Trust is the lifeblood of well-functioning teams, but a lack of trust might be inhibiting teams from truly excelling within hybrid work environments.

Additional layoffs at Facebook parent Meta recently filled the headlines, but in the memo to employees, Mark Zuckerberg revealed new insights on the future of work, the importance of relationships, and how teams need trust to thrive.

Here’s what Mark wrote:

Our early analysis of performance data suggests that engineers who either joined Meta in-person and then transferred to remote or remained in-person performed better on average than people who joined remotely. This analysis also shows that engineers earlier in their career perform better on average when they work in-person with teammates at least three days a week. This requires further study, but our hypothesis is that it is still easier to build trust in person and that those relationships help us work more effectively.

While hybrid work environments might be giving employees the flexibility they want, it might not be delivering the trust teams need. In his seminal research on the neuroscience of trust, Paul Zak shared eight behaviors leaders can follow to stimulate and sustain a culture of trust. Zak’s research stresses the importance of intentionally building social ties at work. These social ties strengthen trust, which in turn improves employees’ self-reported energy levels, satisfaction with their lives, and engagement at work.

What is your organization doing to build trust among team members and coworkers?

Earlier this week I joined US Bank’s Elavon for their latest masterclass. I discussed the disruptive trends impacting businesses and what it means for the future of payments and finance. These are some of the trends we explored:

#1 shift from digitization to ‘data’fication

#2 new faces of commerce that are emerging

#3 new paths to purchase

#4 blurring lines between our physical and digital worlds

The implications for the payments industry, and for the financial sector more broadly, are pronounced. We are already seeing some of these materialize in the following ways:

1. Cryptocurrencies and the tokenization of the internet. As Mark Twain wrote, “the reports of my death are greatly exaggerated.” While it might feel like a crypto winter, and the collapse of FTX feels like a blizzard, viable use-cases continue to emerge. For example, earlier this month the Federal Reserve Bank of New York issued results on the Phase I results of Project Cedar, its inaugural project to develop a technical framework for a theoretical wholesale central bank digital currency (wCBDC). Currently, it takes two days for most FX spot trades to settle. In the test environment, transactions on the blockchain settled in under 15 seconds on average.
2. Embedded everything. Platforms and marketplaces are leading a revolution in embedding payments, instant payouts, and other embedded finance tools. Delivery Hero, Postmates and Uber are just some of the examples. Shopify offers embedded finance products to its customers and half of their revenue comes from their ability to offer loans to their customers. In 2021 they loaned over $3B.
3. Buy Now Pay Later (BNPL) is here to stay. Consumers can get large ticket items right away while paying for them in several smaller installments over just a few weeks or months and merchants love it because they can increase their basket values and move more expensive items.

Last week I took the stage at Global Business Travel Association (GBTA) Convention 2022 to highlight the results of CWT and GBTA’s 8th annual global business travel forecast. I worked with GBTA and CWT to craft forecasts for average room rates, airfares and car rental hires for each of the major regions of the world. Below are some of the key results, but you can see the entire forecast here (it is free!).

Overall travel demand is up significantly. In the U.S., TSA throughput is up 41% over last year (though still down from pre-pandemic levels). Likewise, business travel is recovering sharply and the breadth of travel is expanding. For business travelers, international tickets were approx. 38% of all tickets purchased in 2018 and 2019. This fell to 33% in 2020 and 22% in 2021, but has risen to 34% in 2022.

Looking ahead: global business travel airfares are expected to rise nearly 50% this year. In some regions, like North America, fares have already hit all-time highs. Airline capacity remains constrained. Globally, there were 12% fewer available seats in August 2022 than in August 2019. Higher costs are also pushing prices up. Jet fuel prices have ebbed lower, but hit all-time highs earlier this year.

Our forecasts call for another 8.4% increase in prices in 2023. See more in the full report.

Check out some of the coverage of the study in BTN Group, TTG Media, Japan Today, Business Traveller, Hospitality Net, Hotel Management Magazine,Travel Weekly, Voyages d’Affaires, Business Travel News, Travel Daily, and more.

Last week I joined the Massachusetts Bankers Association to discuss the future of community banking and the future of finance.

