It would be a devastating mistake of executives to believe that their organizations are well prepared for what’s coming; that the shift of their current management thinking is just another phase of a cycle of looking outward and inward, or a natural evolution of industries.
The question of what will likely emerge is pointing to a radically different world in the next 5 years. Traditional strategy planning is a waste of time, and even a distraction. At the core is the dramatic impact that exponential progression is having on industries and the general lack of future thinking and strategic foresight – which is essential for preparing companies for these changes.
We don’t know how many current Fortune 500 companies will remain and how many on the list in 10 years. I am betting at least half will be replaced. Every weak signal suggests a radically transformative future that moves at a speed that most are unprepared for. There is no more “wait and see” – only “wait and then too late.” Every C-suite executive can see discontinuities happening everywhere; the world is seriously lacking talents that are equipped with the right skills (though not lacking well-educated graduates and technical managers). Industry boundaries are now blurred and disappearing every day.
On the product side, what we are designing is changing. New technologies support the creation of new forms of smarter products and experiences, and pressures on businesses and society are demanding the design of solutions to increasingly complex problems, both local and global in nature. Customers are no longer passive recipients of design; expectations are higher, and increased participation is often essential. You can’t be a defender; there is no room for defenders, and so everyone becomes an attacker.
Today, executives need to switch their view from the mirror and window, and look towards warning detectors in order to see what’s coming. This is where strategic foresight comes in. By truly analyzing future scenarios, we can internalize both the radical change ahead, and the pace of that change. The lens of our analysis would focus on where the world is heading, and our potential role in that world and how one can shape it. This analysis brings challenging questions into focus, such as how traditional structures are forced to change and how business design can enable success and viability in this vastly different future.
For decades, CEOs looked to historical data and to the financial markets to approve their strategies. This is no longer helpful; markets can be very wrong and technology is not the sole disruptive force driving industry transformation. Managerial imagination; data fluency and business creative practices are now shaping industries and blurring the boundaries of industries.
Competition has become a battle of imagination and humanization, as well as a battle of technology advancement, resource leverage, and the mobilization of people. The emerging ingredients require new investments in both people and practices. Resources are important, but great entrepreneurs and innovators understand that the key to winning is the ability to create new resources faster than their competitors can. We need to produce managers that can hold two opposite thoughts in their minds, and retain the function to think and act effectively; managers that can both think about the future and the past, and not be confused; managers that can think about speed and quality, without needing to pick just one; managers that can understand and speak technology, but are also fluent in design. The question is, where do you find those people?
Every company has three gaps:
1/ The strategic foresight gap
2/ The innovation talent gap
3/ The business design gap
In short, these are innovation gaps – not a lack of ideas. Ideas are so easy. Institutionalizing innovation is hard.
Image via flickr