Thought Leadership Ideas For 2018 And Beyond

Last year around this time we were just beginning to process the results of the U.S. elections and Brexit. That is why this column pointed to politics and trade as the top themes of thought leadership. The second theme was the idea of rethinking customer experience, and the third was data. This year data takes center stage, and is followed by two other themes—but not always because executives have them on their minds.

The top themes for 2018 and beyond are:

Data. This is going to be the year of data. One obvious angle is regulatory, with the GDPR (General Data Protection Regulation) coming in force in May 2018. The GPDR introduces new requirements and challenges for legal and compliance functions. It will require vast resources: Many companies do not feel ready and fret about their ability to report data and provide adequate transparency. They are right to be afraid. Many companies tell us that they are not always sure that they have a single view of a customer. How then can they be sure that they ensure the privacy of that customer? But how to successfully approach new data privacy regulations is not an intellectual conundrum. Theoretically, we all know—or can find out—what to do, which technologies to install, which advisors to hire, what skills to devote to it. It’s maddeningly complex and time-consuming. It slows everything down and diverts precious resources from other areas. But a road map exists.

Smart data sharing and creating business value from data is another story. Companies have been focused on changing their business models from selling products to selling services, based on data. For example, a maker of a product, if it has data about the use of that product from its customers, can advise on maintenance, thus cutting down on downtime. Since the maker has historical product performance information about both the maker and the client, the trove of knowledge to share and use to improve business is quite vast. This means the ability to add to ongoing services. The trick is to figure out which data and which services the client will find useful.

But this customer most probably also shares and obtains data from other companies, and some of it may be even more useful than the data from the product maker. What’s more, this useful data can often come from a relative startup in the industry, which does not have historical data at all, but finds one useful piece of data—sometimes publicly available—to mesh with the client data and provide the most useful services. I call such data phantom data. It emerges unexpectedly, out of the blue—even though it was there all along, only impossible for many to see—and instantly seems both obvious and visionary. Companies must be on a constant hunt for such phantom data.

Another issue with using data sharing to create services is that it is often impossible to measure which or whose data contributed value to the service. It very often happens that value extraction from data is not fair. There are several reasons for lack of fairness in current data valuation—from data ownership to lack of metrics, to inability to analyze it. Whatever the reason, the actual value creators may be leaving money on the table.

Supply chain. This year we are putting supply chain in the second spot, but not because executives spend so much time thinking about it. Just the opposite, executives do not see it as the cornerstone of their strategy. The supply chain is an orphan child—it typically comes in at the bottom of the list of priorities in terms of investing in or focusing on. It is still often thought of purely as logistics or transportation. It, or parts of it, are often not well integrated with other functions. In many companies the supply chain is siloed—a paradox, considering that the chain should be a connector—and gets little attention from top leadership. That needs to change. It is called chain for a reason.

Speed, transparency, customer experience, platform business models, blurring the lines between the physical and digital worlds, data sharing—these are all issues that companies are grappling with. Whether they succeed or not comes down to their broadly defined supply chain. The supply chain should no longer be only about efficiency or logistics. It should also connect the company’s networks together for value creation and innovation.

Blockchain. This technology earns a third spot, even though it may not be more important than the Internet of Things, artificial intelligence or cloud. But blockchain is different in the sense that it does more than provide a technological capability. It has the potential to upend our thinking about how centralized platform companies need to be.  

The applications of digital technologies have so far led to concentration—e.g., three companies provide more than 60% of the world’s cloud services; Amazon accounts for more than 40% of e-commerce sales in the U.S. Google accounts for 41% of U.S. digital revenues. These platforms exercise significant control over their participants, which is why we think of them as centralized.

Blockchain is a distributed, open ledger in which anybody can record a transaction of anything of value without the need for an intermediary. Verification is done by other users, referred to as miners, who get paid for mining. Blockchain technology is part of the public domain. Nobody owns or controls it. It operates more like a cooperative than a monopoly.

It could change the idea of a platform business model as we know it. It affects all companies. After all, first we used to say that every company is a technology company, now we say that every company is a platform company. We need to do some serious thinking—is it possible that soon we will be saying that every company is a blockchain company?

