Since March, K+C teams have been gathering hypotheses and signals about third-order effects, how the world and particularly, organizations and commerce might be changing in response to the crisis.
We'll share how your organization can start doing the same, what we've learned along the way, and where we see things progressing as the Age of Resilience emerges.
Sensing Signals and Spotting the Path Forward
Since March, K+C teams have been gathering hypotheses and signals about third-order effects, how the world and particularly, organizations and commerce might be changing in response to the crisis.
First things first I'm George, I lead the Strategy Team at Kin + Carta and today my talk is about sensing and responding and trying to chart a path forward in this really uncertain time. What I'm going to cover is one big question, which I think lots of us are asking ourselves. And then unpack it a bit with three “how might we's” that come in three parts. As I go through that I'm going to drop in six tools or techniques to help answer some of those how might we's. This isn't like a rhetorical desk banging presentation, this is really a sharing session which will hopefully give you some tools to better think about what's going on and make sense of it and help chart a path forward for your organisation. I'm going to whip through probably a little bit too quickly and hopefully have some time for questions at the end. But as I said, we will be sharing all of the little tools and worksheets and little bits and bobs that I'm going to go through so look out for those on this landing page. So let's start with the one big question. I'm sure many of you have seen lots of headlines that go something like, “Everything is going to change''. Maybe even forever things like, “Is it the end of the office as we know it?”, “it's going to change education forever” maybe “it's the end of international travel.” And then there's this other class of headlines that also seem to be popping up all the time, which is basically everything is accelerating, things that were happening before, such as, the shift away from cash is accelerating, the shift in cloud deployment is accelerating. In the world of health and pharmaceuticals, people think that maybe non adherence to not taking your drugs and health inequalities are going to be accelerated by the crisis too. But then there's also suddenly a lot of other headlines and lots of examples popping up, that are more show some things return to normal. You know, work is going to change but the office is there to stay, air travel may return to normal by summer 2021 and as our IKEA reopens, people are queuing around the block as they're experiencing flat pack fever, so maybe retail is just going to balance back, and people are going to do lots of urban shopping. So, you know, there's lots and lots and lots of news media, and coverage and data and things coming up all the time about all of this. The big question, that I think many of us are asking right now, is what's really changing? And how should we respond? What's actually accelerating? What's changing for good? What's going to snap back? What's going to go back to the way it was? What's going to be totally different? Undoubtedly, there are going to be some things but it's just really hard to tell right now what those things are. So today, we are hopefully going to help start to address that question. So three how might we's, how do we start to unpack that question into some more addressable chunks?
So I think the first bit of it is, expanding the ideas around what's actually happening and what might be happening next. How might we better understand that? You know, we might just be looking at particular areas around the world. If we're in finance, maybe we're just thinking about the future of finance. Or maybe there are other relevant things we're not looking at; maybe we're just reading one newspaper, and we need to look a little bit beyond that so we've got some ideas there. Then the second part, if you're within an organisation, you might be quite constrained, or feel like you're constrained on what could our organisation do to respond to this? And you don't want to just be spectators to the change, you don't want to just watch things happen. You want to be actively exploring what you could do as an organisation and within your teams to meet the new changes and the answer occurring out there. And thirdly, and this is maybe the most simple one for lots of organisations, you might have a vigorous alignment around what's changing and what you need to do to respond inside your team. But maybe you don't have the evidence you need to make sure that you've uncovered the right path. Maybe you can't convince other people that you need to or you just aren't quite sure of yourself. How do you start to spot what's really happening? And be really strict to yourself about this being an actual emerging change rather than just something that you've quick to think directly about. So those are the three might we's ways. And as I said, I'm going to whip through some tools now, to look at how you might address those questions.
