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RBC Thought Leadership John Stackhouse Page 7

Slack: The Accidental Success Story Tackling Workplace Collaboration

Author: John Stackhouse

John Stackhouse is Senior Vice-President in the Office of the CEO at Royal Bank of Canada, where he leads the bank’s enterprise-wide research and thought leadership agenda on the economic, technological and social forces reshaping global markets. In this role, he helps inform RBC’s strategic perspective and positions the organization as a leading voice on the future of growth, competitiveness and innovation.

John is a nationally best-selling author and, before joining RBC, worked as a journalist for 25 years at The Globe and Mail, including terms as Editor-in-Chief, editor of Report on Business and foreign correspondent in Asia.

The Canadian entrepreneur spent his early childhood without electricity, taught himself to code, and studied philosophy at Cambridge before falling into a tech career that’s now pitting him against Microsoft and Google.

Butterfield’s biggest business success, Slack, is a corporate communications tool that arouses the kind of devotion that brings to mind Blackberry’s early days—and is aimed at reducing some of the 269 billion emails sent around the world each day. In person, Butterfield is soft-spoken and thoughtful, as one would expect from a guy who once contemplated a career as a philosophy prof. He joined us at RBCDisruptors earlier this week, where we had a chance to talk to him about effective communications, the merits of Silicon Valley and why corporate values are important. Here’s some of what we learned.

An Accidental Success Story

Stewart Butterfield didn’t start out to create either of his startups, Flickr and Slack. They were by-products of his efforts to create web-based, multiplayer games. The gaming ventures went nowhere. But in trying to build shared fantasy worlds, he came up with the photo-sharing software that became Flickr, and later the chat tool that morphed into Slack.

While he knew he was onto something with Slack, Butterfield didn’t initially think the tool would work for large organizations. Slack has 9 million users and counts IBM and Oracle among its biggest customers. While the path may not have been planned, building Slack into the company it is now—a challenger to the mighty Microsoft—was no accident, Butterfield says. “It’s a lot of work.”

An Antidote for Email

Butterfield’s luck with startups shouldn’t obscure his big ambitions. He wants to fundamentally change the way people collaborate, whether they work at IBM or as wedding planners. His solution is Slack, an alternative to the ubiquitous office email that Butterfield says is a “terrible choice” for intra-company communications. To illustrate, Butterfield describes a new hire signing onto corporate email and staring at an empty inbox. If that employee joins an organization using Slack, she or he has access to all the work that’s been done on a given project, right on Day One.

With the average 1,000-person company sending out an estimated 40,000 emails each day, it isn’t surprising that Slack has a community of evangelists.

Slack’s greatest advantage, Butterfield says, is that it provides a high degree of transparency across an organization, and quickly. That gives individuals and teams the clarity and alignment they need to perform their jobs.

The Valley Still Wins

Butterfield said more than once during the event that he’s a “patriotic Canadian,” and he believes Canada has all the talent it needs in terms of engineers, designers and marketers to staff Canadian startups.

So if given the choice, why would he start his next company in Silicon Valley? Butterfield’s answer was one we’ve heard before from entrepreneurs: It’s still the place with the deepest bench strength for recruiting specialized executive tech talent.

Corporate Values Matter. Like Playfulness

Butterfield took a page from Netflix’s playbook in assigning Slack some core values. But he wanted to make sure those values set Slack apart, reminding employees both how they should act and how Slack views them. He suggested any company should think carefully about its corporate values and ensure they tell employees and customers what makes it unique.

In case you’re wondering, Slack’s values include courtesy, playfulness and craftsmanship. Courtesy, for Butterfield, means empathizing with the client and always being open to understanding his or her needs. By emphasizing playfulness, he wants his employees to “look at the world sideways” in order to find creative solutions to problems. Craftsmanship is more than a call to avoid shoddy work—it’s Slack’s way of telling employees their individual work has meaning and value.

China’s Off Limits. Everywhere Else is Fair Game

When it comes to the massive and lucrative Chinese market, many tech companies want in. Slack isn’t one of them: Butterfield said the company isn’t prepared to give Beijing access to the company’s messaging data. But he is targeting the 600 million or so knowledge workers around the world that aren’t in China. He’s doing that by making Slack available in other languages and ensuring it supports specific industries and regulatory environments.

Instagram started as a Foursquare-style check-in app. Slack came from a studio making mobile games. And YouTube was originally pitched as a video-dating site.

These stories share one thing, the secret that drives Silicon Valley’s best: the growth mindset. It’s about failing fast, learning fast and growing fast.

The principles of the growth mindset are straightforward: candour, ambition, resilience and diversity. But that doesn’t mean filling out the CARD is simple.

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Candour

Incident response startup PagerDuty is a great example of the growth mindset in action.

At an RBCDisruptors event on July 18, PagerDuty CEO Jennifer Tejada said their culture of candour has room for everything, even stupid questions.

“I ask the question that often other people are afraid to ask,” she said. “That candour gives everybody else the freedom to be inquisitive in a non-judgmental way.”

PagerDuty runs a 24/7 IT alert platform that lets other companies know when critical services are down. That means PagerDuty itself can never go down—and when it does, it’s a big deal.

Tejada said that after an outage, the company holds “blameless post-mortems” to discuss what went wrong and how to fix it.

