'The Future Doesn’t Fit Into The Containers of the Past' with Rishad Tobaccowala, Publicis Groupe

2022 PEO Leadership Conference Keynote. Over the past decade, globalization, demographic shifts, and technology have changed the very landscape in which businesses are operating. The speed of change continues to accelerate with the third connected-age technologies of AI, Voice, 5G, and cloud computing. To further add to the uncertainty of the future, the economy is highly volatile and the world is facing geopolitical strains not seen in a lifetime. Rishad will distill this uncertainty and confusion into the key drivers leaders should focus on to prepare them and their companies for the Great Re-Invention. He will reveal how new scale is replacing old scale, why data is key but like electricity, not really a differentiator, how the rules of brand building require an understanding of “God-like” power, and how to separate the signal from the noise. 

Rishad Tobaccowala is a Senior Advisor to the Publicis Groupe where he has spent his entire 38 year career, most recently serving as the Groupe's Chief Growth Officer and Chief Strategist. Tobaccowala was named by BusinessWeek as one of the top business leaders for his pioneering innovation and TIME magazine dubbed him “1 of 5 Marketing Innovators”. He is in  the Ad Age Interactive Hall of Fame and received a lifetime achievement silver medal from the Chicago Ad Federation.

Rishad is also the author of “Restoring the Soul of Business: Staying Human in The Age of Data” which helps people think, feel and see differently about how to grow their companies, their teams and themselves to remain relevant in transformational times. Each Sunday, Rishad publishes a post covering a variety of topics. Explore more of his insights by visiting https://rishadtobaccowala.com/100. Additionally, Rishad is the host of the 'What Next?' podcast, where he finds fresh takes on society, the advertising and marketing industry, and the way we work to guide us into the near future. Rishad is also the Chairman of The Tobaccowala Foundation which helps 10,000 people in India gain better healthcare and education. Rishad has a BS in Mathematics from the University of Bombay and an MBA from the Booth School of Business at the University of Chicago.

PEO Leadership is one of the leading peer to peer leadership advisory for C-Level Executives. It provides its business community the ability to leverage its collective knowledge, experience and network; to challenge and be challenged in a high disclosure, objective and trusted environment through a combination of Peer Advisory Boards, One-on-One Coaching, and Thought Leadership Executive Networking Events - all to enhance the personal and professional lives of its members.

Transcript

Leon Goren
Hi, I'm Leon Goren, president of PEO Leadership, a peer-to-peer leadership advisory firm. We're an amazing community of CEOs, presidents, and senior executives. Ask yourself, are you learning as fast as the world is changing? It's time for Ontario business leaders to band together for counsel and support. It's time for you to tap into the business wisdom of our peer groups and unlock new ways to grow. I want you to come out of this COVID crisis a better leader and your organization ready for what's next, take the first step at PEO-leadership.com. Special thanks to Aird & Berlis for helping us bring you today's PEO Leadership's Way Forward podcast.