Some of the oldest institutions in the United States today are members of this storied association. Eastern Bank was established in 1818 as Salem Savings Bank, Dedham Institution for Savings was started in 1831, and Cambridge Savings Bank was founded in 1854. BankFive, chartered in 1855 as the Fall River Five Cents Savings Bank, is one of the first Five Cent Savings Banks in America.

Community banks were one of the many unsung heroes of the pandemic. They helped small businesses secure life-saving PPP loans. They supported first-time home buyers finance purchases. They helped commercial real estate owners hard hit by lockdown orders.

Community banks are the bedrock of their communities. Nationally there are about 4,200 community banks today. These banks account for roughly 40% of all bank branches, 14% of bank deposits, 18% of bank loans, and just over 13% of bank assets. The remaining deposits, loans, and assets are held by non-community banks, of which there are roughly 127. Despite only holding 18% of total industry loans, community banks hold over one-in-three small business loans.

Similar to other industries, the pandemic accelerated an often-overdue digital transformation for many banks. For many community banks, new customers could not open an account online until COVID changed how they operated and interacted with customers. You could not talk to your banker remotely until the pandemic necessitated zoom-esque video meetings. You could not sign loan documents or perform other essential operations without coming into a branch. Banks, like many businesses across a wide swath of industries, are still figuring out new ways of operating in our post-pandemic world.

Community banks face significant challenges today. The upgrade of digital solutions has reduced traffic at branches, calling into question what to do with these core assets. Community banks face pressure from neobanks and other fintech upstarts that are bifurcating financial services. They face competition from large companies like Amazon, Apple, and Walmart who are looking to expand beyond their existing industry footprints. They face regulatory burdens not borne by other financial institution competitors. They face the challenge of generational shifts and changing consumer preferences.

In my keynote, I talked about the mindset needed to lead a community bank on the pathway towards the 22nd century. Banks need to introduce new products to new markets in order to thrive. This has often meant finding new customers for existing products they already offer. Adding more checking accounts. Producing more loans. But their future will be more than just broadening their base or expanding existing products. I believe the future will mean a new age of innovation that introduces entirely new products.

Much of the innovation we have seen from fintech has been the result of entrepreneurs and innovators crafting new solutions for problems that have long existed. Venmo helped us figure out how to easily split the cost of a meal when the bill arrived at the table. We are seeing new innovations in alternative credit scoring, immediate access to earned wages, digital wallets, small-ticket loans, cold wallets, conditional cash transfer programs, alternative insurance underwriting, crypto and blockchain, payment gateways, and much more.

How will banks find these new products and services? I talked about how their individual digital transformations will lead to massive data exhaust and it is in this data exhaust that they will find many of the solutions needed to thrive in the years to come. They will find new products to offer and new ways to serve their existing customers.

Here is just one example I shared with them. Today we onboard bank customers by forcing them to pick an account plan before they do anything else. You often cannot become a customer of a bank without opting into a specific plan. But many tech companies onboard customers in a very different way. They do not make us decide how we want to use the platform before we have even had a chance to use the service being offered. Instead, they bring us on board, let us try things out, and then let us decide what type of customer we want to be based on how we use the technology. Imagine if banks onboarded customers in the quickest, easiest way possible, and then let the user’s behavior tell us what type of customer they are or what type of account they should have. Imagine if we let the data exhaust tell us how to think about them as a customer only after we have made them a customer.

I also talked about how tech is changing our relationship with capital. For example, what if autonomous vehicles were to become the bank branch of the future – showing up in different neighborhoods throughout the week just like your favorite food truck does today. We think about capital as a fixed resource, but in the future, it does not have to be. Likewise, autonomous vehicles do not have to play the same narrow role traditional vehicles play in moving people between two points. They can morph into a myriad of forms that impact a tremendous number of industries.

Many banks are embracing innovation. They are partnering with fintech companies. They are replacing ATMs with ITMs (interactive teller machines). This is extending branch hours and helping customers to perform even more tasks digitally. Banks like JP Morgan and Standard Chartered have started opening branches in the metaverse. Crypto has also moved front and center for many community banks that plan to offer capabilities in the coming years.

Community banks, like many businesses, are tech companies now. They are software companies. They are data-consuming AI companies. And technology will help them bridge their rich history with their bright future.

By now you are probably familiar with non-fungible tokens (NFTs) and the many ways in which creators are using them to generate value. While NFTs are being increasingly used by artists and musicians, they can also be used strategically by offline businesses.  