Using honesty and empathy gets people to open up, and that candour helps the company learn from its mistakes.

“If something’s not working, we’re going to talk about it,” said Tejada. “But we’re not going to blame people in that process.”

Ambition

Growing companies can’t be complacent—every success comes with the challenge to top it next time. That means instilling ambition to be the best, and to always be better.

And it’s not only about ambitious leadership. That ambition needs to be baked into the corporate culture from the bottom up.

“Part of my job is to articulate a vision that is approachable and consumable for every single person in our business,” Tejada said.

PagerDuty now runs an internal annual conference, PagerCon, where engineers and product managers give talks about their work and where the company is headed.

“We want a perfect experience for our customers,” Tejada said. “We put a lot of pressure on ourselves collectively to do that.”

Resilience

A key part of the growth mindset is the ability to come back from failure.

In October 2016, a cyberattack took down Dyn, one of the fundamental routing services behind major Internet services including Twitter, Spotify and GitHub. Parts of PagerDuty’s service also relied on that same provider, so they were absent when it was needed most.

The company worked to have its services back online within minutes, and the outage exposed a new point of failure that they now account for in all their planning.

Tejada said that’s one kind of resiliency: the ability to come back, keep working and pull through major obstacles. It’s not just about infrastructure, though—the same idea applies to people.

“Resiliency is about allowing teams to try new things and fail,” she said.

Diversity

The last ingredient for a growth mindset is diversity, which drives innovation in Silicon Valley and beyond.

More than a third of the Valley’s population is born outside the U.S., compared to around 13.4% for the rest of the country. PagerDuty reflects that diversity: Nearly two-thirds of the leadership team in San Francisco was born outside the U.S.

“We think about diversity and difference as upside, not downside,” Tejada said. “All the data points to better business outcomes, better respect, better results, better shareholder returns, better customer offerings if you have a diverse workforce.”

Tejada saw diversity as a way to improve performance once she joined PagerDuty in 2016. Now, half of the engineering leadership team is women, as is half of the executive team.

Tejada says they take their time in hiring, and will leave positions open if they can’t find the right fit.

“While you’re still growing it’s easiest to change the shape of your gender equity or your pay equity,” she said. “And we’ve just started with gender. There are a whole bunch of other classes that we need to look at.”

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Materially improving gender, ethnic and cultural diversity, particularly within executive teams correlates with a wide range of successes – specifically being able to recruit top talent and improve employee satisfaction and decision making.

Diversity can also help drive technological innovation and disruption. Consider Montreal-based Lightspeed, one of Canada’s most successful tech start-ups.

The software firm launched in 2005 by Dax Dasilva and a group of LGBT+ colleagues, and has grown in size to now include 600 employees in eight offices around the world.

A culture of inclusion was essential. So, too, was a recognition that innovation through diversity is as much evolution as revolution.

“Company culture is just as important as code,” Lightspeed’s CEO and founder Dax Dasilva told RBCDisruptors, our monthly event looking at innovation and how technology is changing the world around us.

The purpose of these two organizations is to build up leaders. You can’t make change in the world without having everyone see themselves as a leader.

Dasilva stressed that companies need to iterate in order to innovate.

As part of Pride Month, RBCDisruptors profiled Dasilva, a leading voice for the LGBT+ community in business and technology.

After Dasilva founded Lightspeed, he developed a mantra to ensure that everyone, regardless of gender or sexual orientation, had a seat at the table.

“That gave everybody the freedom to help us to grow the way that we wanted,” he said. “It allowed anyone at the company to be themselves and who they wanted to be.”

Lightspeed’s growth has soared since its start in a converted Montreal home and has become one of Canada’s most successful tech start-ups in recent years after its latest financing round in October that values the company around $1 billion. The company makes a cloud-based point-of-sale system that runs on tablets and computers aimed at for independent retailers and restaurants who annually process $15 billion worth of sales in over 100 countries.

Several recent studies that examine the business impact of LGBT-positive workplaces conclude that inclusiveness results in a more innovative and productive workplace. A study published in the journal Management Science in 2016 found that companies in U.S. states that are considered to be more gay-friendly are actually significantly more innovative, specifically producing higher rates of patents.

On average, companies based in U.S. states that passed laws that prohibit discrimination based on sexual preference or gender identity experienced an 8% increase in the number of patents and an 11% increase in the number of patent citations, compared to states that did not pass such a law.

And yet, LGBT+ people are among the most marginalized employees, according to a recent report by Diversio, a Toronto-based firm.

Diversio surveyed 2,100 people in 20 companies in Canada, the U.S. and Britain and found that LGBTQ2+ employees felt more at risk of workplace harassment, and were twice as likely to feel their opinions were not sought out or valued by their employers.

Dasilva shared an example in which he encouraged Lightspeed’s management to focus on diversifying the company’s data science team to gain additional perspectives.

“If we only build certain predictive models, it’s a self-fulfilling prophecy that creates a certain set of solutions. As great as the AI community is in Montreal, we have to have other viewpoints work on that data science and find new and different angles.”

Supporting LGBT+ inclusion also makes better business sense. A 2017 report by the Center for Talent Innovation concluded 71% of LGBT respondents and 82% of LGBT-supportive allies are more likely to purchase from LGBT-inclusive companies. Even more importantly, LGBT+ inclusiveness drives market innovation as teams with members whose sexual orientation matches the target consumer are much more likely to understand the market, the report found.

