Our world is being shaken and stirred. The blend of an unprecedented level of unpredictable geopolitical events, combined with the industry bending power of intelligent data analytics and digital technology, is quite the cocktail.
BCG describe the latter part of our cocktail as the 'fourth industrial revolution' yet when these changes in technology and business sit alongside and underpin change in governments and supranational institutions, how might we describe such happenings?
The role of powerful analytics in the recent US election and in the success of the Brexit campaign are well documented, so rather than seeing these two major trends as running along in parallel, there is evidence that at least they are enabling each other, and perhaps have entered into a symbiotic relationship.
Opportunities are being created. The Dutch embassy in London has reportedly doubled its staff to attempt to seize the chance to secure a larger share of the fintech market. Unburdened by national borders complicating access to the EU market, the Netherlands is seeking to persuade British-based ventures to voyage across the North Sea. As Australia prepares to overtake the Netherlands as the country with the longest recession-free innings, the Dutch are actively seeking new growth from another country’s choice to exit an economic union.
Let’s experiment. What questions might be posed if we were to pick a certain technological development, and apply it to an environment that we are familiar with?
How about the self-driving car, major infrastructure projects, and your favourite stadium where you enjoy live music? Significant investment has been promised for modernising stadia in Australia, as has investment in new transport links such as WestConnex and the trams in Sydney. The finalist cities bidding to host the Olympics are contemplating major investments, alongside keeping the electorate supportive and demonstrating the long-term sustainable benefits of such projects.
What might happen when we start arriving at the stadium in self-driving cars? Would the stadium provide a special route for such vehicles, be powered with cashless payment options to reduce queuing inside, and offer incentives to users of such vehicles as parking must be more efficient if needed at all? This must be a consideration to those who have decided to, or are contemplating, investing millions in such projects.
Will the car itself transform from a machine requiring our full attention to operate, to an entertainment space? If so, how might our musical artist engage with us in this space to increase enjoyment, and to seek stronger commercial returns?
Digital technology, and the right analytics to make sense of the behaviours taking place around it, presents new and perhaps unexpected opportunities, and when considered certainly poses valuable questions that can guide spending decisions on major infrastructure projects. Contradictions are also created.
We can look to the business of sport for an example of just such a contradiction. The '100 websites that rule the internet' was recently published, which ranked by traffic US-based sites. Of the 100, only two sit in the sport sector, which are the NFL and ESPN.
Contrast this with the findings of a recent KPMG study into the enterprise value of the top 32 European football clubs. KPMG calculated total enterprise value using a combination of on-pitch performance, revenue, and social media following. The results present a group of mid-sized European companies. Real Madrid, for example, had a calculated value of a mere €3m. So as before with the websites that matter in the US, is the importance of sport minimal? Perhaps not. Real Madrid’s ability to mobilise fans on social media far outstrips the combined efforts of Nike, Adidas, and Puma, despite the company values of these sportswear giants being vastly greater.
A contradiction? Perhaps digital technology and analytics have the power to be a winning factor in engagement in apparel as well as in politics, so another symbiotic relationship is established.
What about those who have created their own unique cocktail, perhaps bypassing the need for such a relationship?
Under Armour were ranked sixth in the Top 25 Most Innovative Companies of 2016. They have 175m users on their connected fitness platforms, manufacture clothing, and produce wearables. They are also listed in the top 100 companies to work for, perhaps giving a glimpse of the culture that underpins their success. They have the scale to mobilise people – more than Real Madrid’s 104m followers on Facebook, and the financial clout to be valued at close to US$17m. They still engage with major football clubs through sponsorship, as the aforementioned brands do, yet they derive considerable enterprise value in the way Real Madrid do, as well as the way Nike do.
Opportunities, questions, contradictions. Some shake us and present chances for others; some stir us into new actions. The challenge for us all is not to focus on digital itself (a perspective built from the inside looking out), but instead to craft the right approach that enables chances to be seized in an environment where digital technology and intelligent analytics are an everyday part of life. Innovative leaders are doing this to empower political campaigns and win elections. Innovative leaders are creating opportunities where others see challenge and contradiction. Whether it is for a nation to capture market share and influence from another; a candidate to form government ahead of a rival; or a business to unlock deep engagement by growing outside of their traditional scope or territory, the real leaders are doing the shaking and the stirring.
This article elaborates on the contributions the author made to a recent panel discussion at the Business of Sport Summit, held in Sydney on the 5th April 2017.