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‘A shift from an era of change to a change of era’
Amsterdam, Februari 26th 2015
Liquidity Days, International
Private banking
Han Mesters
Sector banker zakelijke
dienstverlening
Content
1 Conceptual framework: disruption!
The ‘Why”
Innovation
2
3
Findings4
1. Conceptual framework: disruption
• Crisis
• Demography
• Governance
• Generation Z
• Geo-political
shifts
• Culture
• Environment
Where are we?
2 facts of life:
1. Change is exponential (Kurzweil - Singularity)
2. The Internet revolution has only just begun (ongoing ‘Ryanisation’ of business
models)
Computing
(processing)
Communication
(bandwidth)
Storage Content
Moore’s Law Fiber Law Disk Law Community Law
(Metcalf’s Law)
Doubles every
18 months
Doubles every
9 months
Doubles every
12 months
2n
(where n=
# of People)
6
Someone has Hit the “Reset” Button
(Jeffrey Immelt, CEO, General Electric)
We believe:
‘The economy is in an early stage of a
fundamental change with regard to the way work
is organised, managed and executed’
We know:
Many companies are looking for their ‘Why” (why
do they exist?)
Ethos:
‘is a Greek word meaning "character" that is used to
describe the guiding beliefs or ideals that
characterize a community, nation, or ideology. The
Greeks also used this word to refer to the power of
music to influence its hearer's emotions, behaviors, and
even morals’
Nothing is safe……
IBM’s Watson and professionals… ‘singularity’ effect
PayPal does a real-time credit score in millisec., based on your EBay purchase history
http://www.businessinsider.com/these-startups-are-replacing-banks-2014-
2?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Falleyinsider%2Fsilicon_alley_insider+%28Silicon+Alley+Insider%29&IR=T
Bron: http://fermi.vc/post/72559525330/disaggregation-of-a-bank
Fuzzy sector borders
PayPal does a real-time credit score in millisec., based on your EBay purchase history
Forget Singularity:‘You don’t know what you don’t know’
How to deal with Black Swan: portfolio’s and focus on impact, not only chance
chance
‘By analyzing past returns, a distribution of returns is developed and the probabilities of achieving a
range of returns are calculated according to standard deviation’. Hmmm
(…) Extreme events have happened at a far higher rate than the bell curve model predicts. For example,
the October 1987 market crash was statistically impossible. It couldn’t happen. Yet it did. The same
impossibility applies to the back-to-back market crashes of 2000-2002 and 2007-2008. In fact, severe
losses (20% or more) happen about 5 times more frequently than estimated by most statistical models!
Source: www.investfortomorrow.com/newsletter/3rdQtr2011IFT.html
Innovation and institutions: unhappy marriage
“The rationale for a large firm is
that the internal transaction costs
are lower than the external ones,”
he believes. “But the Internet
has made external transaction
costs lower, so the enterprise can
become much smaller.”
IBM
15
Turbulence of the environment increases
Source: Ansoff
Communities on the rise
Between ‘Markets & Hierarchy’ and ‘The Nature of the Firm’ (Ronald Coase)
Clay Shirky: “Since we have grown up with hierarchical institutions
as models for organizational structure, it’s hard to visualize another
model. But this is where social media has come in. The development
of technological features such as #hashtags has allowed people with
like interests to find each other and organize around ideas
outside a traditional institutional model.
(…) So we have an old way of viewing the organization of people
(thesis: hierarchical institutions). Now there’s a new way of looking
at things (antithesis: unmanaged cooperative
collaboration).
We (as a society) are still trying to figure out how to
navigate this (synthesis) to produce results.
September 2013….longer term impact of ICT on work
18
Bron: Oxford
Experience based economy…
Cloud / sofware abonnementen
Who are we?
