Network Magazine Innovation 2016

NETWORK NEW YORK / LONDON

Unmanned systems flying us into the future Lockheed Martin talks SPIDERs, Project Lifesaver and $127bn drone market.

Artificial Intelligence – Humans vs Machines is there a perfect harmony?

Is the UK a fertile FinTech landscape for the special relationship to sow seeds?

SEP T EM BER 2 016

Simplified shipping, small business exporting.

UPS Small Business Exporting. Just because you’re new doesn’t mean you have to be small. We’ve simplified shipping to help you get started and grow, because a world of opportunity awaits. upstoday.com

© 2016 United Parcel Service of America, Inc.

Contents

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60 Seconds with Christopher J. Perry, Chairman Elect BritishAmerican Business

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Innovation and its Role in Legal Services

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Welcome from our CEO New IAB and Board Members Meet The New Members 60 Seconds with Christopher J. Perry, Chairman Elect BritishAmerican Business

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Artificial Intelligence: Human and Machine in Perfect Harmony

Author Spotlight with Disruptive Innovation Expert – Professor Clayton. M. Christensen

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11 Innovation and its Role in Legal Services 12 Leading a Resilient Organisation 13 Flying into the Future 14 Navigating Brexit

A Smarter Airline Partnership for Business Travel

BABC Transatlantic Business Conference 2016

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Policy 19 Innovation

Events

20 BritishAmerican Business Annual Corporate Citizenship Awards Dinner 2016 21 London Event Highlights: Welcome 16 Understanding Digital Business Innovation Reception Future Cities 2016, Young US/UK M&A ‘Special Relationship’ holds despite Professionals Networking, The CHASE uncertainty and a Global M&A Slowdown Awards Dinner 2016 and BABC Transatlantic 17 Can Leaders Foster Innovation and Accept Business Conference 2016 Failure?

22 New York Event Highlights: Business Briefing: An Update on European Loan Facilities To Brexit or Not to Brexit? Innovation Conference: The Future of Talent & Culture Leadership, Young Professionals: Speed Networking and Women’s Forum.

18 Author Spotlight with Professor Clayton M. 23 Events Calendar: New York and London Christensen

Insight

Cover Story 6 Artificial Intelligence – Human and Machine in Perfect Harmony 7 Financial Institutions Embrace Artificial Intelligence

Features 8 A Smarter Airline Partnership for Business Travel 9 FinTech’s Special Relationship 10 Relieving the Cybersecurity Pressure

Office Address

London Staff

BritishAmerican Business

Jeffries Briginshaw, CEO, BritishAmerican Business jbriginshaw@babinc.org

Rachel Reaney, Communications Manager rreaney@babinc.org

@BABLondon

Helen Anderson, Director – Communications and Events handerson@babinc.org

Emanuel Adam, Director of Policy and Trade Acting Director of Membership eadam@babinc.org

“BritishAmerican Business”

John Adam, Office Manager, Accountant jadam@babinc.org

BritishAmericanBusinessLondon

London 12 Phillimore Walk West Wing, 2nd Floor London W8 7RX Tel: +44 (0)20 7290 9888 ukinfo@babinc.org New York 52 Vanderbilt Avenue, 20th Floor New York, NY 10017 Tel: +1 (212) 661 4060 nyinfo@babinc.org Editor Rachel Reaney

www.babinc.org

Tariro Masukume, Membership Manager tmasukume@babinc.org

Get Social

Jillian Gable, Membership Manager membership@babinc.org

Sherry Dolatshahi, Executive Assistant to the CEO sdolatshahi@babinc.org

Mairi Maclennan Policy & Public Affairs Manager mmaclennan@babinc.org

Natalie Raeched Event Manager eventmanager@babinc.org

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CEO I BritishAmerican Business

Welcome

Jeffries Briginshaw I jbriginshaw@babinc.org Innovation is the lifeblood of a healthy global economy and it is often a strategic priority for growth businesses around the world. We know that the power of innovative ideas to revolutionise services and industries, generating wealth and spreading prosperity based on creativity, gives business a powerful competitive advantage, but also marks successful modern economies. Two important questions to ask are how can businesses make this happen and how can we create an environment where it is actually possible to innovate?

This edition of Network focuses on answering these questions and the reasons why innovation is fundamental to the business landscape as a means of transformation for the better; whether this be by using complex technology such as artificial intelligence or simply by harnessing talented employees. Much of our focus throughout is on professional and financial services which sometimes don’t get as much attention as industrial innovation.

We hear insights from members such as Barclays and AIG who talk about how artificial intelligence can benefit the financial and insurance sectors, particularly when rethinking risk assessment. Cyber Security experts BAE Systems talk to us about building resilience and pressure on IT Networks in the current challenging climate of cyber-attacks. Herbert Smith Freehills talk about innovation and its role in legal services and Lockheed Martin give us insight on how the defense sector can use preprogrammed drones to push the boundaries of global security. We also feature an interview with Chairman Elect Christopher Perry on page 5 as

well as Harvard Professor and Disruptive Innovation expert Dr Clayton Christensen (see our Author Spotlight on p16).

We are looking forward to a busy autumn and winter events calendar.

First-up we are thrilled to be partnering with executive search firm Witt/Kieffer Ccentric for our first one-day Talent conference to be held on the 21st September, at which we will bring together expert speakers from Google, NHS, LSE, Kings College London and KPMG amongst others to share thoughts and provoke discussions around talent and innovation. Register online at www.babinc.org/talentconference. Other event highlights to look out for include our Annual Gala Dinner 2016 held at Lancaster House on the 28th September, where we will be joined by H.E. Matthew Barzun, the US Ambassador to the Court of St. James’s and Iain Conn, Chief Executive of Centrica, plus our Annual Women’s Forum Conference on 1st November 2016 tailored specifically for women in the talent pipeline. Finally, as US elections draw closer we have a debate planned at NBC Universal, moderated by their Chief Global Correspondent Bill Neely where we will hear from representatives from both Democratic and Republican campaigns – it promises to be fun but serious and in any event will be followed by a drinks reception so book your places now via www.babinc.org/londonevents/! Finally, thanks to Rachel Reaney, our London Communications Manager who sadly leaves us after this issue. I hope you our readers agree that Network has gone from strength to strength during her time as Editor.

New Board and IAB Members BritishAmerican Business (BAB) is governed by a transatlantic Board of Directors, led by our Chairman, Nicholas Walsh, Senior Advisor at AIG and our President and Chairman Elect, Christopher Perry, President Global Sales, Marketing & Client Solutions, Broadridge Financial Solutions. The Board’s active support and commitment to BAB and its objectives are important to ensuring our continued success as an organisation. We also enjoy strong support from our International Advisory Board, consisting of Chairmen and CEOs from more than 100 major multinational companies.

We are delighted to announce that the following new members have recently joined our Board of Directors and International Advisory Board.

NEW BOARD MEMBERS Andy Howard Chairman, Americas Arup

Jim Singer Partner, Americas A.T. Kearney

NEW INTERNATIONAL ADVISORY BOARD MEMBERS Antonia Romeo British Consul-General, New York Director General, Economic & Commercial Affairs USA 2

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Jes Staley Group Chief Executive Barclays PLC

Antonia Romeo British Consul-General, New York Director General, Economic & Commercial Affairs USA Simon Freakley Chief Executive Officer AlixPartners

Andrew Hamilton President New York University

www.babinc.org

New Members

www.corptraveller.co.uk

www.wittkieffer.com

Corporate Traveller works in partnership with small to medium sized enterprises in reducing their travel related expenditure, improving and streamlining booking procedures and increasing their service levels. We use a number of techniques and strategies to achieve this without any formal contracts.

Witt/Kieffer is a U.S.-based executive search firm supporting organizations improving the quality of life, including those in healthcare, education, academic medicine, life sciences, sports, and the not-for-profit sector. Witt/Kieffer Ccentric, its joint venture with Ccentric Group of Australia, operates internationally with offices in the U.K. and Europe, Southeast Asia and North Asia.

Adam Brace, Business Development Manager adam.brace@corptraveller.co.uk 33 Creechurch Lane, London EC3A 5EB +44 (0)20 7324 8340

Natalie Derry, General Manager, UK and Europe, Witt/Kieffer Ccentric natalied@wittkiefferccentric.com 77 Wood St, EC2V 7RS, London +44 (0)7408 851596

www.amazingsupport.co.uk Amazing Support are the UK’s leading provider of outsourced Managed IT Services and IT Consultancy to North American, UK and European companies. We are an award winning Microsoft Silver accredited IT Services Company delivering Managed IT Support, Business Continuity, Cloud Solutions, IT Projects and IT Consultancy through our customer service driven ethos called The Amazing Way® demonstrating our qualities of communication, attitude, responsibility and expertise.

David Share david@amazingsupport.co.uk Units 715-718, Studio 2000, 5 Elstree Way, Borehamwood, Hertforshire, London WD6 1SF, US +44 (0)20 3728-2555

www.sapphiresystems.com Sapphire provides ERP and business management solutions on a local or international scale. Post implementation services include training, application and technical support, systems integration, design and customisation services.