“We’re all looking for sources of innovation,” Dasilva said, stressing that one of his goals in technology is creativity. “All of the best of us is when we’re involved in something that’s creating good.”

After Dasilva launched Lightspeed, he discovered he had created a “monoculture” by hiring people from his own network of friends and acquaintances. It limited the company’s growth. “You have to own up to your mistakes and widen your circle,” he said. “You have to get out of your comfort zone of the people who are like you.”

In addition to managing Lightspeed ahead of a possible IPO next year, Dasilva also runs Never Apart, a Montreal-based non-profit organization that encourages social change through cultural programming. He understands that his role at both groups is to foster and build leadership, in the corporate world and within the LGBT+ community.

“The purpose of these two organizations is to build up leaders. You can’t make change in the world without having everyone see themselves as a leader.”

But with Bitcoin meeting gravity — falling from a high of $20,000 in December to $7,000 this month — is it also at risk of becoming the latest bubble to pop?

We put that question to three cryptocurrency experts at our most recent RBCDisruptors event:

Hilary Carter, Research Director at the Toronto-based Blockchain Research Institute;

Christian Lassonde, Founder and Managing Partner of Impression Ventures, who specializes in fintech investing;

and Matthew Spoke, the CEO of Nuco, a blockchain company that’s building a network to connect blockchains around the world.

Lassonde thinks crypto is more of a speculative asset than a medium of exchange, and fueled largely by greed and hype. Spoke disagreed, believing cryptocurrencies address a discontent with the centralized financial system. Either way, Carter thinks big companies and governments need to explore underlying blockchain technologies that can eliminate the frictions and costs of centralized book-keeping, whether for financial transactions or other methods of exchange.

<!– To hear our full discussion, listen to the RBCDisruptors podcast on Soundcloud or iTunes. –>

Here’s some of what was said:

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1. What’s the Problem?

For centuries, money has been centrally controlled and managed, for reasons of personal security and economic stability. But with universal access to electronic exchanges and cloud computing, those central ledgers may no longer be needed. Or so the cryptocurrency advocates would have you believe. They think every financial transaction can now be instantly recorded — and encrypted — on every computer in the world. Think of it as one of those card games that doesn’t require a dealer. But what if we like having a dealer, to keep track of the cards and score, and to keep an eye on the other players for us? Centralization is something most consumers seem happy with, whether it’s centralized social media platforms (Facebook), entertainment platforms (Netflix) or money (U.S. dollars). And we’ve already got a range of systems, including digital payments, that work fairly well. Even where there are areas of friction — cross-border payments, for instance — improvements are emerging through technology and competition. Carter still believes cryptocurrencies may be most useful in parts of the world where technology and competition are not widespread, or where trust in the banking system may be weak. She estimates there are 2.5 billion “unbanked” people in the world without access to traditional financial institutions. For them, cryptocurrencies offer an alternative — and may even be necessary for those wanting to protect their money from corrupt governments.

2. Isn’t That a Side Door to Money Laundering?

Crypto is sounding alarm bells with regulators because of its obvious appeal for those who want to go unnoticed. Even big investors may not want to be connected to it because of its links to the underground economy and illicit activities like smuggling, tax evasion and terror financing. As Lassonde put it, “the money that’s coming in doesn’t want to be known, doesn’t want to be traced.” He thinks cryptocurrencies are so useful to money launderers and sanction-busting governments that they won’t escape the long arm of global regulators for much longer. Can those concerns be addressed in time? Spoke, a crypto proponent, admits that’s unlikely, as the technology is out of the bag and “regulatory arbitrage” is already underway. But he feels the underlying technology can still be useful to identify patterns of abuse, and root out the wrong-doers, who will always be looking for alternative channels to move money. Throw out crypto, he said, and the evaders will find something else. “With every new technology, comes the good and bad and you just hope that over time, the good outweighs the bad, and this is a perfect example of that.”

3. What If Regulators Move to Shut It Down?

The Chinese government has cracked down on crypto activity, last year banning Initial Coin Offerings (ICOs) and this year announcing it will scrutinize crypto exchanges. Do crypto investors in Canada face similar risks of a regulatory crackdown? Lassonde thinks so, likening it to the peer-to-peer music sharing platforms that disappeared after regulations were imposed. “We may see a change in the laws here in the next five plus years, where the ownership of crypto has become illegal — there’s very effective tools from centralized states to crush this stuff,” he argued. Carter and Spoke see it differently, with an opportunity for Canada to lead. Recognizing cryptocurrencies as currencies would allow the federal government to license digital wallets, a move that would help Canadians keep their assets safe, they said. But Spoke worries public officials aren’t spending enough time on the issue. “If anybody understands this the least,” he said, “it’s governments and regulators around the world.”

4. With So Many Concerns, Will Crypto Ever Become Mainstream?

Crypto remains on the fringes, used largely by early tech adopters, speculators and thrill-seekers. Lassonde believes that taking that into the mainstream will require massive behavior change. And that usually requires a large organization investing heavily in the infrastructure needed to create platforms for entrepreneurs and developers. He likened it to what Apple did for smart phones — except with crypto, no major developer is stepping forward. Without that investment, he argued, massive growth will be hard. Spoke agreed, saying,“if we can’t get these systems to a point where they’re significantly more accessible and more efficient, I don’t think they will hit the mainstream.”

