MODULARIZE OUTCOMES–KEEP THE GOOD AND DEAL WITH THE BAD
Throwing the baby out with the bathwater is a self-defeating reaction to negative outcomes. Organizations need to think in degrees of gray. They require an ability to sort thinking into modules, and know what to keep, what to get rid off, and what to deal with immediately. For example, when a product is launched and fails, the organization should aim to understand the components of this failure. When the root causes of a failure, or a success, are understood, it becomes clear that what actually failed or succeeded were discrete elements of the process. This learning enables the organization to preserve and build on valuable information or experience–which is present even in a disastrous initiative–not throw it away because it was part of a larger failure.
When assessing an activity, the first step is to identify and assess modules in the larger activity. What were the key elements or actions? Next, interview the decision-makers and other active participants representing each of the modules. The analyst can help build a constructive culture into the interview process by making clear how the information will be used going forward.
Next focus on the modules that appear to contain the issues, and build a deeper understanding of what actually happened. For example, was the market not mature enough? Were the technologies not mature enough? Which ones? Was this offering too much, too soon? Was the organization unprepared to support it? Was the ecosystem not ready for it?
Analysis of the interview results can be sorted into the “good” and “bad” modules, and communicated to the organization. Thus, the entire activity does not to be deemed a failure. Conversely, even successful activities will have their dysfunctional or “bad” elements that can provide opportunities for learning.
A better approach, of course, is to avoid getting into the situation in the first place through greater understanding of the market fundamentals of and organizational readiness. What is emerging in the organization’s external context? What is shifting in the ecosystem? How are technologies shifting? What else is changing? It is not as simple as knowing it all and hence making all the right decisions. It is more about knowing more, and hence making wiser decisions, about the key alternative directions possible and their potential outcomes.
MAKE THE SOCIOCULTURAL CONTEXT CENTRAL
Make the human context central to any strategic foresight activity. Do not be overly enamored with industry analysis, technology, or business trends and forget or overlook the role of people. Many activities produce impressive reams of data but haven’t thought through how the people affected would react or respond in the proposed future. Considering different sociocultural contexts can help the organization respond to a wider range of needs–be they demographic, sociological, ethnographic, physiological, psychological, etc.
The analyst can help the organization see the importance of the sociocultural context and how it provides the baseline for understanding emerging needs and opportunities. Some leading organizations are forming Consumer or Customer Foresight/Insight programs. For example, Nokia has for about ten years been proactively using consumer foresight inputs in its development processes. These inputs are woven into the product development, design, and foresight/insight programs. This approach has been cited as one of the fundamental elements in Nokia’s improved position in the mobile phone market in the 1990s. (Steinbock, 2001)
Consumer-centered programs start with identifying trends in the cultural, sociological, psychological, ethnographic, and demographic arenas and exploring their implications for various organizational activities. In other cases, organizations hire firms to help them get a feel for what is going on, ranging from very deep explorations of the cultural context, using tools such as Integral Futures (Slaughter, 2003) or Causal Layered Analysis (Inayatullah, 2004), to the more surface-level approaches epitomized by “cool hunting.”
Several steps need to be followed in providing a cultural context for foresight work. A multidisciplinary “SWAT team” could be established with the skills to understand people, decision-making contexts, and the output context. The team collects trends either by searching themselves or working with one of the many capable brokers of trend information. Next, they analyze and prioritize the impacts of these trends. This information can then be communicated to the critical business processes where it is needed.
Grounding the activity in an understanding of human behaviors and societal drivers is an underutilized approach. “Mainstream economics today views production as valuable primarily as a means to satisfy the needs and wants of consumers, but has taken a simple–some say, simplistic–approach to identifying those needs and wants.” (Goodwin, Ackerman, and Kiron, 1995, p. 31). Or as Farrell (1998, p. 14) suggests, “In business, waves of demand must be actively surfed, with an acute knowledge of whether the wave is building up or moving into churning, energy-wasting whitewater. The essence of a good ride is knowing when to get in and out and maximizing one’s advantage along the way.”
Understanding emerging needs as an element of the organization’s business system is crucial to right-timing its outputs and hence benefiting commercially. A challenge is that sociocultural inputs tend to be sourced with traditional market-research methods, which mostly highlight existing norms, values, and thoughts and overlook shifting contexts.
The Beta vs. VHS competition among videotape manufacturers highlights the importance of correctly interpreting the sociocultural context. The Beta format focused on superior technical quality, while VHS focused on the usability of the technology in the broader context of the media industry and its customers. VHS won that battle. One fundamental problem with Beta was that it could not accommodate the length of a movie.