Richard Hudson, Marketing Director richard.hudson@sapphiresystems.com Northern & Shell Building, 10 Lower Thames Street, London EC3R 6AF + 44 (0)20 7648 2000

www.nbcuniversal.com NBCUniversal’s international operations include film and television distribution, home entertainment distribution, TV channels, film and television production, theme parks and news operations. The company is led by Kevin MacLellan, Chairman of NBCUniversal International. He is responsible for oversight of all NBCUniversal International’s businesses, as well as identifying and executing international growth opportunities for both NBCUniversal and Comcast Corporation outside the United States.

www.smithandwollensky.co.uk Smith & Wollensky London has opened in the historic Grade II-listed Adelphi Building off the Strand. As the boutique steakhouse’s first opening outside of the US, with locations in cities such as New York and Miami, Londoners can expect the restaurant’s same brand of warm American hospitality that has made it much-loved Stateside together with a menu of signature USDA Prime dry-aged steaks alongside Scottish cuts, premium seafood, award-winning wines and classic cocktails.

Andrew Hall, Head of International Government Affairs andrew.hall@nbcuni.com

Susanna Palmer, Marketing Manager susanna@smithandwollensky.co.uk

1 Central St. Giles, St. Giles High Street +44 (0)20 7240 8480

The Adelphi, 1-11 John Adam Street, London WC2N 6HT, UK +44 (0)20 7321 6007

www.babinc.org

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New Members

www.rima-travel.co.uk

www.npt-uk.org

Rima Travel is an independent London based company specialising in the corporate, music, media and sport sectors.

All of our divisions are manned by our London based staff, 24 hours a day, all year round.

National Philanthropic Trust UK (NPT-UK) is a charity that offers donor-advised fund giving vehicles to help donors manage their philanthropy in a convenient and tax effective way. NPT-UK works directly with donors as well as their financial, legal, and tax advisors.

Ernie Garcia, Managing Director & CEO ernie.garcia@rima-travel.co.uk 7 Angel Gate, City Road, London EC1V 2PT, UK + 44 (0)20 7833 5071

John Canady, CEO jcanady@npt-uk.org 1 Ropemaker Street, London EC2Y 9HT, UK +44 (0)800 133 7540

www.portland-communications.com We work with our clients to develop research-led strategies that will achieve their communications and business goals.

We craft convincing narratives and focused messaging which we use to create compelling content including speeches, opinion pieces, interactive graphics and reports. And we deliver this content to inform and persuade the audiences that matter from employees, customers and regulators, to the media and influencers around the world. We work with our clients to develop research-led strategies that will achieve their communications and business goals.

Alex Waite, Chief Marketing Officer alex.waite@portland-communications.com 85 Strand, London WC2R 0DW +44 (0) 20 7554 1600

www.thegrowthfaculty.co.uk The Growth Faculty brings the world’s best thinkers in leadership and business strategy to entrepreneurs and executives of growing UK businesses. Our education program offers highly effective tools to provoke ideas, stimulate action and drive profitable growth. Speakers in our portfolio include Jim Collins, Simon Sinek, Fred Reichheld, Marcus Buckingham and Liz Wiseman.

Karen Beattie, Managing Director karen@thegrowthfaculty.com c/o TFI Group, 192 Vauxhall Bridge Road, London SW1V 1DX + 44 (0)20 7808 5647

www.westbournecoms.com www.steelcase.com/eu-en/

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For over 100 years, Steelcase Inc. has helped create great experiences for the world’s leading organizations, across industries. We demonstrate this through our family of brands – including Steelcase®, Coalesse®, Designtex®, PolyVision® and Turnstone®. Together, they offer a comprehensive portfolio of architecture, furniture and technology products and services designed to unlock human promise and support social, economic and environmental sustainability.”

From front-page news to door-step issues, Westbourne offers an integrated approach combining reputational support, advocacy and engagement programmes that deliver results and create impact. We combine an analytical and insight-driven approach, with experience at the heart of business, the media, politics and communities. Through an in-depth understanding of audiences and arguments, we help organisations shape debates and strengthen brands: explaining, enhancing, protecting and positioning.

Veerle DeClerk, Brand Communications Manager vdeclerk@steelcase.com

Maurice Cousins, Account Director maurice.cousins@westbournecoms.com

77-79 Farringdon Road, London EC1M 3JU, UK +44 (0) 20 7421 9000

17 Carlton House Terrace, London SW1Y 5AH, UK +44 (0)20 3397 0100

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Feature

60 Seconds with...

INTERVIEW

You have over 25 years’ experience in financial services. What have been the highlights?

Well, a little secret is it has been a bit more than 25 years, but I think the biggest highlight overall has been that during that span of time, there has never been a dull moment. From Penn Square, to the 1987 crash to the 1999 dot com bubble, Global Financial Crisis and of course remembering the 9/11 events, I think you get the idea. Having had the opportunity to be client facing is another highlight. I loved working with clients on MEGA deals – deals valued at $50 Million and greater – where we were often doing something game changing in the marketplace. Such dynamics created great bonds with clients and in some cases, these bonds turned into lifelong relationships that I continue to cherish today. The last 25+ years has been quite the journey for me and I would be remiss if I talked about highlights without including all of the really talented and hardworking colleagues I’ve been fortunate enough to work with – great colleagues who were alongside me to weather the bad and uncertain times and alongside me to share in the joy of hyper-growth during the good times. Lastly, the opportunity to help develop people is a career highlight that I regard as especially meaningful. This includes helping people around me to be successful and to achieve more than they ever thought they could.

What does the word “innovation” mean to you?

I am a simple guy and my view of innovation is simple too. I find that people often confuse innovation with invention. You see invention is doing something for the first time ever and this is actually quite hard (think light bulb, telephone, Orville and Wilbur Wright).

Innovation, on the other hand, is doing something that is already done, but doing it better (think Sony Walkman to Apple iPod and

www.babinc.org

Christopher J. Perry

Chief President, Global Sales, Marketing and Client Solutions Broadridge & Incoming Chairman, BritishAmerican Business

taxi to uber). Innovation is using the evolution of thinking and technology to do what we do now even better. I encourage people every day to look at what they do at work and INNOVATE new and better ways to do things – to brainstorm with others and come up with new ideas, to take risk, fail fast and try again.

Innovation is just using your creative brain. Try thinking about innovation in the shower – it is a great place to think differently and works especially well if you’re a bad singer like me.

As a Chicagoan can you tell us a fun fact about the city?

It’s called the Windy City, not for Mother Nature, but for windbag politicians. But it does have the nicest people on the planet.

What is the achievement that you are most proud of?

Several years ago I took over a 4,000 person global organization that was beaten up and disheveled due to the global financial crisis and some poor prior business decisions. I am very proud of pulling a management team together and in 60 days showing this organization from over 53 countries that they had leadership who cared about them, had confidence in them and was going to support their success in serving our company.

It was a hard year, but very rewarding as this team delivered outstanding results over the following three years.

What’s your view on the US Presidential election race?

This will be my 10th Presidential election and for the first time ever I really do want to write in Micky Mouse. He, at least, genuinely cares for people. Need I say more, or would you like my generally positive self to really tell you how unfortunate we are to have the aura of unethical and seemingly corrupt candidates? I have faith that either candidate will be a one termer – four and out!

When you take your position as the new Chairman of BritishAmerican Business, what are your plans for the next few years?

The next two years will be a great opportunity to re-evaluate the value proposition as perceived by our members to ensure they get a huge return on their investment of time, money and resources. BAB should offer programs and access that no other international organization with a transatlantic business agenda can offer. Further to that overarching principle, I would like to take our Marketplace Diversity and Inclusion agenda to the next level in partnership with our members, as well as co-create great talent building programs for the GenX/GenY professionals working for our members. I have found that when it comes to talent, diversity and corporate social responsibility we are all struggling to take our society and work place to the next level.

What advice would you give for those trying to overcome business challenges or risks?

You must take risk, so start by understanding calculated risks, how to fail fast and learn from failures so in the worst case you just suffer setbacks as opposed to failures. Be inclusive in the decision process, but ruthless in execution and course correction. This simply means that no matter who the smartest person in the room is, the collection of people “included” in your decision process will make the outcome smarter. Furthermore, once agreed, everyone must row in the same direction with a collective agreement to course correct as needed. That is working as a team and that is starting with the end in mind.

What do you like to do in your spare time that we might not know about you?

I am a computer geek. I love to build computers from parts, and work on collector cars. If I only listened to my mom and got better marks in math, then I would probably be an engineer – but then again…

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Cover Story

Artificial Intelligence – Human and Machine in Perfect Harmony ARTIFICIAL INTELLIGENCE

By Ashley Hirst Chief Underwriting Officer and Chief Operating Officer, AIG Europe

“ Artificial intelligence is set to transform the insurance industry, but it’s the human factor that will make the ultimate difference”

Artificial intelligence (AI) has progressed hugely in recent years bringing machine capabilities in some areas to human-like levels, sometimes at astonishing speeds. In the insurance industry, we understand that AI can add value in areas including risk assessment, pricing, distribution and reserving. But we have more to understand in terms of the importance of people in maximising the power of AI. A fascinating result in the world of chess demonstrated a powerful truth: a computer on its own was no match for a computer teamed with a person. Put simply, human plus machine beats machine.

