Purpose and value – a company perspective

If you spent some time visiting several Fortune 500 web sites, how many of those do you think would clearly state their purpose and value to humanity? How many would have people in their brand somewhere? How many would talk about the passion they have for making the world a better place and how their actions bring that about?

I did that one year ago and there are some but not many. Mostly I found that those that have people in their brands and language do not have a ‘purpose’ statement. About ten years ago I did the same sort of study when I was with Nokia and found that a number of Japanese companies had a long term view and something like a ‘purpose’ statement – what was their role in this world, what benefit to humanity where they here to bring about.

The main objective of the company was to design and create innovative products, which would benefit the people. http://www.sony.com.au/section/sonysstory

This is not a mission statement, i.e. how to conquer some hill, but why do it anyway. Nor is it a vision, what could it all look like in some years’ time, if we all rally and make it happen (strategy – how). The focus is on the why.

One could say that all companies have people in their minds and brands to some extent: Facebook – making it easy to connect with friends, Google – making all things findable on the net [used to be: making it easy to find things on the net] and so on. There are many however for whom the purpose and product have disconnected because the ‘product’ is so entrenched in the society. The question of value to humanity is no longer considered to be of importance. I’d say the car industry has fallen into that trap and the banks just keep ignoring us, except for yet another credit card offer. (more…)

Vignette – how to on foresight – nay sayers and cynics

CONSULT UNUSUAL SOURCES, PEOPLE, AND PLACES–INCLUDING OUTLIERS, COMPLAINERS, AND TROUBLEMAKERS

One important function of strategic foresight is the opening of the future. The inclusion of different perspectives is one way to assure this opening. Analysts should look for competent people inside and outside who bring a different way of thinking to the table.

Key steps

The selection of these participants should be done with care. Not every unusual or non-obvious individual qualifies. In the first place, they should be selected based on their authority in a particular domain. They should not bring “just another perspective,” but a well-studied and well-articulated different view. The other participants should feel challenged by the ideas they bring in. This sense of challenge can result either from a deeper view of closely related subjects or from a subject that functions by analogy.

The world of business and decision-making favors the rational and bottom-line approach to gathering information. Prusak ( 1998 ) suggests that the higher up in the organization a presentation goes, the blander it becomes. Consulting unusual sources is a way to refresh the information flow by tapping into edgy or offbeat sources that challenge prevailing norms. In fact, many of today’s norms were yesterday’s novel and unusual ideas. The kinds of sources and approaches to look for and identify include:
• Sources at the edge of the organization–Find those in the organization who may be cynical or complaining, but have tried something different, and talk to them to see what they are thinking, reading, and doing.
• Sources outside the organization–Interview young people. Meet with teachers, designers, artists, economists, movers and shakers of the broader society. For example, observing and interviewing tribal elders has been used as a means of raising public interest in traditional storytelling.
• Sources inside and outside the industry–Interview leaders, regulators, politicians, activists, etc., and understand their motivations. Ask them who is doing the thinking at the leading edge.

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Vignette – how to on foresight – modules of goodness

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.

Key steps

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.

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Vignette – how to on foresight – people knowledge central

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.

Key steps

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.

Benefits

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.

Example

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.

Further reading

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

Vignette – how to on foresight – fertile ground

SHIFT ATTITUDES TOWARDS RECEPTIVENESS TO CHANGE

George Bernard Shaw said, “You see things and say ‘Why?’ But I dream things that never were and I say ‘Why not?’”

It is important to cultivate receptiveness to the new: “Let’s try and understand this better.” The new disturbs existing comfort zones and positions and as a consequence is often dismissed or challenged–it just does not fit with the established order. It is important to recognize this behavior and to educate the organization on its potential consequences, and to give specific ideas for better ways to deal with the new and surprising. In an organization this requires some investment in thinking. If the organization is in a hurry to get results, encourage it to invest twice as much–this is the wisest investment it can make.

Key steps

Executives who have grown up in one kind of organization or in one industry are often firmly invested in their opinions. Eventually many of their views become hard-wired into the organization as conventional wisdom. The more firmly invested in these views an organization is, the harder it is for the analyst to help it let go and explore new ideas.

A simple starting point and approach is to gain agreement that it is important to the organization to improve its receptivity to the new. Model the causes and consequences of behavioral differences towards new information and ideas.

Next, research and understand the key areas where the organization is concerned with the new. These might be about industry growth or decline, as an example of areas where blinders are the most expensive to the organization.

Armed with this knowledge, create a few workshops specifically about highlighting the meaning of the program and the methods to get to some change–focusing on the behavior and the selected content elements. If possible, connect this goal into a leadership development program or other similar programs. Push participants to “lead by example,” and model it yourself.

Be sure to connect the behavior-oriented push to a programmatic approach to foresight. Make a concerted effort to show the value. Measure the impacts of these programs through employee interviews, such as a 360-degree assessment specifically on how the key areas of the business are being improved by this.

Benefits

Encouraging receptiveness to the new is a good practice in general, but will likely “stick” better in an organization when change is imminent or taking place. Many organizations recognize the value of strategic programs, which aim to sensitize their people and approaches to the shifts in markets and industries and to better understand the meaning of those shifts. In periods of growth, organizations may try to build innovation programs, strategic foresight programs, or ideation programs, or at minimum try scenario planning. Often the early attempts are sub-optimal in that they lack a programmatic follow-through activity, and thus fall short of the broad impact they could have.

Also, many organizations have established some means to track trends in their environment. If these rely on classical market-research methods alone, the foresight generated tends to be a linear extrapolation of today’s impacts–and hence will most likely miss the opportunities and risks that a strategic foresight program would be able to identify.

Example

Adam Kahane (2002) tells a remarkable story of transformation in Guatemala. The country has the dubious distinction of having had one of the longest-running and most brutal civil wars in Latin America, from 1992 – 1996. More than 200,000 people were killed or “disappeared.” After a truce, the Vision Guatemala project was formed to help vision a new future for the country. A team of forty-four–including political leaders, academics, business and community leaders, former guerillas and military officers, government officials, human rights activists, journalists, indigenous people, national and local politicians, clergy, trade unionists, and young people–were led through a scenario process by Kahane. The key attraction of the exercise was the process of deep dialogue among people who had previously never spoken with each other. It led to the team enrolling sixty “multipliers,” or grassroots leaders, who worked not to disseminate the scenarios but to replicate the dialogue process in local initiatives. This process of dialogue was instrumental in producing the visioning effort’s successful results.

Further reading

De Geus, A. (1997). The Living Company: Habits for Survival in a Turbulent Business Environment. Cambridge, MA: Harvard Business School Press.
Kahane, A. (2002). Changing the World by How We Talk and Listen. Unpublished manuscript. Beverly, MA: Generon Consulting.
Kleiner, A. (1996). The Age of Heretics. New York: Currency Doubleday.
Marsh, N., McAllum, M., and Purcell, D. (2002). Strategic Foresight: The Power of Standing in the Future. Melbourne: Crown Content.
Ohmae, K. (1982). The Mind of the Strategist: The Art of Japanese Business. New York: McGraw-Hill.

This vignette first appeared in “Thinking About the Future: Guidelines for Strategic Foresight”, edited by Andy Hines and Peter Bishop, published in 2006