Xavier Marcet is from Terrassa, a classically industrial city, but today he is part of the digital aristocracy of the United States, given that he spends half his time travelling between Barcelona, Silicon Valley and Boston, helping companies, universities and administrations to apply innovative models aimed at providing results. The president of Lead To Change unites management, technology and humanism: "It is the thread of my life, I began as a history professor in the Autonomous University, then I entered the world of management at Esade and I have spent the past 25 years among technologists."
In his latest book Esquivar la mediocridad (Avoiding Mediocrity, Plataforma publishers, 2018) the author reminds us that those companies that wish to last must learn to drive a car with two steering wheels and must not forget that authenticity is the new differential of core competence. "The world has always been complicated, and now it is both complex and transparent; we have to combine exploitation with exploration and accept that it is cheaper to be authentic than pretending to be so," he says.
You spend half your time travelling and that has allowed you to get to know different ecosystems. What can we learn from Boston and California?
They are ecosystems that are very different from that of Barcelona. Here we have an environment that is highly attractive to entrepreneurs, where companies have begun to apply open innovation and that look for talent and we also have emblems, such as Pier 01. However, we are still some way away from having the 2,000 venture capital companies that San Francisco has. We have to learn to grow. We know how to propagate a lot of companies but we do not know how to make them grow, we have a scaling up problem. On the other hand, there are other aspects of these ecosystems that I do not like so much. Silicon Valley generates a dynamic of major growth around new business models and technological disruption but that is also creating a very unequal society. Five large digital managers (Facebook, Google, Amazon, Apple and Microsoft) are in a layer of society that accumulates a lot of wealth, but when you go further down you find a large vacuum with a lot insecurity, with a lot of business models that create a lot of value for the user, but which are not capable of creating value for the employee. This throws up a lot of question marks. The European model cannot be like this, we have to achieve a balance between all of the stakeholders: generating value for clients, the shareholders and the employees. If that is not balanced, we will become a weak society.
A society with mediocre companies?
I always do the first analysis in relation to the client. A company is mediocre when it does not manage to please its clients, when it does not manage to create a differential value. That is the centre of everything, from here there are many other aspects to do with efficient leadership, the companies without capacity to inspire... Companies exist to create value for clients and for society. If they are not capable of doing that, we tend more towards vulgarity than inspiration and we end up with mediocre companies.
Can it be prevented?
Yes. Having a company is being on guard and what needs most vigilance is the client. Clients are people who leave without saying why. There is a question that constantly pursues us: 'what does my client need that they do not know how to express?' This is what customer centric means. Before, companies had the sensation that it was they who caused the client to evolve; today it is the clients who cause the companies to evolve. It is a radical change. The clients have all the market information, all those companies that live from the fact that their clients have little information do not survive. Nowadays, either you deliver differential value or you do not make it, and to deliver differential value mediocrity is not the best path.
"A company is mediocre when it does not manage to satisfy its clients, when it does not manage to create differential value"
Would the business successes of the past survive today?
I relate it to the concept that unlearning is more difficult than learning, as unlearning something means accepting that you have a series of prescriptions that in the past gave you success but that no longer serve. I am not very pessimistic about the future; I recognise that it is a worrying time but one with multiple opportunities. In the 1990s, we wondered whether the internet would change everything and now we wonder whether artificial intelligence will change everything. The big difference compared with the arrival of the internet will be that this time the management world will also change. It will bring us new forms of management, how we analyse, how we can assimilate better, be better capable of making decisions, of implementation and evaluation.
More strategy and less planning?
That is one of the consequences. We are in an environment that changes so quickly that the great management tool of the 20th century, which is planning, is no longer so useful. If we do not plan, we do not know how to organise resources but if we plan too much, we are forgetting that the world changes quickly; we have to learn to strategise while planning less and innovating much more. Yet, our business leaders are no world champions of innovation but champions of efficiency; we need a cultural change.
Can only those who think long-term innovate?
Companies work in three phases in relation to innovation. When they are only months old it is incremental innovation, things that we are already doing that we try to improve. It is innovation in which you can see the end. When we think about radical innovation we are talking of two to four years, they are new business models, new products and services... and here you can’t see the end. Finally, with disruptive innovation, the type that breaks the rules, you do not even know how to begin. We need a proposal of balanced innovation; to work with things that can give us results in only a few months and others with a perspective of six to ten years. We have to be aware that the innovation that creates the most value is often innovation that cooks slowly.
"Those boards of directors that do not know there is a logic beyond 24 months kill innovation"
But society demands immediacy and executives want short term results...
There is often a lot short-sightedness. We need to be able to distinguish between the executives that create value and those that do not, and the executives that create value are the ones who know how to get results today because if not we cannot pay the salaries and at the same time they prepare us for results tomorrow. One of the mistakes of the 2007 crisis was this: focusing everything on the short term. Those board of directors who do not understand that there is a logic beyond 24 months kill innovation. We really need an ambidextrous business culture; one that is capable of making the most of the business and exploring innovation at the same time.
Must a company always be willing to change if it does not want to disappear?
To adapt. A company is an organisation that is at risk if it does not adapt and at a time in which the processes of change are sped up, if you do not have the capacity to adapt, you are dead. The capacity of adaptation goes beyond innovation, it also means digital transformation, agility and learning to make strategy and plan less.
We have got too used to doing SWOT analysis.
Yes, all of us have a lot of SWOTs in our lives! The SWOT is a tool created by Stanford Research Institute in 1927 and that lasted the whole 20th century. The tools work well, but the thing is that the context today is very different. The world of artificial intelligence will provide us with many tools to tackle this complexity. It will require unlearning, as we are used to working based on what has gone before, and now we have to take live decisions. In fact, often you have to make decision before understanding because things are happening.
"We are used to working based on what has gone before, and now we have to take live decisions"
A leader is a head?
Leaders are people who create a lot of natural authority through learning. We respect those people we learn from, and one thing is respecting them as people and another is respecting them as leaders or executives. We need leaders who are less worried about what they say and more concerned about what they do. Leaders are capable of seeing where we are going and getting involved in the process of transformation. We should also be clear that if someone does not delegate, it adds up, if someone delegates, it multiplies, and executives have to multiply.
What will be the new KPI for companies?
In being able to combine corporative value and social value. The new company has a double dimension: corporate, about business and very focused on the client, and the social contribution of companies. A large part of the talent that emerges values that. That old saying of Drucker’s that goes 'there are no healthy companies in a sick society' is very true nowadays. We need companies that combine a dual commitment. It is obvious that if a company does not earn money, it closes down, but if at the same time it is not capable of generating social value, in a complex world like today’s, it is not doing everything it could be doing. It is not an issue of it being demanded, no one has to demand it from us, it is a matter of vocation. In California there are lots of companies looking to have this dual income statement. Today we need a type of company in which people make the difference and for these people to be able to give the best of themselves they need a purpose and this purpose is better if it has a corporate part and a social part. Companies that are built to last do not work only with the three classic stakeholders, but rather add a fourth: shareholders, employees, clients and society. The social vector is compatible with the business world and helps us to create strong professional communities.