Power distance (hierarchy)
0
20
40
60
80
100
VS
Canada
Duitsland
Japan
Frankrijk
Nederland
HongKong
Indonesië
WestAfrika
Rusland
China
Masculinity
0
20
40
60
80
100
VS
Canada
Duitsland
Japan
Frankrijk
Nederland
HongKong
Indonesië
WestAfrika
Rusland
China
Low power distance, feminine culture
Trust matters a lot
NL open air museum for Chinese tourists? Not really
Nice fit with ‘Top 10 most competitive countries’
The Global creative Class
2. The ‘Why’
The heart of the problem
Companies experience 3 major problems
1. Gross margin pressure
2. Unique selling point/competitive edge
3. Value added proposition
-5%
-3%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
15% 20% 25% 30% 35% 40%
Brunel The Netherlands
Adecco The Netherlands
USG People The Netherlands*
Randstad Group Netherlands
Olympia Nederland
Bruto marge
EBIT marge
2010
2009
2010
2009
2009
2010
2010
2009 2010
2009
1) USG People, EBIT Margin = EBITA Margin, Gross Margin not available, estimate
Bron: Annual Reports
Standard ‘reflex’ to these Three Big Challenges
The ‘WHY’: ABN Amro roots: 1824
NHM: Nederlandsche Handel-Maatschappij
De N.V. Nederlandsche Handel-Maatschappij werd op initiatief van koning
Willem I in Den Haag opgericht op dinsdag 9 maart 1824
De doelstelling was (Art. 59) "bevordering van handel, scheepvaart,
scheepsbouw, visserij, landbouw en (het fabriekswezen)", in voortzetting van
wat tijdens de Franse overheersing van 1795 tot 1813 was ingezet.
Het hogere doel was volgens de koning dat de NHM zou fungeren als een
“large lever to stimulate and support the national
wealth of our country".
Professional services: From a Brand to a ‘Stand’
29
Can institutions make this shift…..
► autonomy/trust
► mastery
► purpose
Bron : Daniel Pink
‘The purpose of work is to work on purpose!’
Joey Reiman
3. Innovation
Profitability without growth………
S&P 500 Q3 2014
Source: www.zerohedge.com/news/2014-12-08/q3-2014-earnings-breakdown-do-you-still-believe-miracles
Eps + 268% Hoe kan dat? Share buy backs…with debt
Non financial (soft) indicators are basis for future competitive edge
The People versus the Balanced Score Card: ‘Death by KPI’
‘Culture attracts the right professionals, who will generate added value’
Case: recruitment…a few years ago
Adverteren van
vacature
Zoeken met
profiel
Beoordelen
sollicitaties
Benaderen
prospect
Opstellen profiel
Selectie
kandidaat
ActiefwervenPassiefwerven
…..and now
Adverteren van
vacature
Zoeken met
profiel
Beoordelen
sollicitaties
Benaderen
prospect
Opstellen profiel
Selectie
kandidaat
ActiefwervenPassiefwerven
1. Agility score:
• % of non owned assets/contingency (non employed) labour
2. Innovation score
3. ‘Futureproofness’ of ICT infrastructure
Why innovation?
Assessment of ‘Probability of Default’ driven by future based
variables, not by historical financials!
Different types of innovation
1. Strengthen:
Huidige dienst verbeteren / proces efficiëntie
2. Stretchen:
Huidige dienst aanbieden aan andere
eindmarkten/nieuwe dienst aan bestaande
klanten
3. Blue Ocean:
Nieuwe dienst, nieuwe eindmarkt
Incrementeel
Disruptief
The innovator’s dilemma
Rise of the Network economy
Passion and craftmanship belong to an analog world?
The end of ‘pace setting’ leadership
The eldest of four children, Dunham enlisted in the Marine Corps in 2000.
Jason Dunham stepped into the role of protector long before he ever donned a
Marine uniform.
As a teenager, he put himself between a friend and an adversary to protect his
buddy during a fight. As a brother, he would warn his little sister to watch out
for boys. As a man, he dreamed of becoming a state trooper — so long as
work didn’t take him too far from home, where he could keep an eye on those
he loved most. Dunham died as he had lived, said the minister at his burial last
May: “Caring more for others than himself.”
4. Findings
The rise of the network economy
1. Facts of Life not well understood
2. Structural/disruptive changes outweigh the business cycle
3. ‘Never waste a good crisis’
4. Growth returns in 2015 or: ‘profitability without growth’?
5. Innovate or die
6. Institutions are ….so nineties?
7. The Innovator’s dilemma indeed: most of your clients are not smarter than we are
…but the wisdom of the crowd beats everybody
8. Trust is crucial for letting your professionals shine
9. You don’t know what you don’t know
10.Culture determines success ‘culture eats strategy for breakfast’, but…
11...culture is not measured/appraised well enough

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2015 liquidity days ipb

  • 1. ‘A shift from an era of change to a change of era’ Amsterdam, Februari 26th 2015 Liquidity Days, International Private banking Han Mesters Sector banker zakelijke dienstverlening
  • 2. Content 1 Conceptual framework: disruption! The ‘Why” Innovation 2 3 Findings4
  • 4. • Crisis • Demography • Governance • Generation Z • Geo-political shifts • Culture • Environment Where are we?
