Welcome To Our Space

At the end of 2017, and looking forward to 2018 and beyond, Farhad Manjoo, the New York Times columnist who covers Silicon Valley and the digital world in general, wrote that the big tech corporations had reached a kind of tipping point.

He wrote, “This year, for the first time, tech giants began to grudgingly accept that they have some responsibility for the offline world…The dawning realization that a tech platform comes with real-world responsibilities.”

Barely a month later, the highly successful CEO of one of the largest legacy companies in the country, American Express, announced he was stepping down from his old job.  Faced with an enviable number of top job offers, Ken Chenault decided to leave the legacy world and switch his energies to the tech world. He will become chairman and managing director of General Catalyst, a hugely successful VC company with investments in Airbnb, Snapchat, HubSpot and others.

Echoing Manjoo and other observers of the latest tumult around fake news, real surveillance concerns about Facebook and Google, and the boorishness of Uber and its leadership, Chenault told the press, “Given their age and the scale and impact they can have on our society, unless they make a step up, we are going to have some serious problems…And we do have serious problems.  Companies are starting to realize they are growing up and must accept the responsibilities of maturity.”

He’s right. Information and communication technology companies (ICTs) are being threatened with new regulatory proposals, Congressional inquiries, consumer revolts, think tank exposes, and harsh social criticism. This is just the beginning. The days when Silicon Valley could do no wrong are long gone.

As I have written before here, the heart of the matter for the companies is not with their hardware and their software, nor with their short-term earnings. Their biggest challenge is defining their place in our post-industrial society.  They have yet to understand fully that their markets, like all markets, live inside a society.

The brilliance of Mark Zuckerberg, Sergey Brin, Larry Page, Bill Gates and Jeff Bezos, lies in their remarkable capacities to recognize emerging market opportunities enabled by new information and communication technologies, and to create new services and products that meet the needs of existing markets even as they make entirely new ones.

The Critical Need for People Skills

So far so good. But the kind of employees they initially attracted were, understandably, tightly focused on technology and its immediate consumers. They were skilled engineers, hard charging entrepreneurs, and able accountants, people who possessed great marketing chops and competitive drive. What this first wave of employees lacked, however, as we now see, is people skills.

Without adequate people skills they eventually started making classic mistakes about the employees they hired and the people to whom they wanted to sell. They failed to fully understand that their workers and customers are not robots (yet), they are people. People have foibles and unpredictable reactions to new things, and they are fickle. As tastes and behaviors change, products based on new technologies can be quickly left behind. Snafus of advertising, misstatements by executives and the inevitable arrogance of power can quickly turn off consumers and cause them to turn away from once popular products.

At the Annenberg Center for Third Space Thinking at the University of Southern California, we have known for several years that the Big Five (Apple, Amazon, Facebook, Google and Microsoft) and most start-up culture companies were in a foot race. Would they be able to attract and retain enough smart people with ‘soft’ interactive skills before they ran off the rails? They were heavily populated with the hard skill types, who studied STEM.  They didn’t have the other. McKinsey estimated the absence of such interactive skills left about a trillion dollars on the table in the U.S. economy.

Since 2013, we have interviewed hundreds of executives from high tech to consumer goods to legacy services, and they have all said, “We have adequate supplies of MBAs on the one hand and engineers on the other; we lack the third set of competencies of communication and other soft skills.”

Our many interviewees told us they needed people with empathy, adaptability, cultural competency, people who can connect the dots and see the big picture. They needed people with the skills to read Washington, Brussels and Beijing, and Millennials. They have been looking for those rare people with superb people skills who also understand the business model and technology.  Let’s call them a new kind of unicorn, capable of working their wonder in a company. But it turns out they are exceedingly rare, even rarer than a good software writer.

Moving from Awareness to Action

While we are convinced from our research that companies have gained awareness of the importance of interactive skills, working inside companies we now see the results have been meager.  Missing is consistent radical action necessary to create actual change in the mix of hard and soft skills in the workplace. Such steps go against the inherited legacy and culture, and the boldness to recognize that growth in such markets requires overcoming your past successes. They need to move from awareness to action.

Developing a new skills mix requires committed leadership with a new vision and mindset willing to make tough choices, and then to make the substantial investments of time and money to alter organizational hierarchies and job incentives. It requires changing in company practices along with the companies’ relations and communication with its many external stakeholders.  Ultimately, all this requires willingness and subtlety to retain the elements of corporate culture that have brought so much success, and to reform the elements that have already brought or threaten disaster to some companies.  Tech companies (indeed, all companies) must find and hold on to the new unicorns necessary for their next growth phase.

Welcome to the Third Space

In response to these corporate concerns, we developed a communication-driven methodology that goes beyond the already well-known and important competencies of the engineer on the one hand and MBA on the other, which we term “Third Space Thinking.” This new kind of mindset is built around the five attributes or soft skills competencies most in demand: adaptability, cultural competency, empathy, intellectual curiosity and 360-degree thinking (or ACE IT).

Third Space Thinking provides both a new toolbox of these five interactive attributes, and as importantly a different kind of mind set to guide business leaders with a new perspective that encourages a more adaptive, empathetic and society-oriented work environment. This communication-centric methodology recognizes that in our post-industrial society, communication has become more central to everything we do. Communication is truly at the center.

To some, this sounds too pie-in-the sky, too wishy-washy or just plain impossible. You can’t teach these people skills skeptics tell us, you either have them or you don’t. Well, that’s just plain wrong.

In our classrooms at USC we have successfully taught Third Space Thinking to hundreds of students. In our leadership development programs, we have taught executives from companies like IBM, Google, United Airlines and AECOM. In China we teach senior executives from state owned enterprises, and have advised 20-something entrepreneurs launching startups in Los Angeles, and beyond.  Even high schoolers in our local South Central neighborhoods have appreciated our Third Space approach. With the right approach you can indeed teach, nurture and coach these competencies.

The leaders of the Big Five know they need the right people with these attributes if they are to continue to succeed. They recognize their market share, their brand, and their profitability are under threat.  The awareness is there; now what will they do about it?

Now is exactly the time for the companies to act on what they claim in their on-line want ads and at college recruiting fairs – that transactional skills affect the bottom line.

Real World Confirmation

Many companies can look internally if doubts remain about the importance of interactive skills.  Google, for example, carefully mined its own meticulous and voluminous employee data files, through an initiative appropriately named Project Oxygen   They found that of the top eight most important qualities of Google’s top employees, STEM came in dead last.  The top seven most important characteristics were all soft skills.

We now know more about the wide range of risks and opportunities driving this post-industrial, dynamic, complex digital world. We now know that successful ICT strategies demand a mix of interactive and hard skills. We know what those skills are and how to teach, nurture and evaluate them. We know what works and what doesn’t work to help people acquire and hone those competencies.

Now it’s up to top leadership to do what top leaders are supposed to do:  seize the moment, and act in the best interests of their companies and the societies of which they have become an integral part, by ensuring they have the people skills to help make the world a better place through wiser decisions and wiser actions.