Businesses should stop looking backwards
Companies need a new approach to strategic planning to pursue growth in challenging times
To succeed in the 21st Century, successful enterprises will be nimble: tracking the major trends reshaping their markets; adapting to face complex operating environments; and being flexible in the face of uncertainty.
They will think more broadly about innovation too: pushing beyond incremental improvements to product or positioning, while also taking a more fundamental look at the business models their operations are based on.
Reinventing business models certainly does not come easily — but without it, things will get impossibly hard. That’s the bad news.
But the good news is that in a global marketplace where the rules are being rewritten, savvy companies have a shot at even greater success. The race will be won not by the biggest, the oldest or the most esteemed, but by those who can take charge in a rapidly and radically changing world.
All too often, big businesses are told they must act like start-ups to succeed; but they simply aren’t set up like that. And there’s no reason why they can’t radically innovate just as well, if not better, than start-ups.
So here’s some advice which can be implemented by companies of any size. Don’t plan future actions by looking backwards; if you do that you’re basing future decisions on the success or failure of your own past behaviours.
The environment is changing all the time – so while there are valuable lessons to learn from the past, you also need to be looking at the present. What are the current trends, and how are seemingly disparate trends creating new markets?
We need to learn new ways of looking at what’s happening now and what it means for the future – both in the short and long term. It’s fine to think about your plans for 10 years down the line – but to survive that long, you also have to be thinking about next year. You have to change what you’re doing today.
Just as Design Thinking has transformed creative strategy and the way that we approach product and service design, we’ve named our approach to unlocking complex problems in an increasingly uncertain world “Futures Thinking”.
And there are the five basic principles involved:
1. Switch perspectives
Look from the outside in to see the bigger picture. Take Brexit: most business leaders didn’t expect the UK to vote to leave the EU. Why? Because most business leaders don’t mix with the kind of people who voted Leave. Top executives spend their lives in high level meetings and in First Class lounges waiting for flights to their next meeting, not in pubs or on the High Street.
2. Look further
Take a longer view of time to see deeper patterns of change. We’re focussed on the past. We ask job candidates: “where do you see yourself next year, in five years, in 10 years?” When was the last time we asked ourselves where we see our company in the future?
3. Anticipate values
Try and understand how people’s values are changing. We all live in a bubble of values and assumptions and it’s difficult to examine these critically -- but we must if we are to understand change and adapt business plans accordingly. Think about just how society has changed in only 50 years. We see technological change clearly, but we’re slow to see changing social values.
4. See connections
Ask a tech person about the future and they’ll talk about AI. An economist will talk about interest rates. An ecologist will talk about climate change. They are all important; but you need to be able to connect them and see the bigger picture if you want to anticipate the future.
5. Predict surprises
In life and in business, some surprises should not be surprises. Take the craft beer phenomenon. Different strands came together to create the craft beer movement, and they were all visible 10 years ago – distrust in big brands, authenticity, localism, social media and the rise of the micro-entrepreneur, to name just a few – but the drinks industry saw them in isolation. It didn’t see the full picture. To avoid surprises, you have to be looking for them in the first place; you have to know where to look; and you have to want to see them.
The principles of Futures Thinking are explained in a short new book, Futures Thinking: Eggs, Elephants and How to Be Ready for Anything, which is available as a download from the Kantar Futures website