Tuesday, March 02, 2021

Ready or not, the future is unfolding

 I'm back to talk about understanding the future, returning to a subject that I think needs much more examination.  By this I don't mean trying to find out when we'll all get our promised jet backpacks and fly to work rather than drive.  No, when I am talking about understanding the future, I'd like it to be a bit more practical - say a future two or three years from now, with just enough notice about the impending changes that my company can structure new solutions in order to meet shifting market demands.  We need to prepare for the future that we can reasonably address, and understand the future that will unfold just beyond our product cycles.

But no one, and I mean no one, cares about the future in most businesses.  Oh, of course they want a positive future, where margins are higher and costs are lower.  They all want a future where the stock price is higher than it is today - after all, many of us have compensation tied to appreciating stock prices.  But, beyond wanting a better future with a higher stock price, what are we willing to do to understand the future and prepare for it?  Really, not much.  It is no one's responsibility or job, and many people do not believe that it is worth the time to investigate what the future may hold.

Don't believe me?  Let me give you a few examples.

I was speaking recently to a group of executives interested in innovation, and one asked me - what are some of the activities that we can do to get a lot of return for little cost and risk?  And I told him what I've said for years:  the lowest hanging fruit in the innovation world is in understanding trends and understanding what those trends mean, so you can get to the market with what customers want and need as the need unfolds.  The general response from the group was a big "meh" - I think they were hoping for a magic wand.  Trying to understand the future is squishy work that belongs to no one in particular.

Most companies I've worked with have very competent product managers, who are skilled at managing existing products, but at best have one person in a "strategy" office somewhere who thinks about what's next, and no one to convert that thinking into new products and services.

In another example, I've been speaking to a few educators who are concerned about students returning to full time classes in colleges and universities in the fall.  If that happens, students will start arriving in August - just five months away - and everyone says they want students to come back.  But what plans are being made?  What contingencies addressed?  What forecasts about housing, food, faculty demands and so forth? Virtually none.  If students are going to return, universities need to be figuring out what that August will look like now (in all reality it's probably too late) but they could at least prepare.

There are a couple of reasons why there is so little focus and preparation on imminently obvious futures.  First, as described above, the work is distributed.  Everyone has a stake in the future outcomes but no one is responsible for preparing for it.  When "everyone" is responsible, no one is responsible.  Second, there are immense pressures to get things right, right now.  No one wants to hear about thinking about the future when we lack control over the present.  Third, people don't believe that good, practical tools exist for understanding the future, so it feels like a fool's errand.

What I fail to see is why this work is left undone.

The trends are out there and reported on regularly.  We know how fast the US is aging.  We have good data on immigration.  We know how fast the COVID virus is mutating and also the increasing supply of vaccines.  The future - or at least versions of the future - are somewhat knowable, and knowing what versions are likely, a company, university or government could begin to prepare.

Yet we are frozen, as if we are incapable of understanding the data around us and developing alternative futures and understanding their implications.  Or, more kindly, we are too busy with day to day activities to spend time to understand what our future challenges will look like, and, since we neglect the future now, we will continue to toil with too much work and too little insight when the future arrives.

In all things, look to Einstein.

As a lead up to my point, let me relate a story that is often told of Einstein.  He was asked - if you had one hour to solve a problem, how would you spend your time?

Now, gentle reader, when I tell people this story, I stop here and ask them - what do you think he said?  How would Einstein use his time?  Most of us would spend a few minutes panicking, and a few minutes arriving at what we think is the best possible answer, and spend the rest of the time building a solution.

Einstein responded - I'd spend about 55 minutes thinking about the problem, and about 5 minutes solving it.  Note that Einstein, perhaps one of the smartest men who ever lived, is doing problem definition and examining the ways the problem can be defined and gathering the information he has, only then to work on solving the problem.  We, on the other hand, rush to solving the problem.

The data is out there

This failure to prepare and anticipate the future becomes even more perplexing when we realize just how quickly the capacity is growing to gather data and analyze it.  We are in the midst of a data processing, Artificial Intelligence and machine learning revolution, yet we miss one of the biggest opportunities - asking these systems to gather data in a number of trends and make predictions about what the future might look like.  Even if you don't want to spare people to do this work, certainly you can spare some computing time.  These algorithms are good at Monte Carlo simulations and should be able to give you reasonable predictions about likely future scenarios if you will help with the design of the experiment.  We have the tools, we have the insight, we have the clues about what the future may hold.

Why do we fail to act on this?

Willful disregard

There is almost a sense of machismo around the failure to discuss, analyze and develop scenarios about the future.  We'd rather rush around, focused on today's problems and continue to be caught unaware by the unfolding future that in many cases is, and was, predictable to some degree.  Some people say we could not predict COVID, but we've had MERS, SARS and Ebola just within the last 20 years, and the mis-named Spanish Flu before that.  It's not as if the future is unknowable, we just choose to ignore the evidence.

I blame the scientific management revolution in the 1950s and 1960s.  Those managers distilled everything into numbers that can be understood and manipulated and downplayed any other way to think or manage.  When we start talking about future opportunities, trends and scenarios, the common refrain is - but is the data statistically significant?  Can we make predictions without risk?  Of course not, but making predictions and assessing the scenarios and the implications of those scenarios can teach you something about the future, and that's what's important.

I also blame the expectations of slow, predictable change.  For 40 years after WWII, the US stood predominant in global business, and change was slow and predictable, but since then change has been more rapid and more discordant, but we still act as though the future is relatively predictable and stable. 

I also blame science fiction writers and movies - because we have the idea that talking about the future involves jet backpacks and life on Mars and that seems unimportant and unrealistic to people who need to deliver the next quarter.  Understanding the future and acting on it does not require a rocket or a spacesuit.  The future is not necessarily Utopian or a dystopian nightmare. 

What should we be doing? 

Gathering trends and looking for evidence of emerging needs and opportunities, the potential for new competitors to enter the market and possible market shifts based on new technologies, policies or demographics.

We should constantly be examining several time blocks - most importantly, two to three years from the current date, since that's most likely the least amount of time it will take for you to bring a new product or service to market.  After that, a 4-6 year time horizon and a 7-10 year time horizon makes sense to investigate.

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posted by Jeffrey Phillips at 6:35 AM


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