5. Could Crypto Find a Second Life in Other Areas?

If regulators crack down on crypto-currencies, the underlying technology may find a home in less regulated fields like voting and business registration. Carter says governments are interested in “non-payment applications” as a way to reduce inefficiencies, and they may be willing to launch test cases in fields that currently require a centralized ledger. Drivers licenses and vehicle registration, for instance. “If you’re the Blockbuster of today,” she asked, “what’s the Netflix of tomorrow?”

This is what you’ll hear whether you ask a third generation winery, the country’s largest home care provider, or an entrepreneurial program within a university – and we did just that.

Canada is currently facing a ‘quiet crisis’, with half of all jobs being disrupted by technology and automation in the next decade. In a recent year-long study, conducted by RBC, our team crisscrossed the country to speak with a wide range of students and youth in their early careers, employers in virtually every sector, as well as educators and policymakers.

We found that recent grads are overqualified for the jobs they have now, and youth are unemployed without the skills needed for the jobs currently out there.

“We have to prepare youth for the future, from a skills perspective, and from an inclusion perspective,” said RBC President & CEO Dave McKay.

McKay kicked off the last RBCDisruptors, our regular forum on innovation and how it’s changing the world around us. The event was organized in part to celebrate RBC Future Launch, a $500-million commitment over 10-years to prepare young Canadians for the jobs of tomorrow.

We also welcomed three dynamic employee/employer pairs that told us how they are preparing for, and adapting to the future of work in their respective industries. Here’s some of what we learned:

We have to prepare youth for the future, from a skills perspective, and from an inclusion perspective.

RBC President & CEO Dave McKay

Technology Doesn’t Replace People

When it comes to automation changing the nature of (some) jobs, technology should be embraced and not feared. There are many things machines can’t do, such as communication, critical thinking, complex problem solving and social perceptiveness.

“Technology is not a job stealing, it’s job enhancing – it’s freeing up your time to use your human skills to devise new processes, and create community that can’t be done via technology,” said Thirty Bench winemaker Emma Gardner, who was joined by John Peller, CEO of Peller Estates. The winery is using innovative technologies such as drones and heat maps, empowering the winemakers and producing better wine.

Gardner uses her smartphone to track and harvest important data from their precious vineyards, such as wind speed, water saturation and vine health.

“We are overwhelmed with data and it’s helping us be smarter and make decisions more quickly,” said Peller.

He points out that machines don’t make wine, they help people make better wine.

Always Embrace Learning

One question Peller asks his employees is, “are you learning as fast as this world is changing?” He believes in creating a culture of learning and growing as a team.

This means more co-op placements with local post-secondary institutions, team collaboration, communication and leadership development. “Drawing all those things together is what will keep a company successful in the future,” he said.

At Guelph University’s Arrell Food Institute, students learn entrepreneurship first-hand by building businesses from scratch, and gain workplace relevant, team-based, training experience that cannot be taught in the classroom. “It’s an experimental space, and gives people the full skills portfolio of what they need in the workforce,” said Evan Fraser, the Institute’s director.

Leah Blechscmidt, a Masters Candidate and one of the student entrepreneurs at Arrell, is a firm believer that everyone should take marketing and business classes to further develop their communication skills, to sell their ideas. “It’s definitely an extension of our studies, as it gives us the opportunity to really apply the skills we’ve learned and develop new ones we wouldn’t otherwise have – it’s not every day you get the opportunity to start a business,” she said.

Focus on Communication

“All business is a human sport,” said Peller.

Arrell Food Institute students work in inter-disciplinary teams, gaining valuable interpersonal, critical thinking and project management skills.

The caregivers at Saint Elizabeth, which has a 9,000-strong workforce, act as coaches rather than directors into their patients’ health. Nurses used to be the main holders of information, informing patients on their conditions. Nowadays, information is easily found online.

“We’re not telling anybody about their disease – we’re sometimes translating it and interpreting it for them. We’re certainly not providing care to people, we’re providing together care, in a partnership,” said Shirlee Sharkey, CEO of Saint Elizabeth.

“I’m not just a nurse, I’m a caregiver, a shoulder to lean on and a social worker,” said Felicia Kontopidis, a registered nurse with Saint Elizabeth.

Credentials Aren’t Enough

It used to be that credentials alone were enough to land you that dream job, but not anymore.

“I now look at credentials as the minimum requirement,” said Sharkey.

When hiring, Saint Elizabeth looks for comfort to work independently, the ability to multitask and incredible organizational skills.

“We’re bringing in and testing for those competencies well above and beyond credentials. We need to create the future and future proof the organization and our talent – or else we’re going to have a huge wake up call,” she said.

To hear more from our three sets of guests, subscribe and listen to our episodes of the RBCDisruptors podcast, available on Soundcloud and iTunes.

Fast forward to 2018, and another big American thinker, Dan Doctoroff, is aiming to join a new urban revolution in Toronto, this one fueled by data more than division.

Doctoroff would balk at any comparison to Jacobs, who made her name as a writer and rabble-rouser. He’s a corporate leader and builder. But he recognizes they both would see the power of sustainable neighbourhoods as a bedrock to any future city.

