The Four Shifts: Implications

This is the second of a series on The Four Shifts that are revolutionizing every aspect of society and business.

1. Technology Shifts: AI, 5G, Biotech and Blockchain.

2. Power Shifts: From Center to Edge. From Institution to Individual. Consolidated to Fragmented.

3. Boundary Shifts: Office/Home boundaries. Blurring of behaviors. Mongrelized and Multi-Dimensional Companies.

4. Mind Shifts: Generational Differences. Re-evaluation of Work and other institutions.

The first of the Series which describes each of these shifts can be read here.

This second post discusses just some of the implications on Government, Education and Business.

Government: New Models of Governance Emerge.

Most institutions at the national and international level were designed over five decades ago post World-War II.

Today, two countries, India, and China, with nearly three billion people account for over 1 in 3 citizens of the world. And by the end of the decade Africa will contain 40 percent of the World’s people.

If you fly globally, you will find yourself landing and taking off in the middle of the night in many Asian and African countries because landings and take-offs have been optimized for United States and European travelers since these arrangements were written when air travel was primarily western which is no longer true.

The Internet reshapes borders in its own way and creates amazing opportunities and wealth as well as significant legal challenges when companies and the Internet are global, and laws are local. A company like Google has nearly 1000 in house lawyers and multiple outside legal firms since it and other companies like Meta have become a form of government and impact business and society everywhere. Current discussion on how to ensure Chinese ownership of TikTok is not leveraged against the West is an indicator of how the Internet is re-writing the rules.

It is not just the rise of the East and the Internet that is roiling governance but also modern healthcare and gene therapy. As modern medicine can extend the quantity of life but not the quality of life many want new rules on deciding when to exit. With every major country aging fast, this is just one of the issues we will grapple with.

The future will not fit in the organizations and governance of the past where we need to grapple with AI Ethics, Climate Change, Gene Technology, Data Privacy, an African-Asian future, and Space Junk/Wars and much more. We needed new rules for an Industrial Age since the rules of an Agricultural Age were no longer relevant. Similarly, the legal and institutional frameworks of the past cannot get us into the future.

In time this might give rise to what Balaji Srinivasan has named The Network State. The book asks that while Technology has enabled us to start new companies, new communities, and new currencies can we use it to start new cities, or even new countries? This book introduces the concept of the network state: a country you can start from your computer, a state that recruits like a startup, a nation built from the internet rather than disrupted by it.

Education: A Revolution Is Required.

Five shocks have descended on Education in the past decade driven by The Four Shifts.

1)COVID-19 made some parents question what they were paying for, and it also deeply set back learning in many places particularly public schools which are now losing significant students and funding.

2) College Debt has become an anchor for millions and a hot political issue.

3) Alternate Credentials: New certification programs from companies like Google for software and other developers are now available to individuals who no longer need advanced degrees to get a job at these companies.

4) Politicization of Campuses and Schools: From masks to whether certain speakers have the right to address campus have changed the world of education often turbocharged by social media. The University of Chicago has issued The Chicago Statement which emphasizes that free speech and thinking are key to an education and now nearly 100 universities have adopted this perspective.

5) Technology: In a world of Search and now ChatGPT with more advances coming down the line the key issue that is arising is not how one teaches but what one teaches.

We are living in a world where technology is putting a premium on ability. Without an education geared to ensure that we learn to work with and alongside modern technology society will face great challenges.

Educators need to be educated about how to educate.

And most importantly in a world of change education needs to be continuous and not something done early in one’s career. The half-life of most learning is decaying quickly, and education infrastructure developed to be a luxury good that teaches irrelevant things at the wrong times to too few people is ready for a revolution.

Education will be the key differentiator between how countries and individuals prosper, and we will see not just governments, but businesses and many others re-imagine and re-think the core competency of learning.

Business

Companies are the ground zero where the four shifts are creating seismic change.

Five forces that few leaders had to deal with a decade ago are now critical to manage and lead.

1. Re-Thinking Business Models: Globalization, demographic change, technology is shortening how long a company succeeds. Companies today remain in the Fortune 500 for less and less time. The threats to any company tend to now come from outside its competitive set. Newspapers were undone by Google. Auto companies challenged by Tesla and Uber. Kodak by Instagram.

The ability to re-imagine and re-cast a business becomes job one among leaders and the ability to shape shift becomes critical for talent. The need for re-thinking business models has risen in importance due to the rise of distributed and unbundled work which is not only allowing companies to hire from anywhere but plug and play with a plethora of cloud and other based marketplaces and talent pools. This week’s story in the Economist Magazine on the "fuzzy corporation" reveals that distributed unbundled work is accelerating the boundary shifting of where and what a company is.

2. Talent Management: Power increasingly is moving to talent. Technology, distributed work, declining working age populations, new mindsets and expectations are focusing companies on the reality that they work for talent as much as talent works for them.

Purpose, Values, Connections, Freedom, Story, and Growth are significant factors today in attracting talent and managing cultures and it is not just Money, Fame, and Power.

As companies re-imagine what they do they are also re-imagining how they work.

One of the most dramatic upcoming shifts is the increased emphasis on becoming educators and sources of upgrading skills for the future which companies are investing in because the formal education systems are not turning out the skills they need or not providing the flexibility to augment the workplace versus having employees pause work to upskill. Enhancing talents’ mental and skill operating systems is now a key source of competitive advantage.

3. Government Relations: Whether it is ESG (Environment, Social, Governance) or DEI (Diversity, Equity, and Inclusion) or lobbying every business is intertwined with politics whether they want to or not. This is for a multiple number of reasons from Financial Institutions like Black Rock calling for ESG (and others attacking this as green washing or "woke"), employees looking for management to take a stand (e.g., Disney), or the Four Shifts changing legislation and rules and the rise of Union power (e.g., Starbucks).

The Four Shifts are changing the rules of the game and government makes the rules of the game.

Increasingly the governance in ESG is not just internal governance but working with government.

4. Technology Expertise: Every company is a technology company. As the current downturn sees talent reduced at the big Tech companies, they are rapidly being hired by the Walmart’s and State Farms of the world. The power of a Chief Technology, Chief Platform, Chief Data and Chief Growth Officer (almost all new titles) have grown significantly as the DNA of companies now beat to metronome of AI and Networks and Chips.

5. Open and Connected: The Four Shifts have put a premium on openness and connectedness in the mindset and working styles of companies. Microsoft’s resurgence under Satya Nadella was driving by becoming a cloud based, Linux aligned and partnering oriented organization.

Companies like Procter and Gamble and others adopt open innovation.

We are living in a connected world of diverse people, new technologies and increased acceleration. Being able to partner, being open to different perspectives and mindsets is one way companies will bend and morph versus crack and break under the tsunami of change.

Recently even China has realized that it’s economy and society cannot live isolated.

Next Week: How do we as individuals grow and thrive in the age of The Four Shifts?

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