THE ABC’S OF THE
FUTURE
I want to thank you for this
opportunity to speak to your group because I believe that we’re on the cusp of
some radical changes in how and where we will all be working – driven largely
by the introduction of new players and suppliers, new business models, new
automation technologies and new connectivity tools – which together are
changing the face, the composition, the size and the future of our workforces.
Sitting, as I
do, at 1871 in the midst of 500 new startups and about 2000 entrepreneurs and
visitors a day, I feel like I have a ringside seat at the innovation circus and
also a perspective informed by 50 years of my own entrepreneurship and by presiding
over 1871’s dramatic growth from a startup itself in 2012 to what is now generally
regarded as the largest and most successful mega-incubator in the world.
We’ve grown
from 50,000 square feet to 170,000 square feet of space in the Mart – tripled
our revenues and become financially self-sufficient, created over 10,000 new
jobs, and raised over $300 million dollars in new capital for our companies.
The Mart itself has also been transformed by 1871 and it now has more than
11,000 tech jobs in the building and has become the tech center of the city while
also attracting major Chicagoland and Illinois corporations which are all seeking
to get closer to and more involved in the action.
When we talk
at 1871 to our major corporate partners and sponsors, apart from their constant
desire and need to recruit and retain new, young, digital and creative talent, the
two largest concerns they have are (1) that they aren’t moving quickly enough to
generate and incorporate new ideas and new thinking into their organizations and
(2) that the people who built most of their systems and solutions are unwilling
or unable to break them and radically change them going forward. I imagine
you’ve heard the same conversations in your own shops.
How and how
rapidly these new forces will change everything you do in your own companies isn’t
clear, but it is inevitable. These changes aren’t going to be slow and
incremental – that’s no longer the way the world works – and, as a result, the
sooner you start thinking about them and planning for them, the more prepared
you’re going to be and the more likely you are to be surfing the waves rather
than drowning in the floods.
Today, we’re
all connected by powerful and fully-portable devices which are increasingly
intelligent and sentient – we’re prepared and we’re expected to work anywhere
and everywhere – we’re on call – like it or not - 24/7 and 365 days a year – and
because these are the requirements of our work world today, we readily
extrapolate and extend them well beyond our own day-to-day lives into the
broader workplace as well. What’s good for the goose is equally good for the
gander. We’re all in a hurry these days and time is the scarcest resource of
all.
And, in fact, once
we’ve experienced these hyper-speed services – either as providers or
recipients - once we’re an active part and a participant in the “right now”
economy – it takes no time at all for us to mentally up our own expectations
and anticipate exactly the same levels of speed and service throughout the rest
of our lives. Why would anyone wait for anything?
If Walgreen’s
can give me a walk-in, one-minute flu shot, why would I wait three weeks to
make a pain-in-the-ass appointment - with my regular doctor’s nurse – to get
the exact same shot and pay a lot more for the “privilege”. And, oh by the way,
while I’m at Walgreen’s, I can drop off my Fed Ex packages as well since every
Walgreen’s is now a Fed Ex hub.
Everything is
basically about the same three things today – speed, access and convenience.
We’re all looking for a friction-free future and Amazon is leading the way in
so many different ways that it’s simply amazing. Right now, Amazon is
installing automated hubs and pick-up depots in schools, condos and office
buildings across the country – they are faster, easier and more convenient than
your conventional mail rooms – they’re self-service so they’re around all day and
all night long without staffing – and, of course, they’re totally free to the
users.
No business or
industry is going to escape these kinds of changes and the smart money is on
the people that are thinking today about what they will need to do differently
tomorrow in order to not just survive, but thrive in the new mobile and digital
economy. The question that you need to be asking yourselves is not simply how
do I use some of these new-fangled technologies to do my business better – the
critical question is how will I use these new tools to do things for my clients
and customers that I never imagined that I could do before.
I’ll bet you
didn’t know this, but UPS trucks almost never turn left. Every morning the
computer develops a delivery route for every truck based on the packages in the
load and every possible turn is to the right – fewer accidents, no waiting at
intersections for left turns – and, best of all, the routing system is saving
them 10 MILLION gallons of fuel a year – yes, I said 10 MILLION gallons.
Tesla isn’t a
car with chips. It’s a computer on wheels. Detroit is falling further behind in
the battle between steel and smarts every day and the consequences are
important for your businesses as well. At their peak, the BIG 3 auto companies used
to employ 1.2 million workers – today the big 3 Tech companies employ around
137,000 people – a workforce reduction of almost 10 to 1 – and they generate
substantially MORE revenue than the automakers. It’s not clear that we have
jobs today for all those displaced workers or that they’ll need office
buildings of the same size and scale ever again. And those are just the
problems facing the car guys.