Investing in the technology of people Our industry has relied on the technical skills of actuaries – and their human insight and judgment. They have honed a powerful toolkit to recognise patterns in pools of aggregated data, and extrapolate into the future.

Now, the new wave of advances in machine learning methodologies, coupled with ever more powerful hardware, are enabling computers to identify ever more complex patterns in data.

Data scientists are deploying increasingly sophisticated methods and algorithms – ‘teaching’ computers to identify patterns that might involve dozens or hundreds of variables. Predictions can be made at the client, policy or even exposure level, creating enormous segmentation power. Machines’ ‘learning’ patterns can then extrapolate into new situations – and through on-going success or failure, continually learn and improve.

We might imagine that this clinical, detached ability to consider reams of data and dispassionately learn from success and failure alike would eventually render human talent redundant. In practice, however, we know that the best results come from harnessing the experience and intuitive insight of a human expert alongside the ‘black box’ machine. We build on expert hypotheses, and test outcomes with human oversight and judgment. In our complex world, too difficult to be perfectly described in a stream of computer bits, the human can consider inputs that the computer might never have a means of interpreting.

To be successful, we will have to invest in the capabilities of our people. Our people will need insight into how computer models work, and where their strengths and weaknesses are. The human / machine team will let us play to the human strengths of 6

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inter-personal insight and imagination; and address the human weaknesses of noise and bias.

A ‘more human’ experience ‘Chatbots’ – simulating natural conversations with users – are a fast-developing capability today. We should expect to see virtual advisors becoming an ever-present, continually available part of our personal and professional lives. For insurers, these should let us drive down the cost of delivering common services – and let us afford to maintain a personal, human, service for the times of complexity where people are needed; or for those critical moments where a human touch is so important in our industry. We can learn from retail banking; clients prefer an automated experience for the overwhelming majority of routine transactions – but prefer a human for many key moments of truth.

At AIG, we are excited that AI and machine learning can help us address our clients’ fundamental issues and risk exposures. In one example last year, we worked with a US university to monitor traffic at intersections for vehicle ‘near misses’. Computers were able to digest and analyse a huge quantity of data and identify patterns that humans could not, with the aim of being able to intervene and make changes to enhance road safety before tragic accidents occur.

On construction sites, AIG has invested in Human Condition Safety (HCS), an early-stage company matching wearable technology with AI. HCS offers a comprehensive solution to workplace risk, with a platform that enables workers to reduce injuries and employers to improve operational efficiency. For example, HCS’s technology can detect when a worker carries too much weight, makes a “bad bend,” or enters an area that puts them at risk of injury because of environmental conditions or getting too close to dangerous equipment.

Looking forward AI will help us deal with an increasingly complicated world, at an increasingly refined level of detail. The more intelligent we can make machines, the better we can help our clients to reduce their fear of the future. An investment today in ‘deep learning’ will reveal insights and create capabilities we haven’t imagined before. An investment in our people’s ability to harness that technology will realise the benefits for our clients, and our industry alike. www.babinc.org

Cover Story

Financial Institutions Embrace Artificial Intelligence ARTIFICIAL INTELLIGENCE

By Zowie Richardson Director of Business Innovation, Barclays Global Transaction Banking

“ Automation using artificial intelligence could become the next game changer with respect to process efficiency in the financial services industry”

From its inception in the summer of 1956, the field of Artificial Intelligence (AI) has weathered several storms to now become one of the next major technology platforms with the potential to transform the wider economy. Progression of AI over the last 60 years has been benchmarked through human-machine competition; IBM’s Deep Blue’s defeat of chess grandmaster Gary Kasparov and Google’s AlpaGo’s defeat of the reigning Go champion Le Sedol mark two major milestones in this regard.

However, in order to move from the game board to the boardroom a more collaborative, symbiotic relationship with human workers will be required for AI to fulfil its potential.

In financial services, the ability to delegate a number of automatable tasks a computer system has the potential to dramatically enhance human productivity and with that to bring changes to the way financial markets operate and increasing the competitiveness of the sector. Already benefits of such efforts have been seen in the digitization of exchanges and algorithmic trading which have diminished the role of human traders in various asset classes, particularly in equities and futures, freeing them up to do more value-added work.

The next game changer?

Automation using artificial intelligence could become the next game changer with respect to process efficiency in the financial services industry. Financial institutions have established huge data archives over many years, and AI will enable institutions to automate a large proportion of knowledge work, managing data at record speeds and capacities. For example, deep learning is anticipated to significantly contribute to rethinking the approach to risk assessment, credit assessment and portfolio management practices.

Automation + AI = intelligent process automation Banks and capital markets institutions are also making significant progress in intelligent process automation, the process which combines artificial intelligence – including machine learning, natural language processing, autonomics and machine vision – with automation.

Through using intelligent process automation, systems become ‘intelligent’, allowing them to detect and produce large amounts of information. All workflow elements are automated, and also learn and adapt in parallel. This functionality supports the collection, analysis and decision making related to text-based information, and many banks have already started to apply this model to automate www.babinc.org

processes and replace humans in low-value added services, freeing them up to do more enriching work.

AI in practice One clear potential use case is the application of AI to efficiently manage online customer queries, through the use of digital personal assistants or ‘chatbots’. Absa, the South African subsidiary of Barclays, is currently running a trial of such AI-driven chatbots to answer simple customer queries posted over smart messaging apps. These chatbots – essentially computer programs designed to act like a personal assistant – use artificial intelligence to simulate conversation through written or spoken text.

Alongside internal developments, Barclays, through its Rise Accelerator is helping foster the development of the next generation of start-ups in this highly promising field. In embracing a truly open approach to innovation, we have already helped accelerate the development of potentially game changing ventures applying AI to help reduce the cost in international remittances (Vala), enhance the decision making of options trading professionals (Samurai), allow individuals to tap into the intelligence of the crowd (Remesh), bring personalized ultra-high net worth investment intelligence to the wider market and enable enterprise to deploy their own machine learning initiatives more efficiently (Seldon).

Improving the client experience To support client acquisition and retention, financial services companies are paying more and more attention to the customer experience across all touch points. For example, speech recognition technology can be used to automate telephone-based customer service by verifying the caller’s identity, while client onboarding, transaction monitoring and fraud prevention can also be automated. Barclays recently introduced Voice Biometrics, which removes the everyday pain point of remembering password information. Furthermore, by identifying patterns in historical data, machine learning can help to detect unusual behaviours such as money laundering, illicit transactions and security threats.

Realising the benefits Powered by artificial intelligence, computer systems will be able to overcome traditional barriers and achieve unprecedented levels of product and service innovation, efficiency, cost savings, scalability and quality. The benefits are significant and for financial institutions, it’s truly a question of when – not if.

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Feature

Smarter Airline Partnership for Business Travel

By Kerry Douglas Head of Corporate Sales, Virgin Atlantic

ADVERTORIAL

“ Virgin Atlantic and Delta Air Lines® are working in close partnership to offer you innovative products, more choice and a fantastic customer experience”

Our partnership offers much more than simply competitive fares and a large network. So as well as over 200 destinations in North America, together we innovate to bring you convenient flight schedules, reciprocal frequent flyer benefits and the warm, personal service we’re both famous for. Perfect for business travel.

entertainment. So you can stay connected with the office, chat to friends and family or relax with a movie – all from 35,000ft.

Innovating with our fleet Both of our airlines are known for customer-focussed innovation.

Among the many examples are the recent Virgin Atlantic fleet updates.

Equally, to make the journey even more enjoyable, on all transatlantic flights in Virgin Atlantic Upper Class and Delta One™, we offer fully flat beds with direct aisle access.** For an uninterrupted night of refreshing, undisturbed sleep.

Over the next few years we’re receiving 21 new Boeing 787-9 ‘Dreamliners.’ Some are already flying our key routes, including London Heathrow-New York JFK and London Heathrow-San Francisco.

The Virgin Atlantic Upper Class bar onboard also offers you a great space to socialise or chat to colleagues over a drink. And the Wander Wall in Virgin Atlantic Premium Economy is an innovative space where you can stretch your legs, socialise and pick up a drink or snack.

The 787s offer a fantastic onboard experience, with a lighter, brighter cabin, better legroom and more comfortable seats. So you’ll arrive relaxed and ready for your first meeting.

Virgin Atlantic has also just announced another major new fleet investment: an order for 12 new A350-1000s. Along with the 787s, this will help us create one of the youngest, greenest, most comfortable fleets in the sky. Great wherever you’re heading for work.

Innovating for a seamless journey One Delta innovation that should prove incredibly useful is the new real-time baggage tracking system, due to be introduced towards the end of 2016. The system uses Radio Frequency Identification (RFID) technology to allow you to track exactly where your bags are as they move through the skies, via push notifications to the Fly Delta mobile app. The new technology will be available on all Delta transatlantic flights, and on internal Delta flights connecting to/from them.