(05:31) Thinking in Systems Worksheet
So, how do we expand the ideas around what's happening and what's next? The first one, and I think lots of people say this but it's actually quite rare to see people doing it as it can get really complicated really quickly. But thinking in systems is really interesting way to think about the crisis right now, at the moment, we're all in the business of being sci-fi writers, we're thinking about the future, we're thinking about what future patterns might be emerging and what a new future ahead of us might look like. And you know, what's true of sci-fi is true of what we're thinking about with the future right now. In that, it's quite easy to predict the virus is going to be a big part of our world in the future but what's the kind of equivalent to the traffic jam? If you're thinking about the virus as the car. What's the future kind of second and third order effects? The bits of culture that emerge off the back of this giant that changed all of our lives. And how do we do that? Well, thinking systems is a good way to start and this is a really simple framework to start thinking about this. It's surprising how little people really just explore this. So starting on the left, we know that this is undoubtedly happening, people are increasingly staying at home, they're commuting less or not at all. They're going to retail less. They're not using leisure hospitality services and they're gathering socially a lot less. So what might be some of the increases or decreases that we see off the back of that in terms of trend. One really obvious one, is this kind of growing need for social connection and companionship. You might have got that before through going out meeting people outdoors, meeting them at leisure centres or starting a meeting at work but you just don't have that anymore. And then, thinking again, what's the next order on from that? What might we expect would increase the drive, as we move across to the right, we might expect things like, concurrent experiences to become more popular and more interesting. We might look at social experiences that are social distancing, safe, like driving, is becoming more popular again. We might see things like gifting services becoming more popular again, or more popular than they were before, because people just want to rebuild that social connection after distance. And we've obviously seen lots of social messaging apps and video apps like zoom become really popular. Another that has really emerged and the data has come through recently is this increasing demand for pets as people are looking to add to their family. This speaks personally to me as we have a new member of the Kean Proudfoot household Mungo, the puppy. This was the easiest way for me to get him into the presentation because he is a bit of a handful still. These effects are obviously cascading from that core original point, people staying home leads to quite unusual outcomes, that we might not have originally predicted. I'd really encourage you and your teams to actually sit down and think what are these chains of causes? What could they be? Above this transcript is a list of worksheets to run through with your team. So there's a load of effects on the left, then you can start thinking about second order effects, and then third order effects. That frames the start of that hypothesis generation process, the “what might be happening out there as a result of these things”.
(10:14) Historical Analogies Worksheet
The second one that I'm particularly interested in is historical analogies. So it's often said, and this is, I think a Mark Twain quote that's been butchered and plagiarised many times, but that History doesn't repeat, but it often rhymes. We know that there's no event like the one we're going through right now from history but there are lots of similar events. There are lots of things from history that we might want to learn from, we might want to look at and understand more about some of the changes that happened as a result of them. One interesting way I think of doing that with the current crisis is, not just thinking okay, this is a pandemic, let's look at all the pandemics. But think about it as different parts of a crisis. It's quite a multifactorial crisis with lots of different things emerging and there's lots of different aspects emerging as we move through the crisis. So that might be things like, there's a rapid increase of government spending, there’s limited mobility as we can't move around as much anymore, there's an economic shock, there's a big public health scare obviously and there's civil unrest emerging right now, which isn't directly related to the Coronavirus crisis in some ways, but maybe is quite related to it in terms of that economic effects. There's increasing medical testing and investment, and lots of the technological trends that maybe were happening before the crisis and have just accelerated, like the use of video communications and remote work. So let's break all those apart as that gives us a bit more of an interesting starting point. To think about historical analogies, think about how we've had public health crises before, we've definitely had economic shocks before and we've actually had lots of times where our personal abilities suddenly limited. Let's look at what happens when that happens and what the effects might be. So in the public health crisis, you might look at something like the HIV AIDS epidemic, a very different kind of disease and a very different kind of public health crisis in lots of ways. But interestingly, it had this kind of characteristic of while originally being quite unknown, rapidly moving into the public consciousness and becoming available in people's minds, it’s quite a well studied phenomenon. And what happens in that is, that it becomes increasingly pressing in their heads from being almost nowhere. Back in January, February, many people may or might not have even heard of this virus, they certainly weren't thinking about it and now we are in a world where it's almost the only thing you can see in the news at any one time or every story is related to it in some way. It's what you see when you walk out the house and its impacts on the things around you. Similarly, economic shocks, we've had lots of those, and they are really well studied and it's really interesting to look at their impacts on individual behaviour. One area that I'm really interested in is, how it changes people's saving behaviour for the long term. If you're growing up now, and you're just entering the workforce, history will tell us that it's likely that your savings behaviour and the amount of money that you save, is going to be drastically affected. This change is statistically not just for now, but most likely for your lifetime, you might permanently (at least as a cohort), be much more likely to save more and put aside a bit more money than previous generations. Then on the limited personal ability side, we've had this in an extreme way that maybe, many of us will never experience again, hopefully, where we can't really leave at home, so we certainly can't do much more than go to the shops. That's happened before for us here in London, with the tube and train strikes, which unfortunately are very familiar and probably will return again. And what happens there is, it's been studied that when people are forced to try out new different ways to travel to work, to travel to their friends and family homes, they actually find new ways and sometimes they prefer those ways and they permanently switch. So the stress of the mobility crisis for people actually forces them to try out new ways. It turns out that without that forcing, they wouldn't have found it, but they now actually prefer that way which makes it become the new routine even when things return to normal. So what might be we expect, in this case, like building on those as analogies, and again, these are just hypotheses, but some of the evidence starting to emerge for us, that people on the health crisis side increasingly looking for virus protection and cleanliness, in the economic sphere, savings rates are likely to rise and in mobility, people are going to try stuff out which maybe they'll stick with long term. Amazingly, we are actually starting to see all this emerge. European consumers, American consumers, all the data is pointing to more savings being put away, whether or not that becomes a long term thing we'll see. With mobility, a massive increase in cycle and electric scooter sales and things like that. I don’t have a worksheet to give you on this but I'd really recommend firstly, I wrote a blog post about those two examples. So if you're interested in those, read about them a bit more and then delve into the internet and break apart the current crisis and get information on the bits that seem most relevant to your business, and then try and find similar ones. I've linked some here and I think there's an interesting thing as we can look at pandemics in the past, but Germany has just announced that they're going to do a big VAT cut and that obviously could have large effects. It would be interesting to look at the past where VAT has been introduced and taken away, and what its effects on spending and businesses are. So that's just the starting point on these ones and we've covered that firsthand on why we need to expand our thinking.