Hospitality
isn’t much better. Marriott employs 226,000 people and has a market cap today
of about $34 billion. Hilton is about 2/3rds of Marriott’s size in terms of
market valuation and has roughly 169,000 employees. Airbnb has a market cap of $31 billion – 50%
greater than Hilton and closing in on Marriott. How many employees does Airbnb
have? Remember Marriott is 226K and Hilton is 169k – Airbnb has less than 4000
employees – about 1/100th of the size of its two biggest rivals
combined.
UBER isn’t a
better taxi cab company – it was a new two-way marketplace connected by a
powerful new platform that completely changed the game. One active UBER vehicle
at full utilization replaces roughly 7 private cars in any major urban setting.
Think about the implications for the parking facilities in your buildings. Our
own cars are used on average about 5% of the time – the remainder of the day
they are sitting empty somewhere – taking up space, costing us money, and
slowly wasting away. And we’re seeing more and more Divvy bike utilization in
the city every quarter.
These changes
(which are coming at a faster and faster pace all the time) will have
significant and disruptive impacts on the workplace and on the demands that the
users of your services and facilities will be making on you and your team. It’s
not going to be enough to say that your people are fairly responsive and pretty
quick – you need to have a plan that is focused not on how fast you are today,
but on how fast your business is getting faster and becoming more adept and –
most importantly – how capable you are of anticipating and exceeding the needs
and requirements of your tenants and consumers. You need to learn to skate to
where the puck is headed, not chase it down the ice.
It’s a little
bit like running ahead of a steamroller – on any given day, you can beat it,
but you better not sit down and take a break to catch your breath because the
thing will roll right over you. Think about this – the rate of change today is
the SLOWEST that it’s going to be for the rest of our lives. Tell that to your
kids. At 1871, we say that we’re playing the whole game in double overtime and
that’s what it feels like every day when you’re trying to keep up with your
customers and your competitors.
The
expectations of all customers are perpetually progressive, and the movement is always
up and to the right. What was great yesterday – even things that were miracles
of speed and service – are just “so whats” today and business as usual. It’s
increasingly a “what have you done for me lately” world and – if you’re not
meeting the demands, you can be sure that there are plenty of others waiting in
the wings to step in and fill your shoes. The idea of parity – that “we’re no
worse than the next guy” is being blown up by new entrants with new business
models that aren’t held to the same old standards and aren’t doing business in
the same old way. Traditions these days are – by and large – just excuses
offered by people who don’t want to change.
Now I
understand that almost no one likes change, but it’s really not change that’s
the problem. Changes – when they come – take place in an instant. It’s
overcoming the resistance to change – the reluctance to leave behind the old
ways – to abandon the things that have worked “pretty well” for you in the past
– that keeps us from moving forward. But here’s the hard news – what worked for
us in the past – simply won’t cut it in the future – things aren’t going to be
a little bit different – the shifts in the ways we do business will make a lot
of the old methods and programs – not simply slower or less effective – but
essentially meaningless. And, if you
don’t do it to yourselves, someone else will promptly come right along to do it
to you. So, now’s the time to get started.
We use a
simple approach – it’s basically asking 5 questions about your business.
WHO are you
serving?
WHAT are you
offering them?
WHEN AND WHERE
are you providing your products or services?
HOW are you
providing those products and services?
It couldn’t be easier, but too few companies today are taking
the time to pay attention to these simple questions and to honestly ask
themselves how they’re doing in these various areas? That’s the first step in
the process. Eat your own dogfood and see how it tastes.
The second
step in the evaluation and audit process is also pretty straightforward. Since
you can’t be “all things to all people” and you don’t want to spread yourself
“a mile wide and an inch deep”, you have to ask yourself what is your
competitive advantage. What do you do best or at least better than the rest?
Maybe it’s your customers, your distribution systems, your size and scale,
special expertise or intelligence, your brand, reputation or network, or maybe
it’s your platform.
But we know
for sure that it can’t be all of these things and so you’ve got to pick your
spots and take your best shots and double down on the areas where you’ve got an
edge. All the rest are just commodities and they’re not gonna help you win. But
remember that these are also moving targets and changing all the time. I often
hear about pocket listings and competitive/confidential intelligence, but I can
tell you that in the new aggressively transparent digital world, it’s only a
matter of time before everyone you know will know everything you know. Not only
will they know what you’re doing, they’ll know just how well you’re doing it
and – here’s the real rub – if you’re not killing it, doing the absolutely best
job that you can, then they’ll find someone else who can do it better or faster
or cheaper or more easily or globally, etc. You get the idea.
Customers and
clients are increasingly fickle folks these days and their definition of
loyalty is also new. Today, loyalty doesn’t mean much more than I haven’t seen
anything better – YET. I realize that that’s not encouraging, but that’s life
in the fast lane. No one really owns the customers or clients any more…you can
own the moment and the experience, but you have to deliver the goods each and every
time.
