Why Foresight is the Key to Longevity
“Change is coming! Change is inevitable! If you don’t embrace change, your business is in trouble!”
How many times have you heard one of these statements? Probably tens of times, and in most cases, these statements are usually meant to trigger fear. Yet in this case, this paranoia is based on something very real.
The twenty first century is an exciting but also very scary place for businesses.
In a world where your biggest competitor could be a bunch of scruffy college dropouts operating from a garage, there is much reason to fear in the unknown. Anything can happen any time. Your industry could be disrupted any minute.
A formidable competitor might emerge at any moment. The only way to ensure survival in such an environment is to take the initiative yourself, look into the unknown, and anticipate what is coming your way.
If you can anticipate change before it happens, you can prepare for it. You can take control of it.
You can actually get into the driver’s seat and drive the change within your industry. You can prevent your company from going down while others are losing their businesses.
If you know what is coming, you can position your business to capitalize on changing trends and exponentially increase its profits and growth.
You can be the underdog who spots an opportunity that the big companies in your industry can’t see yet and be the first to get there.
In other words, foresight is a managerial superpower.
Every CEO or anyone at the helm of a company in today’s world needs it. If you don’t have it already, you must start honing this important skill.
Below, let’s take a look at why foresight is the key to longevity in business.
1. HELPS YOU SPOT FUTURE TRENDS
Business is always growing and moving forward, especially in this time we are living in, which is the era of the fourth industrial revolution. New technology is constantly being developed and existing technology being improved every day.
Better technology means less costs and more profits for businesses. It means bigger markets for the companies that capitalize, especially for those that get in early.
Sometimes new technology creates a new market and the companies that get in early are the ones that get to dominate while the others have to settle for crumbs.
If your company lacks foresight, all these changes will catch you by surprise.
While your competitors are changing and evolving and adapting to the times, your business will be stuck in the past, which is a catastrophic strategy for any company to take in the twenty first century.
The twenty first century is all about fast growth and exponential change.
Technology and business processes are changing at a rapid rate.
You should take advantage of the power of foresight to spot where the current trends are heading and to anticipate what the leaders in your market are going to do next, or what technology or disruption is coming into your industry and how you should best prepare yourself.
Apple was able to foresee trends such as accelerating bandwidth, processing power, and high-capacity storage. They used them to build products that took the world by storm, such as the iPhone, iTunes, iPod, and iPad.
While Apple was embracing change and creating the future, companies like Motorola, Kodak, and Polaroid were left struggling, since they insisted on clinging onto their analog models in a world that had gone digital.
The same is true of companies like GM.
It did not respond to the emergent trends such as the rise in gas prices which were caused by the rise in global demand for gas from China and India.
If you don’t want your business to be caught by surprise such as the likes of Motorola, Kodak, and Polaroid, you need to ask yourself two questions.
- What are the hard trends that are going to shape your industry?
- How can you prepare for them?
The key to answering these questions is to religiously follow what’s happening in the industry: read widely about your industry and forge connections with others in your industry.
Network and talk to people in your industry to learn what is going on. Find time to take a break from busyness to think through the information you have gathered.
It’s not enough to gather information – you must mull over it to sort out the gold from the trash.
Not every piece of information will be valuable. In fact, most of it may turn out to be a false alarm.
When you take time to introspect, you can figure out what is worth looking into and what you can put on the back burner for the moment. Part of foresight is being able to determine which potential future trend requires the greatest urgency and importance.
Before something new happens, it seems unlikely, but once it happens, in retrospect it looks as if it was inevitable.
For instance, today, social media advertising looks as if it was an inevitable trend, but before it became the force it is today, many businesses were skeptical about advertising on social media.
This is why foresight is so important. If you can accurately imagine what the future is likely to bring before it happens, you can position yourself to reap the greatest benefits from that future reality.