WiFi is available on all Virgin Atlantic flights operated by our Boeing 787 aircraft. And we plan on making it available on every aircraft by March 2017.

Your dedicated spaces at London Heathrow As the home of Virgin Atlantic and many Delta flights, our space at London Heathrow Terminal 3 is an important part of many of our customers’ journeys. And we make sure it’s as stress-free and seamless as possible.

Whether you’re flying Virgin Atlantic Upper Class or Delta One from T3, you can use the dedicated check in at the Upper Class Wing and the Private Security Channel. You’ll breeze through, heading straight to the Virgin Atlantic Clubhouse.

There, you can stay productive with our full suite of business facilities or hold a meeting in relaxing surroundings. You can maximise your sleep or work time onboard by unwinding with a delicious meal and fine wine at our Brasserie. Or get meeting ready with a complimentary spa treatment or haircut at the Clubhouse Spa.

Innovating to enhance your time onboard Together, our partnership offers onboard benefits that make travelling for work more enjoyable and productive.

It’s all part of our smarter partnership, redefining transatlantic business travel. And we look forward to welcoming you onboard very soon.

Joining many Virgin Atlantic flights that currently offer onboard WiFi, Delta is now offering internet access on all international flights to the US and domestic US flights*. It’s also the only US carrier to offer free in-flight entertainment on all international and domestic flights via Delta Studio,™ Delta’s industry-leading suite of onboard

* For further information and terms and conditions, please visit delta.com/wifi. ** Delta’s 757 aircraft flying the London Heathrow-Philadelphia route does not have direct aisle access.

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Feature

FinTech’s Special Relationship FINTECH

By Alastair Lukies CBE Prime Minister’s Business Ambassador for FinTech & Chairman of Innovate Finance

“ Today we see a unique opportunity on both sides of the Atlantic to continue evolving more efficiently and effectively”

This year marks the 70th anniversary since Winston Churchill coined the historic phrase, ‘the special relationship’, referring to the unique diplomatic, political, economic and cultural relations between the United States and the United Kingdom. Coincidentally, this year both nations have taken or are about to take critically important electoral processes, the outcome of each hugely significant for the other, but at the core of both the Presidential election and European referendum outcome remains a common theme: what‘s best for our respective societies in the here and now?

Over the past decade, we’ve seen new waves of FinTech innovations, each one making its mark on the evolution of financial services, and providing the consumer with more choice on how to interact with his or her finances. Last year in particular was testament to a growing industry with a number of record-breaking FinTech IPOs, acquisitions and partnerships between new and old alike. The Worldpay and Square IPOs stand out as two capital market transactions that topped the scales, but also highlighted the industry’s core theme of enabling consumers to engage with their money more seamlessly, in these cases via point-of-sale (POS) products and services. On reflection of a year of large industry deals, two that stand out as demonstrative of M&A activity at the upper echelons of FinTech businesses include the sale of SunGard to FIS for $9.1B, and the acquisition of IDC by ICE for $7.8B. Activity of this scale shows two things: (i) the awareness of the FinTech opportunity, and (ii) a land-grab underway.

Today we see a unique opportunity on both sides of the Atlantic to continue evolving more efficiently and effectively, as regulatory innovation meets technological innovation, placing the consumer at the centre of new propositions by the incumbents and disruptors - there will be a number of key trends emerging. Having seen the significant increase in VC investment over the past year (up over 250% from 2013 to 2014), the increase in deal sizes and funding rounds, and the sheer number of start-ups in the FinTech space, it is likely that the sector will experience a levelling in valuations and maturity for both private and public companies. I also believe that with a reality check on valuations, there will be a global consolidation of FinTech businesses aiming to gain scale and international distribution as synergistic companies “merge to surge.” www.babinc.org

In the past, the UK has led a number of significant FinTech developments including the world’s first ATM by Barclays Bank in 1967, the first rollout of the chip and pin standard and real-time payments, and the globally renowned design and thought behind M-Pesa in Kenya. The UK’s open-mindedness to be at the bleedingedge of FinTech and payments regulation has also contributed to the Open Banking Working Group (OBWG), a task force leading the exploration of how data can be used to help people control their money, established in 2015 at the request of HM Treasury. The OBWG has set out an Open banking Standard to guide banks in this area ahead of the mandated implementation of the European Union’s PSD2, ensuring that the UK has a succinct, efficient and societally beneficial set of standards ahead of the curve. HM Treasury’s foresight here is yet another demonstration of regulatory innovation being as important as technological innovation, and I believe we will see the fruits of labor here within the next few years.

Whilst the UK has a number of favourable characteristics in the FinTech space, there are of course a number of areas that the other half of our special relationship still leads us in - principally in the investment space. The US lead $7.5B of the total global $12.5B VC investments in FinTech in 2014, and with firms like SoFi doing $1B funding rounds in 2015 it looks set to remain weighted that way. Whilst the UK could learn a lot from the US investor mind-set, and could equally benefit from investment entities of the US scale being established here, we also hope that the UK can continue to be seen as something of a 51st state – a fertile FinTech landscape for US investors to sow their seeds and a springboard into Europe for firms looks for international scale. The launch of the TransAtlantic Policy Working Group in March this year, and the establishment of Innovate Finance in the US later in 2016, will endeavour to support development, investment and growth on both sides of the pond. And if both governments continue to embrace the evolution and prioritize social benefit and advancements in this area, then the special relationship has a long way to run and a huge amount of potential to realize, with FinTech as a cornerstone of its future progress. This is an important space that is here to stay – I recommend you pay attention.

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Relieving the Cybersecurity Pressure CYBER SECURITY

By Mark Watkinson Managed Security Services Product Manager

“ 82% of companies admitted to a shortage of cyber security skills”

The job of a security professional has become incredibly complex.

It’s very different from five years ago, and unrecognisable to ten years ago where ‘protecting the perimeter’ was the priority.

There’s more pressure on the security operations of organisations, particularly smaller businesses with lower budgets. They’ve always had cyber threats to deal with, but the volume has and will continue to increase. These threats vary from the ‘generic’ to the unique and targeted, from email phishing and ransomware developed by cybercriminals through to state sponsored attacks.

Threats can also be found internally. Businesses must ensure they are well-protected against the insider threat, which might come from a disgruntled or negligent employee, a commercial spy, a victim of coercion or even a well-meaning innocent.

As the popularity of cloud and mobile devices continues to grow, data is also increasing in volume, velocity and variety, while ‘bring your own device’ means that data is regularly taken out of the enterprise to be accessed and changed on the go. Security, regulation and compliance are all important factors that need to be considered in any cyber security strategy.

In the past, businesses could rely on protection technology. With the evolution and sophistication of threats came more and more security equipment to solve the unique problems. The more equipment purchased, the more staff required to operate and the more alerts created for investigation. The challenge today is making sense of the noise without hiring an army of investigators, ultimately cutting the time to detection and remediation of actual threats.

An analogy around this can be taken from cycling; in the past a bell was enough to warn about a cyclist coming your way. Now there are so many bicycles and bells that you need help to know what’s near you, what is dangerous, relevant speeds, trajectories and risks of impact.

Pressure from the boardroom Many Directors will know all about the business threat of cyber attacks and will be worried about their organisational attitudes towards risk. They want reports, continual updates on activity and investment; all necessary but which ultimately creates added time pressure for the security professionals.

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Even if a business had an unlimited supply of talented security professionals, cyber security would still be a challenge. A recent survey by the Centre for Strategic and International Studies said that 82% of companies admitted to a shortage of cyber security skills.

In response to increasing cyber security threats, companies in the past simply bought new technology to solve the problem. But this increased pressure on cyber security rather than reducing it; often you need another person or a team of people to use that technology properly.

The benefit of managed security services Managed Security Services are nothing new, however providers who can deliver the improvement in managed detection and response is. A recent Gartner report said that one per cent of midmarket and enterprise organisations are already using managed security services to improve their detection and response capabilities. It is seen as a massive growth area, with 15 per cent of organisations using these services to improve detection and response capabilities.

Managed security services can certainly reduce pressure on businesses when it comes to improving capabilities. Firms with less budget to spend in-house can outsource activities such as detection and response, network monitoring and vulnerability assessments. These services will also help with meeting compliance and regulation and the right provider will reduce the boardroom pressure, providing reports or feeds into reports along with the reassurance of a trusted brand.

Businesses not at the enterprise level might be searching for ways to improve operating efficiency without the ability to hire new staff. With managed security services, areas like security device management can be outsourced for greater efficiency and the ability to make devices work at optimum values.

It must be stressed that outsourcing activity through managed security services should never be simply about saving money. It is about gaining efficiencies, enhancements, and greater protection across the whole cyber security spectrum. A good approach might be to look at scalable, modular and tailored modules that can be arranged in any way a business wishes, relieving pressure in all of the right areas. www.babinc.org

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Innovation and its Role in Legal Services INNOVATION

By Libby Jackson Global Head, Alternative Legal Services, Herbert Smith Freehills

“ Even before we launched ALT my colleagues and I knew that we wanted to do something radically different”

“Innovation”. “Law”. Not, traditionally, two words that fit comfortably together. And yet, the two concepts are becoming inextricably linked – with profound implications for lawyers and also for their clients.

