5 Ways To Future-Proof Your Business

5 Ways To Future-Proof Your Business

 

 

By Corinne Williams, Senior Vice President, Organisation Solutions & Dr. Alison Eyring, Chief Executive Officer, Organisation Solutions


Businesses need strategic dexterity to proactively adapt and remain relevant. History is littered with companies that didn’t adapt quickly enough and failed. Today’s Fortune 500 list includes only 60 of the original 500 companies. Or consider General Electric—for decades GE was the benchmark for top performance and a hallmark of good management practice. Yet over the past eight years, it has lost US$500 billion in market value. What once drove success can lead to failure when the world changes.

 

When asked whether their organisations had the capacity to prepare for the future, nearly 80% of executives said, “no”! Nearly two out of three of corporate strategists admit to being surprised at least three times by competitive activity over the past five years.* So, while we seem to know this is a challenge—the typical ways of planning for the future are only preparing us for an idealised future the company hopes for.

 

The Power of Scenarios
If we want to be prepared to succeed in tomorrow’s world then we need to consider several futures—not just our idealised one. Scenario planning is a powerful way to do this. Scenarios are narratives of possible futures that may emerge beyond an organisation’s control. They are written as a narrative that tells the story of a plausible future and how it came to be. The use of scenarios introduces new and innovative ways of thinking about the future by broadening viewpoints and insights from both inside and outside the organisation. Using scenarios helps to challenge existing mental models and preconceptions about the future. This builds strategic dexterity.

 

Scenarios help leaders imagine the unimaginable and act sooner to set themselves up to thrive. They also increase confidence to try out new approaches to solving emerging and complex challenges. Recently we worked with a leading financial institution to build scenarios for the future of banking. We built scenarios around major trends relating to the development of globalist versus nationalist financial infrastructures and the pace of disruption in payments. Some of the scenarios were very scary and would require radically new behaviour and faster action if they were to thrive. Others felt more comfortable. Exploring a range of possible futures led to fresh perspectives and motivated people to behave in unconventional ways needed to thrive in the future. You can’t just mandate others to think differently; you must bring them through a process whereby they gain new perspectives and insights.

 

Over the past twenty years, we’ve helped many clients build scenarios and utilise scenarios to build future readiness. Here are five tips on planning for the future.

 

  1. Engage Customers to Write the Future History
  2. Your future scenarios should tell colourful, detailed narratives of how each future came about. Writing history before it unfolds brings abstract concepts and plans to life. Put yourself five years into the future, what will have happened to have led us here? Use newspaper clippings, videos, and imagery to bring the story to life. Rather than keeping this process internal, engage your customers. This not only improves your scenarios, but also helps them think about the future.

  3. Allow Yourself to Imagine the Unimaginable
  4. Too often, we downplay a future that is threatening or just too unpleasant. Ensure that you include less palatable futures in your scenario planning. This can shift leaders’ mindsets from focusing on threats to seeing opportunities, a critical factor in organisational resilience. Several years ago, we worked with a multinational client to build scenarios of the future. The CEO mandated the leadership team to NOT consider one of the futures which he claimed, “is not our future.” Unfortunately, this was the future that unfolded and led to nearly a decade of pain for the business. They could not have prevented this future from happening, but they could have been better prepared to operate in it.

  5. Build External-Oriented Routines to Scan for Signposts
  6. Organisations that are future-ready have well developed “strategic radars” that help them identify and interpret signals in their external environment and act as “signposts” to indicate the path of change. Identify these signposts from your scenarios and create routines to regularly scan the environment for them and report back into the organisation. These routines may include increasing strategic conversations with customers, reviewing media and news, or creating more regular cross-industry forums. Embed these routines at all levels to increase external-orientation throughout the business, a key capability of successful organisations.

  7. Focus on Capabilities that Will Stretch Your Maximum Capacity for Growth
  8. Use your scenarios to identify the organisational capabilities that you will need to be successful in each future scenario. Then focus on where your organisation needs to build capability now to increase your maximum capacity for growth. These capabilities will constrain how far and fast your organisation can go. For example, this might be the ability to innovate quickly or scale development quickly.

  9. Use the Process to Build Strategic Dexterity
  10. The act of creating and activating scenarios helps to develop leader ambidexterity—the ability to drive both exploit and explore strategies at the same time. For growth leaders, the ability to drive performance today AND transform the business for tomorrow’s growth is crucial. It might be tempting to relegate the creation of scenarios to the strategy team, but this deprives your leaders of a powerful developmental opportunity.

     

Scenarios create a whole new vocabulary to think about the future and to monitor events or “signals” that indicate that one or more of the scenarios developed is evolving in the real world. The monitoring of these scenarios and their related “signals” fosters more proactive and adaptive behaviour and strategies. For the leaders involved, scenario planning develops their capacity to think and lead ambidextrously and to manage key tensions like leading the business to perform as it also transforms or builds capabilities for the future.

 

While we can’t predict or stop the future, we can be better prepared for tomorrow’s world. Using scenarios helps to minimise business risk, build resilience, and nurture the kind of thinking needed for growth.

 

References

*Schoemaker, P. J. H., Day, G. S., & Snyder, S. A. (2013). Integrating organizational networks, weak signals, strategic radars and scenario planning. Technological Forecasting & Social Change, 80, 815-824

 

Corinne Williams is Senior Vice President, Leader Services at Organisation Solutions. She has extensive experience in building organisational capability in global companies. Corinne has deep expertise in leadership development, culture change, and a special focus on executive coaching and assessment. She previously held senior roles at Standard Chartered Bank and Shell. Contact Corinne

Dr. Alison Eyring is the Chief Executive Officer of Organisation Solutions. She works closely with global and regional executives from the Fortune/FTSE 500 and some of the world’s most innovative high-growth companies on leadership and growth. A global thought leader on building organisation capacity for growth, she is Adjunct Associate Professor at the NUS Business School. Alison is the author of the award winning book Pacing for Growth: Why intelligent Restraint Drives Long-Term SuccessContact Alison

 

 
 

 

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