Inflection Points 5: Politico profile of Artemon; Bank collapses highlight global uncertainty
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The Artemon site is www.artemonstrategy.com and you can contact us via email david@artemonstrategy.com
Slightly shorter this week as I’m just about to get on a plane to Singapore.
Politico profile of Artemon
Thanks to Matt Honeycombe-Foster of Politico for sitting down for a chat recently about what we are looking to achieve with Artemon Strategy and publishing a profile of us last week. You should subscribe to the excellent London Influence newsletter here. I’ve also added the profile below, which I think sums up nicely why foresight is now essential for modern businesses and what Artemon is doing. I’ve even got over being described as a veteran!
MEET ARTEMON: Think ahead or get caught short: that’s the message from new advisory firm Artemon Strategy, launched in recent weeks by Google and Policy Exchange veteran David Skelton and which is putting foresight at the heart of its pitch.
What’s in a name? “Artemon was the sail on a boat in ancient Rome,” Skelton tells Influence. “When they wanted to get through choppy waters into better waters they would use the Artemon to get through. That’s basically what we’re hoping to provide for businesses in an age of what I would describe as, in the post-Second World War period, unparalleled uncertainty.”
The pitch: Artemon is aiming to help firms anticipate and plan for wider shifts in geopolitics and business beyond just keeping the lights on and responding to immediate trends and crises. The basic premise is that the post-Cold War era of frictionless trade and relative stability is long gone. Populism and nationalism are on the rise, globalization is on the back foot, and China and the West are pulling further apart. So firms are working in a “deeply uncertain environment,” says Skelton — and need to get much better at things like scenario-planning and wargaming to ensure they’re not swamped by it all.
The big questions: “We will look at the forces in your strategic operating environment and say, this is what might be developing over the next few years,” Skelton says. “How, as a business, are you preparing for it? How are you anticipating things which might have a substantial impact on your operating environment?” One of the outfit’s taglines is “anticipate, adapt, act” – and Skelton points out that history is littered with examples of companies that either didn’t see big shifts coming or stuck their fingers in their ears.
For example: Blockbuster built its business on fining people for late video returns — then streaming came along. Nokia was king of the hill but then got bodied by the iPhone. Kodak, Skelton points out, was “symbolic of photography for about a century,” knew digital photography was coming but “decided not to act upon that foresight.”
By contrast: Fossil fuel giant Shell came out of the 1970s oil crisis better than many of its rivals by gaming out what newly-independent republics in control of supplies plus tension between the Arab world and Israel might mean for oil prices. TSMC, the Taiwanese chips behemoth — “the most important company in the world, according to many people,” Skelton says — saw which way the wind was blowing on increased use of electronic devices and got itself positioned. And Skelton’s old gaff Google (he worked in strategy and public policy there for seven years) snapped up a little-known start-up called Android back in 2005 as it anticipated the shift to mobile search.
Tricky conversations: Of course, waltzing in and telling a company it needs to keep its eyes on the horizon is no easy task. Skelton says his background in Westminster as a relative outsider hailing from the North East of England means he’s pretty well-versed in tricky conversations. At PolEx, he was urging the Tories to embrace the living wage before it was cool, and was an early voice calling on the Conservatives to focus on the North or risk “never being able to have a sustainable period of majority government again.”
Why go external? In-house corporate affairs and public policy teams have enough on their plate already, he argues, and when you’re inside a company it can be tough to “speak up and say difficult things” while also trying to “navigate the promotion ladder.” And so external voices can sometimes be more persuasive when it comes to the big-picture stuff that has the potential to disrupt. “The history of capitalism shows that no company has any divine right to exist,” warns Skelton. “And the history of tech-driven capitalism is that turnover is much quicker, particularly in an age of global uncertainty when you’ve got more regulation. Assumptions are amended very quickly. Therefore, you need to anticipate what comes next.”
Banking shocks a reminder to plan for the unexpected
In my years working in tech, Silicon Valley Bank was always seen as an integral part of the tech ecosystem and even spoken about in hushed tones by many in the Valley. As the HBR put it in this excellent piece of analysis:
SVB’s deep relationships with both VCs and companies could be a source of important networking opportunities for entrepreneurs and investors alike. The products and services that SVB could offer evolved over time to meet the needs of the rapidly changing technology landscape. SVB was a critical piece of the ecosystem and was incredibly important for helping the industry mature and grow. Because it had personal insight into companies and founders through its extensive network, it could operate quickly and efficiently.
As Ben Thompson and Business Insider note its collapse is symbolic of further destabilisation and is another example of a multiplicity of trust issues tech is wrangling with.
To see such an important body for tech start-ups and entrepreneurs hit a crisis point so quickly caused a severe jolt to everyone working in tech in particular. For it to happen in the same week as a crisis for Credit Suisse is a stark reminder of the world of extreme shock and uncertainty we’re living in. In The Spectator, Kate Andrews, talks about a “new era of economic uncertainty” and the importance of not dropping our guard again. It is yet another illustration of why businesses need to prepare for a world of instability and why tools like scenario planning are becoming more and more important.
I couldn’t help but note this tweet from David Ulevitch of Andreessen Horowitz, where he described the bank run on the Silicon Valley bank as the “world’s first memetic, social-media fuelled bank run”. A reminder (as noted in Inflection Points 4 last week) that social media can make the herd move ever more quickly and accelerate shocks and uncertainty.
Against this backdrop, it’s notable that Lloyd’s Of London are now actively utilising foresight exercises, including scenario planning, to better understand how a major “cyber event” or “geopolitical development” might impact them and how they can prepare. This comes only weeks after IKEA shifted from traditional forecasting to more agile scenario planning. As I wrote in Inflection Points 3, such a move enables companies to be more agile and understanding of their emerging environment.
Generative AI continues to accelerate
As we discussed in Inflection Points 3, the acceleration of generative AI and the assorted headaches for regulators will be one of the continuing themes of this year. The past week has very much been one for wow moments. Open AI has taken the wraps off GPT4, but amidst rather more secrecy about how it operates. Will Douglas-Heaven sets out in this great summary for MIT Tech Review that this acceleration is also either facing or about to face competition from other multi-modal large language models. We’ve also seen techs big players setting out how AI will bring about product transformation in Workspace and Office. Artifact, the app developed by Instagram’s co-founders that uses AI to build a personalised news experience is also beginning to gain traction. These developments are a signpost that AI will accelerate a significant personalisation of the web and a question that we will come back to is how comfortable regulators will be with that as it continues speeding up.