A former deputy mayor of New York, who help lead the city’s renaissance after 9/11, Doctoroff is CEO of Sidewalk Labs, a company he created with Google co-founder Larry Page to radically change the way design our cities.

Sidewalk Labs is now focused on Toronto, where they’ve won the right to build a 12-acre community called Quayside on the downtown waterfront — an urban lab, really, where up to 5,000 people will live, work and play. They’ll do that by harnessing technology to reduce the financial, environmental and emotional cost of city-dwelling.

“A set of technologies are converging that can fundamentally bend the curve on the quality of life,” Doctoroff says.

He calls it a “fourth urban revolution,” following the steam revolution that gave us trains and the connected city, the electric revolution that gave us the vertical city, and the car revolution that gave us the sprawling city.

Doctoroff spoke at the most recent session of RBCDisruptors, our regular series on innovation, disruption and how technology is changing the way we live. You can listen to the full conversation on our podcast on iTunes or SoundCloud.

Here are some of the highlights:

1. If It’s Technologists Versus Urbanists, We All Lose

Doctoroff and his Sidewalk Labs team studied 150 so-called smart cities around the world and found none had worked. Simple reason: they didn’t harness humanity. Too many tried to impose master plans (the stuff of urbanists) and master technologies (the stuff of techies) on residents, rather than letting them play with technology and see what might emerge. “Cities cannot be planned all the way down to the last detail. You want people’s creativity and imagination and ideas.”

2. We Need to See Cities As the New Smartphone

Quayside will be a platform for others to build on, with apps, systems and buildings that connect with each other through a kind of open-source neighbourhood. “What makes smartphones so revolutionary is that they enable through reasonably open APIs, for people all over the world to build on top of it, creating things that no one ever imagined were possible, and that’s what gives it the power that it has.”

3. Diversity Will Matter; Inclusion More So

Toronto is renowned for its diversity but its inclusiveness is what caught Doctoroff’s eye. People mix easily in the city, and the inflow of 100,000 people a year hasn’t led to any signs of social fray. This was critical to Sidewalk Labs’ decision to focus on Toronto rather than the other 51 cities it surveyed in North America. “People here (are) more open to new approaches and new ideas… If Amazon sees what we see here, it wouldn’t even be close.” Diversity will define Quayside, but its inclusions is what will make it relevant globally.

4. Avoiding a Digital Palace

Diversity is about more than people’s background. Quayside will need a vibrant mix of income groups and lifestyles if it’s to be useful as a lab. In other words, it can’t be a shiny palace on the hill for technologists. Doctoroff thinks a key to drawing middle-income families, including from the suburbs, will be its ability to meld community design and building to cut housing costs. He thinks Quayside’s living costs will be 15–20% cheaper than elsewhere in the city. “Imagine for that family that makes $80,000 a year, if you can save them 15%, or $12,000 a year, that’s a meaningful change in people’s lives.”

5. Building a Mobility Lab

Quayside’s first priority is mobility. Only autonomous-driving vehicles. A lot of vehicle and bike sharing. And experimentation in pathway design, from tighter corners (efficiency) to curved roads (aesthetics) to bigger sidewalks and laneways (open space). Doctoroff thinks Quayside’s design will reduce the footprint of roads and driveways, which take up 30–40% of North American cities. “If you can reclaim that, you can double the amount of public space, putting everyone within a very short walk of a park.”

6. An Environmental Moonshot

Doctorff is aiming for “the first climate positive community in the world.” That starts with buildings, which in Canada consume a lot of energy. The deep waters of Toronto’s harbour may act as a heating and cooling system. Trees along the waterfront can also help buffer residents from the lake’s winds as they walk or bike. And underground service corridors can feed electricity and fibre-optic cables to residents — along with goods to local shops and the removal of waste.

7. Privacy Remains a Paramount Challenge

Quayside has three guiding principles for privacy. First, protections will be built into all products. Second, all data collected will be used to improve quality of life, and not for commercial purposes. Third, the process used to develop these policies will be open and collaborative. Doctoroff says Toronto has the chance to create “a global standard” for privacy.

8. Toronto As a Global Hub

Doctoroff says Toronto has the chance to draw urban thinkers, and developers, from around the world, in a way Jacobs never envisioned. If Quayside works, cities from China to Nigeria will pay attention — and those who help build it will have a global market. He thinks the project may actually create a new kind of Silicon Valley, around city-building. “One of the great opportunities for Toronto is to set the global example for what urban living can actually be, and to become the hub of urban innovation.”

And for Kylie Jenner, it’s perhaps the best shot yet to change an entire category overnight; thanks to e-commerce, her cosmetics line is now outselling L’Oréal and MAC online – combined. Celebrity brands, mobile payment platforms and emerging technologies like augmented reality may be bringing e-commerce to an inflection point. Too bad not enough retailers are ready. E-commerce accounts for less than 15% of retail sales in the US, and less than 10% in Canada. But as mobile payment technology takes hold and distribution costs decline, those numbers may shift quickly. “The Internet has democratized distribution,” says Harley Finkelstein, Shopify’s chief operating officer, speaking at the latest #RBCDisruptors, our monthly forum on innovation. Here are some of his insights:

The Big Shift: Power to the Purchaser

Sorry stores, it’s no longer about you. Retailers have long dictated shopping terms to consumers: how, where and when you can buy something. But “store hours” are becoming a thing of the past. So, too, is the middleman. “I can go directly to the retailer, get great insights prior to that purchase – and it’s cheaper,” explained Finkelstein.

