ep. 31 - Peter Sheahan: Best-Selling Author & Expert on Business Trends and New Market Opportunities
Bio
Founder & Group CEO of Karrikins Group, Peter Sheahan is known internationally for his innovative business thinking and thought leadership. With staff in more than 23 cities across 7 countries, he knows firsthand the challenges of growing a business in these rapidly-changing times.
Peter has delivered more than 2,500 presentations to over 500,000 people in 20 different countries, and he has been named one of the 25 Most Influential Speakers in the World by the National Speakers Association, and is the youngest person ever to be inducted into their industry Hall of Fame.
Karrikins Group is a global growth-oriented consulting firm with deep expertise in business growth and community investment. The goal of the organization is to elevate clients to be the obvious choice in the hearts and minds of their customers, communities, and employees. Karrikins Group lives at the intersection of commercial gain and social impact, and their work reflects the positive influence they have on the world. By transforming the way people think, act and buy, Karrikins Group is able to solve the most complex problems that arise where tensions exist between legacy approaches and future opportunity.
Transcript
ep. 31 - Peter Sheahan: Best-Selling Author & Expert on Business Trends and New Market Opportunities
Gail Davis: Peter Sheahan is the founder and group CEO of Karrikins Group, a global oriented consulting firm focused on elevating clients to be the obvious choice in the hearts and minds of their customers, communities and employees. [00:01:00] I know that Pete and his group do like 40,000 workshops and we're gonna have him explain what that's all about but in addition I'd like to say that he is the author of I think 7 books, 4 well respected business books including his most recent book, Matter, and he is one of the most booked speakers at GDA. And so I'm thrilled to have Peter on today's episode of GDA podcast. Welcome Peter.
Kyle Davis: Hey Peter
Peter Sheahan: Thanks Gail. Thanks Kyle. Does that mean the other 3 books were spectacular [00:01:30] flops and no one's ever heard of them?
Gail Davis: No, maybe ... what were they? Okay, I know 4 were business books what were the other ones, were they children's stories? What were they?
Peter Sheahan: They were written for high school students 15 years ago to help them transition from education to work. That's the founding of Karrikins Group we went ... it was a very community focused organization we'd go into high schools and teach kids the things we all wished we'd learnt when we're in 11th or 12th grade or in our college years to help us lead a more [00:02:00] effective life so to speak, and that was kind of what started it all.
Gail Davis: And did that, I mean I know people are gonna notice the accent, so did the company start in Australia?
Peter Sheahan: Yeah so it started in my bedroom in Dulwich Hill which is a fairly middle class suburb in Sydney, and then grew from there. We have significant, physical offices in about 4 cities around the world. Toronto, Denver, Auckland, Sydney and then we have staff in about another 25 cities on top [00:02:30] of that. Sydney was the origin but the world is kind of the destination.
Gail Davis: That's incredible. So how did you go from focusing on teaching high school students what you wish you had learned to being such a significant player in consulting for major corporations. I know, personally, the work that I've done with you with one of the largest companies in the world. So how did you make that leap?
Peter Sheahan: Yeah so I was focused almost entirely on the, what [00:03:00] you would now call the millennial generation or generation Y as we were defining it back then. And you know when all kind of ... when the whole business community woke up to the fact that there was a different sort of set of expectations from consumers, there was new expectations from talent and the digital revolution was in its early stages, you know I was working with a couple hundred thousand of these "kids" quote unquote every single year and so out of nowhere, large corporations started calling me literally [00:03:30] and saying "Hey you work with millions of these kids around the world, can you tell us about what their needs are, what their expectations are, how we position our brand?" And so that sort of unwarranted desire and demand led me to write, and do actually quite a significant piece of research and then write a book called Generation Y which sounds really obvious today but 10 or 11 years ago, almost 12 years ago now was basically the first, I think maybe the second book in the world on the topic.
So the transition happened really quickly, [00:04:00] when I packaged out research and our insight into the next generation of consumers and employees, into what does that mean for organizations both at a brand level and a cultural level. But the real transition into the biggest space if you think about the work we've done together and the work Karrikins Group now does around the world, it became very clear to us very quickly when doing that work that it wasn't really about millennials. They were just one symptom or one indicator of the broader change and disruption and that in fact [00:04:30] the challenge organizations had was maintaining their relevance in the market period. Whether that be their customers, whether that be the talent they try to attract, retain and engage or whether that be the very communities that give them their social license to operate, right?
