Managing the Future: Capitalizing on the Driving Forces of Change

In 2006, I was invited to conduct a masterclass for a group of Nokia high potential managers on the topic of driving growth through innovation. At the time, the company was enjoying double digit growth. The were rated the eighth most innovative company in the world by BusinessWeek magazine. And they were winning market share on every continent. What could possibly go wrong?

In a survey ahead of the event, I asked these standout managers to list any barriers to innovation they were seeing in their area of the company. Frankly, I half expected that they would leave the question blank. Barriers? At Nokia? You’ve got to be kidding. But their responses truly surprised me: “we are a risk-adverse culture,” was the most common barrier cited. “We suffer from large corporation syndrome,” was another. “Operational mindset dominates” topped the list.

During the workshop in Palo Alto, I posed a question to the group. “If I work for you and I have an idea, what do you want me to do with it?” One manager spoke up and said he’d urge me to just forget about it. “There’s so much bureaucracy in this company that you’ll just frustrate yourself.”

Years later, after witnessing Apple’s rise and Nokia’s spiraling fall from grace, I thought about that seminar. At the time I’d crossed it off as an anomaly: rapid growth covers a lot of sins, I remember muttering. But it became clear to me how those seemingly forgivable barriers to innovation had contributed to the company’s undoing. They had caused Nokia to be unable to respond to the game-changing iPhone.

To be sure, Nokia is not alone in bungling its response to a disruptive threat. Being blindsided by change is a real and present danger of leadership in what I call the Age of Acceleration. My 30-year career as a trend forecaster and innovation advisor, leads me to the conclusion that, in many cases, disruption can be avoided, if leadership is willing to look afresh at how it manages the future.

What I am referring to here is really a combination of leadership attitudes and attributes and culture. Managing the future is about the right mindset, a well-honed skillset, and a toolset that can be deployed. I assume the leaders I’m working with on any given assignment already have developed this aptitude to some extent, or they wouldn’t be in leadership positions. But given the exponential and explosive rates of today’s rapid change – social, technological, regulatory, demographic, and geopolitical – they may not be developed well enough. My conclusion is that most leaders did not study this basket of skills in school. Most of us can benefit from consciously working to improve our foresight abilities. To do so is to prepare yourself for the changes and challenges that lie ahead.

As the business world grows ever more complicated, the need to simplify grows as well. Simpler messaging, communications, processes becomes more important by the day. Which is why I recommend business leaders do three things with respect to managing the future:

• Look ahead of the curve – scan and monitor trends, master new technologies, intake information differently, up-skill and re-skill aggressively, and:
• Think ahead of the curve – see problems as opportunities, connect the dots, cogitating on threats and opportunities, and
• Act ahead of the curve – don’t just play catch up, be pro-active and experiment with new technologies, ways of doing business, and develop a systematic way of practicing innovation.

Let’s explore these three success principles one by one:

LOOKING AHEAD OF THE CURVE

Above all, tomorrow’s leader will need to be open-minded and curious. He or she will need to be a lifelong learner, interested in people as well as objects and abstractions, and he or she will be someone who asks lots of questions, and engages in stimulating activities outside the office that take the mind off work. Like a good detective, forward-thinking leaders seek to uncover the truth, loves data, and shifts easily from the micro to the macro, from the day-to-day to the longer term, and to the bigger context that trends reside within, and emerge from.

To improve at trend identification, start with your information diet and what you read and stimulate your thinking by, and what you watch on television and as you browse the internet. Start with how you approach walking through an airport, with how you monitor the chatter at cocktail parties or around the water cooler; and with how you take notes at the various conferences you attend each year.

Innovators like John Foley, CEO of Peloton, the fast-growing fitness equipment company, are trend-hunters par excellence. They take in more information. They read voraciously. They ask lots of questions. They assault assumptions. And as a result, they “get it” just a little bit faster than the rest of us. And they pounce on opportunities.

In the age of sudden disruption, trend-tracking must become a daily activity and even a way of life. Track consumer trends, social trends, global trends, economic trends, political trends. Use industry conferences and gatherings of leaders to “play with the clay” – such meetings are pivotal in gaining a sense of where one’s industry is “at” currently, and updating one’s read on emerging (and declining) trends. They know that the first time you hear about a trend, technology or new business model, that is often a critical “ah ha” and it may be time to pay close attention and be open to understanding.

THINKING AHEAD OF THE CURVE

Unstructured, unscheduled time for the modern executive is precious, but essential. Simply being exposed to vast amounts of data is not to be confused with interpreting that information, or making sense of it, or finding dots to connect. The question becomes: how does one best go about thinking ahead of the proverbial curve?

I’ve put this question to numerous business leaders over the years, and what I have found is they all have a well-honed personal process to keep them percolating.

I once asked Doug Greene, CEO of New Hope, at the time one of the fastest growing natural foods companies in the United States, how he managed the future. His answer was immediate. “Every month I take a Doug Day,” he explained, “where I just go off and think – no meetings, no phone. I’ll go for a hike (he lives in Boulder, Colorado), or I’ll drive to an adjacent town, and I’ll take my idea notebook with me to jot down ideas.” Greene explained that the agenda was to have no agenda, but rather to follow his instincts and let the dots begin to connect themselves.

Bill Gates, when head of Microsoft, would take an entire week to do a similar activity. Ronald Reagan, when he was president, would head to his ranch in the mountains above Santa Barbara to cut brush, and mend fences – said it was the best time to think.

