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The future builders

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The article analyses the approach of leaders who have successfully built their own future during uncertain times.

The article analyses the approach of leaders who have successfully built their own future during uncertain times.

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The future builders The future builders Document Transcript

  •    THE  FUTUREBUILDERS   by  Norman  Chorn  “The  future  is  not  what  it  used  to  be”  WHY  FUTUREBUILDING?  I  have  been  reflecting  about  my  experiences  with  clients  preparing  and  developing  their  strategic  plans.  In  the  last  few  years,  this  exercise  has  become  increasingly  complex  and  challenging.  In  part,  this  is  due  to  markets  having  become  so  unpredictable  and  volatile.  But  it  is  also  been  hampered  by  the  growing  inability  of  conventional  planning  approaches  to  cope  with  discontinuity  and  change.  I  have  watched  many  organisations  struggle  with  typical  forecast-­‐based  planning  approaches.  Their  plans  are  based  on  sets  of  assumptions  that  predict  factors  such  as  market  size,  interest  rates  and  the  like.  Often  these  assumptions  become  invalid  soon  after  the  start  of  the  planning  period,  and  the  plan  loses  much  of  its  credibility.  Leaders  often  give  up  on  the  planning  process  in  these  situations,  declaring  planning  not  worthwhile  (or  even  required)  in  these  rapidly  changing  environments.  But  I  have  also  witnessed  another  group  of  leaders  who  engage  in  quite  a  different  form  of  planning  for  the  future.  Rather  than  evading  the  uncertainty  by  making  predictions  about  the  future,  they  embrace  the  uncertainty  and  use  it  to  drive  their  planning  processes.  These  leaders  have  recognized  that  different  planning  approaches  are  required  when  working  in  unpredictable  environments.  And  they  have  used  these  approaches  to  build  purposeful  futures  for  their  organisations.  I  call  them  the  FutureBuilders.  These  are  some  of  the  principles  they  espouse.      LEGACY  ASSETS  CAN  BECOME  A   brands  are  vulnerable.  Organisations  MAJOR  COMPETITIVE   such  as  Encyclopaedia  Britannica,  DISADVANTAGE   Ansett  Airlines  and  Rover  cars  are   evidence  that  when  the  rules  of  the  In  these  “new  normal”1  conditions,  it   market  change,  everyone  goes  back  to  seems  as  if  even  the  most  venerable     the  start.  Previous  track  records  don’t   count!                                                                                                                                   In  addition,  as  the  environment  shifts,  1  A  term  coined  to  describe  the  fact  that   your  most  powerful  competitive  discontinuity  and  change  should  now  be  considered  as  “normal”  operating  conditions.   weapons  can  become  millstones   STRATEGY. ORGANISATION. LEADERSHIP 1  
  •    around  your  neck.  Those  very  assets,   These  leaders  will  seek  to  develop  processes  or  competencies  that  have   strategy  by  influencing  and  shaping  provided  you  with  competitive   the  direction  of  the  conversation.  This  advantage  in  the  past,  can  hold  you   can  be  done  by  inputting  key  back  by  narrowing  your  range  of   information  and  concepts  at  various  strategic  options.  Examples  include   points.  Although  many  people  are  the  integrated  steel  producers’   involved  in  the  conversation  to  inability  to  compete  with  the  nimble   develop  strategy,  FutureBuilders  and  flexible  mini-­‐mills,  or  the  inability   accept  a  significant  responsibility  to  of  the  traditionally  full-­‐service  airlines   shape  and  direct  it.  to  compete  effectively  with  the  highly  focused  niche  specialists  such  as   THE  FUTURE  IS  A  SET  OF  Easyjet  and  South-­‐West  Airlines.   POSSIBILITIES  THAT  CAN  BE   SHAPED  AND  INFLUENCED  BY  CULTURE  IS  OFTEN  BLINDING   PURPOSEFUL  BEHAVIOUR  AND   ACTIONS  Encyclopaedia  Britannica  found  that  their  previous  success  formula   FutureBuilders  understand  that  the  (printing  high  quality  volumes  and   future  does  not  exist  a  priori.  The  distributing  via  a  direct  sales  force)   ongoing  cycle  of  discovery    choice    was  so  deeply  etched  into  the  culture   action  means  that  individuals  and  of  their  organisation,  that   organisations  influence  the  shape  of  management  was  unable  to  see   their  environment  by  the  very  choices  alternative  pathways  to  success.  