And so we stepped back and went "Ah. The millennial / gen y thing is just one force of disruption. What are the rest?" And more importantly to where we do our work and this is really the crux of what we do, is what is it gonna take for an organization to maintain its relevance and build its reputation [00:05:00] and become the obvious choice in the face of all of that change and disruption? And that's really been our sweet spot for the last 11 or 12 years.
Kyle Davis: Would you say that the change in expectations whether it be millennials or even now-a-days, they're the same thing? Or are they different then they were 10 or 12 years ago?
Peter Sheahan: Yeah, so we have a very strong opinion about that but I need to separate the answer between say the talent marketplace and the consumer marketplace, right? [00:05:30] So if we look at talent and employees and culture and employee value propositions when we get to the heart of it everyone really wants the same thing. They want to feel like they're developing their career and working for you will make them more employable. They want to feel like there's purpose and meaning to that work. They want to feel like they're well compensated. They want to feel like it's a respectful environment.
I mean the basic values that are being presented by either millennials today or gen y millennials 10 years ago or even baby boomers 30 years ago, the core value cards exactly the same. What seems [00:06:00] to have changed is the rules they have as to whether or not you're meeting them, right? So a respectful workplace culture once upon a time might've been that the boss knew your name. Now it's like if you haven't invited them out on a yacht, introduced them to your kids and let them work from home 4 out of the last 16 days there's no respect, you know? And so ... I'm being a bit facetious but it's this notion that we just have a different set of rules to define whether those values are getting met. So that's from the employee.
Kyle Davis: Well I can say as [00:06:30] a millennial employee, the cold relationship where you just know the person's name and you have very little interaction is not nearly as fun as being able to go to their Hamptons House.
Peter Sheahan: Yeah. Or we get really serious about it, not nearly as fun as feeling like you're in a purpose-driven organization making an impact on the world. And that ... you go mate?
Kyle Davis: No no no, go ahead.
Peter Sheahan: Well I was gonna say and you're being enriched in your own life by being a part of that team and a participant in that journey.
Kyle Davis: [00:07:00] Yeah I mean with the time that I spent out in Silicon Valley, the company that I loved working for the most was definitely a company that built culture and everything about it was not just about improving the company's bottom line pre IPO to IPO, but then just really seeing what they could do to better the community and really feeling like you're part of a team and having everybody's insight and that's what really made it stand out and made it such a great experience in comparison to the other start-ups which were like "Ugh." Miserable.
Peter Sheahan: [00:07:30] And so, like, that's not a millennial thing. What we saw with our most recent research that ended up in our last book Matter, it was that organizations are increasingly expected to do that across the board. Talented people of all ages want that experience but so do consumers as well.
And the second part to your question was "Has it changed at a consumer level?" And I would say fundamentally changed at a consumer level. Because of digital capabilities, self-service, the role technology plays in how we interact with organizations, [00:08:00] the level of transparency that exists. The fact that we all have our basic physical needs met these days that it's essentially an existential crisis that we're faced with solving every day, means we elevate the expectations we place on the organization.
Now, that's not just true in the western world we see that in eastern and developing markets as well, obviously, to a lesser extent. But yes I think what we're seeing today around 1) consumer expectations, but 2) even in the B to [00:08:30] B environment, we're seeing this kind of emergence of an expectation that they're partners whether they be consumer brands or business to business manufacturers, whatever the right category is, that they serve the higher order need, right? And that's not all about ... I'm not saying that every organization has to be all about community and the culture's the only strategic level that they can pull to create value, I'm not saying that. I'm just saying there is a big shift in how we interact with these organizations, how we partner with them in a B to B [00:09:00] fashion and the expectation we have on how they behave. Because that's important for us and our ability to tell our story and differentiate both the employee market and a sales marketplace as well.
Kyle Davis: The only thing that I would say with that is that I think kind of that you need to think about ... millennials, a lot of people say that we complain a whole lot? I just think that for the first time in a long time people are actually vocal about their employment experience. And so they're telling you "Hey, this is what we want."