(14:54) Disrupter Analogies worksheet
As I said earlier, we don't want to be spectators and we need to stretch it to how our organisation might respond. What can we do in our organisations to meet some of these emerging changes and shifts? One way that we've often done this, and this is a tool that we've used for many years, but feels like a really interesting one for right now, is to use this tool called disrupter analogies. So what you'll often hear from big companies is, “if I knew we were like a small company” or “if only we were like one of those Silicon Valley companies'' what would we do? We can't operate like that but we can challenge people to think a bit more broadly. And one way to start doing that is to, let's say you're a pharmaceutical company and you have some of these ambitions and you want to meet the changing environment we're in. How do you start to think about your business and how it might flex and adapt in a more broad way? Well, first, maybe unpack some of the attributes that you associated with your business. So maybe clarity, accuracy, efficiency; you offer a personalised treatment program and you're hyper convenient. These are just ones that I pulled from our experience of working with pharmaceutical companies or ones that they might typically aspire to. You then need to think about those attributes alone and think about brands who are completely outside of your industry or your sphere that relate to those. So I've just pulled some random ones today, so for example I could say The Economist, Goretex, personalized Google and convenient Uber. And then take those brands and think about Uber or The Economist entering the market. If one of these companies decided to enter your market how would they do it? And you can really ask yourself any question during this, but we've got some prompts that we like to ask people. So let's say it's 2021, and Uber has completely come to dominate the market. How would they do it? So they've reinvented creating on demand direct to consumer healthcare, the aggregates the best available treatments and monitors efficacy, and makes it hyper convenient and trusted for people using the technology that they bring healthcare to you and they call it one tap health. I know these are random ideas, but the point is you're stretching your thinking, think about how they might connect it to their existing business. So in this case, maybe they would create cloud kitchens with nutritionally specialised menus for things like, diabetes, or high grades. These aren't really meant to be too serious, but I do think it is a really interesting exercise, especially if you need to step out of the constraints of your business and you have aspirations to operate in the way that the modern economy moves. This is a really interesting exercise to go through and it doesn't take much time. Again, look out for the extra sheets on this one, is a good bit of fun to do, and maybe a good way to break up the day and break out of kind of existing modes of thinking.
(17:39) Corporate Lego Worksheet
The second one in this section, I've definitely contravened certain corporate trademarks by calling it a corporate lego. But you'll see why. It's easy, for some of the businesses we work with, to think of themselves as a very fixed, operationally efficient entity. So we've worked with a fuel retailer for a number of years and the fuel retail is under a lot of strain for lots of reasons. And we know that and those reasons were there before the crisis, and they'll be there after the crisis. But, you know, this is an interesting moment for them to really think about confronting those, as we're seeing things like the pressure to accelerate the energy transition, and to become more green and socially conscious, coming alongside the need to reform as we come out of the crisis. So one thing we often do is get our clients to break themselves apart, like what are all the different resources, processes and values that make up you, the fuel retailer, and all the other things, which when you look into there's loads of actual different parts here. And there's no reason that they have to be put together in the way that they are right now. So think about that. Think about taking apart the components of your business, the resources, the processes, the values, what are those key thoughts, and then think about what's changing out there in the real world and how we might reconstitute them to meet that change. So I want to start a guide with a couple now and related some of the trends dimension earlier. So, what if we're the fuel retailer, and mobility has changed drastically in the last few months, maybe it changes permanently, that we should be experimenting by bringing together our retail locations by the side of the road. Things like our food and beverage retail electric power, our colleagues, obviously our payment infrastructure, we've got these amazing locations. What if we could create a kind of micro mobility recharge and refuel hub for customers who've just switched out public transit. If you've got locations in a city center, maybe that's a really interesting opportunity to explore. Then with your fuel brand and your fuel delivery, infrastructure, and all that car care supply and tools that they have in petrol stations and fuel stations around the country. Maybe there's some emerging need to support this huge growth in logistics. So with the E-commerce growing market simply logistics, growing hugely, what might we do to support those? Well, maybe we can bring those together to create an on demand service to help DPD drivers and FedEx drivers and Amazon delivery drivers, and the rest of them meet that increased demand. So those are just my ideas. Again, really encouraging try out with your teams, this is the kind of inside out version. So, get together all of your values, processes and resources. And think about the crisis and the challenges and opportunities that are presenting to you as a business and see if you can merge them, reconstitute and bring those things together.