Over the past seven years I have been on an incredible journey as the global head of international law firm Herbert Smith Freehills’ Alternative Legal Services (ALT) business. Founded in 2011 in response to client demand for top-quality legal products & services provided in the most efficient, technologically-advanced and cost-effective way, we provide a highly-structured approach to managing document-intensive and volume legal work.

Even before we launched ALT my colleagues and I knew that we wanted to do something radically different, whilst giving our clients the best possible experience – and we knew that innovation would be key. Seven years ago, that was more revolutionary than you might imagine; law firms were not, on the whole, known as innovators or forward-thinkers. However, we had a real belief in what we were doing and remained tenacious in our beliefs, with the result that innovation is firmly embedded in ALT’s – and Herbert Smith Freehills’ – processes and systems. Indeed, the delivery of innovation is a key element of the firm’s recently-announced 20/20 vision.

To me, innovation means achieving excellent results by doing new things. It can take many forms, three of which are particularly close to my heart:

technology degrees, for example. Recruiting highly-skilled hybrid legal and technology talent should be a priority for all legal service providers.

Technology It’s impossible to talk about innovation without referring to technology. Certainly, its use has been critical to the ongoing success of Alternative Legal Services. We are a market leader in the use of predictive coding or technology-assisted review (TAR) – and worked on the first UK Commercial Court matter to use it. An excellent example of its effectiveness is a recent arbitration client matter where we used predictive coding to reduce the number of documents which needed reviewing from 4.5 million to half a million. This achievement had a huge impact on both this, and subsequent, matters.

That doesn’t mean, however, that technology is going to replace people – more, that it will displace certain types of lawyer activity and better enable elements such as improved collaboration and project management. It also means that technology will become a core competence for lawyers and legal staff - expect an increase in law &

Lessons learned Laid out in black and white the above sounds straightforward, doesn’t it? Yet one thing I’ve learned through my ALT journey is how important it is to remain pragmatic in your approach. Accept that sometimes things go wrong or don’t work out as planned. And remember: it is hard work and perseverance that lead to innovation: nothing more, nothing less.

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Flexibility We make a point of listening to the feedback our clients give us – and learning from it. One comment that we heard a number of times was that, while the standard of our work was excellent, clients would love to see more flexibility in our business capacity as regards timezone and geography.

This is how our “pop-up” office in Perth came about. We acted quickly and confidently in identifying the right time zone and location and recruiting a high calibre of staff – and launched the office in under 12 weeks. Thanks to this innovation, we now provide our clients with a seamless, 24/7 global service from which they undoubtedly benefit.

People At the heart of everything we do – and so they always will be.

Whilst we are evolving and adapting, so are our clients. Their own behaviour is becoming more sophisticated, as evidenced by the fact that they are becoming increasingly comfortable accessing legal products and services online. There may come a day when they will access products only online – and we need to be ready for that day.

Looking to the future When Alternative Legal Services was first founded, no other law firm was using technology, people or processes in the same way – hence our use of “Alternative”. Now, other firms are hurrying to catch up – and the “alternative” part of our name is becoming less relevant. Time, then, for us to evolve and reinvent ourselves; by the end of this calendar year we will have relaunched, under a new name, but with the same clear-eyed approach to innovation – watch this space, as they say…

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Leading a Resilient Organisation LEADERSHIP

By Christine Congdon Director, Research Communications, Steelcase Inc.

“ In today’s complex and unpredictable environment, rapid adaption and resiliency are critical to driving an organisation’s success“

Executives face challenges that their predecessors never imagined.

From the ubiquity of technology and the explosion of data, to a workforce where a third of employees are disengaged, plus the challenges of globalisation and an unpredictable global economy. No wonder many CEOs see more business threats than opportunities in 2016, according PwC’s most recent annual survey.

Leaders know they’re operating in a dynamic environment in which ‘business as usual’ becomes more counterproductive every day.

They know that in today’s complex and unpredictable environment, rapid adaptation and resiliency drive an organisation’s success, perhaps even its survival.

Yet, too many leaders are constrained by pre-existing norms that affect their performance, whether in business structures, processes and technology, or the space they operate within. In the physical workplace itself, too many executives are affected by a lack of areas where they can think clearly, concentrate easily, solve problems and generate new ideas. Or too few settings where they can socialise informally or rejuvenate and re-energise.

The right work setting An environment intentionally designed for the C-suite’s distinct needs can be a powerful influence. It can help leaders recalibrate fundamental practices to tackle their toughest challenges in more effective ways. It can make their work less stressful and more satisfying. At the same time, it can convey a compelling message about the organisation’s culture and brand, perhaps even driving desired new behaviours throughout the organisation.

Naturally, each executive is unique. Some are more task-oriented, others more people-oriented. Some are digging their companies out of crisis, others head vibrant businesses. However, Steelcase research suggests that there is actually growing convergence around performance expectations of leaders today.

As essential as information persistence is to their work, executives need to be able to clear their minds quickly to get ready for what’s next. Leaders also need time for private focus or to meet confidentially with just one or two others versus entire teams. There are three key principals for designing leadership spaces that can help foster this adaptive culture: 12

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1. Nurture the Individual There is a link between physical health, mental health and cognitive performance. Executives need to manage significant stress from the performance pressures they face. Environments that can help executives manage stress and promote wellbeing, enhance the cognitive process.

2. Performance Continuum Executives are challenged with the need to constantly switch informational contexts throughout the day. Time is also a critical resource. Physical spaces should help accelerate contextual immersion and support leaders getting into flow faster.

3. Space as Synapse Executives face even greater challenges in maintaining relationship and informational connections, especially in globally integrated organisations. Leadership spaces can be designed to help facilitate better connections between people and information, while providing remote executives with a virtual presence that is more similar to those leaders who are physically present in the space.

The Ecosystem Solution Delivering on individual nurturing, performance continuum as well as leadership spaces is a tall order, yet all three dimensions must be addressed effectively if executives and their organisation are to thrive. And while isolated tactics may meet some needs, Steelcase’s research sheds light on the reality that a sturdy solution requires holistic thinking.

For example, there needs to be spaces that enhance concentration, with minimal noise disturbance and greater choice and control over lighting, sound and temperature. There also needs to be spaces that encourage employee rejuvenation, where the body can assume different postures and the mind can unwind. Collaboration is another critical aspect of great work. Spaces should support both physical and remote presence across time-zones and geographies, and display digital or physical information for all to see.

A piecemeal approach can’t adequately support executive work today. Instead, leaders need a specific range of executive settings that are unrestricted by current conventions and instead optimised for individuals and how they work together as a team – in other words, a workplace ecosystem. www.babinc.org

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Flying into the Future:

By Andy Horler Business Development Manager, Unmanned Systems at Lockheed Martin UK

innovations in unmanned systems building a better tomorrow TECHNOLOGY

“ In the next decade, the possibilities for unmanned technology are limitless”

Today Unmanned Aerial Systems, more commonly known as ‘drones’, might be most closely associated with simple applications such as videography and photography. However, drones are already being deployed in more radical ways – revolutionising the way first responders tackle fires or how researchers explore the earth’s terrain. New breeds of winged and rotary propelled drones are flying across our skies. Next generation drones being built today have the capabilities to transform the way the world operates in the future.

The Impact of Drones PricewaterhouseCoopers predicts the commercial drone global market will near $127 billion by 2020, representing a more than 6000 percent boom by the end of the decade from 20151. It is therefore no surprise that drone technology is advancing at the same rate as mobile technology, another booming sector. Each new generation of drone is getting smarter, flying for longer and is more capable than its predecessor. The fast-growing global drone industry has benefited from a climate of increasing investment and human effort into opening up this market.

As a result, drones are now improving crop yields, verifying insurance claims, and assisting in the high definition filming of Hollywood blockbusters. This is down to drone technology costs falling so quickly that everyday applications are becoming more cost-efficient to use technology in.

At Lockheed Martin, we are continually innovating to improve unmanned technologies, enabling systems to go further, operate longer and succeed in harsh or dangerous conditions. In addition to harnessing drone technologies to benefit firefighting, disaster relief and precision agriculture, Lockheed Martin has been working with the non-profit organisation Project Lifesaver International to improve emergency services’ first response protocol.

Project Lifesaver International works to bring people’s missing loved ones home by providing vital support to emergency responders to save lives and reduce potential injury for adults and children who become lost due to Alzheimer’s, Autism, or other related conditions.

To improve its ability to locate missing individuals, Lockheed Martin has integrated an antenna and receiver with its Indago quadrotor unmanned aerial system, which can be stored in any emergency vehicle and deployed in less than five minutes. Using Indago extends Project Lifesaver agencies’ search areas from one and a half miles to well over seven miles. Indago’s vertical take-off and landing ability provides an eye-in-the-sky that is suited for urban or heavily forested

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areas because it does not require a large space to take-off or land.

Indago is a safe and effective airborne search and rescue tool that can be used in all weather, even when manned aircraft are grounded.