But one the flip side [00:09:30] it's the same thing from consumers so it's like you're trying to meet that bottom end as to what you're trying to say it's like are you meeting this need and what are you doing outside of it because there's a lot of companies that could probably provide you like a great service, but if it's with a non-reputable company or somebody who has a bad reputation or something like that then it may not be worth the merger or the partnership.
Peter Sheahan: Yeah we have a belief that reputation is everything. And actually there's some fascinating research that maybe we can attach to the podcast or something like that that shows [00:10:00] that companies that protect and invest in their relationship drive up to two times more shareholder value than those that don't, right? So this is not ... you know, we're talking about, sorry we got into this conversation talking about the millennials but it's really about value creation, right?
Kyle Davis: Yup.
Peter Sheahan: And going back to Matter this most recent piece of research we actually found that there were kind of 5 attributes that really enabled an organization to elevate itself and differentiate itself in the market in a way [00:10:30] that the buy, whether it be a consumer or in the B and B sense, would attach genuine economic value to one. And purpose and meaning was one of them, actually, and that was kind of new but you look at brands, not just like the typical Tom Shoes but even look at an organization like Warby Parker and the way they behave or you look at the paper and pulp manufacturer Domtar and the groundbreaking and industry transforming approaches they had to minimizing environmental impact and turning paper and forestry into a renewable resource. [00:11:00] Like, it's not just the sexy consumer examples that we saw purpose and meaning we saw it in the B to B space too and there were 4 other attribute that, if you want to get into, I'm happy to unpack ...
Kyle Davis: Yeah let's ... let's do the 30,000 foot view, as they say. Of those 4.
Peter Sheahan: Yeah. Okay, so really quickly the other 4 were importance, and that's this notion that your buyer has a problem, but they have more ... every buyer has a problem but every buyer has problems they care about more, right? And the question [00:11:30] is are you solving the higher order problem in the mind of the marketplace, right?
So let me give you a consumer example. Nike sells athletic apparel and sneakers, right? But the ultimate problem that the market is trying to solve is to consistently engage in a disciplined way in exercise and a healthy lifestyle and the biggest challenge we face is not access to functional product or sexy apparel, it's motivation and accountability, right? And so what Nike [00:12:00] has done with it's Nike+ platforms and its Nike training club platforms is basically behavioral economics meets social pressure, and technology, the internet of things, and manufacturing to create really a holistic behavior change platform, right? And this is a company that just grows double digits on multi-billion dollar base, has market share on certain sports over 90%, because they constantly evolve from the current increasingly commoditized need [00:12:30] into that higher order need so that was number one.
The second was complexity and this is, if you really step back is kind of an obvious one, right? If you're solving problems that aren't particularly complex whether it be for the consumer or a B to B environment then it's a pretty good chance that other people know how to solve them to so there's not a lot of scarcity or differentiation there if you're basically solving the commoditized problem so ... but actually leaning into the complexity and going after the things that other people aren't [00:13:00] yet prepared to go after might ... presented the opportunities for a point of different and presented the opportunities to be be seen as the quote unquote "obvious choice".
Now interestingly, you could take Adobe as an example of that, right? Adobe used to make creative software products like Elements and Premiere and Photoshop or whatever. And they would allow the marketer to make beautiful imagery that was consistent across multiple mediums, right? Well that's not the higher order problem. The higher order problem is marketers [00:13:30] know half of their marketing works they just don't know which half, right? And Adobe has so much data collection of some of the worlds largest retailers that its ability to lean in the complexity of that data, and not just help people make beautiful imagery but make the right image sell to the right buyer in the right way at the right time. That's really the higher order problem but there's a lot of complexity there. So Adobe have leaned into that complexity and according to Gartner are really the market-leading solution in that space, but they make [00:14:00] less profit on that revenue than they make on their traditional profit revenue which is now deployed as software as a service, right?
But the interestingly wall street values that revenue is basically 2 to 1 compared to the traditional revenue so going after that complexity doesn't necessarily generate immediate margins but it generates a position in a sticky relationship and a strategic relationship that allows you to plug and sell the other products.