Even   and  actions  they  take.  with  the  best  consulting  firms  working    alongside  them,  these  decision-­‐  makers  could  not  accept  the  fact  that   discovery  their  culture  was  giving  them  selective    perception,  and  there  was  no  future  in    their  current  strategy!     acWon   choice    STRATEGY  IS  A  CONVERSATION      WITHIN  THE  ORGANISATION     FUTUREBUILDERS  DO  NOT  FutureBuilders  recognise  that  strategy   ATTEMPT  TO  PREDICT  THE  evolves  in  a  continuous  process  as   FUTURE  managers  and  staff  interact,  share  ideas  and  make  decisions.  They   FutureBuilders  don’t  attempt  to  describe  it  as  an  ongoing   predict  the  future.  Instead,  they  work  “conversation”  within  their   on  developing  a  series  of  alternative  organisation.   and  plausible  futures,  and  then   examine  the  organisation’s  position   STRATEGY. ORGANISATION. LEADERSHIP 2  
  •    within  each  of  these  alternatives.  These  so-­‐called  scenarios  are  not  just   Develop  future  scenarios  pie-­‐in-­‐the-­‐sky  science  fiction  or   Analyse  industry  fantasy,  but  rather  a  series  of  plausible   trends,  change  drivers   Developed  by   Pathfinder  Group   and  uncertainWes  stories  about  the  different  paths  along  which  the  future  is  likely  to  unfold.  NO  MONARCHY  HAS  EVER  FOMENTED  ITS  OWN   Conduct  strategy  workshop(s)  OVERTHROW   Develop  winning   Developed  by   strategies  for  each   scenario   ExecuWve  Team  My  experience  is  that  leadership  teams  usually  find  it  difficult  to  envisage  bold  and  adventurous  futures,  particularly  those  that  might  threaten  their  vested  interests  and   AcWon  plan  for  capabiliWes  privileged  positions.  Envisaging  the   Develop  acWon  plan  to   Devloped  by  Exec  uWve   develop  future   and  management  future  is  therefore  best  left  to  bright,   capabiliWes      younger  people  that  have  creative  and  contrary  views  about  the  way  the    industry  will  unfold  into  the  future.   KEY  CHARACTERISTICS  OF  THE  Leaders  are  best  making  the  strategic   FUTUREBUILDER  choices  about  a  particular  strategy  or  course  of  action.  FutureBuilders  will   From  my  research  and  observation  of  often  separate  the  process  of   FutureBuilders  at  work,  I  have  isolated  searching  for  new  opportunities  from   four  key  characteristics  that  seem  to  the  allocation  of  resources  and   describe  the  way  they  work.  traditional  decision-­‐making.   A  GROWTH  AND  LEARNING  They  generally  mobilize  younger,   MINDSET  often  more  junior  staff  to  develop  these  alternative  scenarios  as  part  of   FutureBuilders  are  characterised  by  a  their  planning  process.  These   growth  and  learning  mindset2  that  Pathfinder  Groups  are  then  directly   sets  up  a  virtuous  cycle.  The  key  sponsored  by  the  leadership  team  and   elements  of  that  cycle  are:  afforded  some  protection  from  the  prevailing  culture.                                                                                                                                  THE  FUTUREBUILDING  PROCESS   2  Based  on  the  ideas  of  Carr,  Liedtka,  Rosen  Their  process  can  be  summarized  by   and  Wittbank,  in  “In  search  of  Growth   Leaders”,  MIT  Sloan  Management  Review,  July  the  following  three  steps:   2008.   STRATEGY. ORGANISATION. LEADERSHIP 3  
  •    • Treating  every  day  as  a  school  day:   So,  instead  of  simply  describing  the   A  belief  that  life  is  a  journey  of   market  by  way  of  standard   learning  and  growth   demographics  and  statistics,  they  • Seeking  new  experiences  to  create   focus  on  identifying  target  groups  who   learning  opportunities:  One  can   are  characterised  by  particular   only  learn  by  being  exposed  to   lifestyles,  product  usage  patterns  or   different  experiences     needs.  They  use  research  approaches  • Accepting  the  uncertainty  that   where  they  can  study  and  understand   accompanies  these  new   the  real  life  experiences  of   experiences:  In  order  to  learn   customers3.  Approaches  such  as  these   something  new,  the  experience   enable  FutureBuilders  to  understand   has  to  be  different  and  therefore   the  needs  of  target  customers  as  real   uncertain   people  –  thereby  promoting  value  • Learning  from  new  experiences  to   propositions  that  address  these   broaden  their  repertoire:  The   customer  needs  more  closely.   enhanced  repertoire  increases   their  capability  and  overall   AVOID  BIG  RISKY  BETS   effectiveness  as  a  leader.   