Tomorrow’s Questions || Today’s Decisions

English:

Credit: Wikipedia

The pace of change, driven by the exponential pressures of Moore’s Law as well as such factors as globalization and shifting social values, presents decision-makers with increasing demands.

  • How to scope a future that is quite literally changing faster every day?
  • How to avoid groupthink, which as 2008 reminded us presents the greatest single risk factor to our organizations?
  • How to make strategic choices which will have long-term implications when uncertainty about future situations has never been higher?

The C21 Paradox: The faster things change, the more important it is to look ahead.

So how come the future, where all the value lies, is of such marginal interest to business? Put it another way: Every reporting mechanism driving business understanding and the value of companies looks behind. Yet all the value lies ahead.

Obviously, this has always mattered. But it mattered far less when stasis was king and the future was much like the past. Business models delivered value with reliable consistency, change was incremental, disruption slow and rare. Does anyone take the view that this is the situation today? Yet these remain the standard operating procedures of almost every major company.  (Otherwise their CEOs, like Rupert Murdoch, Michael Dell, and Richard Branson, would all be on Twitter.)

Moore’s Law is not driving everything equally. Purely, or largely, digital industries like social media and search it drives directly. Further along the spectrum, industries currently being innovated by creative destruction have a more indirect relationship with Gordon Moore’s terrifying logic. From cell phones (RIM, Nokia) to photography (Kodak) to newspapers (all) to publishing (think Amazon) – the gearing is different but the direction is the same. Of course there are other forces at work. New opportunities for women, the forces of globalization, the impact of “social media” on every enterprise (and government) – change is in one direction only, faster every day, vast in its creative and destructive power.

In short: In every sector, value and competitive advantage lie in the future that is emerging from a rapidly changing environment. In every sector, the market assesses value in terms of the past. This used to be an adequate rule of thumb. It is no longer.

 Those enterprises most focused on what lies ahead will win.

·        That’s why absurd valuations have been placed on companies like Facebook and Google, on the bizarre assumption that they were old-style enterprises with a slow life-cycle. They are not.

·        That’s why once-brilliant companies like RIM and Nokia are going down; why Kodak and Sun went down; why the mid-generation giants Microsoft and HP are in the balance; why all eyes are focused on Yahoo.

·        That’s why the nearly total rejection of social media by Fortune 500 CEOs and, incredibly, CIOs, should warn us (and, more important, boards and investors) of impending disaster – even as it offers incredible possibilities of advantage to competitors who take seriously not only new technologies but dramatic new ways of listening to customers, markets, and the future itself.

·        That’s why the fact that “futurists” have branded themselves on the margins of the value equation is so dumb both for them and their prospective clients.

·        That’s why key elements in company valuation now need to include decision-making techniques, practice of diversity of many kinds, and the roles of both contrarians and biz-focused futurists at the top level. Past performance sure is no guide to what lies ahead.

·        And that’s why the corporate/government stand-off is proving an increasing disaster, both for corporate America and for America. The enslavement to 2-year, 4-year, electoral cycles has proved even worse for good governance than quarterly and annual reporting for business.  Few leaders get the (counter-intuitive) Cameron Paradox: That the faster things change, the more important it is to look ahead.

That’s our focus at FutureofBiz:

·        On bringing the best integrative thinking about the future to bear on the fundamental questions faced by every business.

·        On connecting the 10-year time horizon with quarterly reporting.

·        On aligning tomorrow’s questions with today’s choices.

 

Related articles

Leave a comment