The other two I'll do really quickly was how do you mitigate and absorb risks, [00:14:30] so take risk away from the buyer and absorb it onto your balance sheet and into your world, and we've seen a lot of examples of that, and then finally was friction. How do you remove friction and make it easy? Look at what Warby Parker did in the kind of [inaudible 00:14:43] space is just a simple example of that or the way Mercedes-Benzs are designing service centers at airports so that busy, wealthy travelers can just drop their bends at the airport, run off do their work, come back, land and it's been service cleaned and their dry-cleanings been done, right? [00:15:00] So that was the fourth.
I could talk for 5 hours, I should shut up at this point.
Gail Davis: What I love about your style, Pete, is that obviously you bring a lot of enthusiasm to the stage but you're talking about something that's based in research and that's what I think is great. You know, you can make research sound exciting but at the same time what you're talking about is substantiated with many many case studies. So I think that's what makes you very special for sure.
Peter Sheahan: I appreciate that. I think [00:15:30] the market for though leadership has evolved, right? Their used to be like the 3 categories. The mega celebrity that doesn't really bring a great deal of content but everyone wants to here their inside story from the locker room, right?
Then you have the academics who have the theory and sometimes have the case study history as well, rarely are they at the core face of this work but they often bore you to tears. That's an unfair generalization but they're too content-rich and there's no kind of element.
And then you've got the inspiring, engaging presenter like "I've climbed [00:16:00] a mountain, so can you." But you know what I try to do is I don't have the celebrity status, that's never gonna be my game, but if I can merge depth and rigor with engagement and inspiration in a provocative way but do so through the lends of case studies that we have in the majority of cases been involved in - so we're talking about real work with real companies that we understand, that feels like it's a bit of a sweet spot for me in this market, anyway.
Kyle Davis: [00:16:30] So one of the things that I kind of want to circle back on when you're talking about the value props if you will ... just out of pure curiosity I want to say is it 4 or is it 5 because I counted 5?
Peter Sheahan: Yeah I said the other 4, the first was ...
Kyle Davis: Okay, cool, I thought so. 'cause I was writing them all down I was like ... okay cool I was just making sure. When you were giving me this list and I'm going through it I'm like okay, purpose and meaning I totally understand that. Importance, I [00:17:00] get it. Complexity ... I understand what it's like if you can go and if somebody says "Here's my insanely complex problem" and if I have all the data and I have the team and if I can make that problem very simple for you, I completely understand that as well.
But when you start talking about mitigating and absorbing risk and then the next part, removing friction, and we can talk about the Warby Parker example probably with that, how are you seeing companies before you talk to [00:17:30] them, handling the mitigating and the absorbing of risk and then what are they doing afterwards? And then the same thing for the removal of friction.
Peter Sheahan: So let me give you ... like let's use a really generic and easy to access example for risk. Think about what Rolls-Royce does with its aircraft engines, right? So if United Airlines or, pick your airline of choice, wants to install a Rolls-Royce engine into its dream liner or whatever you make us responsible for that [00:18:00] purchase. They don't necessarily want the risk of owning that hard asset nor do they want it to sit on their balance sheet necessarily for tax reasons either, right? And so Rolls-Royce see that and they go "Well you know what we'll rent you the engine.", right? And you pay for mile flown and it's a pay for usage model and you see that with [inaudible 00:18:19] as a service, too increasingly as well. And this whole move to everything as a service in a way like ... take data centers. Who wants to own the responsibility of their own data centers? If you can guarantee [00:18:30] security for the data then I would love to put the risk and the organizational complexity and the distraction of managing data centers onto someone who's ... that's their core competency and I can leverage the fact that they've got greater volume to run across their fixed assets etc. etc. so that's a risk mitigation piece.
Does that make sense?
Kyle Davis: No it totally makes sense now. So it's like, the example that's most salient in my mind is like the difference between building a CRM versus going to a company like Salesforce and saying okay we could build this [00:19:00] thing but it's going to take time, effort, energy, lots of money, probably won't even come out the way that I really want it to and etc. etc. etc. or I could just go with the industry leader that's been doing it for 17 years and I get every single update that they have because I'm doing a SaaS model versus having something else.
