Zuzanna Skalska, analyst and researcher of trends and changes that also motivate business changes, was interviewed by Ewa Zakrzewska, Innovation and Curiosity Leader at Publicis Groupe.
Ewa Zakrzewska: “The new normal” is a term that we have been hearing from all sides for a year now. Is this a change that appeared only in 2020 caused by the pandemic or did it start earlier?
Zuzanna Skalska: That all depends on how we define this phenomenon and what we relate it to. For people who follow politics and economics to a small extent and focus mainly on their lives, the “new normal” began when the pandemic and lockdown were announced. For those who monitor economic, social, environmental, technological, political changes, the “new normal” began much earlier. In fact, the beginning was 9/11, meaning the breach of conventional security that we had known in this part of the world for the last half century. We have experienced a great deal of uncertainty caused by terrorism. In 2008, that uncertainty was extended to the economic area. Many banks were nationalized, a lot of people lost some of their money not covered by bank guarantees. Citizens of these countries suffered, countries imposed new taxes on them. And, in fact, we have all been in this “new normal” since then. However, this financial crash concerns only Western countries, because the problem did not reach Poland, nor Asian countries, nor China.
EZ: How then can we describe the moment we are in now?
We are on an endless curve but we don’t know yet when it will turn into a straight road. Before we can even see this straight line and enter it we all have to agree on certain conditions. The first of these is new energy sources. Failure to change in this area will result in polluted air that will be a greater threat to us than the one we are now facing through the virus. There will also be a shortage of clean water. The second condition is a whole new look at what and how much we buy. This will require many companies in many industries to undergo a major transformation, or their existence will be threatened. We can see, for example, the financial results of large oil companies, which in 2020, after years of huge profits, recorded multi-billion dollar losses. Another point we need to ponder is whether the peace and sense of security that have accompanied us over the past few decades are the “normal” states that we so long for? Our ancestors experienced wars, famine, disease, and many other threats. We have lived in a peaceful environment for a long time, but inequality is growing in society. We see disparities between large metropolitan areas and non-urban areas. Many countries have tried to hide this, but at a certain point it was no longer possible, and this is one of the reasons for Brexit. All this results in the “new normal” being created, although we still do not know what it should look like, we do not know who will decide about it. To sum up, the situation we are facing now is not only an economic or health crisis. It is a crisis of values, of purpose, of meaning, of quality. We have a veritable waterfall of crises that keeps constantly on a curve and we are simple unable to get out of it. Given the list we have to accomplish I predict this could go on for up to 10 more years.
EZ: Are you already seeing any attempts to invent this new model of how the world works?
ZS: The pandemic crisis has shown us how dependent we are on China in many areas. However, if we want to bring back production to our countries to a large extent, we have to reckon with higher prices. If our consumption levels were to remain unchanged, the cost of living will continue to increase and wages will have to keep up. And those will drive higher prices for products and services. And again, we come to the point where we need a new model. Thomas Piketty’s proposals were widely discussed a few years ago. More recently, Kate Raworth and her Doughnut economy or sustainability model has been in the news. Let’s see what has been happening on Wall Street lately. Until recently, it was considered sacred to be able to make money on risk. Profits were made by betting on what would fall or lose in value. There was a group of people who said they would take action against Wall Street just to show how fragile the system is. All of this requires us to get rid of the prosperity mindset, the idea that we can buy, throw away, buy new. About the fact that we always have to own and possess more and more.
EZ: Consumers are becoming more and more aware of the changes and phenomena you are talking about. How are their purchasing decisions changing?
ZS: Firstly, we have to agree on one thing – the term consumer is no more. It is a user, a customer. This is an important distinction – the user is the one who uses our product or service, the consumer is the one who buys something to own it, that is, consumes it. This is not just a change in nomenclature, it’s a change in attitudes that forces the market and companies to act differently. For as long as we don’t understand and accept this change and this difference, we simply won’t find the new model we so desperately need to get off the ground.
EZ: This change in consumer-user attitudes is already a big phenomenon or is it a niche, a hipster thing for now?
ZS: It was hipster 15 years ago, now it’s already visible. I remember about a decade ago in New York there were second-hand clothing places where you couldn’t buy using money. You could bring your used clothes in good condition and you would get points for that. And those points were the currency, exchangeable for other things. There was no cash involved at all, it was a constant barter. At that time there was a lot of excitement and it became very popular among students. For example, let’s look at veganism – a marginal phenomenon for a long time, associated with a certain philosophy, ideology. At the moment, there is more and more talk about it, and more and more people are choosing this lifestyle, because the quality of meat is getting worse, and there are more and more harmful additives in it. The industrial breeding of animals was a response to our habits of prosperity, to the fact that every day we want to eat a cutlet or broth for dinner. At the beginning of the previous century, meat was eaten only on holidays. Then increasing consumption screwed up mass production. And in fact, the prosperity that we have built over the years is a fake one – we have more things, but they are of lower quality, our houses, apartments, cars are often really owned by banks.
