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John Jantsch (00:49): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch and my guest today is Jonathan Brill. He’s a speaker and advisor managing director of resilient growth partners and a board at frost and Sullivan. He’s also the author of a book we’re gonna talk about today called rogue waves. Futureproof your business to survive and profit from radical change. So, Jonathan, thanks for joining us.

Jonathan Brill (01:18): Thank you for having me, John. It’s a pleasure to be here.

John Jantsch (01:21): So I’ve, I try to go like at least every other show without mentioning the word COVID, but unfortunately there’s too many topics or too many interviews where it’s relevant. I mean, radical change is the, the day, the word of the day, isn’t it?

Jonathan Brill (01:35): It, it sure is. I think we look at things like COVID and we say, Hey, this is an edge case. No, no one could have predicted it. That reality is that when I was at HP, my group actually did identify the shifting likelihood of something like a, so respiratory pandemic and recognize that most companies were misidentifying. The likelihood, the point here is even the ones that did eight of 10 large companies, publicly held companies in the United States failed to identify pandemics as a risk. But the two that did one was CVS health at the insurance, right? Obviously they identified it as a risk, but, but the other one was apple. And they said, Hey, you know, it might Jack up our supply chains a little bit. They didn’t really consider the, what happened, what the act of the second domino would fall. And I think that we need to start thinking much more about these seemingly unlikely events and how they’ll change our companies, because it turns out that well, any one of these might be unlikely and aggregate. They’re actually highly likely spent about 27% of the 20th century dealing with them. And, uh, manager spent about 45% of the 20th century bailing out of these sorts of,

John Jantsch (02:54): And I think that that’s your point is that there, a lot of times people will see one thing or another thing. It’s like a little wave on the ocean, right. And, but it’s the, when they come together, you get this freakish thing that nobody probably could properly prepare for. And that’s what tips the boat over. I mean, that’s your nautical sort of metaphor, isn’t it?

Jonathan Brill (03:12): That that’s exactly right. There was a, you know, you see these individually manageable wave is a change or whether it’s changing demographics, populations are getting older or emerging technologies like artificial intelligence, you know, or maybe there’s an economic shift, like, like massively inflationary pressure, right. From money printing. Yeah. The question that I have is have you thought about what happens when all of those come together? Cause that’s exactly what’s happening this week.

John Jantsch (03:42): Yeah.

Jonathan Brill (03:43): And the shift is going to be massive. It was a knowable thing, but everyone kind of read that the, the headlines in the newspaper instead of considering the whole newspaper.

John Jantsch (03:55): Yeah. And I think that, I think what we’ve all learned too is, was the event, which to all pointing to as the pandemic really was just an accelerator of some things that were going on anyway, wasn’t it,

Jonathan Brill (04:06): That’s typically what happens, you know, there’s, uh, I haven’t been able to actually find the original source, but linen once said there are decades where weeks happen and there are weeks where decades happen. Right. Right. You know, and we’re certainly experiencing the latter right now.

John Jantsch (04:25): Well, and one of my favorites is a Hemingway, uh, quote. I think it’s in the sun also rises. The character says I went bankrupt slowly. And then all it’s all of a sudden, you know, or something, you know, kind of the same idea. It’s like, we don’t see the little things that are happening till boom, you know, we’re bankrupt. So, um, I love trends. Most people love trends. You identify at least 10, um, in this book that you think are some things that are happening right now. And maybe in the near future, you obviously, we can’t unpack the entire 10, but you wanna point to maybe a couple that you think people really should be paying attention to right now.

Jonathan Brill (05:00): Yeah. So was the global futurist at HP and over a number of years, as we were restructuring the firm, we had to figure out what are the things we know will happen over the next decade, over the 2020s. And we identified, we did maybe 15 million of research, not just in this, but in the impacts for us. And we identified 10 major trends that are shaping the next decade. And so we talked a little bit about, you know, changing demographics, you know, and, and these things are like, they’re obvious, you know, they’re like, they’re news headlines now three years ago. They weren’t, but they’re news headlines now, many of them. So we talked about changing demographic, right. And, and how it’s gonna impact labor. Yeah. You know, the cost of labor, but also consumption. You know, if you think about, as people get older, they tend to buy less stuff.