(20:43) Calling your shots worksheet
Okay. So finally, we've had a good think about the future and how this stuff might be changing. Then we've stretched, what we might be able to respond to, we might come up with some really exciting ideas, and some really interesting ones, but the question remains, how might we get the evidence we need to make sure that we've uncovered a new path? How do we become sure that this is actually genuinely something worth investing in? Or really pursuing? I think the first one to call out here, is calling your shots. There's a lot of danger in this space of hindsight bias. So, in two or three months time, we'll look back, like we might be doing right now and think I knew about that virus and think that we knew all along, this was going to shift and this was how the industry was going to change. So the first step we need to do to avoid that hindsight bias, is do this work now and just start writing down your predictions, write down your assumptions and hypotheses about what's going to change and write down what you think the evidence might be that those changes are occurring and what are the kind of leading indicators for that. I'd really recommend doing this together and start gathering data and signals as a group because from our organisation, there are some people who read the FT every day, there are some people who are deep in some weird corner or read every day, those are two really quite distinct places. But both are equally legitimate sources of interesting data and signals for knowing where the right path might be ahead. We started to do that internally at Kin + Carta. We built a spreadsheet that pulled together all these hypotheses and in the team, we started building this out really early on in the crisis, we added through it, we opened it up to everyone and then we opened it up to the public, as just doing and sharing this stuff in public seems like a good thing to do right now. Having these in place means that you can update them over time and you can start gathering large quantities of data. To collect data, we set up a slack channel internally, as we often do with lots of things, and if you see something interesting about responses to the Coronavirus crisis, new bits of data, new sources of data in all different industries and countries around the world, people would drop them in the slack channel with a link for reference. So we've been doing that pretty much continuously, since the beginning of lockdown and it's just been a really valuable exercise. I'd really recommend other organisations go forward, too and with this one, the tools already out there. The link to ours is here and we recommend you make a copy of our one. Just use our one as it is there and open for you guys to build on. Finally, in working out whether you've got enough evidence before it is faking it? I think this one's most interesting. I mean, there's lots of uncertainty about whether something's a good idea, you might be wrapped up in “is this idea technically possible?” or “can we actually fund this?” Those questions tend to be answered internally with prototypes and meetings and communications internally. But the biggest question is often, do people actually want this? Or some subset of that, such as, will people pay enough money for this to a business priority for us? Or would they buy this off of us, over other organisations who are selling a similar thing? And those are really difficult questions to answer without launching a thing. The answer with lots of corporate audiences is to say, let's go and ask people, let's do a survey and let's ask them if they want this. The problem with surveys, as we all know is, they give us some interesting data, but their stated preferences, they're what people say they might want. Until they've seen it, until they've maybe even put credit card details into a payment interface or committed, whatever it is that they need to buy that service or use it. It's tough to know that they really mean it. So we really try to move towards revealed preferences. So, it's a term from Economics, where you look for where people are actually behaving in the right way to respond to an option, they're actually purchasing it, they're actually choosing it, rather than saying that they will. Naturally really difficult to do if you haven't got the thing, obviously, but you can't fake it. So, we're working with a number of financial institutions at the moment. One of them has lots of really exciting ideas about what might be a new proposition that can pop out as the crisis starts to recede, and some of the things we talked about, maybe start to lock in. So maybe we're seeing this increase in savings behaviour, something like a savings coach, using artificial intelligence to help you save more might be really, really relevant for people as they kind of get into that bubble. But as I said, as well, there's also this maybe growing need for people to invest socially, in a socially conscious way. And maybe that's another thing that they want to launch as the crisis abates. And there's also maybe an increasing feeling that I need to protect myself and my family a bit more. And so maybe there's a product line there around insurance that kind of is bundled together to really protect the family. So, these are all really exciting ideas. Those ideas we would really like to be able to test them with this client of ours. But as we know business doesn't work like that and you can't do everything, you can't see all the opportunities all at once. So how might we understand which ones are really interesting to people? We started running a number of fake ads. We put out some fake communications that really communicate some of these propositions, and see if people will tap on them and sign up for them. This has been really interesting, because you don't just test the proposition itself, but you can get live data for customer appeal or for price sensitivity, maybe for different parts of that proposition, which appeal most. We think this is a really interesting tool for right now, where most businesses are kind of waiting for that moment to move and they're maybe not competent enough to put down the big investment money in a brand new proposition so this kind of data is hyper valuable when you're trying to chart that path forward. If you're interested in this, and doing this kind of thing, please do get in touch because we're really excited to do this with more organisations, to spot where different industries go next and how they can prosper as we come out of the crisis.
