How can your company better anticipate ways in which the world is changing around you? This is a challenge for every organization functioning in what the military has termed a "VUCA world." The acronym refers to an operating environment characterized by Volatility, Uncertainty, Change and Ambiguity. (The kind of worlds President Trump and other volatile leaders often help create.) For decades now, we have worked with senior executives to help their organizations spot, anticipate and remain resilient in the face of VUCA challenges. Here are two main ideas that work broadly, and in many settings.
Reduce Your Blind Spots
Nearly all organizations we work with, small and large, acknowledge having missed important external developments. For example, the board of a community foundation had to decide what to do with several acres of land that we donated to them. While contemplating this largesse, an energy company approached them about leasing rights for hydraulic fracturing (fracking). The extra income on offer would benefit the community, so the board decided to take a deeper look. To help them, the local staff staked out what parts of the tract might be leased.
But after the board and some key leaders trekked out, in boots and coats, to take a closer look at the donated land, they ran into an ambush of sorts. To their surprise, word got out rather quickly about the fracking option under consideration and various community groups organized to stop it. The board then temporarily abandoned any lease options because the reputational costs and pushback were too great. After some further education, research and community meetings, the foundation eventually signed a non-surface lease that provided financial support to the community while limiting impact on the land.
The above is a simple example of why peripheral vision takes work. Everyone in this situation tried to be thoughtful and act with care including doing some due diligence. Their clear-eyed operational focus on the land itself, however, came at the price of reduced peripheral vision, which requires a wide-angled look to prevent blind spots. Most weak signals of trouble or opportunity are first visible at the edges of your business. Waiting for them to appear at the core means you are too late.
The corporate world is littered with examples of companies whose failure to foresee threats or opportunities proved costly.
For example, the personal computer revolution that blind-sided IBM started outside the mainframe business: with small companies, graphic artists and other specialty players. Likewise, the LED revolution that forced such giants as GE, Philips and Sylvania to get out of the light bulb business in the U.S. started in flashlights and exit signs--far away from their profitable core segment offering bright, warm lighting to illuminate home or office spaces. Other classic examples include Kodak and digital photography, the Encyclopedia Britannica being over taken by CD ROMS or RIMS's Blackberry. As is typical in technology domains, the threats in these cases came out of left field and were seen too late by senior leaders and the board.
The Need for Scenario Planning
To see the future sooner, leaders need to scan the horizon systematically, look for weak signals, connect various dots, and then communicate the insights via compelling narratives to get others engaged. The donated land controversy highlights the importance of thinking through multiple scenarios when making strategic decisions. Leaders of other community foundations have expressed concern to us that they are not fully grasping how societal polarization, significant funding decreases by the federal government, discontent with elites, troubling questions about social media, AI, concerns about privacy--and other looming issues--will affect the roles, functions and social perceptions of foundations.
During such discussions, I was reminded of a 2016 environmental scan we did with the Knight Foundation to map out how social, economic, political and technological forces might create deep, unwelcome fissures in American democracy. The mission of the Knight Foundation, headquartered in Miami, is to help foster a well-informed and fully- engaged U.S. citizenry through grants, education and investments. As insightful as we thought our scenarios were, based on considerable desk research and expert interviews, we still misread the fallout of the Trump election and the accompanying Facebook backlash-- prompting calls for stricter regulations of social media. It clearly takes special, ongoing and rigorous leadership efforts to see around corners and to develop strategic responses to these external developments that may otherwise rock their world.
The good news is that this daunting challenge is not about being the smartest executive in the room, or even having collected the brightest group of people around you. Above all, it's about having the right approach and mindset. Many practical tools and proven success stories are ready for use by vigilant leaders, as described in my new MIT Press book with George Day titled See Sooner--Act Faster. It is based on research we did with global companies as well as non-profits that are trying to stay abreast of external changes in the environment as well as the problems festering right under their own noses. Just as each family is unhappy in its own way, as Tolstoy famously wrote in Anna Karenina, each organization has its own blind spots and systemic weaknesses. Unlike families, though, corporation have the means to audit their past misses and hits in order to reveal the root causes. Once the underlying organizational issues have been surfaced, a plethora of tools exist to tackle them, as our new book lays out.