By Rohit Talwar

How can we make sense of the waves of change coming towards us and map a future path for our organization?

The Future of Business – a Response Framework

This article sets out a framework to help leaders respond to the ideas and questions presented in The Future of Business and then use the resulting insights to shape future strategy.

Trying to respond to every force, trend, development, and idea individually would be next to impossible. Instead, it may be more appropriate to use a framework through which to filter and interpret the myriad “future factors” of change and map out the preferred direction and operational strategy for the organization. There are ten key elements of this framework that help us analyze these future factors that will shape our business choices. Each of these elements is summarized below along with key questions we need to ask ourselves and our organizations.

Five of the elements focus on market facing decisions and behav­iors – mission, markets, magic, models, and message. The second five elements address internal choices we need to make – myths, mastery, muscle, mindset, and management.

Market facing decisions and behaviors

Mission. We are entering a world where everything we know and understand about the purposes of business and the mission of our own organization will be challenged. In the face of relentless change we need real clarity about what role we believe business should play in society and the mission of our own organization.

• What are the needs or opportunities we should be addressing in tomorrow’s emerging economic, societal, and business landscape?
• Who are the core stakeholders we should be serving?
• What are our ambitions and what would success look like?

Markets. Developing a viable business proposition will require a clear understanding of the potential evolution of current and potential markets (products, services, geographies) and how customers might respond to these changes. It also requires a sense of how the evolution of adjacent and emerging sectors might impact our core offerings. We also need scenarios of how the market for talent could play out in the locations where we most need the brightest minds and most capable leaders, managers, and operational staff.

• How might the key future factors shape the behavior of current markets and customers?
• What new market opportunities could open up – how would customer needs differ in these emerging sectors?
• How might the needs, expectations and availability of talent change over the short, medium, and longer term?

Magic. As we automate our products and services, the risk of commoditization increases. The challenge is to ensure our offerings and service experience stand out from the crowd and create a “wow factor” for customers.

• What stands out about the brands that deliver us the biggest “wow factor” today – what makes their offerings and experi­ences noteworthy?
• How can we differentiate customers’ experience of our brand in tomorrow’s increasingly commoditized markets?
• Where might the biggest potential opportunities be to inject magic into our future product and service offerings?

Models. Profit-making can no longer be assumed as the prime objec­tive for every enterprise. Even the very need for profits and money are being challenged in emerging economic paradigms. Business models are changing – for example, greater emphasis is being placed on user­ship over ownership. Firms are looking to market-based solutions such as crowdfunding to validate and finance new product ideas. Greater experimentation is taking place in how we charge for goods and services with freemium pricing models, aggregated buying, auctions, pay with a tweet, and a range of other options becoming more common.

• What are the trade-offs between usership (rental) and owner­ship (purchase) in the design of tomorrow’s company?
• How might the adoption of crowdsourcing to test new ideas impact our approach to the development and marketing of future offerings?
• What experimentation are we doing around alternative approaches to charging for products and services?

Message. The internet and social media provide instant rewards for brands that back marketing promises with operational action. Customers are keen to see us deliver on our commitments in terms of product and service quality, customer experience, business ethics, innovation, employee welfare, operational processes, contribution to society, and the management of environmental impacts. An ever-more transparent future with increasing levels of scrutiny will reinforce the importance of alignment between promise and delivery.

• What are the critical values and beliefs we want our brand to be synonymous with?
• How can we ensure constant alignment between our innova­tion agenda and marketing messages?
• What role could our broader social commitment play in determining our “license to trade” in the eyes of tomorrow’s customer?

Internal choices

Myths. Every organization has a set of myths that are essential to its effective functioning. They enable us to make sense of the world and provide the stories that help simplify complex systems and influence the core operational decisions that guide our every action. These stories, worldviews, assumptions, metaphors, and mental models shape the way we do things internally. They also define how we view the operating environment and determine our marketplace behaviors.

• What are the core stories, worldviews, assumptions, metaphors, and mental models that underpin our current strategies and operating models?
• What new models and metaphors could help us make sense of the emerging environment?
• How should we evolve our current organizational mythology to help us reframe strategy, drive the resulting organizational changes, and navigate the emerging landscape?