2. ANTICIPATING THE FUTURE ALLOWS YOU TO CONTROL OR CREATE IT
The future is either a train coming at you or a train you yourself are riding on – in fact, you could be the one driving this train.
The future is inevitable. Whether you ignore it or acknowledge it, the future is coming, and the future brings change with it. This is why change management is so important to businesses in the twenty first century.
How do you ensure your business is not crushed by the train when it gets here? Wouldn’t it be better to be inside the train, directing its course even?
If that sounds ambitious, consider that this has been the consistent strategy of some the biggest companies in the tech world today. For instance, Facebook has continuously innovated in the social media arena.
It bought off competitors such as WhatsApp and Instagram and used their technology to enhance its own original app’s services.
In other words, Facebook is not waiting for the future to happen. It foresees what is going to happen and takes control of it.
For instance, Mark Zuckerberg recently announced that the company is going to venture into cryptocurrencies with their own coin known as Libra. That is Facebook seeing the potential opportunities that cryptocurrencies can open up in the internet and social media space.
With Libra, Facebook is taking control of the train. Instead of waiting for the inevitable crypto-dominated future to arrive and hope for the best, Facebook is getting involved in actively creating that future.
Whoever controls the train reaps significantly greater reward than whoever waits to ride on the train. Whoever is late to gate onto the train risks being left behind or getting run over by the train.
Let’s take a deeper looker into the train metaphor. The train represents change. When you are outside the train, this represents situations where change occurs from outside the company.
When you are inside the train, that’s when the change occurs internally. When you are driving the train, this means that your company is in control of the change occurring in the industry.
When change occurs from the outside, it is disruptive. You cannot control it. This type of change can easily ruin your business. Many companies which were hit by disruptive change have never recovered.
Change from the inside out, on the other hand, is done constructively and with purpose.
This is the sort of change that enables you to be in charge of your company’s destiny and direct its future.
The latter type of change needs foresight. If you can’t tell what is coming, how can you control it?
The company must therefore become anticipatory.
This is a quality shared by all the big tech companies, since they understand that their business is dependent on how much hold they have on the future.
This is why, for instance, Google conducts what it calls moonshots.
These are the most innovative projects being carried out at Google X, which is the company’s semi-secret laboratory.
Google defines a moonshot as a project or proposal that does these three things:
- Tackles a huge problem.
- Gives a radical solution to the problem
- Does this using breakthrough technology.
Put simply, a moonshot is a project that uses breakthrough technology to propose a radical solution to a huge problem. The term references the Apollo 11 moon-landing or may derive from the phrase “shoot for the moon”.
While your company may not have the resources to be as innovative as Google, that does not mean you cannot embrace the same forward-thinking philosophy. Google understands that the future belongs to those who are making it.
In the same way as Google, you can create your future by finding a huge problem in your industry and developing a solution for it. Your solution does not even have to use breakthrough technology.
It could be something as simple as adjusting your business processes. So long as no one else has figured it out yet, the solution will give you an edge over your competitors.
Most small businesses resign themselves to the business of merely making profits or avoiding losses.
However, the key to longevity is looking beyond today’s profits and losses and focusing on maintaining hold of the market for years to come.
3. FORESIGHT ENABLES TRANSFORMATION
There is a difference between change and transformation. Change is limited. Transformation is limitless. Change provides a slight increase in growth. Transformation provides exponential growth. In the twenty first century, transformation is of more importance than mere change.
Change is when you continue to do essentially the same thing you have been doing, but with some variation.
For instance, you could make your operations bigger or smaller or higher or faster or longer… It might mean increasing your marketing budget, or laying off staff.
However, I want you to ask yourself one thing: can a company like Kodak be saved by merely changing? Can the record music industry survive by merely changing?
Transformation, on the other hand, is about making a complete overhaul of the way we do things.
It involves ripping out one thing and installing another. It means replacing our current systems or technology with something better. Transformation is about adopting an utterly new and radically different way of doing things.