FutureBuilders  are  not  avid  risk   seekers.  They  prefer  to  place  small   View  life  as   learning   bets  fairly  quickly  and  then  learn  from   journey   the  outcomes.  They  move  on  quickly   and  recognise  that  any  failures  from   Broaden   your   Seek  new   experiences   these  small  experiments  are  the  price   repertoire   for  learning  and  testing  propositions.   It’s  the  performance  of  the  overall   Embrace  the   uncertainty   portfolio  of  experiments  that  counts  –     not  the  outcome  of  an  individual  bet.  PREFER  PEOPLE  OVER  DATA   As  a  consequence,  FutureBuilders  are   fairly  conservative  and  tend  to  shy  FutureBuilders  recognise  that  the   away  from  making  large  and  risky  traditional  emphasis  on  “customer-­‐ “bet-­‐the-­‐business”  decisions.    centricity”  can  often  obscure  the  real   Allied  to  this  is  the  fact  that  people  who  make  up  the  customer   FutureBuilders  rarely  describe  base.  They  recognise  the  importance   themselves  as  perfectionists.  In  a  way,  of  focusing  on  people  and  their  experiences  rather  than  simply  the                                                                                                                                  data  that  measures  market  size  and   3  Ethnographic  research  focuses  on  intimately  relevant  demographics.   examining  the  daily  life  of  customers  and   consumers.  This  is  often  done  by  spending   time  and  developing  personal  relationships   with  them.   STRATEGY. ORGANISATION. LEADERSHIP 4  
  •    perfectionism  may  be  interpreted  as  a   WHAT  DOES  THIS  ALL  MEAN?  fear  of  having  one’s  work  judged  and  receiving  feedback  –  hence  the  need   It  is  clear  that  the  traditional  to  continually  avoid  releasing  it.  In   approaches  to  strategic  planning  are  addition,  the  notion  of  “completing   not  coping  well  with  the  post  GFC  something  to  perfection”  connotes   conditions.  Making  planning  that  there  is  no  more  to  be  achieved   assumptions  by  predicting  future  or  learned.  FutureBuilders  favour  the   market  conditions  is  too  risky  in  these  view  that  preparing  for  the  future  is  an   circumstances.  But  we  can  influence  ongoing  dynamism  –  something  that   and  shape  our  future  by  using  the  keeps  moving  as  they  learn  and   principles  adopted  by  FutureBuilders.    develop  their  capabilities  further.   Developing  alternative  future  RATIONAL  OPTIMISTS   scenarios  is  an  important  element  in   building  a  preferred  future  for  our  FutureBuilders  are  rational  optimists  -­‐   organisation.  But,  this  approach  of  they  believe  that  they  can  and  will   FutureBuilding  requires  a  particular  make  progress  by  pursing  a  bold,  but   approach  from  leaders.  They  need  to  sensible,  approach.  While  they  hold  an   adopt  a  growth  and  learning  mindset;  optimistic  view  of  life,  they  recognise   look  behind  the  data  to  understand  that  optimism  is  NOT  necessarily  the   the  people  in  their  markets  and  opposite  of  pessimism.  It  is  not  the   organisations;  avoid  the  risky  “bet-­‐idealistic  belief  (or  hope)  that  things   the-­‐business”  decisions  as  they  seek  will  get  better  simply  because  they   competitive  advantage;  and  want  them  to.   understand  the  whole  system  of  which   they  are  part.  Instead,  rational  optimism  is  a  balanced  understanding  of  the  whole   In  these  practices,  FutureBuilding  system  of  which  they  are  part.  It  is   offers  useful  pointers  for  planning  recognition  of  both  strength  and   effectively  in  an  uncertain  and  weakness;  an  interest  in  building  the   challenging  world.  best  as  well  as  repairing  the  worst;   About  the  author  and  a  concern  for  finding  self   Dr  Norman  Chorn  is  a  strategy  and  organisation  fulfilment  as  well  as  serving  the   development  practitioner  with  over  20  years  experience   in  Australia,  UK,  New  Zealand  and  South  Africa.  His  work  community.  Rational  optimists  are   is  focused  on  strategies  for  growth  and  corporate  realists,  but  their  defining  point  of   resilience.     The  firm  works  with  businesses  and  organisations  that  are  difference  is  that  they  don’t  give  up  on   increasingly  challenged  by  the  accelerating  pace  of  themselves.   change  and  globalisation.  Our  partners  provide  fresh   advice  and  insights  on  markets,  strategy,  supply-­‐chain,   organisation  design  and  leadership.       Norman.Chorn@centstrat.com   www.centstrat.com     STRATEGY. ORGANISATION. LEADERSHIP 5