  • 5. 2 facts of life: 1. Change is exponential (Kurzweil - Singularity) 2. The Internet revolution has only just begun (ongoing ‘Ryanisation’ of business models) Computing (processing) Communication (bandwidth) Storage Content Moore’s Law Fiber Law Disk Law Community Law (Metcalf’s Law) Doubles every 18 months Doubles every 9 months Doubles every 12 months 2n (where n= # of People)
  • 6. 6 Someone has Hit the “Reset” Button (Jeffrey Immelt, CEO, General Electric) We believe: ‘The economy is in an early stage of a fundamental change with regard to the way work is organised, managed and executed’ We know: Many companies are looking for their ‘Why” (why do they exist?) Ethos: ‘is a Greek word meaning "character" that is used to describe the guiding beliefs or ideals that characterize a community, nation, or ideology. The Greeks also used this word to refer to the power of music to influence its hearer's emotions, behaviors, and even morals’
  • 8. IBM’s Watson and professionals… ‘singularity’ effect
  • 9. PayPal does a real-time credit score in millisec., based on your EBay purchase history http://www.businessinsider.com/these-startups-are-replacing-banks-2014- 2?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Falleyinsider%2Fsilicon_alley_insider+%28Silicon+Alley+Insider%29&IR=T Bron: http://fermi.vc/post/72559525330/disaggregation-of-a-bank
  • 10.
  • 11. Fuzzy sector borders PayPal does a real-time credit score in millisec., based on your EBay purchase history
  • 12. Forget Singularity:‘You don’t know what you don’t know’
  • 13. How to deal with Black Swan: portfolio’s and focus on impact, not only chance chance ‘By analyzing past returns, a distribution of returns is developed and the probabilities of achieving a range of returns are calculated according to standard deviation’. Hmmm (…) Extreme events have happened at a far higher rate than the bell curve model predicts. For example, the October 1987 market crash was statistically impossible. It couldn’t happen. Yet it did. The same impossibility applies to the back-to-back market crashes of 2000-2002 and 2007-2008. In fact, severe losses (20% or more) happen about 5 times more frequently than estimated by most statistical models! Source: www.investfortomorrow.com/newsletter/3rdQtr2011IFT.html
  • 14. Innovation and institutions: unhappy marriage “The rationale for a large firm is that the internal transaction costs are lower than the external ones,” he believes. “But the Internet has made external transaction costs lower, so the enterprise can become much smaller.” IBM
  • 15. 15 Turbulence of the environment increases Source: Ansoff
  • 17. Between ‘Markets & Hierarchy’ and ‘The Nature of the Firm’ (Ronald Coase) Clay Shirky: “Since we have grown up with hierarchical institutions as models for organizational structure, it’s hard to visualize another model. But this is where social media has come in. The development of technological features such as #hashtags has allowed people with like interests to find each other and organize around ideas outside a traditional institutional model. (…) So we have an old way of viewing the organization of people (thesis: hierarchical institutions). Now there’s a new way of looking at things (antithesis: unmanaged cooperative collaboration). We (as a society) are still trying to figure out how to navigate this (synthesis) to produce results.