Shaping the Future of the Unmanned Systems Industry It is inevitable that unmanned systems are going to play a major role in creating a safer and more efficient world in the future. Companies from across the globe are innovating to build faster, smarter and smaller systems with the capabilities to meet many of the world’s challenges.

At Lockheed Martin, we believe the future of unmanned systems will focus on three key concepts: miniaturisation, automation and communication. In fact, we have already brought this theory to life with one of our Skunk Works creations: SPIDER (credit front cover image).

SPIDER is an autonomous system developed by Lockheed Martin that locates and patches pinholes found in a hybrid airship’s envelope.

This miniaturised system works in two parts: one part scurries along the outside of an airship, while the other shadows its counterpart on the inside surface. The outer robot shines light through the airship’s fabric, with the robot on the inside detecting any pinhole light (thus indicating a puncture) with its sensors. Once a puncture is detected, it is patched up in a matter of minutes. Autonomously roaming the envelope of the hybrid airship, both parts of the state-of-the-art system communicate with each other to ensure the vehicle is in the best condition, 100% of the time.

This concept has almost endless applications. From cargo ships to space ships, SPIDER technology can work autonomously 24/7 to ensure the condition of cargo vessels is always at its best.

Furthermore, this technology is well suited to remote and challenging conditions, such as offshore platforms and mining sites, where monitoring and making repairs prove challenging for people.

In the next decade, the possibilities for unmanned technology are limitless. This means realising the potential for wearable unmanned systems – personal assistants that travel around with us. On the other end of the scale we will see unmanned systems replacing traditional infrastructure such as cars and commercial freight carriage vehicles to make businesses more efficient and profitable. Whatever their application, one thing is certain: unmanned systems are flying us into the future.

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Navigating Brexit The following content was provided by lawyers at Debevoise & Plimpton LLP.

POLICY

On June 23rd 2016 the UK voted to leave the European Union (EU). As the UK begins this new chapter the UK-US relationship will be more important than ever as a source of strength, stability and opportunity.

One factor of immediate relevance to business has been the market re-evaluation of the value of sterling against other major trading currencies. The main effect of the devaluation has been to impact cross border transactions and the modelling for future business activity including capex investment. Members in the UK who export can take immediate advantage of a cheaper invoice price for the future contact prices of goods and services they provide, but also will have to consider their own input costs, and their dependency on imports as part of a necessary currency management review.

Workforce There is a risk that EU nationals may no longer be able to work indefinitely in the UK. The government has not given a definitive guarantee regarding the status of EU nationals currently living in the UK, on the basis that such a guarantee cannot be given in the absence of a similar agreement from other EU member states about British nationals living on the continent. Whilst it appears that EU nationals who have lived in the UK for at least 5 years, and therefore have the right of permanent residence, will be eligible to remain in the UK after Brexit, the position relating to others is less clear.

Assess the risk of changes to your workforce: Whilst it should by no means be assumed that those employees will be required to leave the UK or obtain permission to remain, businesses with key personnel or large numbers of (non-UK) EU nationals (or British nationals if employed in Europe) may wish to assess the impact should they no longer have the automatic right to remain in the UK. Contracts If significant economic uncertainties follow, parties may wish to claim a right to terminate existing contracts or claim that contracts have come to an end because of force majeure.

Review key contracts: take advice as to whether Brexit or the economic conditions that accompany Brexit could result in breaches of covenants and/or allow you or counterparties the right to terminate or to claim an instance of force majeure. If there are doubts or uncertainties, immediate steps should be taken to clarify 14

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the position. Consider renegotiating existing contracts: in light of fluctuations in the value of currencies and other uncertainties, it may be a good time to renegotiate existing contracts and/or to enter into contractual relationships on revised terms and other opportunities; it may be worth considering whether contracts ought to be renegotiated.

Data If the UK diverges its data protection laws from the EU rules (the new General Data Protection Regulation), it will become more difficult to transfer data between the UK and EU countries. This is particularly significant for large multinational companies with branches within the EU. Assess risk: businesses should take steps to assess the way they conduct internal or external transfers of data, including the way in which data is transferred electronically and online. Businesses should consider whether voluntary compliance with the new rules might be prudent.

Tax Currently there are certain EU directives that ensure that intra-group dividend, interest and royalty payments may move within the EU free of any associated withholding taxes. Following Brexit, if the UK does not negotiate a position with regard to these directives, the UK will have to resort to the default position which is stated in the relevant double tax treaty. A double tax treaty may reduce the withholding tax rate in some cases, but it is not always eliminated.

Treaties sometimes allow a tax authority to impose full withholding tax and require recovery of any reduction in rate only after a demonstration of entitlement to benefits under the applicable treaty.

It is unlikely that there will be dramatic changes to the VAT system, though the UK will be free to determine how it charges VAT postBrexit. While derogating from the EU VAT scheme may provide flexibilities, businesses have grown comfortable with the existing system which seems to work well. Businesses may need extra working capital to address cash flow VAT issues after Brexit. www.babinc.org

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To find out more call 0208 795 9540

Industry Insight

Understanding Digital Business Innovation INNOVATION

The way to understand digital business innovation is through the lens of strategy, not technology. Real innovation comes when a business enables their strategy with the right digital tools, tools which have the power to create new efficiencies, new markets, and new ways to connect with customers. If technology is the engine, than strategy is the wheels. The rise of the digital economy has made digital business innovation a business necessity. Digital disruption has affected every sector by changing the way business is done, success now requires turning disruption from a hurdle into a transformative opportunity.

I admit, that’s all very abstract ... let’s take a look at some real world examples of how technology and strategy have come together successfully. The two obvious and most stark examples are Netflix and Uber. Both these companies were able to upend existing business models with a confluence of digital technology and strategy. The technology provides the raw capability (in Uber’s case mobile GPS and Netflix’s case improved video streaming), while the strategy guides the technology throughout the marketplace. Both companies took aim at an existing marketplace and completely disrupted it by creating new efficiencies and completely outmaneuvering competitors.

By Adriaan Bouten CEO & Founder, Digital Prism Advisors

For legacy companies, digital innovation is harder. Stopping the momentum of a traditional business model and transforming into a digital innovator requires immense leadership. Looking through the Fortune 500, consumer electronics giant Best Buy is a solid example of a legacy company which has managed to succeed despite digital disruption. A traditional brick and mortar retailer has plenty of hurdles to overcome but Best Buy has been steadily turning itself into a successful hybrid digital/traditional retailer. Their digital innovation can be seen in their fantastic in-store pickup system where purchases made via their eCommerce platform can be picked up within an hour or two.

This is a smart example of a legacy company using digital technology to create a new efficiency which meets a real customer need, technology harnessed with the right strategy. Best Buy will no doubt continue to transform into a more pure digital retailer, digitally innovating to retain market share.

Digital disruption is both a wake up call and an opportunity. Understanding and becoming a digital business innovator is the best and only way to capitalize on the shifting digital economy.

US/UK M&A ‘special relationship’ holds despite uncertainty and a global M&A slowdown BUSINESS

The US/UK M&A corridor is the most valuable in the world and continues to show resilience amidst uncertainty.

According to the US/UK M&A Deal Monitor H1 2016, published by Deloitte, the total volume of US & UK outbound deals rose through H1, with volumes in the second quarter the highest since Q4 2014.

US corporates and Private Equity houses announced 168 deals into the UK during the first half of 2016, equal to the 168 deals for the same period last year. Going the other way, UK acquirers announced 99 deals in the US, 32% higher than 75 deals announced for the first half of last year.

The disclosed value of US & UK outbound M&A deals fell in H1, with UK outbound values recovering modestly in Q2. US outbound value has now been above UK outbound value for three consecutive quarters.

Driving the deal corridor today is TMT, which remains the busiest sector in transatlantic M&A, accounting for the most deals in both volume and value over the last ten quarters. From an exit standpoint, the London-California axis is now overtaking the London-New York one.

By Cahal Dowds

UK Head of US/UK M&A Corridor and Vice Chairman Deloitte UK

The continued health of the US/UK M&A corridor through the H1 2016 is the result of several other powerful driving factors.

1. The growth of ‘alternative lending’ funds in the US & UK, in 2015 for the first time European funds raised more capital than their US counterparts.

2. The US and UK enjoy a high and improving ‘comfort level’ in business and investment.

3. Corporates and Private Equity on both sides of the Atlantic have large reserves of un-deployed cash reserves to do deals The fundamentals for this corridor are built on long term horizons and while Brexit may cause some pause while the policy uncertainty remains, it is likely to pick up once the situation becomes clearer.

The real test will be if deal processes slow down over the next six months. However, in the short term, we expect the strength of the Dollar will make certain UK assets look more attractive and this could accelerate inbound deal flows into UK.

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Industry Insight

Can Leaders Foster Innovation and Accept Failure?

COMMUNICATIONS

By Christine Mackey-Ross

Senior Partner, Witt/Kieffer Ccentric

What is innovation? Is it a strategy? A process? A goal? Is it something only for the young and entrepreneurial? Is it the responsibility of everyone within an organization?