Social Selling

The old mall map has been replaced by social media channels that can guide you through a personalized shopping journey, informed by your habits, preferences and friends. “What social media has done from a marketing perspective, is level the playing field,” explained Finkelstein. Which brings a whole new meaning to You Are Here.

Side Hustles Go Mainstream

Celebrities like Jenner, Kanye West and Drake were quick to seize on this opportunity, knowing social commerce would allow them to monetize their massive fan bases as old business models – music, for instance – fade. The resulting celebrity product lines have helped launch a whole new side of retail, known as “side hustles.” Case in point: Finkelstein described an investment banker who uses Shopify to sell homemade jam made from lemons on his hobby farm.

Playing With the Platforms

Online platform giants like Amazon, Facebook and Alibaba enjoy an unparalleled scale and cost base. For everyone else, that means an even greater need to create a unique ecommerce value proposition. Forget commonly available products. Think cool brands, unique experiences (online and offline) and personalized relationships with customers. “You have to create value,” said Finkelstein.

Paying How You Want

When it comes to payment, Finkelstein believes retailers should accept the payment that’s preferred by customers. Full stop. He pointed out that Shopify was one of the first to accept bitcoin, with rapper 50 Cent selling his branded headphones via Shopify and accepting cryptocurrency as payment. “We as a retail industry should be agnostic as to how people pay.”

The Many Cultures of Commerce

When selling online to a global audience, knowing the culture is key. “Each country and each region has these really interesting nuances. The idea of using a credit card to pay for a transaction online in India is unheard of. You have to use a ‘cash and delivery’ type of model,” explained Finkelstein. In Indonesia, retailers have sold through Instagram for years, and now use social media in very different ways from North America. While in the U.S., “everybody is used to next-day delivery. Most countries don’t expect that. In Brazil, you just want to receive your package.”

The Big Q: Is Traditional Retail Dead?

The short answer: no. That is, if retailers can create great, customized experiences that are unique to their store offerings and to the customers they’re targeting. In other words, it’s not just about product and price. It’s about the experience and emotion that shoppers attach to a brand. Some clothiers, for instance, offer espresso and hot shaves to customers who visit their shops, perhaps after browsing online. Others are starting to offer Augmented Reality tools that let customers visualize products on them, to get a smart read on sizes and cuts. There’s no denying the retail industry is in a state of mass disruption, with over 5,000 stores in the U.S. closing their doors last year. But Finkelstein believes that chance will create greater opportunities for Canadians seeking a slice of the global market. “Canada is becoming a lot more ambitious. We are fiercely Canadian but we are becoming fiercely ambitious with our companies.”
Nail is CEO and co-founder of Singularity University, a Valley think tank that’s taught 18,000 participants from 111 countries in exponential change. He’s also a master of the big wave. This is what he says you need to know about both: Every wave is different. Every day you’re a beginner. And every failure – at least those that don’t kill or maim – is a gift. Nail spoke recently at #RBCDisruptors about the massive changes coming at us because of technology, the mindset needed for exponential change and how we can shape it. He helped launch the first-ever SingularityU Canada Summit last week, to advise large Canadian firms and governments on the disruptive power of technological change. Here’s some of what he had to say:

If You Knew You Would Live to 120, What Would Your Retirement Strategy Look Like?

Nail believes this will become reality in the next 30 years, as advances in health technology continue to evolve exponentially. His young children may even live to double his life expectancy. Singularity predicts that human longevity will change dramatically with the increased use of digital health checks, in which humans will access 150GB of their body’s data yearly, literally digitizing their physical selves. Through closer monitoring and preventative interventions, they want to “make 100 the new 60″.

What Does Singularity Advise Companies to Do to Shift Their Mindsets?

Embrace the crazy idea. “If those crazy ideas just so happen to be the future of this business ten years from now, you need to set up a structure, a team or a process that will allow those to come in, or at least experiment with them in some way,” said Nail. And this has to come from the top. Nail emphasized that the CEO has to directly support change and protect the individual or team that is experimenting with something new, different and ‘weird’. One CEO that has embraced radical change is Former GE CEO Jeff Immelt. With such a hardware-heavy, industrial model, GE has become a leader in digitizing their business in order to prepare for the future. “Ultimately what I believe Jeff has built is a business that has longevity; he’s built resilience for that business,” said Nail. Another company example? Hardware giant Lowe’s. Nail recounted an interesting story about their small innovation team that began collaborating with startups and experimenting in different areas of the business. One prototype to emerge was a multilingual robot, with inventory management system integration, designed to interact with customers on the sales floor. Despite not having much, or any, support internally (except for the CEO), the robot got built and was eventually launched in-market at a San Jose store. This launch generated more publicity and press coverage than anything the company had seen in its entire 80-year history. “From then on, the CEO internally starts talking about Lowe’s as an ‘information and innovation business’,” explained Nail.