Peter Sheahan: Yeah or to give you, you know for your listeners who may be out in the technology space or making multi-million dollar engines, we saw the same with a logistics company. We studied a freight company in Canada who was like single million dollar digits [00:19:30] like 7 figure company not even large in any capacity, right? But they saw the increasing complexity of cross-boarder transportation, the inefficiency that existing within the brokering system an how they would sort of negotiate what a [inaudible 00:19:44] which is like Montreal or Toronto, or Toronto to New York and they were like "You know what we should become the outsource provider of freight solutions for the entire company." And they would go to consumer products companies, consumer brand companies and say "You know that, you know in the business of freight [00:20:00] logistics this is what we do. Let us take over your business. Let us absorb the risk of customs and goods flow across boarders. Let us do the compliance work around refrigeration and FDA needs and all that kind of stuff. And so in a way they're taking that risk on-board and removing it from the organization itself.
Kyle Davis: So now when we're talking ... when we switch over to the next bottle which is the removal of friction and making the process simpler [00:20:30] whether it's through customer acquisition or the on-boarding process making that, you know, less frictional and more simplistic if you will, to me in my minds eye it seems that you ... it has to be, that's almost where the innovation and that's where the ideas come from because it seems to me that the most amazing removal ideas, like the one you just mentioned with Mercedes-Benz, it's so obvious that I would never even think of it.
I'm just curious as to, what are companies doing [00:21:00] to remove friction and to make life easier for their clients?
Peter Sheahan: Yeah so let me just support the point you just made first which is that it's in those pain-points to use a fairly cliché term, that some of these opportunities are found, right, and we have this saying called hidden in plain sight.
Mercedes is such a great example. I did some research and found out that their customers were rich. Groundbreaking, I know. [00:21:30] But the issue, by the way, the fundamental issues was that they weren't servicing their vehicles consistently. That's one of the most profitable parts of the automotive industry is the service relationship not to mention that it's sticky and it allows them to sell you or upgrade you one the next lease on the next car. You want the service relationship, right? And when it got to the heart of why people weren't doing it it was so annoying, they'd usually be downgraded to some terrible rental that the dealership was landing out if they could get one at all they'd be all lined up at 7 AM so they didn't have a 2 hour wait. [00:22:00] It's just full of friction, right?
And so they tested it on 2 airport locations in different cities, what it would be like to take a very small piece of real estate, because don't forget it's expensive, to build an airport, where you could drop-off your vehicle like it were Monday. They would quickly run you to your terminal. Literally you could leave your dry-cleaning on the backseat they'd run your car-service, do your dry-cleaning hang it up, put a couple of Lindt chocolates on the front seat which they stole from Lexus, and send you back [00:22:30] on your way, right? And that's literally what they did.
You know what's fascinating it didn't just fix the service challenge, it became one of the highest velocity sales environments in the network. Because what would happen was, you think about this for a second like, you fly off on a Monday one of two things have happened. You've either closed the deal which makes you feel like a master of the universe, or you missed the deal which makes you feel sorry for yourself. Either way you have the perfect narrative to justify buying a new car, right? There's a certain story you could tell [00:23:00] yourself. And you land back on a Tuesday you're like "You know what I'm flying again on Thursday, why don't I just demo that S-class? Why don't I demo that E-class, let me just see what it's like."
Once you've taken that E-class home or that S-class home you're not downgrading back to your C-class in a million years, right?
Kyle Davis: No.
Peter Sheahan: And so they started driving sales almost unintentionally through these service drop-off centers which were really just branded physical spaces. It was phenomenal.
So back to your point Kyle, it is about friction and removing it and what's interesting is there are so many [inaudible 00:23:30] [00:23:30] market models, or to use kind of insulting speak there are so many value chains where people are holding on to their role in the value chain and actually not creating any new value but extracting value by creating friction, right? So this scares people as an idea which is ... you take the funds management business. There's research that suggests that 9 out of 10 active managers never outperform the market and that the single best thing you can do is buy the index [00:24:00] and buy it at a fraction of the normal fees, right? But you do that and you disrupt an entire value chain many of which ... many people who are involved in which get their money from brokering and restricting access, right? So there's two sides of that friction thing, right? One is that yes it can have tremendous consumer and customer value, but on the flip side it can extract entire functions out of the value chain that can disrupt industries in really significant [00:24:30] ways so you know ... it's an interesting space.