  • 18. September 2013….longer term impact of ICT on work 18 Bron: Oxford
  • 19. Experience based economy… Cloud / sofware abonnementen
  • 20. Who are we? Power distance (hierarchy) 0 20 40 60 80 100 VS Canada Duitsland Japan Frankrijk Nederland HongKong Indonesië WestAfrika Rusland China Masculinity 0 20 40 60 80 100 VS Canada Duitsland Japan Frankrijk Nederland HongKong Indonesië WestAfrika Rusland China Low power distance, feminine culture
  • 22. NL open air museum for Chinese tourists? Not really Nice fit with ‘Top 10 most competitive countries’ The Global creative Class
  • 24. The heart of the problem
  • 25. Companies experience 3 major problems 1. Gross margin pressure 2. Unique selling point/competitive edge 3. Value added proposition -5% -3% -1% 1% 3% 5% 7% 9% 11% 13% 15% 15% 20% 25% 30% 35% 40% Brunel The Netherlands Adecco The Netherlands USG People The Netherlands* Randstad Group Netherlands Olympia Nederland Bruto marge EBIT marge 2010 2009 2010 2009 2009 2010 2010 2009 2010 2009 1) USG People, EBIT Margin = EBITA Margin, Gross Margin not available, estimate Bron: Annual Reports
  • 26. Standard ‘reflex’ to these Three Big Challenges
  • 27. The ‘WHY’: ABN Amro roots: 1824 NHM: Nederlandsche Handel-Maatschappij De N.V. Nederlandsche Handel-Maatschappij werd op initiatief van koning Willem I in Den Haag opgericht op dinsdag 9 maart 1824 De doelstelling was (Art. 59) "bevordering van handel, scheepvaart, scheepsbouw, visserij, landbouw en (het fabriekswezen)", in voortzetting van wat tijdens de Franse overheersing van 1795 tot 1813 was ingezet. Het hogere doel was volgens de koning dat de NHM zou fungeren als een “large lever to stimulate and support the national wealth of our country".
  • 28. Professional services: From a Brand to a ‘Stand’
  • 29. 29 Can institutions make this shift….. ► autonomy/trust ► mastery ► purpose Bron : Daniel Pink ‘The purpose of work is to work on purpose!’ Joey Reiman
  • 31. Profitability without growth……… S&P 500 Q3 2014 Source: www.zerohedge.com/news/2014-12-08/q3-2014-earnings-breakdown-do-you-still-believe-miracles
  • 32. Eps + 268% Hoe kan dat? Share buy backs…with debt
  • 33. Non financial (soft) indicators are basis for future competitive edge
  • 34. The People versus the Balanced Score Card: ‘Death by KPI’ ‘Culture attracts the right professionals, who will generate added value’
  • 35. Case: recruitment…a few years ago Adverteren van vacature Zoeken met profiel Beoordelen sollicitaties Benaderen prospect Opstellen profiel Selectie kandidaat ActiefwervenPassiefwerven
  • 36. …..and now Adverteren van vacature Zoeken met profiel Beoordelen sollicitaties Benaderen prospect Opstellen profiel Selectie kandidaat ActiefwervenPassiefwerven
  • 37. 1. Agility score: • % of non owned assets/contingency (non employed) labour 2. Innovation score 3. ‘Futureproofness’ of ICT infrastructure Why innovation? Assessment of ‘Probability of Default’ driven by future based variables, not by historical financials!
  • 38. Different types of innovation 1. Strengthen: Huidige dienst verbeteren / proces efficiëntie 2. Stretchen: Huidige dienst aanbieden aan andere eindmarkten/nieuwe dienst aan bestaande klanten 3. Blue Ocean: Nieuwe dienst, nieuwe eindmarkt Incrementeel Disruptief
  • 40. Rise of the Network economy
  • 41. Passion and craftmanship belong to an analog world?
  • 42. The end of ‘pace setting’ leadership The eldest of four children, Dunham enlisted in the Marine Corps in 2000. Jason Dunham stepped into the role of protector long before he ever donned a Marine uniform. As a teenager, he put himself between a friend and an adversary to protect his buddy during a fight. As a brother, he would warn his little sister to watch out for boys. As a man, he dreamed of becoming a state trooper — so long as work didn’t take him too far from home, where he could keep an eye on those he loved most. Dunham died as he had lived, said the minister at his burial last May: “Caring more for others than himself.”
  • 44. The rise of the network economy 1. Facts of Life not well understood 2. Structural/disruptive changes outweigh the business cycle 3. ‘Never waste a good crisis’ 4. Growth returns in 2015 or: ‘profitability without growth’? 5. Innovate or die 6. Institutions are ….so nineties? 7. The Innovator’s dilemma indeed: most of your clients are not smarter than we are …but the wisdom of the crowd beats everybody 8. Trust is crucial for letting your professionals shine 9. You don’t know what you don’t know 10.Culture determines success ‘culture eats strategy for breakfast’, but… 11...culture is not measured/appraised well enough