Just to recap quickly, there's one really big question that we will all be asking; what's really changing? And how should we respond? We have to unpack the way as well. Let's expand our ideas and therefore how might we expand our ideas around what's happening? We have looked at a couple of tools there, for consistency maybe look at some historical analogies, how might we stretch our thinking about how our organisation might respond? Then we looked at some really exciting ways to do that, or try and be a disrupter through analogy. Then you can also just break apart your business, treat it like lego and see if it can come out of the crisis in a new different way. Then finally, how might we get the evidence we need to make sure we've uncovered a new path. Call your shots in public work on that data gathering process internally and monitor things as there is some amazing data out there right now and you should be bringing it all together in one place. Don’t be afraid to fake it, just so you can get that initial data and insight.
What's been your favourite example of how organisations or individuals have responded so far?
We were lucky enough to work with some of the biggest grocers in U and actually in the US as well. It's been amazing to see how the grocers have mobilise and initially, there was a moment when a lot of people worried about there not being enough food on the shelves. So, there is also all the stuff that we can't see that they've had to work really hard on around supply chains and making sure there's actually fresh produce on the shelves which is incredible. But on top of that, shifting their retail outs and offering services for vulnerable people who can't go out to stores is fantastic. In the case of Tesco, we've been particularly proud to be part of that and helping build a digital product that people with impairments and accessibility concerns can use and millions of new customers have started using because of the crisis. So, I think it's incredible to see how the grocers have adapted in the short term and that's been really exciting.
What surprised you most that has felt counterintuitive to what you expected to see during COVID-19?
Hmm, I don't know. Maybe I'm suffering from a bit of hindsight bias or, I was quite open to lots of things happening off the back of this, and, there's some really weird stuff happening. I think like things like Tik Tok introduce very unusual things into culture. I saw the other day that there's obviously lots of people buying very nice lighting setups for Webinars and vlogging. But apparently, people are buying lights that switch through red, blue green rapidly, so they can do really nice cuts on Tik Tok, which isn't directly related to the Coronavirus crisis, but just seems like a bit of culture that wouldn't have happened otherwise. As so many people are focused on basically making their homes really entertaining for a video audience on mobile which I think is pretty fascinating. I'd imagine there's lots of young people who are basically making new bits of culture right now that lots of us probably don't know about, but we'll come to know about over the coming months.
Did you see any change in how people consider delivery workers during COVID-19, compared to the perception before the pandemic?
I think it's really interesting as my cousin's postman and he certainly felt a dramatic shift in the way he was perceived and greeted. I think there's definitely something really interesting going on in terms of that broadening out of how people are thinking about workers. This term “essential worker” is a little bit weird, and maybe won't last that long. But I think people are realising that some of the functions of our society that we relied upon, were not viewed as the greatest or the most essential job in the world, like being a delivery driver. I think that does seem to be changing and would hope that the policy response is one of increasing minimum wages for those people.
Where does the responsibility for asking these questions and thinking about these subjects sit? Is it for strategists/technology leaders?
As I said, I think it's everyone's job. I think it's really important to do this as a team and people like me, read really wonky things about the economic history and the economic current which gives you a certain sort of signal. We picked up some really interesting and early examples of how people were coping in the retail space again, from Reddit, people were building public spreadsheets or availability of different grocery stocks in their local area. To us, that's an amazing signal to say that people want this stuff and we should maybe think about offering it to people or creating a service that does this because, yes, someone on Reddit for a local area is building something as best they can. So I think it's everyone's job and it’s important to have cross functional teams thinking about this stuff.