Rishad Tobaccowala
Why should we care about the future? It's a very simple question. And we have challenges enough, today, we're haunted by our past, we have all kinds of things. So why I muddle it up and care about the future. The only reason we want to care about the future is because we're going to spend the rest of our lives there. And that includes tomorrow, because tomorrow is the future. So as long as you're alive, you're going to spend the rest of your life in the future. So it kind of would make sense to care about the future. So that's one reason. But all of your last successful business people, successful entrepreneurs, successful everything. And one of the words that often y'all use is a word called strategy. Almost every business executive often says strategic strategy, strategist, and very few say, tactical execution, or things like that. Now, I happen to have been the chief strategist of what today is 100,000 person organization. And I was terrified that someone would come to me and asked me, What are you the chief off? Right, so your chief strategist. So what is that? Which means? Can you please describe what the word strategy means? So I'll ask you, what is the word strategy mean? So I decided, before someone would ask me a question, and I give them a dumb answer. I would go ask people who are spot for good answers. And then I would like any good person, copy those answers and say, that's what it is. Right? So I sent out a SOS bad signal to colleagues at consulting firms, like Bain and McKinsey and BCG to corporate strategists that I knew to university professors who taught strategy, and they all gave me answers. And I got the equivalent of about 50 pages of answers. And then I decided that that was too much. Because if I give an answer, which required me to speak for an hour to answer what a strategy is, you would say you clearly don't know what strategy is. So went to the other extreme, and after reading all of that, decided that possibly the best strategist in the world, was actually a gentleman. And since you're aligned Canada, you may know him called William Shakespeare. So for those of you who may not be aware, he was a playwright and poet who died long time ago 500 years ago, but he had a line in Julius Caesar, called take the current when it serves are prepared to lose their ventures which is decided was the best definition of strategy. So strategy is three words. Future competitive advantage. That's it. Three words, future competitive advantage. What does that mean? It means? What will your marketplace look like in the future? Specifically? What will your potential consumers, customers, members, guests, whatever you call them look like a need in the future. So number one, who will you be competing with in the future? And against those future needs? And those future competitors? What advantage will you provide? That's simple, which is the other reason you have to worry about the future. Because if you aren't thinking about the future, you aren't doing strategy. I don't know what people are doing. But if it isn't about future competitive advantage, it's not strategy. It's something totally weird. And most companies, when they do strategy, don't think about it that way. And they end up in trouble because they end up being weird. And I'll show you some examples of companies that actually didn't think about it this way and ran into trouble. So you might say, okay, future competitive advantage, very, very good. Now, pray, what crystal ball exists that allows me to tell the future, and Ryszard if you knew so much about the future? Did you know that for three years we'd be wearing masks? Did you know that a crazy guy would start a land war in Europe? Did you know that the Cubs would actually win a baseball World Series? And the answer to all of those is no. But going back to Shakespeare, take the current when it serves or prepare to lose the endeavours, what is very clear, are the trends. So basically, what he was saying is, man or woman, make the trend your friend. So if you align with the trend, your likelihood of being successful, is far greater than if you don't align with the trend. A mediocre person aligning with the trend will beat a very smart person who doesn't align with a trend. Someone who has no sales experience could sell word processors. And someone with world class world experience could not sell typewriters, when the age of digital technology came. Successful businesses that move early on a trend, not so early that you get burned, but early on a trend are likely to succeed much more than businesses that stay on what they currently are doing. And those trends are very, very clear. And there are four of them. And these are four trends, I suggest every business, every company, and even every individual align their sales with these are for sure. Right? I will bet everything that these are going to happen. And they're broad enough. So they're not so specific, like who's going to win the World Series or things like that. But they're broad enough for me to be quite comfortable, because they're not too narrow. So what are those four, I'll give you what those four and then describe in more detail how to sort of think about them. The first one is globalization. The second one is demographic shifts, surprising demographic shifts. The third one is a new age of technology that's coming. And the last one is how work is going to be reinvented. So those are four that I'm very clear about. And you will learn more about those details. Obviously, I'm going to speak about it but if you want notes, just go to that reshot tobacco.com backslash 100 and read the future. And you'll get more on it, but I'm going to describe it but if you want it. Let's start with globalization. The good news is you're in Canada and not in the United States. But even Canada, North America, Europe, if you read the economist in the Financial Times and the Wall Street Journal, they all are tearing the head out and hair out also in basically saying this is the end of globalization. And what are some of the things that they Bring forth? China, rise of nationalism, all kinds of things.