Kyle Davis: Yeah I mean the most salient example of it that comes to my mind is Square the company that I work for in San Francisco. I mean what they did for accepting credit card payments was an absolute disruption to the credit industry, to the merchant services accounts, to the banking industry because you get rid of all of that and then instead it was a simple form that you filled out. It took 2 seconds. You were either proved or denied, 9 times out of 10 you were approved and [00:25:00] then you could start accepting credit card payments on your iPhone. You didn't have to purchase a 2,000 dollar point of sales system you could start taking payments right away.
And as a company that really focused and really went in and said "What are the things that are limiting companies' sales?" You have so many of these cash only businesses, you know we're gonna then make it so that they can make commerce easy. To steal their slogan. That's Square. Thank you Jack Dorsey, bless up.
So anyways it made commerce easy for people because for the first [00:25:30] time in a long time, or the first time ever, they could actually take credit card payments and it was a flat fee, they knew what was coming, they weren't gonna get hit with this merchant services account or not ... fee or not processing enough fee it was just a flat fee. And it almost seemed for many people too good to be true and that's what made it so good was it wasn't it was that what it was and that's what it is today. Peter Sheahan: Yeah. And that's look at the broader implications of that. If you're First Data and you make a lot of money [00:26:00] from selling those other devices for 2,000 bucks that's challenging, right? If you're a merchant services group inside of a bank, that's really just changing one of your core, highest margin products and service lines.
But on the flip side, think about what that does for unleashing greater transparency into the cash marketplace and the ability for the government to collect taxes in a meaningful and efficient manner. I mean there's so many other consequences both positive and negative that come from that which makes something like Square [00:26:30] such a beautiful example of innovation. But it's essentially going after friction. That's where it's at.
Kyle Davis: And you're right. There's a lot of people that are like for the first time ever "Wow I gotta pay taxes on this stuff?" I'm like "Yeah? You're ... what you thought you could just run your cash only hair salon forever that's not gonna work" Like yeah. Pay Uncle Sam. That's your rent for this country.
Peter Sheahan: You want to know something ... oh, I'm sorry Gail you go.
Gail Davis: What I want to say is is there any industry that isn't going to be disrupted. I mean [00:27:00] ...
Kyle Davis: No. I'm just gonna tell you the answer's gonna be no.
Peter Sheahan: Yeah. Huh. You know I'm thinking about it ... let me caveat this conversation a little bit. The study we did before Matter was how do organizations make intelligent decisions about disruption, right? So we're trying to understand how you create enterprise value and not destroy it, right? And other people have studied [00:27:30] that and let me give you an example Booz Allen and Hamilton did a study that found that 90% of all enterprise value destroyed from risk came from strategic risk. That is, senior, executives and boards making very bad assumptions about changing the marketplace and the impact that it would have on their organizations and the way they went to market, right? Far bigger than fraud or environmental disaster or all these other things that we give so much attention, right?
But when we dived into disruption, like, even take Square [00:28:00] as an example to build on Kyle's case there. There is not a single example in all of human history that we could find where that disruption came out of nowhere, right? The notion that there was inefficiency in the payments value chain and the concept that we needed greater levels of mobility and the likelihood that was someone was gonna find out how to use smartphones and smart tablets to do that was 5, 6, 7 years before Dorsey launched Square with his other investments and partners, right?
[00:28:30] Uber's another great example. Every conference you go to someone wants to go "Oh my God! Uber! Disrupted them over night!" Uber turns 12 in October. Like, come on.
Gail Davis: It does?
Kyle Davis: Yeah?
Peter Sheahan: Yeah, right?
Gail Davis: Oh my goodness.
Kyle Davis: I've been using Uber now ... I actually launched my first complaint on twitter about Uber yesterday but that's neither here nor there, but yeah I've had an Uber account since 2011 I think? I don't know. Maybe even longer than that.
Peter Sheahan: Yeah. So what happens is these ... what really changes an industry are things that have sat on the [00:29:00] peripheral, threats or opportunities, for a period of time, so let's take financial services which is probably half the thought leadership speaking business, right? The concept that what's coming out of financial services right now that was result of Dodd-Frank is this notion that advisors, brokers and agents, depending on product category, need to put their clients best interests at the center of their recommendation. As opposed to just recommending a product that could be arguably suitable [00:29:30] for that client. The concept that an investment advisor should put their best interests at heart is confronting that we have to regulate that to begin with I would suggest. But we have been talking about this for more than decade in the industry. In Australia, the UK, Hong Kong, other markets have already gone down this path anyway so it's not like no one saw it coming. Does that make sense? This was on the peripheral.