Jonathan Brill (05:52): And they tend to, you know, for the people who inherit, they tend to accumulate capital. So it changes the consumption patterns. We see the explosion of the data economy. So we’re seeing, you know, companies like Amazon, right. Generating tremendous amounts of capital, enabling, uh, platform companies on top of them. And the question we need to really be asking is, are they creating new value or are they extracting value? So a good example is like Uber versus Airbnb. Well, Uber has actually made new things possible in cities, new business models possible, uh, new businesses possible. Whereas when you take a look at a company like Airbnb, if they’ve taken housing off the market, they haven’t replaced it with a new product. And so they’ve transferred value in a lot of cases from the hotel industry into their business. And so the question becomes, you know, are you creating versus extracting value?

Jonathan Brill (06:46): I think that’s a really important question in the next decade for a bunch of reasons. Um, the closing innovation window, I’m just kind of choosing, we have kind of this model, like there are 10 things, but you can’t keep ’em all in your mind. So, right. I think about what’s social, what’s economic, what’s technological. Those are big buckets. So I’ll pick one from each second. One is the closing innovation window. So we’re seeing research and development move faster, right? That the life of the, in which you can monetize, uh, a new piece of IP shrinking. And so we’re seeing faster product cycles at a certain point that decreases the amount of originality. It changes the way that you innovate. And we’re seeing that a lot of industries, uh, pharma right now is, is one that’s about to see massive acceleration. And then social change is the, the third of those three big buckets.

Jonathan Brill (07:38): And it, I think we’re having a real question when we look out at the future is what is the social contract, right? What is a right versus what is a regulation? So crazy example a year ago, if you’d said, Hey, my, you know, here’s my data, it’s my right. I own that data. I generated it. Like, I would’ve agreed with you, but in thinking about in the age of something like COVID right. If my data can save a million lives, should it really be mom? It’s a really interesting question. And, and it’s one that’s gonna play out in a million different ways, you know, over the next decade, should we have, you know, universal, basic income, you know, should that be a right? Should, should I be able to take money from a wealthy person and give it to the poor? Well, we have said, you kind of can’t do that increasingly over the last 40 years, but it might really flip in the United States, certainly in Europe.

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John Jantsch (09:30): Now we’re getting into, uh, philosophical and ethics debates. Aren’t we, uh, um, you state in the book, there’s a systematic way of identifying these radical changes and position yourself, you know, increasing resilience. What, obviously that’s a giant topic, but just the thumbnail sketch. What do people need to start doing differently to, to, you know, identify position the themselves?

Jonathan Brill (09:56): Yeah. So first of all, start thinking about like, what are those big topics? What are those big trends? Uh, a number of good ones, useful ones are in the book. They’re, they’re clearly playing themselves out right now. And that research was done several years ago. So, so we know that there’s some validity to them. Start there, ask what would happen if as they overlap, what would be the impact for me? And then what would be the earliest and the latest that they would impact me. Right. So that’s kind of horizon scanning is what we call it in kind of strategy, world business strategy world, and then ask, what are the steps I need to take to increase my optionality and to increase my potential by the earliest and the latest time that, that they would impact me. The, the interesting thing that I hear a lot is, well, yeah, sure.

Jonathan Brill (10:47): These are all unlikely events. We can’t prepare for everything, but I think the more important question is do these events cluster in terms of their impact on us and yes, they do. So when you take a look at the major causes and decrease in firm value, and once again, I’m talking fortune 2000 firms, but I think it attracts to smaller businesses too. You know, the question is, you know, what are those? And they fit into four buckets, financial, operational, external change and strategic change. So, so our demand forecasts are off the most common one. Well, we spend upwards of 90% of our brain cycles and companies focusing on finances and operations, right? The things we can control, but 75% is that decreases in firm value are a result of external change, right? Are strategic change. And so we need to have our people digging down, looking at what’s going on in terms of our finances and operations, for sure. But we need to have them looking out, you know, we’ve gotta be using the microscope as well as the telescope looking out to see what’s going on the horizon. And so I, about

John Jantsch (11:56): That, go ahead.