And all I say is, are you kidding me? All that's happened is we moved from a world where we had uni polar globalization, globalization dominated by the Western world, primarily Western Europe, and North America, and replacing it with multipolar globalization. In fact, the world's becoming more global, because it's not centralized to one region. Oh, over the last between 1990, and today, 2.5 billion people have come out of poverty, because of globalization. The entire Western world, which is not America, less Mexico, and all of Europe is 800 million people. This week, global population, turn to 8 billion people make the math quite simple 10% of the world 90% of the world. So 10% is going to define what globalization means. Now, we basically have a global world order built on 1945. The country that I grew up in, is about to have a bigger population and China, at the current time, has the world's fastest growing economy is the largest user of Google, Facebook, LinkedIn, and has more engineers than anywhere in the world and does not have a seat in the Security Council. But little countries like Britain and France do. How's that fair? Is that fair? Well, that's because it was all defined in 1945. But we're living in 2022. We're not living in 1945, which is why globalization is going to happen. Because if you think about it, demographics make the rest of the world rise. Currently, the basic belief is the world's population will peak at 10 billion, from eight to 10 billion, almost all that growth is taking place in one place, Africa. That's it. Nowhere else. So globalization is happening. It's probable multipolar globalization. Even somewhat like the United States, unlike China, or other unlike Canada, so Canada actually is pro immigration. The United States has decided to like commit suicide and become anti immigration. If the United States is actually going to compete with China, it can't do it without immigration. It just can't. Because of the second big shift, which our demographic shifts the population of the Western world, and China and Korea and Japan, so everything but India and Africa, has begun to go into decline. The United States grew by a million people last year, which is the smallest growth ever 17 million people in the last 10 years, the smallest growth ever. It takes 2.1 children to replace keep the population the same. That number in California is 1.7. That number in Korea is 1.3. That number in Japan is 1.4. That number in Germany is 1.5. The population of the world is in decline, excepting for Africa, and India. And in India, it's gonna peak faster than most people think. So that's the first part. Every business plan has been built on increasing population. What happens when that doesn't happen? GDP growth is productivity plus population growth. What happens when that doesn't happen? And it's not happening. One of the reasons that China is behaving the way it does is at current projections. We have long past week China. China's population at current projections is going to decline by 50% in the next 50 years. Because of the one child policy, which they can aren't fixed now they've said, Okay, forget about one child, two child have three children. No one's having no children. It's too expensive. And so what you basically have is a country, which population is in decline in Korea, they're closing down schools, there's nobody to go to schools. But no one talks about that. Right? Now, how about this, if that wasn't a challenge enough, the entire world is aging. By 2051, out of every six people in the world will be over 65 years old. In five years, one out of every three people in China will be over 65 years old. In the United States, in 10 years, one out of every four people will be over 65 years old. Declining flattening population and aging populations is a fact and these things don't change all of a sudden, you suddenly can change it. That's a trend you can see. So 8,800,000,000 tells you something. declining population aging population tells you something. I would basically make sure my business is global, I would make sure that my business understood that yes, while Gen Z and millennials are intensely important for a variety of reasons. Most of the wealth in countries like the United States and Canada, 75% of it is held by people over 50 years old. And most of them are going to live productively and happy to 85. And we have learned how to change our behavior as COVID showed. And therefore a fixation on youth as the next market may not be actually very cool. Let's start with the money is the money is with the older people. And the older people because of good health care, breakthroughs in cancer, and not dying at 65. and handing it over to the millennials, it's not going to happen. So that's fact number two. Number three, trade, a little thing called technology. Now, technology has been around for a long, long time, buyer, and veal and all kinds of stuff. So I'm going to forget all of that. And I'm going to basically just fast forward to 1993. So 1993 is when we entered the first connected age of technology. And it was when Tim Berners Lee and sun made the world wide web available for everybody, license free. That's when this began. Now, I happen to have taken marketers on to things like America Online and stuff like that. And I do realize there was online and DARPA net and all of that before, but the first connected age began in 1993. And between 1993 and seven, we lived in the first connected age where as human beings, we did two things we connected to discover and we connected to transact. In our businesses, we call that search an E commerce. In North America, the dominant companies for that are called Google, and Amazon. In 2007, we built on those first connected agent, we entered the second connected age. And in the second connected age, we had three new forms of connection. We were now connected to everybody connected all the time and connected to distraction. All human connections, we call that social, mobile, and streaming, also known as Apple, Mata, and Netflix. And if you go back to about six or eight months from today, those are the five most valuable companies in the Western world. They're not technology companies. They basically give human beings godlike power because she would beings like to connect. And these are the companies that made connection, friction free.

