Qualities that will define the future’s best businesses
Uncertainty is already the defining word of 2020, but it could be here for a while yet.
Right now within the UK, we have the constant shifting of regional lockdown rules; the possibility of a National circuit breaker; the potential for a last minute scramble for the thinnest of Brexit deals, which could itself depend on what happens in the impending US election.
Add to those the unquantified impact of Covid plus Brexit on the economy in 2021; not to mention the different routes the government might take regarding the ever-spiralling national debt over the coming years; and on it goes – uncertainty, like turtles, “all the way down”.
None of these things is easy to predict, but their business impacts are potentially huge. And as uncomfortable as it may feel, there is absolutely no reason to assume that next year will be any more predictable. Or the year after, or the year after that.
So how do we plan? How do we make decisions now, that will enable our businesses to anticipate, adapt and grow in that future context?
As regards the future, there are two main tactics you need which I’ve covered before: essentially, analysing the data and pulling out the trends so you can bet on the most likely outcomes; and looking at the outlying scenarios to hedge those bigger bets.
The tools and techniques may come and go, but the principle remains, from investment banking to demand planning, in volatile markets, it is the capacity to continually re-evaluate the likely future, to prepare, hedge and build in the flexibility and resilience required, that makes the difference between winners and losers over the longer term.
And as businesses learn from their pandemic experience, more and more of them will start assigning that same level of importance to anticipating trends and scenarios, building flexibility into their strategies, and investing in their organisational resilience to cope with future shocks.
The point is, though, to really future-fit your business, this capacity to anticipate change will need to become habitual thinking, not just a once-in-a-blue-moon strategy process, but in all leadership conversations and decisions.
As will what naturally follows: investment in adaptability.
In 1899, FW Taylor’s famous “time and motion” studies kick-started a trend that has run through industrial management ever since. For the past 70 years, the dominant focus within most industries has been to build a lasting competitive advantage by becoming the biggest, most efficient, most productionised competitor on the block.
But when the market changes, and that big, efficient operation is no longer delivering what the market wants, it’s a very short road to the land of Blockbuster and Kodak. In an unpredictable, fast-changing world, adaptability will trump efficiency every time.
Also, there’s another, less visible downside to big-brand efficiency. There were no protestors in Parliament Square supporting RyanAir or Wetherspoons with their Covid challenges – as customers, we tolerate doing business with them because they’re big, cheap and efficient, but few people would go as far as to say they actually like them. And that matters now, far more than it did.
Even before the pandemic, the world was changing, and the most adaptable businesses had already started to see the new principles of market success.
They were there already, building whole communities of customers and advocates; creating networks of collaborators; crowdsourcing innovative and experimental ideas, and sometimes even raising investment capital from the same crowd.
From BrewDog, to SalesForce, to Lego, they grew by allowing themselves to be loved – by opening themselves up to the outside world, to share their passion and vision, to engage with and build an ecosystem of ideas, interaction and evangelism, not just around their products, but around their purpose, their passion and their shared values.
Because ultimately, in an unpredictable future, the one thing we can predict is the need for businesses to change, and those changes must inevitably include changing:
- From the five-yearly strategy process, to continually reappraising the future
- From the drive for ever more efficiency, to investing in the “inefficient” capacity to rapidly adapt and innovate in the face of change
- And from the closed, impersonal corporate culture of leadership past, to a passionate, personal, and public drive, to openly engage those armies of collaborators, supporters and evangelists who will speed them along their way
None of us has much of a choice about what kind of future the big, epoch-shaping events happening around us right now will usher in. But what we do have, is a big choice about how we prepare for it.
So, take this as a prompt to reflect on how much of your strategic effort should shift to future forecasting, building adaptability, accelerating innovation, and creating community. And if you want to talk it through, just drop me a line.