a part, we are not just subject to information, we are inside the information, we are creating information, we are sharing that. I think one of the very interesting things to look at in the global context, so India and China, massive countries. India, catching up, not that far away from overtaking China in population, to being the most populous nation on the planet. Connectivity, in terms of the feature phones. Very high, continuing to rise fast and the larger and larger proportion of that being data. Broadband based. But very interestingly, that India does not have the degree of social media participation that China does and a lot of the developed countries does. I absolutely believe that this is something that’s going to move incredibly fast over the next few years.

We’ve seen, if we’re looking at the global contact, we’ve seen these flows of uptake of social media. One of the very interesting trends just over the last two to three years, that Latin America has come from behind, to be now, one of the dominant regions in the world in terms of participation in social media. I believe that the social understanding and the Indians aside, are now of getting this verge of the tantalizing way, in which we get this pervasiveness of connectivity. I believe that social participation will absolutely explode in India. There is this expectation, that people are not just subject to information, but creating that. We have a expectation of choice in every aspects of our life. Not just for what carriers to use, but how we use that, the interfaces, the ways in which we get our services managed for us, all of these choices being expressed in faster and faster, more and more ways.

We expect beauty, and this is, you know, we expect absolutely that things are functional, things are usable, they have efficient interfaces, but I believe that it goes beyond that, we now have an expectation of beauty in the things that we receive. This is going from, even being driven by consumers and even forcing enterprise technology, to now finally become beautiful, after being ugly for so long. All of this combines to what we can think of as this expectation of extraordinary experience, which is the sum total of absolutely every aspect which touches you. This is not just all of the customer service and the interactions and so on, it is every single thing that you experience, every day, in all of the life, in all of your time. That experience where people expect that to be getting better, to be extraordinary, to be exceptional, to be world class at all times.

Now at the same time, the structure of the economy is fundamentally changing. If you look at economists talk about how different industry sectors will grow or shrink, but they are entirely missing that the very nature of how value is created today is fundamentally changing. That is driven by the rise of networks we’ve already seen, how our brains are networks. We understand the technologies networks, where you can see that social networks, in which we are all connected. We understand now that organizations are networked, and in fact at all layers of our lives, the networks are rising. What we are seeing, that now the economy is shifting to be a network.

Then there’s scale free networks. These all have the same topology, the same structure, whether they be small or large. The whole structure of the internet is exactly the same as it was 20 years ago, except larger. It has not changed in terms of the structure. All of the relationships or dynamics, it has only changed in terms of size. What we are seeing now is that these networks, these scale free networks are growing but maintaining the same structure. What that means, among the other things, is that you have winners and you have losers. In this network economy we’re seeing more and more the rise of platforms where we are seeing that the smaller number of players are being able to attract the largest proportion of the value.

But in this world, where we’re individual… players, we are shifting to an economy of individuals. The unit of value creation in the economy is no longer the organization. It’s no longer the company. The unit of value creation in the economy is the individual. As they are connected, as they are able to share and create value, as we’ve started to see, where not a little while ago, now we’re starting to see the first phones going into villages, being able to be rented out in one stroke, in one moment, creating a livelihood for a person and connecting an entire village. I think in India, perhaps more than in any country in the world, this is already this economy of individuals. India has already been started from that premise, and is growing and growing. Now we are connected on top of this. This economy if individuals becoming real and is able to explode in terms of the value that it can create.

The sharing economy is a big theme. We’re seeing a whole lot of marketplaces rises, we’ve seen of course, not that long ago, coming into India, Uber and Airbnb and local competitors such as Rentshare and so on. Well, there’s things where these marketplaces, where these individuals, those that are able to supply something of some time, some time, some energy, some labor, some ideas, some cash together with connecting that with those that need it. At the same time this idea of how do we bring those many things together to be able to create something which is more, for the some of the parts of the individuals. It’s again, I think, what we’ve seen, that in India, there has really been failure early on in terms of the sharing economy, there’s a lot of discussion around that. But as we see the foreign plays coming in, I think that the mentality overlaid with the exploding connectivity. India provides this extraordinary opportunity to create this economy of individuals and bring it to life, and this crowded and sharing economy landscape.