Jonathan Brill (11:58): I, I think that’s a really important kind of concept to, to look at like structurally, what would these changes do to our finances or operations or our external environment and our strategy because typically kind of, there’s certain shapes that they there’s certain shapes of stress for companies and how do we increase our resilience? You know, and, and I know you, this is really marketing and external focused. How do we do that for our customers? How do we create products that increase resilience for our customers in the same sort of way? So it’s a, both a process and a product innovation concept.

John Jantsch (12:33): So what do you, I mean, I know what you say, but to this, but you know, some people look out there and externally in their industry, things are changing in a way that is just gonna gut the company. You know, it’s just, but yet I’m a 60 year old board member. Am I going to say, okay, we have to stop selling classified ads now and give them for free because otherwise, you know, we’re gonna, that business is going away and then we’ll be irrelevant as a newspaper. I mean, how do you know, I’m sure there are people out there that look at that and say, well, we’re just gonna stick our head in the sand because I’m outta here in a few years.

Jonathan Brill (13:06): Sure, sure. A lot of professional services businesses are having that problem this year, like dentistry businesses, right. That you tend dentists tend to be demographically older and you’re seeing a lot of that change going on right now. I, I think the question to be asking, you know, is whether the goal is acquisition or whether it’s shaping, right. Do we want to build out work within a new ecosystem or, or is our goal to be acquired in, in a situation like that, uh, where we can’t optimize to profitability or we can’t pivot to profitability. Yeah. We need to figure out some new ecosystem relationship and that sort of thing’s been happening in all of the, all of the small, medium business areas. Uh, oddly in, in the mortuary business, you know, where we’ve seen aging populations, demographic shifts, consolidation of materials, brands, Costco, selling coffins, I was

John Jantsch (14:09): Gonna say, even societal find

Jonathan Brill (14:11): Those new relationships,

John Jantsch (14:12): Even societal change about funerals and right.

Jonathan Brill (14:16): Yeah. Yeah. And so that’s good. The top question is, is like, do a, you know, is the goal to be you to hold on. If we say we can’t hold on, is the goal to be acquired or is the goal to build some kind of partnership ecosystem relationship with kind of a platform provider? Yeah.

John Jantsch (14:33): So all,

Jonathan Brill (14:33): All of those aren’t options, I would emotionally want as a get where you’re going, but that’s kind of the strategic palette.

John Jantsch (14:40): Yeah. So over the last decade or so, you know, culture’s become such a buzzword in, you know, in the corporate environment and, and not just that people have realized it has real value to, you know, to the company, to the customer in using your metaphor. Is there a, is there an under to coming from, you know, COVID that, that is really kinda wreaking havoc on company culture right now.

Jonathan Brill (15:05): So within what we’re talking about, I think these a larger frame within the book, which is, you know, when you have to deal with the first thing everyone does is stick their head in the ground, right? And so you need to generate awareness. And whoever starts saying that the sky is falling, you know, people are gonna take out the Spears and start throwing on them and, and I’m gonna start mixing metaphors as well. So, so you have the ABCs of resilient change of resilient growth. So you have a awareness, you have behavior change. If people don’t have the skillsets to make sense of the future, right. It doesn’t really matter that you have awareness. It’s just chicken. Little, if you get ahead of it early enough, if you make those small steps to increase your optionality and potential over time, then we’ll talk about what those are.

Jonathan Brill (15:49): You can get ahead of it, increase your flex building. And then the third is culture, right? How do you create a culture where those behaviors are acceptable? Because a lot of the time we’re talking about, you know, adapting to change, as opposed to trying to, to keep things, keep the ship righted, right. How, how to be a kayak instead of, uh, an air aircraft carrier. Right, right. Um, because an craft carrier can make it down any storm, but you know, only in the ocean, not in a class four rapid kayak is a much more flexible vehicle, but you know, much less stable and, and our volatile times that we’re moving into, I think we need to really rethink whether our goal is to be, you know, uh, impervious to any thing or ready for a changing sea, a changing environment, because that’s, the more likely disruptor is a change in the environment than, you know, than competing against a more aggressive situation that we already know.

