In: Categories » Business » Management » Strategy Innovation Is Managing Your Business Toward the Future
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Organizations that have found it difficult to focus on managing the future business provide a range of excuses, including:
Corporate Myopia There are some companies that are so engrossed in managing today’s business that they claim they cannot find the time or energy to think about tomorrow. We recently asked the senior management team of a billion-dollar corporation to speculate on the com- pany’s future, and on which direction it might take to identify new business opportunities. It was clear from our interviews that only two people on the team had spent any time thinking about the company’s future beyond their current one-year planning period. This is probably not unusual. Especially in light of the downsizing and the relentless pressure to make the quarterly numbers in many organizations, the urgency of today’s business supersedes the importance of tomorrow’s business. Industry Turbulence Other companies, particularly those involved with fast-changing industries such as communications and technology, claim that attempts to understand the future are fruitless, given the chaos and unpredictability they see in their markets. With technologies, products, and pricing changing so rapidly, they maintain that it is impossible to speculate on where those markets might be in a threeto- five-year time frame. As a result, many of these companies take a reactive approach to the future, preferring to make decisions once market dynamics are clearer. Future Incompetence Finally, we have also run into companies that know it is important to understand the future and want to do it, but they do not know how to go about doing it. Their typical response is to try to find someone who ‘‘really understands the future,’’ who can advise them on what to do about it. They want the answer delivered to them by an enlightened outsider. The search for this person is rarely ‘‘prophet-able.’’ Futurists vary significantly in the assumptions they make and the factors they consider. None have the answer. As a result of this lack of attention, the future is an unknown, mysterious place for many companies. The mystery even leads to some myths about the future, which can actually discourage its exploration. For example, many people see how sudden changes can have an impact on a market. Believing that these changes could not have been predicted, they assume that all ‘‘forecasts’’ of the future are too tenuous to be of value. Therefore, they do not bother to explore the possibilities of the future. Assumptions About the FutureStrategy innovation can be a powerful means of managing your business toward the future. However, the effective pursuit of strategy innovation requires a few basic assumptions about the future. 1. The future does not yet exist and can be created. There are some people who feel that the future has already somehow been determined and will be revealed to us as it arrives. For them, the future is like an actor, with lines carefully rehearsed, waiting backstage for the right moment to enter the scene. Those who feel this way tend to be very reactive in their actions, for they fear that they cannot control the future. They will take no action until the future arrives. Then, they will ‘‘see what the future holds’’ and respond to it. Perhaps they feel the future is so powerful that it will nullify their actions, so why waste energy and resources now? By definition, the future does not exist and never will (once you experience tomorrow, it is no longer tomorrow, but today). Therefore, because the future is not a fait accompli, it can be influenced. Although maybe not a totally blank canvas, the future has considerable latitude for the artist to make an impact. Actions taken today by a company will result in some future effects in the marketplace. Therefore, proactive companies that take those actions today will have the greatest influence on the future. Reactive companies may survive into the future, but it is the proactive companies that will create that future. The proactive companies can, through their actions, ‘‘change the rules’’ in the marketplace, requiring the reactive companies to play the game a different way or perish. 2. The future cannot be precisely predicted, but its forces can be identified. If all trends were linear, constant, and noninteractive, it might be possible to predict the future. However, trends change, and so much of the future is shaped by events that cannot be predicted. We call these events discontinuities, things that shift the trend lines. They are inflection points that cause the future to be diverted from its previous path. The invention of the transistor, the evolution of the Vietnam War, and the development of the Internet were all discontinuities that had a significant impact on the future that we are now experiencing. The human genome project, the 9/11 terrorist attacks, and nanotechnology may have a similar impact on our children’s future. Although these elements cannot be predicted with any degree of certainty, the forces that led to them would have been quite easy to spot—by those who were searching for them. We were involved in a strategy innovation initiative in the mid-1990s where an industry expert shared a concern that terrorist attacks could render city water supplies vulnerable. Back then, that seemed a very unrealistic possibility. But those who were in positions of responsibility recognized the potential because they were dealing with such issues every day. It is a valuable exercise to identify existing forces that could have an impact on the future. It is not the same as predicting the future, but it is gaining market foresight that can help understand and shape the future. 3. The future is not one-size-fits-all, it is proprietary. When you see a cow standing in a field, what do you see? A farmer may see his chores. A toddler may see something scary. Ben & Jerry see a potential supplier. The point is that we all see things differently, based on our experiences and what is important to us (our values). The future is the same way. Companies perceive the future according to their past experiences, their core competencies, and their values and aspirations. Therefore, two companies from the same industry may see the same forces in the marketplace, but paint two totally different pictures of the future. The future you see is proprietary to you, based on your values. It cannot be delivered by a consultant, it must be discovered by you. With these basic assumptions about the future, you are now in a position to explore the future for strategic opportunities that exist there.
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