For instance, the Barnes & Noble superstores model changed how people shop for books.
When Amazon came in, it first changed how people shop for books, and then it transformed how people shop for everything.
Think about Uber and the taxi industry. Can traditional taxi driver survive by merely changing?
No, they have to transform and start doing things the Uber way. However, Uber has the advantage sine they introduced this new model.
The kind of foresight that will give you longevity in the twenty first century is not merely about changing how you do business. It’s the kind of foresight that will help you identify how you can transform your business.
When you change, you are still like your competitors, only varying in degree.
When you transform, you are a totally different animal, a new phenomenon. For instance, when the iPhone was introduced, it was in a completely different category from anything before it.
The iPhone didn’t just increase its storage space or add some interesting new features.
The iPhone was not just a phone. It was like a computer compressed into a handheld device, and it did away with all the pesky buttons so it was highly aesthetic. It looked like a device from the future.
The iPhone was a transformation not merely a change.
All the iterations that have come after have been merely changes. After the iPhone and the iPad, Apple has not created any revolutionary new product. New iPhone releases are merely tweaks, not transformations.
4. HELPS YOU FIND CREATIVE SOLUTIONS TO YOUR COMPANY’S BIGGEST THREATS
When things are really going wrong, that is when most companies start to feel the pressure.
Unfortunately, waiting until things have already gone wrong is not an option if you want your business to survive in today’s world.
If the moment of reckoning is already here and the industry is already experiencing disruption, you are either too late or changing now will cost you far more than it would have cost you had you started the transformation before the disruption took root.
This is the advantage of foresight. If you see what threats you company is facing long before they become actual threats, you can prepare for them and find solutions. They say necessity is the mother of invention.
When a threat is on the horizon, this creates a sense of urgency which precipitates creativity and innovativeness in a company. This is when a company comes up with creative solutions to help combat the problem.
What’s more, when you discover looming problems long before they become problems, you have enough time to tinker with the solutions.
In most cases, when it looks as if you are facing impossible odds, all you have to do is reframe the question, approach it from a different angle.
When you do that, you are able to see matters with a new lens and can come up with creative solutions.
A good example of a company that did exactly this is Eli Lilly. The company realized that for it to create new pharmaceuticals, it had to solve several big molecular puzzles. This was the only way Eli Lilly would be able to alter its trend of falling stock prices.
However, to solve these big molecular puzzles, the company would have to hire not less than a thousand new Ph. D. employees. Unfortunately Eli Lilly did not have that kind of money.
If the company thought that it had a money problem, this would have been the end of that matter, and Eli Lilly’s stock prices would have continued plummeting.
However, the company looked closer at the matter and realized that the problem they thought was the problem (insufficiency of funds) was not the real problem.
The real problem was solving molecular problems. All the company needed to do was find an alternative way to solve those molecular problems without having to hire a 1000 new costly employees.
That’s when Eli Lilly created an online scientific forum which it called InnoCentive, Inc.
On this site, Eli Lilly posted challenging chemical and molecular problems, offering to remunerate anyone who would find solutions to the problems.
Eli Lilly made the site open and available to any scientist who had an internet connection and posted in more than a dozen different languages.
This way, the company was able to develop a global, virtual research & development talent pool that enabled it to find solutions to problems that its own researchers were unable to solve.
Thanks to this looking-out-of-the-box approach to problem solving, Eli Lilly was able to create a variety of new drugs, and in the process it not only survived, but thrived.
Thanks to Eli Lilly’s foresight (that unless it found solutions to the molecular problems, it was doomed), the company was under intense pressure to find a creative solution that would not drain its coffers (as hiring 1000 Ph. D. scientists would certainly have).
In the same way, you should ask yourself, which is the greatest threat to your survival? What is the conventional solution? If that solution is not attractive to you, can you find another way to combat the problem?