My advice with any trend, technology, or development is to run it through a five-step process:

1. Project ahead where this trend will most likely be three, five and ten years out. If it’s a demographic trend, like the rise of Millennials – this generation will be deeply into their prime earning and spending years and climbing the organizational ladder. If it’s a technology trend you’re monitoring, apply Moore’s Law, which holds that computing power doubles every two years. And even if Moore’s Law slows down a bit, rapid technological change and innovation are unlikely to slow down from their current torrid pace.

2. Consider the big picture societal and industry impacts of trends. What industries will be affected? Speculate on who’s likely to win in the emerging environment, and who might be adversely affected? Take driverless cars for example. Five or ten years ago, where were they? Now versions are already in operation in Phoenix, San Francisco, and a growing number of cities. What’s the broader impact going to be? Will people still want to own a vehicle if it’s driverless or just be transported around on demand? If you’ve got young children; they may never need a driver license. And how about auto insurance companies? With fewer and fewer claims, what happens to them? And what will our roads and transportation systems need to do differently?

3. SWOT at the trend. Which is to say, do a SWOT analysis—strengths, weaknesses, opportunities, and threats with the trend you are seeing. If you’re a manufacturer, and you’re seeing early adopters already taking action using 3D printing in your industry, try to separate the hype from the promise. Do a SWOT analysis examining how this new way of making things might impact you and your organization. Is it going to be a strength, a weakness, an opportunity, or a threat?
4. Benchmark. Research early responses to the trend. In today’s world, the minute you identify a development, chances are good that somebody somewhere – maybe right in your back yard– is already doing something with it, and you can benefit from their experiences to guide your own decisions and save time.
5. Embrace. Lay out your findings on the table, and then get the creative juices flowing. Embrace the Opportunity Mindset. Challenge yourself creatively with a series of questions: how might we capitalize on this trend? How can we add value to the customer? And if it’s a disruption bearing down on you, the question might be: how can we take these lemons and make lemonade?

In today world, it’s all too easy to get blindsided by change. But, by incorporating the techniques of the best trend-watchers into your schedule, you’ll be ready for step 3: the action component.

ACTING AHEAD OF THE CURVE

As a future-focused leader, it’s important to helicopter above your functional area from time to time to take in the big picture. Acting ahead of the curve really means inventing the future. Take time to review effectiveness in how well you’re managing your own, and your department’s future. On balance, are you reacting or pro-acting to trends, emerging technologies, process innovations and the Driving Forces of Change? Are you constantly playing catch up or consistently moving in the “early adopter” or “early majority” categories of adoption of new ideas, approaches, etc.?

When I conduct “Managing the Future” workshops for management teams and boards of directors, I will often have the group assign a number (1 – 10 with 10 being highest) to how effective the group or organization feels it has been with delivering innovation. Next, I’ll have the team rate the optimal or necessary rate of innovation for success going forward. The gap between those numbers can often be revealing in terms of does the group (and the CEO) have the will to close that gap, and what would that look like to improve how we act ahead of the curve on a consistent basis. Here are five principles to guide you in acting ahead of the curve:

1. Embrace the growth mindset. Eighty-four percent of leaders believe innovation is extremely important to their growth. Eighty-five percent say it’s a top 3 priority. But according to McKinsey’s surveys, 94 percent of company leaders are dissatisfied with their company’s innovation performance.

2. Implement an idea management system. If you’ve got a process for everything else, why not for innovation?

3. Collaborate with customers (internal and external) and strategic partners. Innovation in the modern age is similar to movie making, a bunch of freelancers who come together under a producer and a director to do something that has never been done before. Forward looking leaders know that fostering teamwork among collaborators is job one. Customers have needs: current needs, unmet needs, and unarticulated needs. Spend time pondering what in their “heart of hearts” they would ask of you if they thought you might possibly be able to produce it. Start there and work backwards to what is possible. Not long ago I was leading a workshop and I said something like “customers want it better, cheaper and faster.” And a fellow corrected me, when he quipped: “Actually, they want it perfect, they want it free, and they want it right now.”

4. Cultivate a risk-taking culture. Apparently, Nokia had fostered a risk-adverse culture, but it is hardly alone. The pitfall of risk-adverse cultures really begins to show up when the company is disrupted and simply can’t respond fast enough or with creativity. And time runs out. My advice is, don’t wait for your organization to install an innovation culture, as you’ll likely have a very long wait. Instead, work on improving the culture in your arena, and soon you’ll have others wondering how you’ve been so successful at getting new things done.

5. Involve everyone in the enterprise. Even today, some twenty years after the start of the Innovation Movement, this remains a radical notion in many quarters outside Silicon Valley. But the truth is that in today’s world, you never know where a company’s next breakthrough idea might come from. It’s simply not true that only a few people have the right stuff and can come up with ideas and help to bring them to life. To be sure, innovation is a learned behavior, and failure is part of the learning journey. While some people are able to come up with solutions and alternatives with ease, others have become rigid in their thinking, and are more comfortable sustaining the status quo “way we do things around here.” My experience in conducting innovation workshops for 200 of the Fortune 500 companies and in 53 countries, that with proper facilitation and warm up, that everyone can contribute, and everybody has a role to play. While courageous “ideators” (idea people) are needed to get the team “thinking out of the box,” your detail oriented, operationally minded team-mates will be essential in carrying the football to the goal line of successful implementation, and beyond.