So how do you
compete successfully in a world of more options, more competitors, fewer
workers and a finite base of clients. I break it down into what I call the ABCs
of the Future. Don’t worry – my alphabet is pretty short.
A & B are
for Amenities and Benefits. It’s an absolute arms race and you need to be
aggressively in the game. But it’s not just about shiny bells and whistles any
more – it’s about things and offers that add real value – save time and money –
increase productivity – help your clients attract new talent, etc. It’s about
making your properties stand out in a crowded and noisy marketplace.
We’re seeing
this with malls already. There are about 1000 malls in the U.S. and half the aggregate
value of those properties is wrapped up in ONLY 100 of them. The other 900
malls are in trouble. Retail chains are also over-stored and so they’re all
trying to cut several hundred locations from their inventory. As they review
their properties, they are looking at the sales numbers for sure, but also because
they’re concerned about branding, they want to be in the malls that matter –
the malls that have something more to offer – that have a presence and a
personality. Places that still pull people in.
Your
businesses aren’t going to be much different. I brought some materials today
from an 1871 company called LISA which provides easy tenant access to all kinds
of onsite personal services. It’s like an automated concierge service for
office buildings and it’s just one good example of what’s coming down the line.
Another 1871 company, Sparkl, provides on-site, on-demand waterless car washes
for a clean car wherever you are. We
have other businesses building better systems for package tracking; for
automated replenishment of basic supplies and staples; and for automated access
control and security.
C is for
Community. It’s easy to think of your properties as consisting of an
enormous number of individual tenants and clients and that’s certainly part of
the job. I’ll talk about data in a moment and the need for what I call “mass
customization” which is essential today. But, for the moment, I want to suggest
that you look at ALL of the occupants in each of your buildings as members of a
connected community – not simply in a negative way – like when the air
conditioning isn’t converted over soon enough each spring and it’s a sweat fest
– but as a positive population which you can help combine and connect in order
to make your properties into special places. Centers for charitable events,
places to gather after hours to talk politics, hubs for adult education and for
lifelong learners, etc.
Social media –
for better and for worse – has made us far more connected than ever (we know
other people in our buildings these days that we would never have met in a
lifetime before) and you need to build on and capitalize on those channels and
connections to help distinguish and differentiate your buildings. It’s more
work, but you’ll be surprised how many volunteers will turn up to help you in
the process. It’s a chance to see a lot of people when they’re not in pain or
being a pain in the ass. In the future, community will be as important a
component as concrete in building the lasting connections to your clients that
will make the difference.
D is for
Data. Data is the Oil of the Digital
Age. Your job is to use the enormous amount of information which is now
available about just about everything that’s going on in your buildings to
design and develop systems to make it easier and less expensive to deliver
better and more extensive products and services to your clients. It’s a world
where you can actually be all things to each person because we have the tools
today to build highly-individualized offerings to millions of people in
minutes.
We call this
idea “mass customization” and frankly it means that large-scale, general, and
basically boring communications of any kind are relics of the past. If a
million different vendors from all across the country know my shoe size and my
sushi preferences, your “one-size-fits-all” tenant letters and boilerplate
solutions aren’t going to get the job done. I want you to make an investment in
getting to know me or I’m going to find someone else and someplace else that
will. These things take time and effort,
but they aren’t about money – they’re about attention and engagement – and
those are the new dimensions of connection in the digital world. If I’m not
listening or interested, it doesn’t really matter what you have to say.
And E is
for Experiences and Environments.
In the new
world, no one wants to own much of anything. Ownership and possessions are out;
utility and experiences are in. It’s about agility, flexibility and mobility
and it has implications which we are just beginning to understand about how
workplaces will establish and broadcast their newly-appended identities - how
they will signal to the clever and the initiated that this is the kind of place
where they need to be and where they need to locate and build their businesses
– and how they will assure those same people that – as solid and substantial as
things may seem – they’re ready to change and upgrade them in an instant if the
need arises in order to keep raising the bar and providing the best tools,
technologies and resources possible.
I wish I could
tell you that even 1871 has cracked the code on these new questions, but all I
can say for sure is that what really matters in the end is not the
bricks-and-mortar or the concrete – it’s the culture you create and that you
consistently reinforce – that will determine your success or failure. This
business of taking care of people is all about a moment of inspiration and
creation – followed by a lifetime of maintenance – and that’s what determines
who lasts and who succeeds even in times of radical change.
At 1871, we’ve
built an air and an electric aura of tension, excitement, enthusiasm, and energy
that permeates the place and one that’s apparent from the moment you enter our
doors. We believe in hard work, not wishful thinking, and it shows. You get
what you work for, not what you wish for.
And we believe
in one more thing as well…it’s not big money or fancy cars or expensive houses
that will ultimately make us happy … it’s finding something to do every day
that we can be enthusiastic about.
There’s no greater pleasure or privilege. Thank you.