Mastery. For the last 20 to 30 years, business schools and strategy consultants have emphasized the importance of developing the firm’s critical capabilities. A fast changing environment places even greater emphasis on ensuring excellence in the core activities that help the firm stand out against its competition. However, with ever-shorter and faster business cycles and unruly new competitors, the lifespan of our capabilities is declining. We have to reassess what it takes to win and act to ensure mastery on a more frequent basis. This implies that change management becomes a capability where being average could be mission-threatening. Given the central role of information and communications technology (ICT), effective management of ICT and the associated data assets also rise to the fore as areas where firms have to pursue excellence or risk being left behind.

• Which existing capabilities will we require mastery of to deliver our strategy in the markets we plan to serve in the future?
• What actions can we take to close any gaps between our current and desired strength in these capabilities?
• How will we decide on the capabilities to retain and develop in-house and those we should procure from external providers?

Muscle. Alongside refining internal capabilities, the most agile firms will act to identify and acquire new capabilities quickly. As the shape of next economy starts to reveal itself, many firms are already focusing on identifying and developing key new muscles. In a fast-changing world, such capabilities will include accelerated decision making, rapid execution, and ever-faster resourcing approaches to match talent to short-lived opportunities at speed.

• Where is the organization beginning to experience pain due to a lack of capability?
• What are the capabilities you most admire in the firms that seem to be navigating change most effectively?
• What steps can be taken to accelerate the acquisition and embedding of critical new capabilities?

Mindset. Throughout this book, the authors have emphasized the need for mindset change to embrace digital and exponential ways of viewing the world in traditionally linear thinking organizations. Leaders and managers in particular are being encouraged to develop the capacity to look ahead, see round corners, embrace uncertainty and complexity, and abandon long-cherished assumptions in the face of change. Seeing ourselves as players not victims, and learners rather than knowers, are becoming essential traits of organizations that are willing to embrace the future.

• How is the organization planning to facilitate the shift to more digital and exponential ways of viewing future possibilities?
• What frameworks are in place to explore, interpret, and act on the future factors that could impact the organization over key timeframes? (Twelve months, one to three years, four to ten years)
• How is the need for foresight, future sensing, and scenario plan­ning being embedded in training and development programs?

Management. Leading the organization into an unknown and potentially unknowable future will require fundamental shifts in how we lead and manage. An entirely new set of skills will be required to help deliver on our goals. These will include scenario planning, complexity management, cross-cultural awareness, collaboration, systems understanding, design thinking and extreme creativity. Understanding and responding to change will also require us to free up time and space for people across the enterprise to engage in serious research, analysis and choice-making about our preferred futures. These in turn require us to prune our currently overloaded “To-Do” lists. In their place we need “To-Stop” lists – encouraging “orgies of elimination” to tackle unnecessary complexity and kill off the reports, meetings, and processes that no longer add value.

• How is the corporate learning agenda being updated to reflect the skills required of tomorrow’s workforce, management and leadership?
• What is being done to drive the simplification of current activ­ities to reduce workloads and enable the business to respond faster to external stimuli?
• What new management and leadership models are being evalu­ated to help steer the enterprise on the next stage of its journey?

A point of departure

This book provides a range of potentially conflicting views, forecasts, visions and ideas of how the future could unfold for society and the businesses that serve it. We have deliberately avoided trying to package up a neat set of recipes and seven-step plans for creating your future. They simply can’t and won’t work in the complex and fast-changing environment that will unfold over the next twenty years.

The authors have deliberately sought to provoke, inspire, enthuse, and challenge our readers. We believe the most valuable role of these provocations is to stimulate the reader to explore the issues raised and resolve them in the context of their own organizations. The ques­tions posed at the end of each chapter and here in this conclusion will hopefully encourage and stretch you to think broadly about the emerging future and how your organization can survive and thrive in a rapidly changing reality.

This article is excerpted from The Future of Business. You can order the book here.

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