Webinar with Alexander Bard (Sweden): Creative Leadership in the Internet Age

If during the summer, at the height of the pandemic, we at the Stockholm School of Economics in Russia considered it important to pack our webinars with the most up-to-date knowledge on the topics that most affect society, now we have decided to focus on those speakers whose opinion is the most relevant. In particular, we had already had a webinar with Kjell A Nordström, a Swedish economist and author of world business bestselling book (Funky Business, Urban Express), a Russian economist and professor of economics at the Sciences Po in Paris. This time, on September 22, a webinar for the SSE Russia was hosted by Alexander Bard, a former musician and creator of the music trio Army of Lovers, as well as a Swedish cyber-philosopher, sociologist, writer and internationally renowned speaker.

For his audience Alexander Bard chose an unusual topic of creative leadership in the context of the modern world, the Internet age. "However, to move on to the main point, it is worth remembering that there were four main paradigms in the history of mankind, and they all depended on how people communicated with each other," – he began his speech. Each paradigm was determined by the type of communication that prevailed at the time.

Approximately five and a half thousand years ago, the spoken language was replaced by writing, which led to the formation of a completely different type of society with permanent settlements, a major change in the lifestyle and population growth. But the most radical new ideas emerged during the domination of the third paradigm: the appearance of the printing press and the technological revolution. This in turn leads to the The Age of Enlightenment, to the increase of available affordable information and to the growth of population who actively uses this information. Thus, historically, the aristocracy was gradually replaced by the bourgeoisie, the kings were replaced by politicians, organized religion and clergy by the mass media and academics.

"We are looking at the historical processes where, thanks to the technological developments, new empires emerged while the old ones fell into oblivion. This is a small warning for you: if there are new technologies on the horizon, accept and use them, try to understand what kind of power they will bring, instead of living the old way and waiting for you to be pushed off the ship of modern times," - Alexander Bard advises.

When we try to understand what creative leadership is today, it is important to understand that we are living in the era of capitalism or industrial society. "Institutions of power today are actively trying to fight for the importance, and if they succeed, they try keep everything new silent, because of the fourth revolution - the Internet revolution - is coming," - the speaker explains.

The Internet revolution is comparable in scale to the invention of the printing press. With the advent of the Internet, more information had become available than ever. And the technical giants of Silicon Valley and China began to use this to collect and analyze data from every Internet user, and thus control everything. For example, Google's search algorithms will give an optimal result taking into account all collected information about the user in the global network and the interests of other similar users.

"Now we are living in the world where everything is measured by sensors, they respond to our behavior and affect our behavior. In this strange era, it turns out that the technology around me knows me much better than I do. This is not just a device that simplifies my life. Technologies begin to recognize me, and I start to build my relationship with them in a very different way than before," Alexander Bard shares his reflections.

Thus, the leadership model itself is changing. To replace the human leader, who once dictated the rules of behavior "from top to bottom," the Internet emerges with an avalanche of information, and the whole environment leads to people initiating communication "from bottom to top": they begin to react to more things, to share their opinions and to discuss them. "Research shows that an advertisement on YouTube is skipped by user after 5 seconds 992 times out of a 1000. Companies are finding it increasingly difficult to be liked by the audience, which is why we are talking about the need for creative rather than traditional leadership," - the expert explains.

People began not only to express their opinions, but also to expect a certain reward for it. And if they see that their opinion does not matter to the company, they start blocking communication with it. The reason is that society suffers from the information overload. "Today it is almost impossible to be a leader of a corporation and simply sell products and services to your target audience. Numbers of people watching TV are falling, we hate advertising on YouTube, radio is not used. There is a feeling that the Internet does not like people who pay for communication", - Bard leads to an interesting thought. -"People are still interested in other people, products and services, they just don't like the way all of these are packaged and brought to them.

The Internet is organized as a flat structure, seeking to reach zero costs, which means that almost every person can afford a device to access the Internet. The problem is that the available media is interactive and people communicate within it. "If 8 billion people communicate with each other in a flat structure and don't listen to anybody else, they probably start shouting at each other, and whoever shouts louder gets attention. Thus, people have moved from the economy of capitalism to the economy of attention, and no one reacts to a paid communication," - the speaker says.