These were questions tackled by attendees at a June BritishAmerican Business conference in New York dedicated to the link between talent and innovation. I had the good fortune to participate and was struck by the idea that innovation is a fundamental business practice in every industry today – central to sustained success. Disruption pervades every industry and organizations must expect it and adapt accordingly.

The question for each organization to ask itself is: Have we created an environment where it is actually possible to innovate? As much as organizations prefer to recruit innovative talent, the values and culture of the organization must support innovation over time. Leadership must set the tone by not only encouraging creativity and exploration but also by accepting a degree of failure. Employees will not innovate if they fear repercussions. “Make the failure functional,” encouraged Toni Harris Quinerly, a senior consultant for YSC. “Does it go to die or are you studying it and learning from it? If you do then people can see that the risk and failure is value-added.”

Innovation must also be something encouraged in all employees, not only the domain of a select few who have it in their job descriptions. (This is particularly true in relation to age, and the New York event featured a healthy discussion about the ability of more senior employees and leadership to innovate and drive change.) “Talent is your most important tool to enable innovation,” said Camilla Webster, CEO of media and marketing company New York Natives.

A final takeaway from New York was about the interconnectedness of innovation and diversity. “I don’t think innovation exists without cognitive diversity, cultural diversity, or diversity of style,” said Erica Irish Brown, Global Head of Diversity & Inclusion for Bloomberg LP. Innovation is a business imperative today, and we are only beginning to understand how organizations can ensure that it happens.

An Update on European Loan Facilities LENDING

By Tom Smith

Partner, Debevoise & Plimpton LLP

www.babinc.org

Following the 23 June vote in the UK to leave the European Union, European financial markets were unsurprisingly initially intemperate.

Now that some time has passed, European financial markets appear to have stabilized somewhat. Indeed, the European financing markets gained material momentum post-Brexit vote, and financing markets have been open through the traditionally slow August period. Lenders continue to have funds to lend, borrowers continue to launch deals, and pricing levels are more borrower-friendly than earlier this year.

It is therefore a useful time to look the prevailing European leveraged loan financing trends.

Covenant-lite Although the majority of European leveraged loans continued to have at least one maintenance financial covenant, true “covenant-lite” facilities in Europe are increasingly popular. Through Q2, statistics suggest that just under a third of European leveraged facilities were covenant-lite.

The rise of second lien European borrowers are often filling perceived funding gaps with term loan B/second lien structures. Second lien facilities are often arranged by direct lenders, rather than banks. Interestingly, in second lien structures, while some second lien lenders are now willing to accept covenant-lite terms, a number ask for equity co-investment rights.

Other borrower-friendly terms The trend to other more borrower-friendly terms continues. Incremental facility terms are a case in point. This year, an increasing number of incremental facilities permit additional debt to be raised both under a “ratio” basket and a “cash-capped” basket.

Convergence of certain US and European terms Certain historically-US market terms are becoming increasingly prevalent in Europe, particularly for borrowers raising dual currency facilities. Some recent European term loan B facilities include 6-month soft call protection and almost all European leveraged facilities have a LIBOR (or equivalent) floor (the standard floor level being 0%, although a small number of recent European leveraged term loan B facilities provide for a 1% floor).

Surprisingly, European financing markets have been bullish post-Brexit vote, with lenders having capital to deploy and the economic markets coping with the post-Brexit world. However, the medium and long term impact of Brexit remains uncertain.

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Culture

Interview with Professor Clayton M. Christensen AUTHOR SPOTLIGHT

Sixteen years ago a book by Clayton Christensen changed business thinking forever Explain the concept of disruptive innovation which was popularized in your book ‘The Innovator’s Dilemma’? What relevance does it have for businesses today?

The theory of disruptive innovation explains two things. Whether, when to predict you put your innovation into the market, whether your competitors are going to organise to kill you off – or ignore you. It helps predict what your competitors will do. The other thing it explains is ‘’How can I create growth?” The answer to that came from The Innovator’s Dilemma. We create growth by making a product that historically has been complicated and expensive into a product that is affordable and simple so that many more people can own and use the product. So the theory of disruptive innovation allows us to predict the competition – and predict whether customers will buy the product. Business still struggle with those two questions – and the theory is as relevant today as when I first wrote The Innovator’s Dilemma 20 years ago.

What innovation trends or concepts do you think will be a game changer in terms of businesses and their employees?

Innovation today is very much in a “pre-quality” era. In other words, it is practiced in much the same way as manufacturing was practiced before Edwards Deming, Toyota, and the quality movement changed the way managers thought about manufacturing. The shift was fundamentally from one in which defects were accepted as an intrinsic part of manufacturing to one in which defects were treated as process anomalies that could be studied and addressed. The same will be true for innovation. As businesses will get better and better understanding why customers make the choices that they do – the subject of my latest book, Competing Against Luck – they will also get better at predicting what innovations will be successful. We will see a separation of those firms that adopt “quality innovation” and those that cling to a “hit or miss” past.

What role does technology play in evolving and shaping innovative, competitive and global markets?

Technology is having profound implications in evolving and shaping global markets.

1. Time and Money: in many industries, technology is dramatically reducing the cost and time required to create new products and 18

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launch businesses. Platforms such as Amazon’s AWS, for example, have cut time and cost for many innovators.

2. Balance of Power: In the analog era economies of scale and asymmetries of information allowed large firms to exert extraordinary leverage over suppliers and customers, but modular, global supply chains and democratization of information through services such as Google and Twitter and evened the playing field dramatically.

3. Business Models: while established firms continue to invest disproportionately in new products, advance in technology have rewarded business model innovators – such as Uber, Airbnb, Amazon, and Facebook – more than traditional product innovation.

What are you are currently working on in the innovation space? Would you tell us about your latest book ‘How Will You Measure Your Life’ and its significance in drawing on your theories surrounding disruptive innovation?

How Will You Measure Your Life is an encapsulation of the last class I have with my students every year. We’ve spent all semester learning and discussing the best theories I know for making great choices in their professional lives. The importance of good theory in making choices is profound. If you understand what causes what to happen, you’ll be far more likely to make decisions that lead to the outcome you seek. I started thinking about applying theory to our personal lives, too, after I watched so many of my own classmates from Harvard Business School settle for unhappy personal lives.

They never intended for that to happen, yet if you examined the choices they made all along the way, that’s exactly the strategy they executed. In that last class, I turn the tables on my students and ask them how they’ll use our best theories to ensure that they have a strategy for building a satisfying personal life – as well as professional life. I consider it my most important class all year. www.babinc.org

Policy

Innovation: a year of challenge or opportunity?

DISRUPTION

Mairi MacLennan

Policy and Public Affairs Manager mmaclennan@babinc.org Follow @BABPolicy

“ Innovation will be key to securing growth and success in these uncertain times”

In my opinion 2016 is proving to be a memorable year, not particularly for the right reasons. Much to the shock of many in the business community, the UK voted to leave the European Union on 23 June 2016. On the other side of the Atlantic, the US elections are proving to be equally unpredictable, with the most unpopular candidates ever nominated by both parties.

As our Members in London and New York face this everchanging political and economic climate, innovation will be key to securing growth and success in these uncertain times.

By its very nature innovation does not come in a one size fits all approach. The UK and the US have proud histories of innovation – with companies able to thrive in free market, liberal, outward looking and competitive environments. However, they each have cultivated cultures of innovation in ways that match their unique characteristics. So what can they learn from each other?

The US is a hub of innovation. As a young country, founded on a set of ideals and exceptionalism, the desire to succeed and be the best is embedded into the American culture. This drive pushes individuals and companies to think outside the box to fulfil their American Dream. The result is companies such as Uber, Google and Facebook which have fundamentally altered the way many of us live our lives.

So, how has the nurtured environment allowed these companies to thrive? The answer is very simple. It has, to a greater or lesser extent, left them to their own devices – to either fail or succeed off their own merit. Historically low taxes and light touch regulation have created a nation welcome to innovation and innovators.

Some trends are beginning to emerge which are causing concern, including higher taxes, tighter regulation and overtime pay thresholds1. While policies may be made with the best intentions in many cases they are burdensome to business and limiting to the spirit of innovation America can and should be proud of.

Contrast this with the UK, although no stranger to innovation, it did after all give the world the telephone and the television, in more recent times it hasn’t been the first country that comes to www.babinc.org

mind for innovation. However this is beginning to change, and according to the Global Innovation Index it is now the third most innovative country in the world2.

It is not hard to see why. The Silicon Roundabout in central London is gaining recognition as a global hub for start-ups in fashion, technology and more. London is also emerging as a leader in Fintech, benefitting from the extensive financial services infrastructure that has developed over the years London has been the world’s financial centre.

Much of this is thanks to an innovative approach the Government and regulatory bodies have taken to nurture emerging technologies and sectors. As part of ‘Project Innovate’ the Financial Conduct Authority has embraced a Regulatory Sandbox, which invites business to test innovative services, products and business models free of the normal regulation3.

The Government has also been taking steps to make sure the Public Sector is not left behind the innovation tide, and show its willingness to work with the private sector to make this happen.