The Role of Failure

Nail expressed that the grind of the workforce beats us to be fearful of failure, as many of us need to work in order to survive. Similarly, most organizations get set up and develop this deep fear of failure – in that, if a project doesn’t work, people are reprimanded or fired. Nail brings in surfing as a metaphor. “It’s going through those failures over and over again, and then the one time you hit it, it all makes sense and makes it that much more powerful. Those failures aren’t really failures, they’re all part of the learning.” Nail believes that corporations have a responsibility to empower their employees with new skills to help them find their next path, even if that means leaving the company – without fear. “If you’re motivated by fear, you look for something stable, which often looks like the past,” said Nail, referencing Brexit and Trump.

Moving Forward

According to Nail, we require adaptability, mindset, tools, resources and a support ecosystem) to help us move at a faster pace. “We are going to see a fundamental amount of change in every aspect of our lives, every business, every industry and society,” said Nail. Where to start? Nail advises taking a moment to think about the future, the shape of the next 30 years and what we can do differently. “It’s rare that any of us have time to look beyond the next project, the next quarterly numbers, or even the next election cycle,” said Nail. “Remember that there is a fear of technology out there. However, it may be the strongest force for good.”
 

Sometimes, it seems, revolutions can be described in haste.

While the onslaught of Massive Open Online Courses back then seemed like a death knell for traditional learning, mass online learning has struggled in its infancy, while demands for colleges and universities has never been greater.

Now that educators are settling in for the long haul of disruption, they’re discovering that technology and teaching go hand in hand. American MOOCs — led by Coursera and Udacity — are turning to pay models, more rigorous standards and better links with established schools. And post-secondary institutions are breaking down their own walls, equipping students, and teachers, with the power of technology to personalize learning, speed up instruction and reach the critical scale needed to amass enough data to make even greater leaps in the quality of education.

The latest #RBCDisruptors, featuring edtech pioneer John Baker and York University president Rhonda Lenton, asked if the post-secondary model is broken. The answer: in places. And it can be fixed.

Baker, who is the founder and CEO of D2L, a digital learning platform, believes the model can be improved dramatically through new ways of teaching and learning. Lenton, who took over the top job at York this summer, feels that while the model is not broken, it needs to change and evolve, which she argues, is already happening.

“Incremental change,” she said, “is happening but we are not yet seeing fundamental change.”

Here are some of the tougher issues they’re taking on:

Technology as Teacher

Like practically every other sector, technology is increasing its presence in the classroom, helping to personalize the learning experience by providing better ways of engaging students and enabling them to learn better.

Baker noted that instructing all students at the front of a classroom makes it very difficult to personalize to individual needs — such as tailoring lessons and giving real-time feedback.

Baker, who founded D2L while in his third year of studies at the University of Waterloo, also said that technology makes learning accessible to the blind, deaf and visually impaired, allowing them to move through learning as quickly as everyone else in the class. It also provides predictive data to understand a risk of a student dropping out of a class, by allowing the teacher to identify the warning signs early on, and uses AI to reach out to the student with personalized interactions.

Experience as Educator

Lenton emphasized that the term ‘experiential education’ (EE) cannot be narrowly defined. EE requires an entirely different partnership model between higher education and outside sectors, and should include public sector and non-profit organizations, not just businesses.

“The day of the ivory tower university is long gone,” said Lenton. What she predicts will happen is an increasing fluidity of campuses and outside sectors working together to shape the curriculum.

“York University has in fact made a commitment that over the next five years, every single program will have an EE component,” she said.

Flipping the Classroom

Rather than students spending all of their time in the classroom with an instructor at the front, they now can get the materials online, and use the class time to work together and apply their learnings. Think less one-to-many lecturing, and more using the physical classroom space to work collaboratively.

Baker believes that less time spent learning in the classroom is a big improvement on how the traditional model works, as time is our most precious commodity.

Campus of the Future

Both agreed that physical space will always play a large role in student experience.

“The one thing students don’t want to lose is the face-to-face opportunity to work together,” said Lenton.

Baker predicts that in the next five years, 50% of students’ course load will be done online, and universities may not need to build a new building every time they add thousands of new students. “It gives universities the ability to scale,” he said.

The Value of Education

Lenton, a first-generation student from a family of five siblings, always understood the incredible opportunity that higher education affords, in giving access to a research-intensive experience, and allowing one to realize their full potential.

“University graduates do very well,” she said, pointing out that 91% of university graduates are employed within three years of graduation, and that 86% of students are in an occupation related to their career.

Income-wise, Lenton noted, university graduates earn about $1 million more over their lifetime than college graduates, and about $1.5 million more than someone with a high school education.

From Courses to Competencies

Baker believes the largest opportunity in education is a shift to the outcome-based model for learning. This means moving away from “seat times” and pass/fail measures, and much more towards a competency-based model.

“When you graduate university you no longer are going to say, ‘I took this course and this program’, but, ‘I have these skillsets, I can think critically, here’s my research ability, and here’s my portfolio of all the work that I’ve accomplished’. That language is consistent with what you’re going to see later in life.”

Lenton added that universities are about providing students with transferable skills that will allow them to be flexible and adaptable to the fact that careers are changing constantly.

Disruption for Good?

“We really don’t see disruption as a negative. We see disruption as an opportunity to be embraced,” said Lenton.