Leaders who attract more attention create smaller networks over time. If the pressure increases also within smaller groups, more even smaller networks above this level will appear, and so on. And these smaller networks will defend themselves with their elitism: not everyone will be allowed to enter. If we draw an analogy with a nightclub where there is a long queue of people who want to get inside and only celebrities are allowed into the club, but not those who pay for the entrance. "People strive for more power, because the more power, the more freedom you get. And thanks to freedom, you make the most important decisions in your life. When everything was about money under capitalism, you earned more money because it meant freedom. Today, most of the problems are related to communication, to the lack of attention. And now that there is a society of 'attention', the way to achieve that attention is to climb up the pyramid and solve your problems using human contacts," Bard explains.

But there is a much faster way to implement the same system - algorithms. This is why they are so important today. The algorithms build optimal output of the recommended options for a request based on the principle of Infotainment (information + entertainment). Scrolling through their feeds, people want to learn something, or have fun. Companies that can combine one the other well can expect profit and general success. Thus, according to the formula "trust" multiplied by "consciousness" we gain the "value of attention". And even if the algorithm has many different settings, its effectiveness is measured by how well it attracts users’ attention.

"Naturally, before we make any decision, we go online. A search engine serves as a gateway through which everyone goes before doing anything important, whether it's a part of their private life or a commercial decision. Nobody goes to buy anything or sign a contract without checking it online. 98% of decisions are made based on what the algorithm offers us," the speaker assures.

Companies now need to interactively communicate with customers. This leads to an explosion of client relationships. Companies need to respond to any negativity or dissatisfaction from client side. "You have to live and breathe your relationships with clients. And your clients become your research and development department from now. Every person is important, and not only the loudest ones," Alexander Bard says. But working only with negativity is also a mistake. "You have to try and run the whole algorithm on yourself. You have to use it within your own culture, see how you can optimize what you do in your culture. So you can go out into the world and offer your services to external customers. This requires creativity from you. And a leader needs to understand what digitalization offers," he continues.

2020 has accelerated all digitalization processes, due to the pandemic and global remote work wave. Everything leaves a digital footprint and goes through a narrow gate of algorithms. And if companies understand how algorithms work, the principles of Infotainment and adjust their actions, they can focus their activities better and offer the best product in the world at the best price. "A good product, a good price and a normal Internet page make a good business plan for you," the speaker assures.

With algorithms, the Internet is gradually becoming organized in a way that threatens institutions such as old companies and industries, the media, politicians and academics, who can no longer control the algorithms and the economy of paid communications. And those old institutions are attacking the existing freedom by trying to bring corruption and manipulation into the powerful algorithm structures. Thus, wire tapping and spam have found their way on to the messengers, hand in hand with the search optimization. However, people prefer to use secure communication channels and trusted sources, where the algorithms are not viable, so the power is still in the hands of people. "Google and Facebook now face serious problems due to their credibility being undermined, because of the ads one can buy there and the search optimization that affects their algorithms. I'm not sure that these giants of today will remain giants in the future. If I were them, I would try to keep corruption and manipulation away from their companies," Alexander Bard suggests.

The real issue that will appear over the next 30 years is the power struggle between a free open algorithm and those who will fight against it. And the more old institutions will realize how the new system works, get acquainted with its algorithms, understand their position in this landscape, the more they will strive for open algorithms, and more and more attractive democracy will be because as it allows for the freedom of expression.

The world becomes one big shared environment where the boundaries between large cities are blurred and there is a move towards Nodalization (nodal + civilization). The subculture that spontaneously emerges from the flat structure is what the company is. Companies (nodes) should become the entities people turn to for help in solving their problems. If people know, appreciate and respect the company, then it forms a network of contacts around itself and this gives it power. "We need to get the customers to think about you as soon as something's about the activity you are doing, or the algorithm to show you. If you have a 5/5 client experience, it doesn't matter if you're a small or a big player, you'll be number 1 for the algorithm. You also need to have employees who increase the confidence in your company, and it is important that there is no manipulation. Without trust in the system there is no attention. And finally, you need to be constantly in the mode of creative movement, analyzing your approach and striving for openness and all of it will allow you to go forward," - Alexander Bard sums up.