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When we first met, I thought that Rik had some great ideas about reinventing organizations. Even though we are working in the same area, he offered me some great perspectives I hadn’t seen before. What I enjoy a lot, is the complementarity we share. He looks at things from the outside in, and I look at things from the inside out. But who is Rik?
When I asked Rik to introduce himself, I immediately recognized myself in a lot of things he said. Rik loves to solve challenges. The more challenging and complex they are, the easier it becomes for him to look for creative approaches and think outside of the box. For over 25 years, he has been inspiring large organizations to use data, technology, and creative thinking to outsmart the competition. He never stops rethinking the nature of the business to come up with better business models that can adapt to a changing and turbulent environment.
And we certainly do live in turbulent times. We have a global pandemic going on, we have to face great societal problems like global warming, unstable economies, and some red-haired republican who wants to inject bleach to cure the coronavirus.
Furthermore, we both agree that in order to reinvent business strategies and models, we have to change the way we approach these strategies. Instead of simply coming up with new and better products for the customers, we have to work on the connection between the products or services and the customers. As Rik said to me, he likes to be provocative and reject the Blue Ocean Strategy, because it simply no longer works. Instead, you should always start with the customer, not only look for solutions but rather look at the problem. You should look at all of the customer frustrations and find a way to turn them into customer delight. He calls this strategy the Red Ocean Strategy. And why is that such a hard thing to apply for most companies? Well, if you tackle these customer frustrations, it might interfere with operational excellence, with maximizing profitability, or it might make your life as a company very complex. Solving customer frustrations, making it easier for the customer, often makes it way harder for the company, that’s why most companies are too afraid to dig into that. But Rik specializes in these kinds of situations and knows that that is where digitalization comes in. By inventing new algorithms and developing new dynamic business models using technology, you can solve these complex problems!
In order to be aware of these customer frustrations, you need to have short feedback loops. You create these feedback loops to turn your company from a traditional company that offers products and services, to a human that is connected to itself. And Rik refers to that body as an ecosystem. That means the body has sensors, a nervous system or infrastructure, and a brain. The key in understanding how Smart Ecosystem Economy works lies in the interactions between these elements. The sensors cannot react in a proper way to a stimulus if they do not pass on data to the brain. But the brain cannot come up with good ideas if it doesn’t receive the required data.
What Rik mentioned to me as well, was the concept of anti-fragility and how every company should start using this concept to become more resilient and agile in these tumultuous times.
When you start a company, that company is fragile. You’re entering a lake of data and you find yourself in an unknown and uncertain environment. You won’t immediately know how to process that data and deal with the unknown. What most companies will do in that case, is develop an algorithm, a business model that deals with these inputs and can generate a certain output. They want to refine that algorithm and make it as robust and rigid as possible to avoid any risk. And this worked great a decade or two ago. These rigid companies did extremely well in environments that didn’t change that much.
However, problems start occurring when you enter an uncertain zone with a robust business level. And we live in an uncertain zone. Like I said before, we have a global pandemic, we have to deal with rising sea levels and temperatures and the economy is very fluctuant. Most of these robust business models cannot handle these new and uncertain data. That is why you have to become anti-fragile.
Instead of adapting the data you put into your steady model, you have to adapt your model and create a dynamic, changing business model, capable of reacting to the unlikely and the unexpected.
These concepts seem kind of neat, but implementing them can be a hassle. You must change the mindset of the organization and that can be a hard thing to do. The most important step you can take as a leader is to build a safe environment. If the people feel safe, it will be easier for them to adapt, cope with change and learn new skills. I asked Rik what kind of leader he would have to become in order to create this environment and he gave me two great acronyms: a CHIEF with a HEART. We won’t about the qualities in-depth, that deserves another podcast in my opinion (if you want that, go ahead and comment ). But a CHIEF is a leader who is Connected with the people, who is Humble in what he says and does, who has Integrity, who shows Empathy to others and to himself, and who shows Forgiveness. Because if you never show forgiveness, people won’t dare to take action, because they are afraid of punishment. The HEART of the leader is Honest, Ethical, Authentic, takes Responsibility, and is Transparent.
I learned a lot from this conversation with Rik Vera and I hope you did as well. Rik has written a few books and papers in his time that might inspire you. You can check these out on his LinkedIn, Facebook, Twitter, YouTube, or his website rikvera.com. You can find the links below!