EZ: Should organizations also adapt to the social processes you are talking about? What challenges does this pose for leaders, for CMOs?
ZS: Just as our consumer is becoming a different person, the position of existing CMOs must undergo a transformation. The set of competencies, skills and prerequisites that were previously needed in this function will have to go. People who have a creative background, who have empathy, who can understand all the stimuli in the marketplace will take their place. People who are flexible, able to talk to everyone. A deep knowledge of the latest technologies and AI and how to combine them with different forms of production and even craft will also be key. These will be the people who will show the direction in which companies will develop. They will have a vision and will work very closely with CEOs and general managers to implement it. This will cause major organizational changes in many companies. Herbert Diess, President of the Volkswagen Group, spoke about this. According to him, the changes taking place in the world are forcing a change in the business basis of companies in the automotive industry to the high-tech industry, and this means that his company needs a completely different organization and different skills in its employees. Companies that understand this have a future. It’s hard to educate existing employees regarding these changes because it means a process that will be too slow and not radical enough. So I see transformation of the CMO into the CIO (Chief Innovation Officer) and this is not just a name change. It has to be followed by all the conditions mentioned before.
EZ: How will the competencies that will be needed in this new handover change?
ZS: A few years ago, the American Institute for the Future (IftF) published a very interesting list which became one of the bases for the publications prepared later by the World Economic Forum. The first of the competencies of the future is sense making, which is really understanding what we see, read or hear. This is not common among people today. The next one is social intelligence, i.e. the ability to reach out to other people in a deep and direct way, to sense and stimulate their reactions and desired interactions. Then we have innovative and adaptive thinking – the ability to think outside the box and create solutions that go beyond the accepted rules. And this should be an important new CIO competency. Another important competence is intercultural competence, which we do not develop very much in Poland. The list also includes computational thinking, new media literacy, transdisciplinarity, design mindset, dealing with a mass of information and virtual collaboration. The list prepared by IftF does not rank these competences, they are all equally important, because it is crucial for these competences to work in one, transdisciplinary team.
EZ: New people with new competences will be needed. How should organizations adapt to this? How will the approach to innovation also change?
ZS: This requires a lot of maturity and awareness on the part of organizations so that with the transformation they will have to go through, they will understand that they need such a new person who will be responsible for realizing the mission and vision of the company, linking them to the purpose the company has in the world, to the passions and skills of its employees and, of course, to the needs of the market. This way everyone can know what they are doing and why, what the processes are like. A clearly chosen and defined company vision is one of the success factors. An organization should determine what area it is good at and focus on improving and developing in that area all the time. You can not play small and follow every idea that appears on the market if it does not make you better in the area defined by the company.
More and more often companies are relying on cooperation, working things out together, greater equality and it is in the employees that the real engine of the organization is seen. With such an arrangement of elements, we can say that this is where innovation is born. Innovation is different thinking, different way of reaching ideas, there are more possibilities, a higher ceiling. This is not small changes in a product’s appearance, small improvements – this is implementation. Innovation starts with thinking differently. This is a matter of organizational culture and I will again emphasize – it has to be real, it cannot just be a declaration and change of position name or a nice sentence on an office wall.
EZ: New people, new competences and a new way of working in the organization should translate into the quality and value of the built offer for customers. Will this help to create better experiences with products and services?
ZS: A clearly defined vision and consistent work and continuous development should translate into building experience. And you have to look at it broadly, holistically. Philips, where I used to work, focused on creating medical solutions. It knew that you can’t just create good machines and be only a supplier and installer of, for example, MRI scanners. The company focused on a holistic experience (Ambient Intelligent) – we designed the room where the machine would stand, what it would look like, what the air would be like there, the light, what the waiting room would look like, the way kids could see what the scan looked like, the entire system for booking and getting ready for the scan. Philips hired sensory experts, architects, light experts, sociologists to build this. They explored and learnt the full experience, not just how a machine should look and work. Another example is the airlines, which hired a staff of psychologists to build a website that counts on the fact that the customer will make a mistake, and will then have to pay to correct that mistake. However, it will still make them think that they bought an airline ticket cheaper than somewhere else. I also remember going to visit the then newly opened Nike Town flagship store in London in the late 1990s. The whole thing was polished down to the smallest detail, the atmosphere was such that customers seemed to be in the brand’s temple. It was breathtakingly impressive. Experience design is really about deeply affecting emotions. Something that to some seems very outdated. The V&A (Victoria and Albert Museum, the Victoria and Albert Museum in London) does this brilliantly with their temporary exhibitions. You go there as if you are going to a theater, to experience the exhibition. After a few hours, you leave unsatisfied because you want more. After leaving the exhibition there is a store where you can buy things you have just seen. And behind it there is a café where you can sit and discuss what you have just experienced. To design such an experience you need a broad, multidisciplinary view and thinking.
EZ: Thank you very much for the interview.