When we look at the connected world. Back in my book Living Networks, I described what I called the flow economy. Now, we look at any offer that comes to somebody. Essentially, … of all of these things that are connected. Anything where there’s not a physical thing. Such as a product or a thing. Every other element of the offer, you could describe inside, they are the flow economy. I’d just like to run through the six elements of the flow economy, because this describes so much of where we can find value in this emerging world. The first underlying element is that of standards. You know, just of the many many standards that are enabled today, Ericsson gave a gift of Bluetooth the entire world. It owned it, it gave it away to be able to revive that as a standard enabling value to everyone.

Second key element is that of connectivity. The ability to connect and of course in the flow economy, connectivity is a fundamental enabler. By itself though, it can often be a commodity. As it is combined with the other element is where it creates value. Interfaces and arguably a phone is an interface to the flow economy. A set top box on a TV is an interface to the flow economy. We can have in fact a kiosk as an interface. All of these are the interfaces, are from, or browsers for example, again interfaces, which capture a part of that value.

Content, and of course in the connective world, there’s content, it’s growing and growing in value. Advertising is gradually being marginalized in the pure form. But content with the appetite that I think, we are discovering about human, that our appetite for content, for quality entertainment, for quality information, is… This no more…as humans have…attention spans. In a world of exploding content, exploding information, exploding entertainment. Only the very best will actually attract people’s attention. This is the feel of competition, but one of extraordinary value, which can draw people to some of these other elements. Services, and this is of course one of the key topics of the day. There’s many layers of the service. The services that enable everything else to happen.

The services that enable connectivity, the services that support the interface, the services that support content. But also the services that support services. The ones which are part of the offers to your customers. Where they are not just…and this is where an extraordinary amount of the value comes. Once you control that interface, once you’re able to control the customer, that’s when you can bring in services. And finally, and critically, relationships. That’s where the true value resides. Where you can start to move. Where you say, well, if we have an interface, how do we create a relationship from that? From content, how do we create relationships from that? And from the relationships, how do we then pull all of the other elements together?

A strategy, for every strategy you need to say, what is our customer buying. Who is providing each of those elements and it’s almost never one single company. You’re always working with others, sometimes in the formal collaborations, sometimes it’s a, the very fact you’re simply different companies providing different elements of that. Then the next phase of…..how could we move from where we currently are, to be able to take some of those other elements of the flow economy. Just to give a couple of examples, we have Jimmy Telecom in Kenya. Using a fiber TV, where it’s moved to be able to have a connectivity interface, to provide a TV set top box. Becomes a interface player and it also becomes a content player in providing all of the TV streaming to it’s customers.

We’re seeing Telephonica, which is, it’s thinking things, service, what are this, provides these devices, which you can simply, literally stick together. They are connected, they provide information to the world about them, and so you can create your internet of things, home, in just a few small building blocks that you can pull together yourselves. Becoming a player from that connectivity, to be able to participate in many elements, in terms of the interfaces and in terms of the services. Then linking those elements of connectivity. For example, buying things, communicating, content, and a whole variety of guises.

This all creates a world of disruption, where the world of the old is being pushed away to be able to create new pathways. I think, when we look at the economy globally, one of the most fundamental things that we can see is the divergence in performance between the best performing organizations and the least performing organizations. Essentially, what we’re seeing is that those organizations, that are staying the same, while the world is changing, are falling down, where as those organizations that are changing as and seeing all of the changes and opportunities are moving forward. We can see that in some data from the U, showing the gap between the best productivity firms and the least performing productivity. A growing and growing divergence between the best and the least performing organizations.

Organizations, you know, it’s in the classic theory. It’s about those things which are, start off being not as good as any other offers. But because they’ve created it in a different way, because there’s a different price point, they’re eventually able to get the critical mass, get the network effects of the broader participation to be able to break through and absolutely move out what has already been an existing disruption. Just one illustration, which we’ve all have seen and experienced over the years, was that of moving from still cameras to digital cameras. Of course, these….by digital cameras through to phones, on the cameras on the phones.

If you think, look at say 2001, still, the vast bulk of the industry was in the traditional markets. Yet, the transformation was really rapid from there. This is where organizations need to be sensitized to those things, can actually dramatically shift, where they are other new things coming. There’s an extraordinary array of not just new technologies, but new ways in which services are being provided to be able to do that. Organizations need to learn how to continually transform themselves to go from the old. To be able to come out and be born and new.
There’s a race at all time. The red queen, and Alice in Wonderland, had to run as fast as you could in order to stay at the same place. That is pretty much the state of business today. We need to able to continue to be running. In order simply to be able to stay at pace with all of the others. All of your competitors, every, both direct competitors and those that are providing similar value throughout the streams, are moving ahead in an extraordinary pace. And now the race is how do you push yourself even further ahead. I think fundamentally, the answer is in networks. To be a high performance organization today, to be a high performance organization five years from now, you must be an extraordinarily well networked organization. Where you’re able to bring the right capability, experience, relationship, background inside your organization, to where there’s the challenge or the opportunity, ….real time.