Jonathan Brill (16:46): So in, in terms of behavior, there’s something I call the rogue method where, you know, basically what you wanna be doing the, as a board member, as a strategy person within your organization is saying, okay, R and the rogue method is, is reality. Testing is our baseline assumption about what is going to remain the same. The second is observing the system, right? Can, can you understand independent of knowing all of the details, what the components are of the ecosystem you work in, and with using that technique, understand if there’s a change in the upper left hand corner of your model, how it impacts the lower right hand corner of the rub Goldberg, right? And, and that’s a skillset, that’s something you can build. The third is generating the range of futures. And so this is the thing that I think was a big challenge in 2020 is everybody said, Hey, we’re gonna do 6% better or worse next year.

Jonathan Brill (17:42): But then you had situations where AMC, the movie theater company took on a billion dollars and still make go bankrupt or situations like zoom, where they did 26 times growth. Right. In, in our volatile world, you can’t do traditional strategic planning and have it work. Right? Yeah. So you’ve gotta plan for the range of possible futures, not the ones you want and then think about, you know, okay. Like what would cause you to, to get to one outcome? What would cause you the best outcome? What would cause you to get to the, the worst outcome and what are the small decisions you can make today, you know, in terms of how you do contracts in terms of whether you make decisions earlier, late, like simple things that will shift the probabilities of success for your company, and then how do you experiment? So most companies, they really just try and do one thing again and again, better and better and better and better and hope that the world still needs that solution in the future. Right. Right. Like that’s not a viable solution world where you have radical change. Right. The environment changes. It’s not just the, it’s not just your competition. It’s not a feature based competition. It’s a platform, you know, it’s really about how do you deal with radical change? How do you deal with a change in the environment? Can your aircraft carrier survive on a class four rapid, or are you really better off in a kayak?

John Jantsch (19:10): You’re really talking about constant innovation, of course. And so does that, I mean, does that need to be a department or does that need to be culture?

Jonathan Brill (19:20): I, it can be a department, but it has to be culture, right? Yeah. Like you, you know, the army, no matter how big your, your army is, it has an infantry and it has special forces. Right? Right. Like you want, you probably want both, but the question is really whether your culture can absorb the innovation, whether your culture is set up to, to listen to people who say, I have a future, I cannot yet prove I see a future. I cannot yet prove. Right. And, and can you support those types of people in your organization that type of thinking in your organization, and then go through the validation process of, you know, is this the right scale of risk, right. Is this too lower risk, too high risk for us to take, can you have that conversation? Or are you just going and saying, Hey, we want you to be, but we won’t protect you if you fail. And by the way, we will protect you if you take no risk.

John Jantsch (20:18): Yeah. Yeah. I mean, that’s

Jonathan Brill (20:20): In, in

John Jantsch (20:21): Nutshell that explains most leadership, true businesses.

Jonathan Brill (20:23): Right? Like you see a lot

John Jantsch (20:25): Of

Jonathan Brill (20:26): Yeah. Especially in mental management.

John Jantsch (20:27): Yeah. Yeah. Right. Jonathan tell people where they can, uh, find out more about obviously the, but, but your work, if they’d like to check out some of what you’re working on.

Jonathan Brill (20:36): Yeah. I have a website, Jonathanbrill.com. The book, you should get it on Amazon. It’s called rogue waves. And please follow me on LinkedIn. I try and drop something useful every day. Awesome.

John Jantsch (20:49): Well, again, thanks for sub by the duct tape marketing, uh, podcast. And, uh, hopefully we’ll run into you one of these days out there on the road, John, then

Jonathan Brill (20:55): Looking forward to it, John.

John Jantsch (20:57): All right. So that wraps up another episode. I wanna thank you so much for tuning in and, you know, we love those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients, and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That’s right. Check out the duct tape marketing consultant network. You can find it at duct tape, marketing.com and just scroll down out a little and find that offer our system to your client’s tab.