What we were not watching, and which is what I'm now going to boardrooms all over the world and saying, and because I actually told people about the first and second connected ages. Now in my atrophied and older state when I get wheeled into a conference room, besides saying okay is an unemployed starving author. Why should we listen to him? I'll say, I don't know a long time ago, I said something and I'm about to say something else. And what I'm about to say It may sound very strange and weird, and not exactly what the headlines say. But give me a listen. So they pat me on the head, give me a little food. And I give them a lesson. So I'm going to give you that. Okay? We have entered the third connector days, 345 years ago, I'm not sure because I'm not exactly sure. But there are four forms of connection that are now happening. So remember, the first one had to the second one had three. And by the way, they're all alive, none of them have died. But the new ones are coming. And you know how dramatic society and business news and everything changed because of that, right? The first two. So now imagine the third one. So in the third year are the connections data connecting to data, which is the flavor of AI that actually works really well. It's called machine learning. And a simple way of thinking about it is the following statistics. One out of every $3 of Amazon's revenue that takes place in their store, so I'm not taking talking all of Amazon's revenue, because most of their revenue and profits on Amazon Web Services, etc. But you're not amazon.com. One out of every $3 that Amazon gets is after you have checked out. So you got to buy something to check out. A third of their sales is after you checkout. And you might say like, what's that all about? Because they serve up, people who bought this bought this has happened to you. And you click, that's machine learning 75% of the time, the next show you're going to see on Netflix is what they serve up. They know better than you what you will like, it's true. And that's machine learning. Machine learning is doubling its capabilities every six months, three times faster than Moore's law. If you want to see it in action, I'll give you two ways you can see it in action. If you have a google home device, just say okay, Google be my Spanish translator, or in this particular case, I would say, OK, Google be my French translator. And I start speaking, it's really good French. One of our daughters is fluent in Spanish. So I said, Okay, you speak in Spanish. And let's see if this is good. And you're fluent in Spanish. And you're fluent in English. I don't know any Spanish, but I know English. So let's go. It's really good. So unless you're like President G, who needs that kind of translator? Do you have to worry about your kids learning Mandarin? They can speak in English, and just say, okay, Google, obviously, there's no Okay Google in it, okay. Baidu, I guess. And they have sort of an answer. That's how fast it has process is moving. Here's another one, this is free, go to a place called Open AI. And basically, get a free license, it's free, you get 50 hits 50 queries a month for free. And then the rest of it's really, really cheap. And you could basically say, I would like to see a kangaroo, sitting in a car, driving through Paris with a renaissance sunset at the back. Within seconds, you have those images. Look at something called runway ml. It allows you to create video at a highest level for almost free. And the CEO of that company basically says his vision is between the idea and the reality there should be no friction. runwayml.com tried out, open AI, try it out. If you're a writer, go to S-U-D-O write sudo write sudo. Right, and start writing and it's free. They'll start finishing paragraphs for you. Now imagine that doubling every six months. Interesting is that. So that's the first one. The second one is much faster forms of connection, which is 5g. 5g is not like what 4g was to 3g. 5g has two things. It's exponentially faster. And it's far more robust and resilient. So there's no signal drop off. As a result, it's very likely that like in Chicago, because of the nature of what I do, and we have to do a lot of stuff all over the world. I have backup systems. So I have two internet providers. So I have Comcast and I have Google Fiber. And Comcast I have the fastest speed I can get which is 800 megabytes. In this hotel I haven't checked but it's probably 50 megabytes so 16 times faster than this hotel. And for good streaming, you need about 25 megabytes. So this is 800 megabytes. And then I've got a hardwire ether line from Google Fiber, which is one gigabyte. And I have it on two separate computers set up into different places. So regardless of which board call I'm having to fly into in any place, I can't say my technology didn't work, because then they say that's stupid. So I have to have a backup plan. When I go to the Verizon store, it has to be only in the Verizon store in downtown Chicago using their phone using their transponder, I get speeds of four gigabytes. But the average speed will be about two gigabytes, which basically means you will be able to download a high definition movie onto your phone in six seconds. But that's not where the thing is. What's really cool is it basically means that all the computational power and not just storage in the future will be in the cloud. Which means this right now have your somewhere your the iPhone 14 Pro Max, the most expensive thing with a one terabyte or two terabytes, it's still big in the future, why? Everything can be in the cloud. And I can just speak. And that's coming in two to three years. So 5g, so much faster connections, data connecting to data machine learning to new types of connection. Voice in the country of India, where I grew up, more people search through voice than through their fingers. All the great voice engineers for Google and Microsoft are in India, because India has 22 different languages. And many people are illiterate. So you speak. Coming soon as augmented reality and virtual reality. Augmented Reality faster, virtual reality slower, but they're all coming. And then the last one, and you may start laughing at this, but I'm going to mention this and explain to you why what you're seeing is not what you think you're seeing is in a world where all trust has broken down. There's one thing that I do trust in, and it's I've long forgotten it. But I still remember some of the horrible stuff of it. I have an advanced degree in mathematics. You can trust mathematics. And mathematics is what blockchain is. So you might say, Okay, listen clown FTX collapsed, crypto prices have crashed. What's wrong with you? Lots of things, but not that. FTX had nothing to do with Blockchain. Most of this crypto stuff. It's got nothing to do with Blockchain.

