“Progress is impossible without change; and those who cannot change their minds cannot change anything.” This famous quote from George Bernard Shaw must be a
mantra for business leaders in 2018. Disruptive and accelerating change envelops us. Fundamental shifts are taking place in business and society, and they’re turning the world we thought we knew on its head. But don’t fear them. Change equals opportunity, and these trends, from population growth to rapid urbanisation to the explosion in data, will present the biggest opportunity that businesses have ever seen.
But to capitalise on – not capitulate to – them, business leaders will have to adjust their mindsets, to break free of received wisdom or dogmatic adherence to what worked for them in past. We need to open our minds to radical new perspectives to succeed. Here’s five mindset shifts that I believe will be vital to progress in 2018:
Start running in circles
The world’s population is on pace to hit 9.4 billion by 2050[1]. And according to the Brookings Institution, the global middle class will grow by about 160 million people every year between now and 2030[2]. That means more prosperity, more opportunity, but also more consumption. In the next 20 years, it’s predicted that energy use will rise 48 per cent, greenhouse gas emissions will rise by 34 per cent[3], while demand for water will be 40 per cent higher than supply[4]. At our current rate of growth, we’ll need the equivalent of 2.3 earths by 2050 to support us[5].
In response, I believe there’s a viable economic model, contrary to the one of ‘make, use, dispose’ that we’ve been hooked on since the industrial revolution. Big businesses like HP can – and are starting to – shift their business model and operations towards a more efficient, circular and low-carbon economy. It means reinventing the way products are designed, manufactured, used and recovered. It means decoupling growth from a reliance on increasingly scarce raw materials. Business leaders ready to consider the circular economy will reap benefits to their firm’s efficiency, value, innovation pace, environmental performance, and customer satisfaction in 2018.
Serve up experiences, not just ‘stuff’
Central to the growth of the circular economy is the fact that our idea of ‘ownership’ is changing – people are becoming more interested in gathering experiences instead of ‘stuff’. By 2025, 1.8 billion new consumers will join the world economy[6], with most of us living in cities[7]. As a new generation of urban workers and consumers, living in expensive cities with space at a premium, we’re changing what we buy and how we buy it. It’s driving us towards a service-led, on demand economy. Contractual buying is accelerating rapidly across all areas of the economy but especially so in HP’s native tech devices sector. It’s why HP recently announced its enhanced Device-as-a-Service offering. For business leaders embracing this shift in 2018, it’ll be an opportunity to provide more managed services, generating recurring revenues and getting closer to customers. All while improving the customer experience.
Move from cyber protection to cyber resilience
The pace of change today is exponential, not linear. In ten years’ time, your smartphone won’t be 10 times more powerful, but 1 billion times more powerful. With the rise of AI we’re entering an era of ‘omni-intelligence’ – where data flows through every aspect of life and work. As a result, we’ll see a massive growth in data – 44ZB by 2020[8], the equivalent to 352 million years of UHD video!
The security implications are enormous. Organisations will spend more than $90 billion on security protection in 2018 alone[9]. At HP, we’ve reinvented our approach to security from protection to resilience, which has led us to design self-healing devices that not only detect a breach but are able to remedy it before it becomes a problem. And I believe that’ll be a crucial mindset shift for all business leaders in 2018. It’s not enough to just put up a wall and hope for the best. Cybercrime is now a $445 billion problem globally[10] and the frequency and intensity of attacks on businesses will continue to expand in 2018.
Prepare people for tomorrow, not today
Digital transformation of the British economy continues apace. There is no sector, and no job role immune from the disruptive potential of digital technology. That’s a good thing – we have an opportunity to be faster, better, more flexible, more productive. But we have to know how to harness its potential. And here’s the challenge. There’s a digital skills gap in the UK, and it’ll hold us back if we don’t address it. 75 percent of UK businesses report a digital skills shortage among their own employees[11]. Experts describe a 40,000-strong shortfall in people with the necessary STEM skills to meet the demands of the UK economy[12]. And it’s getting worse: the gap between the STEM skills needed by employers and those evident in graduates and school leavers has widened for ten years running[13]. All in, this digital skills gap is estimated to cost the UK economy £63 billion a year[14].
Smart business leaders in 2018 will be looking at their workforce, and planning future skills needs over a far shorter time horizon than ever before – prompted by the exponential rate of change. They’ll engage – as we do at HP – with the Government and educators, taking action to equip the workforce of tomorrow with the crucial skills of tomorrow. These could range from basic programming to managing complex systems and equipment. These practical skills, along with creativity, 3D design and logical reasoning, will be all-important in the future.
Embrace difference to make the difference
In addressing the digital skills challenge, education is important, but diversity is essential. Across Science, Technology, Engineering and Mathematics, we can broaden the skills base of the UK’s digital workforce by making sure that it truly reflects the diversity of our society. That means developing technology interest and skills across the entire talent pool.
For businesses, this is not a box-ticking exercise. And it’s not just relevant to the tech sector. There’s both a moral imperative and a fundamental commercial imperative. At HP, we’re firm believers that the more points of view a business can draw on, the better its products and the company as a whole will be. Diversity helps drive new business, fuel innovation, and attract and retain the best employees. That’s why I recently pledged, as a founder signatory to the Tech Talent Charter, to hire a minimum of 50% female interns each year. Our intern scheme is the main pipeline for our graduate employment.
I’m competitive and my number one goal is to win. To do that, I need to make the best decisions, but that’s only possible if I have access to the full talent pool that society offers. Otherwise we won’t win as HP, and the UK won’t win as a nation in the global digital race. Business leaders who haven’t adopted a similar way of thinking for 2018, could well see themselves and their firms soon obsoleted.
Change is perhaps the only constant today. But I, for one, am optimistic. It’s vital to track the megatrends shaping our society, and keep an open mind that what got you here today, probably won’t get you where you want to be tomorrow. So embrace and enjoy all the opportunities that 2018 throws at you, and don’t be afraid to change your mind once in a while along the way.
[1] Total Midyear Population for the World: 1950-2050,” U.S. Census Bureau, International Data Base, http://www.census.gov/population/international/data/idb/worldpoptotal.php. Accessed 10 May 2016.
[2] “The Unprecedented Expansion of the Global Middle Class,” Brookings Institution, https://www.brookings.edu/research/the-unprecedented-expansion-of-the-global-middle-class-2/, February 2017.
[3] “International Energy Outlook 2016,” U.S. Energy Information Administration, https://www.eia.gov/outlooks/ieo/world.cfm, May 2016.
[4] “Charting Our Water Future,” 2030 Water Resources Group, 2009.
[5] “Vision 2050: The New Agenda for Business,” World Business Council for Sustainable Development, February 2010.
[6] Mckinsey (2012)
[7] United Nations (2014)
[8] IDC, “The Digital Universe of Opportunities: Rich Data and the Increasing Value of the Internet of Things”, 2014
[9] Gartner, “Forecast Analysis: Information Security, Worldwide, 1Q17 Update”, 2017
[10] McAfee & CSIS. Net losses: estimating the global cost of cybercrime, 2014
[11] British Chambers of Commerce, 2017
[12] The Campaign for Science and Engineering, Improving Diversity in STEM, 2014
[13] The Institution of Engineering and Technology, Skills and Demand in Industry, Annual Survey, 2014 & 2016
[14] House of Commons Science and Technology Committee, Digital skill Crisis – Second Report of Session 2016-17, 2016
