THE FUTURE IMPERATIVE

The future is already 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. Every year, venture capitalists deploy hundreds of millions of dollars betting on a different future, and toward 2030 baby boomers will transfer ~50 trillion dollars to their Millennial and Gen Z children, upending traditional consumption and investment patterns as a result.

As an executive, half your job is figuring out how to think about, invest in, and prepare your organization for tomorrow. So, how do you position your company to exploit change rather than being sidelined by it? In our view, computer scientist Alan Kay said it best: “the best way to predict the future is to create it”.

Start by stepping back to think through the macro. Which large forces could change or even reconfigure the structure of your industry? What is likely to stay the same? In times of macro change, we tend to overestimate the speed and magnitude of change in micro fundamentals such as consumer needs and desires. More often, what changes is competitor capabilities and business models, and their ability to fulfill known needs in new and smarter ways. Therefore, take a deep look at your direct and adjacent competition. Where are they coming from and which changes would benefit them? Are they motivated to solidify the current market 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 these opportunities and threats. Thinking through different solutions to these issues, making a concerted and conscious effort to avoid jumping straight to conclusions. 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 preconceived attitudes and guesswork out of choosing between the strategic alternatives. You do this by testing the critical assumptions in real world settings, and letting the biggest skeptics define the standard of proof necessary to validate assumptions. Conducting these tests will get you in position to make the critical strategy and business model choices based on clear and relevant data instead of general points of view and high-level data.

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.