Another good example of inadequately considering sociocultural trends was the case of Nike and its production facilities in less-developed nations. After some of its contractors were found underpaying workers and using child labor, Nike suffered a media backlash and a slew of legal cases. The company’s phenomenal growth in profits in the late 1990s took a hard hit. Consumer backlashes can have devastating consequences, as Nike found.
Beyer, H. and Holtzblatt, K. (1998). Contextual Design: Defining Customer-Centered Systems. Oxford, UK: Morgan Kaufman.
Farrell, W. (1998). How Hits Happen. New York: HarperBusiness.
Goodwin, N., Ackerman, F., and Kiron, D. (1997). The Consumer Society. Chicago, IL: Island Press.
Inayatullah, S. (ed.). (2004). The Causal Layered Analysis (CLA) Reader: Theory and Case Studies of an Integrative and Transformative Methodology. Taipei: Tamkang University Press.
Marsh, N., McAllum, M., and Purcell, D. (2002). Strategic Foresight: The Power of Standing in the Future. Melbourne: Crown Content.
Slaughter, R. (2003). Integral Futures: A New Model for Futures Enquiry and Practice. In Futures beyond Dystopia: Creating Social Foresight. London: Routledge. (Available at www.foresightinternational.com.au)
Steinbock, D. (2001). The Nokia Revolution: Success Factors of an Extraordinary Company. New York: AMACOM.
This vignette first appeared in “Thinking About the Future: Guidelines for Strategic Foresight”, edited by Andy Hines and Peter Bishop, published in 2006
At the Enterprise 2.0 Future Exploration…..
One fundamental change will be in the day to day way in which people in the company work.
Euan Semple a former leader in BBC on knowledge management spoke of the difficulty to counter some of the arguments against leveraging the social networking and collaboration tools like wikis, blogs and RSS in the Enterprise. The fear is that people will be wasting time roaming around other people’s blogs or reading feeds or taking part in meandering conversations.
One approach Euan took was examining the old ways if the new ways were so frightening.
One of my favorite quotes by a systems scientist Marilyn Ferguson, a system theorist, is around change and the difficulty with it…..”it is not so much that we’re so in love with the old ways but change is like being in between trapezes…..”. Part of the solution is taking those for whom letting go is too hard by the hand and giving them a sample of the experience.
Those who are already in flat and less hierarchical organisations are likely to have embraced these technologies as they fit neatly to the behaviours already. The transparency and level setting technologies bring about visibility to the dead wood and the meetings which do not advance the organisations agendas.
It is fundamentally about how we all change our behaviours and our role in the organisation. Us vulnerable people need to deal with our fears.
Do or die
An enterprise can consider a few alternative pathways as to how they respond to the technology induced changes. The enterprise can decide to create waves by defining their own way to leverage the technologies. Another possibility is to ride the waves others have created. Or the enterprise can crash some waves. The last one is not really a choice but rather a disastrous outcome due to inaction. It is like the proverbial red carpet [or any color] being pulled from underneath you.
An enterprise wishing to be competitive in this connected world needs to leverage the technologies and squeeze innovation out of them, in a way that is meaningful for the enterprise, not the market as a whole. Competitive moves come from left field at a pace and in ways that typical approaches to competitive behavior cannot keep up with.
For example the telcos are rapidly shifting their business models based on the fact that the old network revenue models do not work anymore. One example is of course BT who are investing billions to streamline their environment. BT – new core will initially replace 16 different network environments, each with their own billing systems, operating systems and even companies operating them. The cost savings alone from the new network environment are huge but that will not be enough to have a meaningfully defined role in the new connected world.
One thing that fascinates me in all this is that the networks created from mid 1800s to end of the 20th century were done obviously over a long time and also were done with technologies and even in some cases raw materials we could not redo any more due to the sheer volume of demand. Imagine re-digging the ground for copper wires to every home. No way! and then do that in China….
Now we have several players, so very soon after many of those just re-emerged from the financially challenging 3G auctions in the early 2000, again reinvesting billions of dollars to completely change the landscape. And the target for doing so is a short 5-10 years. May we live in interesting times ……
The enterprise plays a role in this rebuild, as a client but also as a provider. How’s that? Many of the innovations as to how exactly the key technologies are leveraged and used for the benefit of the connected world come out of the enterprise vision and strategy.
By all means leave the doing to others but without a sense of who you wish to be when you grow up you are bound to be crashing some waves you did not see coming.
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