Moving beyond the classic traditional structure, so we have the vitality and the dynamism of that organization. But also it’s around the networks that extend beyond. To be able to look for the ideas, the possibilities, the capabilities beyond your organization to be able to bring those inside you. Now, a Mobius strip is when you get a strip of paper, you turn it once and you join it together, and then that piece of paper only has one side. The three dimensional analogy equivalent of that is the Klein bottle. The inside and the outside is the same. I think that’s an extraordinarily powerful metaphor for organizations today. The way in which you interface with your customers…needs to absolutely mirror and be integrated with the way you work internally.

There’s a challenge, where you both need to be able to be very effective internally, as a network type performance organization, and to have the right culture and connection and flow of ideas internally, but also be able to keep that tied and integrated and in sync with the ways in which you are using the networks to be able to drive value for your customers externally. It’s around how do you create value with your customers. For example, Nike ID, where your, the customers are helping to design the actual Nike shoes and then sell them and participate in that value creation. That’s just one example of how we are seeing that value creation is with customers. You are not creating something and then selling it. Your customers are actually participating in creating value, in creating the products and be able to push those out into the market place.

The great example in the telecom world is that of Giffgaff in the United Kingdom. Where all of the sales, of the marketing, of the customer service, is done by the customers. These are basically formed, they participate, and in order for their participation and helping do the customer service for the other customers, to be able to sell and to market that. They’re rewarded either in minutes, in dollars or in contributions to the charity. In fact, recently Giffgaff was noted one of the top customer service organizations in the United Kingdom. One where the service is provided by the customers themselves. This is the crowds and the sharing economy as…as an organization and a high performance organization.

Organization, looking at leadership. Leadership is required in order to be able to cease the value in this world. Because the..was at variety. Tells that only those individuals and organizations, that are as flexible as their environment, actually have any choice at all. Otherwise you’re simply buffeted by the winds of change instead of being able to take a lead and to shape the world around you. That’s deeply challenging, given the extent of change and the world around us. Now we must create unique organizations, Andrew McAfee at MIT, or through, amongst other things racing against the machine. Certain event that I organized a little while ago, he said that, what do you see is that all organizations are becoming more and more different.

Back in the old days companies used to have the same processes, the same structures, the same ways of working and they looked more and more similar to the customers. Yet now, we are seeing the potential for the merging of technology and culture, and history of an organization to create something that is absolutely unique. That is not just an opportunity, it’s also an imperative to be able to create an organization which is absolutely distinctive, which is absolutely unique, which cannot be copied by any others. However…look at it, because they’re not able to embody what it is. In this connected world of today, there are amazing opportunities to create things which are not just unique, but the things that have never been done before, in terms of how value is created, putting together the different elements of the flow economy, the different pieces that create value in a connected world.

Joseph Campbell was a comparative mythologist and he studied cultures and societies all around the world. What he found was that in every culture there was a common story. What he called the hero’s journey. Every race tells the same story. What it is, is if a person who is called beyond their everyday life, to something that is beyond them, to be able to go forth to encounter many challenges as well as many help that’s on the way, to get something that’s of value and to bring that back for their community. Now I believe, we are now extraordinarily, the extraordinary challenge, we must all hear the call to go beyond what it is ….to be able to create. Because what you’re doing, as we’ve already heard this morning, what you are doing is creating exceptional value for India, for it’s citizens. For India in the global economy. This is where in the connected world, the possibilities truly are.

To be able to create new things that have never been created before and to be able to bring those back for all of us to benefit from. I’ve looked at connectivity, as the underlying thing. The increasing expectations driving the shapes of all services that are provided. Changing structure of the world, this idea of the flow economy, with the six different elements. Disruption, transformation required of organizations and finally the leadership required to create it. But I think you’ll agree with me, the opportunities are absolutely going to explode, and I invite you to see those opportunities and create an extraordinary future in the connected world of India. Thank you.