Now what happens is, change is slow. [00:30:00] Until it's not, right? And so it chips away at the edge Uber style until like 2011 where an early adopter group, right, Kyle and his mates jump on Uber and all of a sudden they start telling a story, Uber get massive V.C. money they expand [inaudible 00:30:16] using Uber, right? But that forgets the 6 or 7 years prior to that that it was chipping away, chipping away, chipping away, right?
And so this idea that, your question [00:30:30] "Will there be any industry that's not being disrupted" I agree with Kyle that the answer is no. But there will be very few industries disrupted by things people aren't already aware of, right? We've just done 2 historic examples, let's use a future example. 18% of all Americans work in transportation. 18%, right? Give or take depending on the numbers that you understand. We are 3 to 4 years to commercial freight being done by driveless trucks. Like, maybe 6 or 7 years at worse. [00:31:00] We are 10 to 15 years max from all autonomous driving on the road. Now you can't tell me that any of the Uber drivers aren't aware that that's coming. You can't tell me that the property and casualty and insurance industry aren't aware that their duty of care is gonna shift from the individual potentially to the REM. You can't tell me that the collision repair shops aren't aware that there's gonna be a whole lot less and less serve collisions when human error is removed from that scenario.
[00:31:30] Now, Gail, you don't need a crystal ball to know that. We know this now, right? So there won't be a single industry that's disrupted by something no-one predicted. There'll be a whole bunch of people struggling for relevance because they failed to get ahead of it.
Kyle Davis: I mean you can already see that today with Tesla. There's that video online, I want to say it's in the Netherlands, the guys going down the highway now with their new software update that uses the radar that shoots underneath the car in front of you to see 4 cars ahead? It stopped [00:32:00] a second before the accident happened. Like, it's the most insane ... and the most insane car I've ever driven too is the P100D so if Elon Musk is listening ... I want it all black.
Gail Davis: Good luck on that.
Kyle Davis: It's not gonna happen.
Gail Davis: [crosstalk 00:32:17] Italian sports cars but yeah I could do a Tesla too. Maybe we could get matching ones, Kyle.
Kyle Davis: Yeah. Well I've said this [00:32:30] kind of about ... when we did the Nando podcast I think there's like 2 things that are gonna happen. I think there's always gonna have this nostalgia where people are gonna want to go back to something. You're gonna want to go back to the time when you could drive a 6 speed manual 1964, Alfa Romeo convertible doing some heel-toe down a country road somewhere, but to the same point time for your daily every day, if I can just throw it and ... I'm forgetting what the mode is called for Teslas but if you can just throw it in [00:33:00] the autonomous mode and just have it drive you wherever, that's insane. I mean there's a guy who had a heart attack while he was driving his Tesla and he asked the Tesla "Drive me to the nearest hospital" and it drove him to the hospital while he was having a heart attack and it saved his life rather than him pulling over and waiting for an ambulance.
Gail Davis: Wow.
Kyle Davis: It's insane.
Gail Davis: Mind boggling.
Peter Sheahan: What you're describing is like the Swiss watch of the watch category, right?
Kyle Davis: Right.
Peter Sheahan: But let's think about this, right? If I was to ask you the question what are the most popular watch-brands [00:33:30] you might go "Rolex, Patek Philippe, you know Audemars Piguet, Hublot if you're into that collective space" but actually the Apple watch is the second most watch brand in the world, right?
Kyle Davis: Wearing one right now.
Peter Sheahan: Yeah. But like the share of the Swiss watch is making a massive resurgence. The share it has in the market is still not as significant as [inaudible 00:33:54] space, right? And so I absolutely see that market for the heel-toe [00:34:00] driving your Porsche 6 speed whatever down the country road but the reality is most of us are gonna want to just be on the phone and working when we're getting from place to place, you know? And so there will be this creator ... authentic, niche market that emerges in these spaces but let me tell you there's not a single consumer or package goods company on the planet that's feeling nostalgic about the dangers and risks and the costs of hiring humans to drive one box from Montreal [00:34:30] to Toronto or from Denver to LA. We're gonna say thank you very much. And the only people who will feel nostalgic about it will be the truck drivers who've failed to prepare themselves for the world as it's going to exist.