Baker concurred, “sometimes we think about disruption as this painful thing we have to go through, and sometimes it is. But it’s also probably the single biggest opportunity in front of our educational institutions, and I can’t think of a bigger market opportunity for them to pursue than going through this transformation.”

 

The latest RBCDisruptors looked at the state of entrepreneurship, how companies big and small can be more entrepreneurial, and how leading corporates can work better with startups.

Our guests were Hubdoc co-founder Jamie Shulman, Goldmoney Network founder Darrell MacMullin , and Laura Buhler, executive director of the C100, a non-profit group linking entrepreneurs in Silicon Valley and Canada. Here’s some of what they had to say:

1. Hire for Curiosity

Shulman built Hubdoc’s recruiting after taking stock of the characteristics of its most successful employees and looking for a common denominator.

“The one that popped up that we weren’t necessarily expecting was curiosity, being interesting and interested,” he said.

That led them to redesign their process in search of the most curious candidates.

The first round of their recruiting for sales staff is a simple sales call—but the potential employee has to call in and sell the company on their own product. The second round has nothing to do with sales: candidates have to come in and give a presentation about their passion, whether it’s fly fishing or the Dave Matthews Band.

2. Know Your Customer. Really Know Your Customer

The last stage of Hubdoc’s recruiting process focuses on something both Shulman and MacMullin said is key: knowing the customer.

Hubdoc asks new hires at all levels to spend a month doing customer support, to better understand their product and how the company works with customers.

“The biggest thing is they just learn how the customers and prospects are viewing our product, which is very different than how we were staring at it every day,” he said.

MacMullin said customer feedback is one of the most critical data sources for any business—and often the most underused. He gets a report every week about the top issues customers have reported. “We actually have someone that kind of straddles customer service and the product team that actually has a prioritized roadmap directly related to customer solutions.”

3. Be Ruthlessly Transparent

It’s no secret that communication is necessary condition for business success, and MacMullin said entrepreneurs have little room for error. “Most failures come down to misalignment of expectations or breakdown in communications.”

Goldmoney has had around three meetings in the last 12 months, MacMullin said, thanks to its use of the messaging software Slack for the majority of its internal communication. It’s efficient and helps people cut to the chase.

Shulman added, “Transparency often empowers people. People have a better sense of what they’re doing and what’s going on and how they can be a part of that.”

4. Boil Expectations, Not the Ocean

MacMullin said misaligned expectations come down to either timelines or resources, and can happen within a company or in a partnership between a small company and a big one.

“A lot of times, entrepreneurs are thinking, ‘oh I’m going to get a deal done with RBC and we’re going to be up and running and have a million customers in six months.’ Let’s be real here, that’s not going to happen.”

The challenge for hard-driving entrepreneurs, he said, is getting caught up in the final goal and not building the proper platform for success. It’s even more of a challenge when the product itself needs work to move from idea to execution.

“People tend to try and boil the ocean on a bigger project versus trying to figure out what the stages are,” he said.

5. Always Be Building Your Bench

The best organizations have accountable leaders, and the best startups identify and empower those people early on.

“There is a very clear level of accountability, a clear level of communication and a very real sense of urgency against the opportunity,” MacMullin said.

He said he tries to imitate a shared characteristic of all the best companies in any field: they not only seek out the best recruits, but they develop what they already have.

“That’s actually part of their culture is actually investing in their people, investing in their processes,” he said. “They’re always working on how they run meetings, how they get the right questions, how they get the right leaders to mentor the people on their teams.”

6. Time Is Money. Don’t Waste It

Shulman said dealing with slow-moving incumbents can be challenging for entrepreneurs.

“Large organizations often don’t appreciate the real resource constraints of entrepreneurial businesses,” Shulman said.

In one meeting, he said, so many people from a potential client showed up that the first 15 minutes was taken up with introductions.

“A large organization can send many people to several lengthy meetings over and over again, while entrepreneurs can barely sacrifice 30 minutes,” he said.

7. Build Fast, and Know When to Go Slow

MacMullin said that large organizations are great targets for entrepreneurs looking to score their first big client, but they can’t stake everything on a single source. He added that in the early going, many small businesses are still on their way from zero to one.

“Part of the balance is building your own value proposition,” he said. “It’s very difficult for a large company to actually see how they would implement that or justify a use case or meaningful proof of concept when you haven’t been able to do it yourself.”

It’s still important to reach out to established companies, he said, with the end goal of building relationships, rather than a one-time sale.

“We had the same type of thing,” he said, referring to Shulman’s story of the over-populated meeting. “But it wasn’t until we got to a certain stage, and the fact that we already nurtured and built that relationship over time, that was key.”

8. Tell Your Story (No One Else Will)

Buhler said there are lots of great stories of Canadian entrepreneurs changing the world, but the general public just doesn’t always hear about it.

“We think those stories need to be shared, because they inspire and help future entrepreneurs and they get the word out about the great things that are coming out of Canada,” she said.

The C100 is now capturing the many stories of Canadian entrepreneurs who have and continue to play key roles in the startup and venture community. One example is Geoff Lewis, who founded two companies before joining the US$3-billion Founders Fund venture capital group led by former PayPal CEO Peter Thiel.

“We have a thriving startup community, but we’re not always good at amplifying our stories,” she said. “We are hoping to change that so many more Canadian entrepreneurs can benefit from the knowledge and experience of others.”