May 19, 2023 - 183 views|
How future-ready businesses cover blind spots and anticipate change.
Deep into retirement, former British Prime Minister Harold Macmillan was reportedly asked what he’d found most challenging about leading Britain through the grim years of post-war reconstruction. “Events, dear boy, events,” was his famous reply.
Did he actually say it? Possibly not. Like many of the best quotations, Macmillan’s “events” quote is somewhat short on corroborating first-hand ear-witnesses.
Yet it lives on in his legend, not just for capturing the pragmatism, wit and unflappability of “Supermac” (as he was known) but also because it speaks to a deep and often-overlooked truth about human affairs that has never been more true than it is today in the Turbulent ‘20s: Big things are going to happen, and you don’t know what they are.
For business leaders, today’s uncharted waters are particularly choppy, hard to navigate and infested with Macmillan’s pesky events. Two massive technological upheavals—the rapid digitization of everything and a deep science revolution (artificial intelligence, quantum, biotech, etc.)—are in full swing, sweeping in a profound shift in how value chains, industries, companies and people work.
The pace of change has never been faster, and as it accelerates (gen AI, anyone?), there’s a natural impulse to adopt a defensive crouch, to react to each unforeseeable event only after it unforeseeably happens. Because, well, what’s the alternative?
The alternative is to do what successful firms do: Treat rapid change as an opportunity for rapid growth, using predictive insights and strategic foresight to see what’s coming next. To be, in a hyphenated word, future-ready. Does this require the gift of prophecy? The strange power long sought by alchemists, wizards and holy men to peek ahead a few pages in the Book of Time? Yes and no.
Some market signals, after all, can be read well in advance. The current delay in electric vehicles, for example, is a harbinger of the brewing geo-political chip war between China and the US. This is a fight for the world's most valuable technology. Microchips are in virtually everything, from missiles to microwaves, and from smartphones to the stock market.
According to author Chis Miller, China now spends more money each year importing chips than it spends importing oil, and is investing billions into a chip-building initiative to catch up with the US. If China succeeds, the US could lose the military and economic dominance that—for most post-war analysts (very much including Harold Macmillan)—underpins the world order and the relative stability of global trade.
How does a future-ready business prepare for this kind of real but long-range eventuality? It might be dull, but it means attending to such basic maintenance as: updating and stress-testing business continuity management processes; prioritizing critical processes; revisiting and rescheduling production plans; and constantly working with suppliers to get ahead and stay ahead of global events. It means constantly monitoring, scanning, watching, reading, meeting, discussing and gaming out how a threat like this could change how your company creates value, and how it might, in fact, present opportunities.
But what about those so-called “black swan” events that arrive suddenly, and seemingly out of nowhere? Could anyone have predicted, for instance, that world shipping could effectively be shut down overnight by a tanker getting jammed sideways in the Suez Canal?
The threat of a global pandemic was relatively well-publicized for decades before 2020, but did anyone foresee the Covid pandemic’s second-order impact on supply chains? Who knew that our Western healthcare systems relied heavily on Chinese manufacturers for medical supplies? Or how Vladimir Putin’s long-threatened invasion of Ukraine would impact energy costs across Western Europe?
Doubtless, some will claim they did, indeed, see these global calamities, and their ripple effects, coming a mile off. But what future-ready business execs understand is that you don’t need to know what’s coming to prepare for what’s coming—and that the latter, for business purposes, is what really matters.
Increasingly, for instance, our economies and societies hang by literal threads, with internet traffic passing through a tenuous collection of undersea cables. If you have detailed plans in place for how your business would respond if those cables were ever cut, then you can skip the impossible task of trying to predict if they’ll be severed in an attack by a rogue state or by a distracted Norwegian fisherman trawling for herring in the North Sea. True future-readiness is as much about understanding how your business operates now as it is about predicting the future.
We’ll examine other aspects of future-ready business (platform strategies, ecosystem plays and much, much more) in the rest of this series. But—SPOILER ALERT—my own take is that the firms who capitalize most successfully on periods of turbulence and rapid change are the ones that deploy operational strategies emanating from a strong tech foundation.
Why? Because it’s also especially true in turbulent times that “knowledge is power”—a quote attributed to just about everyone except Harold Macmillan. Only we generally don’t call it “knowledge” anymore. We call it “data.”
You can check out the future-ready business research project we put together with Economist Impact and assess your business's future-ready strategies with our benchmark.