Kyle Davis: And I hate to sound rather mean but it's kind of like what you just said, it's failure to prepare. I have family and friends from Michigan and Ohio, and you can see the robots who were coming to do your jobs 15 years ago. The fact that you didn't prepare for it then you're sitting on the sidelines now I'm like ... are you surprised? [00:35:00] I mean it sounds callous it sounds rude but like you had 15 years to prepare for it I mean what are you doing now?
Peter Sheahan: Can I present ... so I agree with that, fundamentally. However I do think this change ... I think we need to think at the level of systems rather than at the level of the individual so carve for an educated professional like you that's been exposed to the thought leadership that you have through GDA and you're mom and the people you hang out with, [00:35:30] to you that's a really logical thing. But not everyone has the same level playing field, fair enough?
Kyle Davis: Fair.
Peter Sheahan: And are often crippled by fear. And so I'm gonna site an example of an organization who only yesterday for the first time made it onto the Fortune best workplaces list and that's AT&T. This is an organization that is spending tens of millions of dollars investing in retooling its workforce. So they've been really clear, their CEO Randall has been so visionary to come out and say "You [00:36:00] know what? We're moving to a software-defined world not a hardware-defined world and the skills we needed for the last 80 to 100 years are gonna be irrelevant in the next 10. But we see it as a responsibility as a active member of the community because organizations and communities are inextricably linked we see it as our role to give every possible change to retool themselves and get ready and I can tell you I've seen very few organizations in my life that are that committed as say AT&T is, right? And so I want [00:36:30] to see a future where ... because by the Gartner released a report and others have done similar which are suggesting that 46-47% of all US base jobs are gonna be automated within the next 2 decades, right? Just think about that.
Gail Davis: That's incredible. That may be your next research and book is helping companies have that responsibility for how to retool their workforce which will be impacted by disruption.
Peter Sheahan: Yeah. And in a way, the concept of mattering more which is the last piece we did, is about [00:37:00] that. And I believe that new jobs will be created, they always have. However the rate at which the dislocation is gonna happen is gonna happen far more quickly than it did with the first industrial revolution and the steam engine etc. because it's coming from digital bits and bites. And the ability for them to scale and self-learn, and the net cost of every additional is zero, right? It might cost you 100 million dollars to write the code, but you could ... every [00:37:30] net new user of the code is basically zero because you're already paying for everything else, right?
Gail Davis: Right. Right.
Peter Sheahan: And so the rate at which that change will happen will be faster than society's ability to adjust. And so we need people like Kyle going "You know what I'm going to reeducate myself I'm gonna build my skills." We need organizations like AT&T who are visionaries to do that but we're gonna need systemic level change and this will be one of the most important roles of government. Irrespective of whether you believe in big or small government, this will be part of what they have to do. [00:38:00] Otherwise, we face a level of disruption at a social level ... imagine if 46% of people who's entire identity is tied to their work in the western world in many ways, can't find work. I mean this is gonna be pretty serious stuff.
Kyle Davis: I mean they're doing it already in Germany I think. I'm forgetting what it is, but all the autoworkers that worked for the Volkswagen group and whatnot they have like a reeducation pool where there money ... like a portion of their income goes to and then I think the government matches it? And then when the job is [00:38:30] nearing "Hey the robots are about to take it", they then send them to education to reeducate them on something else so that way they're still relevant on the marketplace.
Peter Sheahan: Agreed.
Kyle Davis: So I think that's good I mean whether it's a system like a government or a great company like AT&T everybody gets a fair shake so that's awesome.
So cool. Well I think we're gonna wrap this up now. If people want they should go out and buy Matter which will be available for purchase on the GDA podcast website that's GDA podcast dot com. And if you're interested [00:39:00] in booking Peter Sheahan for any one of your events you can do so by contacting GDA speakers at 214-420-1999 or GDA speakers dot come. Thanks Peter.
Gail Davis: Thank you Peter!
Peter Sheahan: Thanks.
Kyle Davis: Have a good one.
ep. 31 - Peter Sheahan: Best-Selling Author and World Renowned Expert on Exploiting Business Trends and New Market Opportunities by GDA Podcast is licensed under a Creative Commons Attribution 4.0 International License.