5. ENABLES YOU TO SEE WHAT EVERYONE ELSE IS DOING AND INNOVATE BY DOING THE OPPOSITE
Foresight is also about seeing potential in doing what others are not. By following others, you set yourself up as a competitor. You have to fight for crumbs, especially if the industry leaders are dominant.
Coming in as a smaller competitor, you will have a very difficult time reaching the top. Instead of doing that, why not do the opposite of what everyone else is doing?
When you do something different, you stand out. This gives you attention, which gives you customers.
Most importantly, by doing something different, you create a new space for yourself: a new product, a new business process, and so on. It could even mean creating a new market that didn’t exist before, in which case you will enjoy dominance because of first-mover advantage.
Look at what everyone else in your industry is doing, then ask yourself: is there something I could do differently?
This “think different” attitude is what has led to the Silicon Valley revolution.
It is what made it possible for companies which started in garages, run by scruffy founders barely out of their teens, to overtake behemoths like IBM.
It is the secret behind the success of companies like Facebook, Apple, Microsoft, Google, and so many others.
All they did was take a drastically different route from the established way of doing things, and it proved immensely profitable.
Jeff Bezos of Amazon looked at what Barnes & Noble had done to take the traditional bookstore to a new level of size and substance by creating a modern superstore. Rather than following in Barnes & Noble’s footsteps, Bezos went the opposite way.
Instead of building even bigger stores than Barnes & Noble, he shrank the size of Amazon shops to nothing, ditching the idea of a physical store in favor of an online store – something that was relatively new at the time.
As you can see, doing things the opposite way is usually the best option for a David when facing Goliath.
Instead of fighting Goliath with a sword as was expected, the much smaller David did something drastically different, unheard of in a sword fight – he only brought a slingshot and some stones.
Malcolm Gladwell discusses this phenomenon of underdogs using unique, unexpected weapons to beat behemoths in his book David and Goliath.
Just like David, Amazon and most other Silicon Valley startups came into the arena as underdogs.
They lacked size and resources. They were incapable of competing with the big companies in their markets on an equal footing.
Only by veering off the beaten path and finding a totally creative solution, opposite of what everyone else was doing, were they able to compete, and in fact topple their opposition.
This is how you take control of the future when you are an underdog. You just have to be creative and willing to take a risk.
6. ENABLES YOU TO REDEFINE AND REINVENT EXISTING PARADIGMS
The twenty first century is a century of invention and innovation. It belongs to the companies that are constantly at the cutting edge of innovation in their industries.
One thing most people don’t realize, however, is that invention and innovation doesn’t have to involve an R&D department. It doesn’t have to involve making something completely new.
One of the easiest ways to innovate is to take what is already in existence and improve it. You can redefine it or reinvent it to create something new and better.
A good example of this is what Chrysler did to the family station wagon in the eighties. They realized that baby boomers required a car that had substantial family room but which at the same time would look different from what their parents had driven.
That’s when Chrysler introduced the Dodge Caravan, which created a new automotive category – the minivan. Chrysler dominated this new category for the next quarter of a century. This innovation combined two insights:
- Baby boomers needed their own car.
- This car couldn’t look like what had existed before because no one wants to look or act like their parents.
Through such redefinition and reinvention of existing paradigms, companies such as Chrysler have survived and thrived. On the other hand, companies like Toshiba and Maytag, which were complacent, paid the price.
In the past, reinvention was an option. In the twenty first century, it is an imperative. It is either do it or die.
Foresight will enable you to determine what areas of your business or your product you can reinvent or redefine in order to remain relevant.
If you got one thing from this article, let it be that change is inevitable in the twenty first century, which means that you can’t be comfortable, even when things seem to be going well. Always be paranoid.
Always ask yourself questions like: What if? What could happen next? What threat am I not seeing? What problem am I not solving? How can I respond to changing customer needs?
Only through this sort of vigilance will you be able to anticipate the future and ensure that your company will survive when change comes around.
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