This stuff is for real. But it's so complicated. And it takes time to understand. There were a few years from becoming easy to use. But blockchain is one of the most advanced technologies ever. And it's coming. And right now, people are mixing up the signal with the noise. When the.com crash happened in 2001, I was running an interactive agency. My agency didn't lose a single client. We didn't have to have a single layoff. And the reason was two reasons. One is I refused to accept dot-com clients because they did not understand their business model. And the second is I went to every existing client and said, This is what you're looking at. And this is what you should look at. What they were looking at was que que que the price of the NASDAQ index, which went from 5000 to 1100. So they were looking at that. And I said, Okay, that's there. And I haven't figured out the exact thing for crypto yet, not for crypto but for blockchain. But in that case, I'd figured out what I had to show them. And I said, Okay, you're seeing this. But let me show you this line, which goes up like this, which is broadband penetration in the United States. So number of people who were signing up with broadband. So I said, the internet's for real, this is what it is, it's not bad. Pay attention to this. Most of us pay attention to the noise, which are financial markets and not the signal. I'm not saying the financial markets are the very good indicator. But the financial markets are such a good indicator that they always are right half the time. Right. And they're completely wrong half the time. And just to a great extent, Blockchain is coming to so you take those four, and you're gonna have completely new types of businesses. So the four things really are data connecting the data, which is machine learning, much faster connections, which are 5g, new ways of connecting which is voice augmented reality, virtual reality, and a new trust connection, which is blockchain. And that's going to create sort of a future of internet for this section and the best way of thinking about the future of technology. I have a in the section called the future, I have a little thing called the future of the internet, you all should read that it's about 1800 words. And at the end of which there's actually a link to a presentation, which is the single presentation I have written in the last five years. I've written one presentation in the last five years. And I didn't know how to go into a boardroom and talk about the future of the Internet without showing them something. So I had to actually put a deck together, which was very hard for me, but I did. And that deck is available for everybody, it's the same deck I take to a McDonald's or General Motors. So everybody, it's free, license free, completely free. And you'll understand why because that's a part of where the web three world is going. So that's there. And then there's a piece which I call Omniverse Omnipresence, which shows you everything that's going on with open AI, Unreal Engine, and you can see videos, you can experiment. And those two are my education for anybody who wants to. And I suggest you do it, because it's like 40 minutes, and it could basically save you a lot of grief. And it's there. Okay, which is very simple. So that's a little bit about that. So now, what I'd like to move to is the last one of these four shifts, globalization, demographic shifts, technology. And I'm going to the last one. And the last one is very, very real, and all of us have lived through it, and are living through it, which is what the hell is going on with the office, which is what is going on, which is, it's very hard to get a lot of people to come back to the office. And in most companies, they're at the highest levels that they've ever had people come back to the office today. But in almost all companies, that number is 40 to 50%. It's not 80 to 90%. It's 40 to 50%. And so there's this entire thing about are people lazy, do they know what they're doing, what the hell is going on, and some other people are saying, you know, this recession will show them, whoever those people are them, they have to be shown. And my basic belief that if you want people to come back to the office, and you need a recession to do it, it's like basically cutting off your head when you have a headache. It's not the way it's gonna work. When I wrote my book, by book came out before COVID chapter two in the book, basically call is set is talks about how to manage distributed workspaces. Because it was so clear to me that in 2019, we were working using 2008 and 2009 technology and into 2020. How can we suddenly good work. And by the way, most companies after an initial hiccup, and obviously different industries, travel restaurants got hurt much more, but many companies had higher profits and growth when everybody's sitting at home. So one day you had 100% of the employees at home six months later, 100% of employees were working from I mean, 100% or office 100% from home and business went on for usual for two and a half years. So how can somebody come back to you and say the office is critical for the future. People will say What are you talking about? And then you're going to basically say, Well, you know, if you come to the office, you do these things that are so important. Like I'll say what oh, well you know, you can learn better Okay, take better at break brainstorming tick that are networking, tick, better relationship building. We heard those tick. Now go back to 2019. And for each of those things, when you needed to do those things, you left the office you went to events like this to let work and learn you went to a bar to basically meet people in restaurants you went experiences you went to everything but the office you went to creative off sites. So the exact reason you want everyone to come back to the office is exactly what you left the office for in 2019 What BS okay, I mean what BS and by the way, if that was the only challenge would be fine, but this office stuff is one of eight challenges we're about to see in the next five years.