The Future Imperative
The future is here, it’s just not evenly distributed.
Advances in software, hardware and material sciences coupled with economic, demographic and cultural changes are reshaping the operating environment and opportunity set for every business on the planet. In 2018 venture capitalists deployed 255 billion dollars betting on a different future. Toward 2030 baby boomers will transfer ~25 trillion dollars to Millennial’s and Gen X, upending traditional consumption and investment patterns as a result.
As an executive, half your job is figuring out how to think about and prepare your organization for tomorrow. So, how do you position your company to exploit change rather than being sidelined by it? Well, as Alan Kay once remarked “the best way to predict the future is to create it”.
Start by stepping back to think through the macro and the micro. Which macro forces could change or even reconfigure the structure of your industry? Equally important, ask what is likely to stay the same. In times of crisis and change, we tend to overestimate the speed and magnitude of change in fundamentals such as consumer needs and desires. More often, what changes is competitor capabilities and business models, and their ability to fulfill well known needs effectively. Therefore, take a deep look at your competition. Where are they coming from and which changes would benefit them? Are they motivated to solidify the current dynamics, or do they need to redefine the basis of competition to win?
Now you should be in position to identify and frame your most critical strategic issues. Next, generate different ways of addressing the identified threats and opportunities. Thinking through different solutions to an issue seems obvious, but in reality we have to make a concerted and conscious effort to avoid jumping straight to a conclusion. A whole host of cognitive biases are holding us back from thinking strategically, but we can design the process to circumvent these mental and social traps.
Finally, and crucially, take the preconceived attitudes and guesswork out of choosing between the strategic alternatives. You do this by testing the critical assumptions behind these in real world settings, and letting the biggest skeptics define the standard of proof. Conducting these tests will get you in position to make the critical strategy and business model choices based on specific and relevant data instead of general points of view and high-level data.
Now, having carefully considered your options and tested your potential choices, you can make the strategy decisions and get to work building the future of your company, feeling confident that it’s a company fit for the future.