Horizon Scanning-Mapping the Future
The question which Covid19 has raised is not whether our sales will rise or fall next year or whether the new product launch met its objectives or not but whether our company will survive into the next decade or not. Covid19 pandemic has exposed just how swiftly major and fundamental facts of our times can alter. Have you tried looking around yourself?
In the disruption caused by major VUCA event such as Covid19, it is calm to drop sight of your long-term survival strategies. Short-term objectives may go for a toss, but long-term changes remain largely intact. Although, it sounds paradoxical but long-term changes are more certain than short-term ones. Take the case of EVs, the short-term market may be in chaos, disabling one in being not be able to visualise or forecast for subsequent years or next but looking at a 10-year horizon, we can say that EV will replace 30-40 percent of the internal combustion engine vehicles and this projection has not changed during Covid19 pandemic. Just keep an eye on the merging patterns.
Survival in the short-term is proportional to the strength of the balance sheet and cash-flow. As we have witnessed in the Covid19 pandemic, despite revenue drying, certain fixed costs continued to drain cash. Companies which have low fixed costs and low debts have a better chance to continue post covid than otherwise.
However, long-term sustainability of any organisation depends upon the renewal strategies, that is in probing, what business will we be in the next decade. This necessitates a revolution in the mindset, culture, and tools to be deployed. Have you checked the industry vertical you are associated with?
Nokia, at one time, a world leader in mobile phones missed reading the technological disruption initiated by smartphones and is now reduced to a marginal player in this high-value high-margin segment with world rank no.13. It is surviving only because of its networking & telecom software business. Steve Ballmer, then CEO of Microsoft, the company which latter acquired Nokia’s mobile busines, laughed and dismissed the launch of Apple’s iPhone as a flop show. Microsoft launched different products such as Surface and Lumia to compete with iPhone and android but failed. Looking back in a Bloomberg interview on the 10th anniversary of iPhone, Ballmer admitted that Microsoft got into the mobile device market too late and smartphone strained his relationship with Bill Gates.
Microsoft is not the solitary big company missing the bus to the future. Another big name to fall was General Electric. In 2018, General Electric, the last original member of the Dow Jones industrial average, was dropped from the blue-chip index. Though it may not be prudent to predict the future but certainly it is likely to view the range of options, the contours of which are visible at a distant horizon and then subsequently, dynamically calibrate a response.
A recent article in Harvard Business Review by Martin Reeves and Kevin Whitaker reasoned that “Resilience deals with the unknown, changeable, unpredictable, and improbable. It is across the industry. It requires a multi-timescale perspective: forgoing a certain amount of efficiency or performance today for the sake of more-sustained performance in the future. In the short run, a crisis many appear tactical and operational, but on longer timescales, new needs and the incapacitation of competitors create opportunities. Crises can also be the best pretext for accelerating long-term transformational change. One of the key roles for leaders is therefore to shift an organization’s time horizons outward.” Start thinking now.
Fiskars, the 350 years old world famous Finnish company for its scissors were not afraid to forge into new territory. To accomplish that, Fiskars deploys a 10-year horizon, which is focused on disruption and change and to discover new opportunities outside current businesses. It uses tools like ‘The Futures Radar’ to make sense of signals and trends and to link them to foresight deliverables. Trends framework is composed of signals, trends and megatrends that interact with each other.
In 1876, Alexander Graham Bell offered to sell his patent on telephone to Western Union, which ruled the telegraphic industry in the US but they dismissed it “We are not interested in a scientific toy”, just as Steve Ballmer did not see the advent of smartphones. If you are stuck in the present, one can never visualise ‘what is just round the corner?’. The future often is at the junction of technology and the ongoing social change. To enable a better understanding, one must cast the individual’s net wider.
This requires horizon scanning in several inter-related areas. Twenty years back, environmental issues never entered the Boardroom. Today. It is No.1 constraint of doing business. Therefore, organisations must scan the horizon, for at least a decade in advance in political, economic, social, technological, legal and ethics sectors, what is commonly known as PESTLE analysis.
This foresight ability does not come automatically to organisations which are largely designed for stable business environment. It requires a leadership, which develops an “Explorer’s Mindset” and fosters a culture that encourages curiosity, inquiry and candour dialogue between various levels of the organisation to evaluate, challenge and understand the future. Such a culture is brought through a mindset which values learning over experience.
Only in such an organizational environment, one can launch horizon scanning tools which are essential to look at the distant future, where the new businesses germinate.
To start with, the organisation should identify maverick employees, especially in the middle management which, according to some studies constitute about 5% of the workforce. Mavericks don’t respect authority, also do not accept no as an answer. They are like rebels within the placid existence of an organisation, always ready to topple the status quo. No doubt, most bosses shun them and hope they go away, if not to another organisation, at least to another department. Mediocre leaders ensure that the people they hire will not rock the boat and easy to manage. Smart leaders do hire mavericks. These mavericks are the ones offering innovative ideas into the organisation blood flow and bring insights to the attention of senior leaders. As the group matures into a cohesive team, it can start the development of a horizon radar, a foresight tool to identify opportunities & threats emanating from the distant future.
As a society we’re focused on immediate problems and in so doing we’ve lost the skill and ability to think for the long term. Initiate Horizon scanning, if not yet started.