Here are three ways NFTs could augment your customer engagement strategies.

1.       NFTs Create Communities

Organizations are using NFTs to provide access to private Discord groups, VIP fan experiences, exclusive meet-and-greets, and special merchandise all with the aim of developing devoted fan communities. Miami super club E11EVEN plans to host private in-person get-togethers for holders of its Captain Club NFTs. A new movie production company is even using NFTs to create a community of super fans who will be able to provide feedback on content produced by the studio.  

2.       NFTs Grant Exclusive Access

A number of brands are offering limited edition items and exclusive access only available to NFTs holders. Think of NFTs as the next member’s only initiative. Digital fashion brand Cult&Rain’s first NFT can be redeemed for an identical pair of luxury sneakers. Gary Vee’s VeeFriends NFTs grant access to its VeeCon conference for each of the next three years. And Buffalo Trace Distillery minted NFTs that correspond to a limited release of its O.F.C. Bourbon Whiskey, distilled in 1982. The holders of the NFT can redeem for a physical bottle of the bourbon and when they do so they also unlock a private VIP tour experience at the distillery.   

3.       NFTs Can Pay “Dividends” that Reinforce Engagement

NFTs can create value into perpetuity. If you buy a collectible in the physical world, the value of that item changes as the tastes and preferences of potential buyers change. But the underlying item does not change. With digital assets like NFTs, the original creator can assign additional value or utility to the NFTs they have created. In this way, you can use NFTs to pay “dividends” to your biggest fans. For example, the Gift Goat token is one of the NFTs created by VeeFriends. The NFT provides admission to the VeeCon conference in 2022, 2023, and 2024, but it also includes a series of physical gifts that are mailed to token holders.

While NFTs have initially occupied the digital world, they are increasingly influencing what takes place offline. Executives should start to take note.

Man U recently announced it is partnering with Sony to build the first professional football stadium in the metaverse. The Atlanta Braves became the first MLB team to announce it was also joining the metaverse. A plethora of interesting consumer-facing opportunities including ultimately bypassing traditional media distribution networks to deliver live matches, game highlights, and other content directly to the fanbase. Remember, the metaverse won’t be exclusively accessible through VR, but will also be accessible through other devices like laptops and smartphones.

In the process of digital mapping, their stadium experiences to develop the virtual reality replica appearing in the metaverse, Man U and the Atlanta Braves are creating a digital twin which opens up other opportunities for their respective organizations. There is tremendous focus on the consumer-facing applications of the metaverse, but in the process of building out the metaverse, organizations are creating digital twins of their physical assets. The enterprise applications could far surpass the consumer-facing ones.

A basic tenet of economics suggests that when the supply of labor shifts down or the demand for labor shifts up, it creates a shortage of workers at the current wage rate. If this imbalance persists, eventually wages rise, attracting workers into the workforce, resulting in a new equilibrium level of employment with a corresponding higher wage.

While wages have been rising, and are expected to continue to rise in 2022, worker shortages remain. Company executives often tell me they can’t seem to recruit workers even when offering higher wages. There are a lot of theories about why higher wages are not seemingly working to attract desperately needed workers.

The fear of COVID exposure likely kept some workers out of the labor force, at least early in the pandemic. Many executives have felt that strong unemployment benefits in the wake of the pandemic lowered the desire, and perhaps the necessity, to work. In the U.S. we have seen a sharp drop in the number of daycare workers, which has likely led to a reduction in childcare services and is keeping some workers out of the labor force. Some workers might be unwilling to return to the office for other reasons.

New research from Julie Hotchkiss suggests that higher wages may not be enough to sufficiently attract certain segments of the labor force. From her paper:

“labor supply decisions of both Generation X (those born from 1965 to 1980) and the millennial generation (born from 1981 to 1996) are less responsive to wage increases than decisions made by baby boomers at the same age…compared to baby boomers, millennials’ labor force participation decisions are only about three-quarters as responsive to wage changes and participation decisions by members of Generation X are only about half as responsive.

So what does this mean for employers? You will likely need to more aggressively offer non-monetary benefits and incentives. This is especially true for jobs requiring less education. You likely can’t avoid offering higher wages, but you also need to sweeten your offers with greater nonwage incentives to attract and retain the workers you need.