It is currently trialling the use of Blockchain for welfare payments in conjunction with Barclays and fintech start-up GovCoin, with further plans to expand Blockchain use across the public sector in the pipeline.

The UK approach could provide a template for the US going forward. Although America still leads the way, the US Government must be cautious of over-regulation. The innovative and open approach the UK Government has taken creates the opportunity for companies to thrive.

Who knows if will we see the emergence of British firms that are capable of competing with the globally dominant American firms who have radically changed their marketplaces. Google, are you ready?

1 2 3

Department of Labor: Overtime Pay (2016) Global Innovation Index 2016 FCA Regulatory Sandbox (2015)

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Event Highlights

BritishAmerican Business Annual Corporate Citizenship Awards Dinner 2016 LONDON

On Wednesday June 8th 2016, BritishAmerican Business London presented Peter Grauer, Chairman of Bloomberg, Stephen P. McGill, Group President Aon and Xavier R. Rolet KBE, CEO of the London Stock Exchange Group with our Annual Corporate Citizenship Award in recognition of their exceptional commitment to corporate social responsibility. Guests enjoyed a welcoming drinks reception in the courtyard of Merchant Taylors’ Hall followed by a three course dinner in the historic hall where the Awards ceremony took place. Visit https://www.babinc.org/ britishamerican-business-csr-highlights/ to watch the highlights of the evening including interviews with the honourees.

Guests network over drinks in the courtyard of Merchant Taylors’ Hall.

BritishAmerican Business CEO (right) with honouree Stephen P. McGill, Group President of Aon Plc.

Peter T. Grauer, Chairman of Bloomberg with his Bloomberg colleagues.

Xavier R. Rolet KBE, CEO of the London Stock Exchange Group gives his acceptance speech.

With thanks to our sponsors Platinum Sponsors Aon Manchester United Bloomberg Marsh & McLennan Companies Cardew Group Willis Towers Watson London Stock Exchange Group

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Gold Sponsors AIG HSBC Broadridge XL Catlin Deloitte

Silver Sponsors Finsbury UBS

www.babinc.org

Event Highlights

LONDON

Welcome Reception Future Cities 2016 Hosted at Tower Bridge On May 11th 2016 we kicked off our Future Cities Conference with an evening welcoming reception in the walkways of the stunning Tower Bridge. Guests enjoyed champagne and canapes with unique views over the River Thames.

Young Professionals Networking Sponsored by La Compagnie and AKA Hosted by Arup On May 26th 2016 BritishAmerican Business held its popular speed networking series designed for our younger generation of members with less than 15 years professional experience.

CHASE Awards Dinner 2016 Sponsored by EY On May 12th 2016, BritishAmerican Business held its first CHASE Awards to recognise and showcase the very best stories of successful exporting and inward investment from micro-small and medium businesses in the transatlantic corridor. The ceremony took place at One Great George Street in Westminster. See the 2016 Award Winner stories and success on our website www.chaseawards.org

BABC Annual Transatlantic Business Conference 2016 Sponsored by American Airlines, Arup, City of London Corporation, McKinsey & Company. The event was kindly hosted by NEWS UK On May 12th 2016 BritishAmerican Business brought its chapters across North America and the UK for its Annual Transatlantic Business Conference on Future Cities: Smart, Sustainable, Social held at News UK. The day was filled with an array of expert panel speakers including two city mayors plus Justin Webb from BBC’s Radio 4 Today Programme.

www.babinc.org

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Event Highlights

NEW YORK

Innovation Conference: The Future of Talent & Leadership Sponsored by Witt/Kieffer, Angela Mortimer, Willis Towers Watson Hosted by Sullivan & Cromwell Members in attendance for New York’s Annual Conference listened to insights from leading professionals in the talent and human resources field discuss the latest trends and current initiatives of their companies to grow effective leaders, practice diversity and inclusion, adapt to demographic and generational shifts, and determine the true origin of innovation.

Business Briefing To Brexit, or Not To Brexit? The Business of Britain’s Referendum Hosted by JWT US Managing Editor, Financial Times, Gillian Tett sat down with Instinctif Partners’ Warwick Smith, Global Head of Public Policy for a fireside chat on the implications of a British exit from the European Union.

Young Professionals: Speed Networking Hosted by: Y&R New York’s Young Professionals Network, members with less than 10 years of professional experience, entered a lightning-round pitch session to meet their professional soul-mates in this fun, high-energy take on speed-dating.

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Women’s Forum Why Tomorrow’s Leadership is Nothing Like Today’s, and Why Women Will Lead the Way Sponsored by YSC Hosted by: Norton Rose Fulbright Featuring a panel of female executives, the discussion on the ever-evolving roles of women in various industries was a key topic for those in attendance. Insights from our sponsor, host, SWIG and Allure magazine were shared.

www.babinc.org

Events Calendar

LONDON

September 2016

November 2016 Talent Conference Speakers include Google, LSE, KCL, KPMG, NHS England and Witt Kiefer Wednesday 21st September 2016 8.30am – 5.30pm Hosted at EY

Breakfast Briefing: Overview of the World Economy Thursday 29th September 2016 8.00am – 10.00am Partnered with Barclays Hosted at Pillsbury Winthrop Shaw Pittman

BAB Women’s Conference 2016 Tuesday 1st November 2016 Hosted by Chicago Booth School of Business

Executive Roundtable with Jo Bertram, RGM Northern Europe at Uber Friday 23rd September 2016 8.00am – 9.30am Hosted by City of London

Clinton vs Trump: A Debate Wednesday 6th October 2016 6.30pm Hosted by NBC

Employment Law event Tuesday 8th November 2016 8.30am – 2pm Hosted by BritishAmerican Business in partnership with Littler

Gala Dinner 2016 with H.E. Ambassador Barzun and Iain Conn, Chief Executive at Centrica Wednesday 28th September 2016 7.00pm – 10.00pm Hosted at Lancaster House

Chairman’s Lunch Thursday 20th October 2016 Hosted by Deloitte

Annual Christmas Lunch at The Dorchester Thursday December 8th 2016

SME Forum Financing New Growth Thursday 22nd September 2016 8.00am – 9.30pm Sponsored by HSBC

Ambassadorial Briefing with Matthew Barzun Wednesday 5th October 2016 11.30am – 1.30pm Hosted by KPMG

Washington Insight Thursday November 10th 2016 8.00am – 9.30am Sponsored by Alston & Bird LLP

BrexitCon Tuesday 27th September 2016 8.00am – 6.00pm Sponsored by Nasdaq

Transatlantic Business Awards Dinner Thursday 13th October 2016 6.30pm – 9.30pm Hosted by The Pierre

Fall Pub Quiz Thursday November 17th 2016 6.00pm – 8.30pm

October 2016

December 2016

NEW YORK

September 2016

October 2016

November 2016 CEO Roundtable with Mark Weinberger Wednesday 28th September 2016 8.00am – 9.30am

December 2016 EACC Women’s Forum with Sally Susman Thursday November 3rd 2016 8.00am – 9.30am

Annual Christmas Lunch at The Pierre Friday December 9th 2016 11.30am – 3.00pm

www.babinc.org/our-events/ www.babinc.org

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B

usiness investment and commercial growth

opportunities in the UK made possible with support from technology partners

As part of the inward investment initiative of the

IT services were always operational as well as

UK Government and working in conjunction with

providing staff, managers and executive officers

the UK Trade & Investment (UKTI), companies not

with immediate user and device support, together

located in the UK are considering expanding their

with change request management. In addition to the

business operations and opportunities overseas.

remote back-office support team enabling extended

business to the UK and are doing so because it’s an ideal location. London is especially seen as one of the global hub locations for start-up, enterprising and expanding businesses across multi-sector industries.

The UK has people with talent, the right skills, a simple and competitive tax rate system and a transparent regulatory system making it easier to do business than ever before.

Smartmatic, the undisputed leader in the electronic voting industry help hundreds of millions of voters cast billions of ballots in thousands of government elections around the world through their electronic voting systems and technology that has now become a worldwide standard.

The company chose London for their UK headquarters and employed Amazing Support to

IT support options, procurement assistance and consultancy, the full array of IT services provided

by Amazing Support safeguarded the business in maintaining their unique hold on the EMEA market and continuity of their commercial operations.

“

We were looking for outsourced IT support for our headquarters in London. Amazing Support provide a weekly on-site support service as well as remote support when needed. The London office is where our CEO, CFO and multiple executives are based and I needed to ensure as near to 100% uptime of our infrastructure, laptops, phone system and day-to-day user support.

support them through weekly on-site visits ensuring hardware, software, internal and external connecting

“

Companies are choosing to expand or move their

Jay, Smartmatic

We’d love to hear from you If you’re considering moving or expanding your operations to London or thinking about creating new business opportunities in the UK, then Get In Touch on 0203 728 2555 and we’ll go through with you how we work with overseas companies to make that happen.

Amazing Support Units 715-718, Studio 2000, 5 Elstree Way, Borehamwood, Herts WD6 1SF

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Email: giveme@amazingsupport.co.uk Tel: 0203 728 2555

www.babinc.org

/AmazingSupport