Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.
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How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought:
Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth.
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The Journal of 2020 Foresight
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Monday, July 21, 2003
The Ridge Summary
Chapter Two
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
Chapter Two: The Ridge Foresight Journals
As you gaze out over the landscape far below you gain a new appreciation for all of the dynamically changing forces. Looking out on a time horizon is no different. Between now and the year 2020 the terrain, threats and opportunities will mix in much the same way as these storm fronts intermix with highs and low pressure zones. While there are no guarantees, we can anticipate several ways our future story may unfold. We can select signposts, signals, or indicators which, when monitored, foretell which contingency plan to activate.
Threats are external conditions, people, and forces that appear to act against our intentions and aspirations. They hinder our progress along our journey and may force us to back track over past trails. They may be real or imagined and they typically emerge and dissolve over time. Threats remain threatening as long as we ignore their presence, have not anticipated how to handle them, or lack the will to confront them. And, threats, like opportunities, can be discovered during environmental scans of technology, political, economic, and social trends.
If you try to track all the macro forces – political, technical, social, and economic trends – you fall victim to “analysis paralysis.” By the time you come to a conclusion the window of opportunity has already shut or the threat has nailed you between the eyes. What we really need to discover is what are the growing, brand new forces? Which of the current forces are loosing their steam? Which trends have peaked and are reversing themselves? What are the "wildcards" about to disrupt us. In an 8-step process of strategic exploration, instead of looking in from the macro sea of changing trends to your decision, we start on the inside and work out.
We all enter a crossroads in our lives, each from our own, unique life experience. Even those in the same life stage come to seek a different set of options depending upon their current situation. Our goal is to better understand the dynamics shaping our future. The shift in perspective opens our awareness to the hidden long-term forces shaping today and tomorrow. The variable, wildcard forces likely to have a major impact on our decision get ranked, or sorted into clusters. We’re after four logically plausible, yet qualitatively different screenplays of the future.
One learning expedition chose “Do What You Love, And the Money Will Follow.” They didn’t want to wait too terribly long before the cash began to flow. So, they applied their scriptwriting skills to these four future storylines: “Staying Put, Doing What You Love;” “It’s Wired, Doing What You Want – Anywhere, Anytime;” “Struggling Lone Eagle, Overpriced for Local Market;” and “Trapped & Permanently Temporary.”
Major disruptions in our lives force us to change our normal habits. We know from “change experts,” that we respond in one of two ways. The so-called valley of despair -- the death and dying model of shock, bargaining, denial, anger, depression, and acceptance. Through selective filtering we miss the clues that suggest just how close we’ve come to the edge of the cliff. The second is a process of anticipation. The first drains all of your energy. The second feels more like an adventure.
While largely a creative writing project, you can rely on typical plot structures as catalysts for developing story lines. The story plots revolve around the actions of, not individual people, but of larger organizations and communities. We almost always work in three: Zero-sum game of winners and losers; Adventure stories of challenge and response; and Growth and decline through evolutionary change. Usually we throw in cycles and infinite possibilities. In the latter, the accelerating growth leads us to higher and higher plateaus. Booms lead to bubbles and then cycles exert themselves – usually in politics and in the stock market.
The “Trapped and Temporarily Permanent” boomers forced to work without much of a pension or retirement savings of their own, find themselves over qualified, over specialized, and discriminated against in a vicious economic spiral. Social Security, Medicare and private pensions -- which had been included in calculations of the Bob Hope generation's wealth will not transfer to their boomer adult children.
In the“Staying Put, Doing What You Love Scenario,” baby boomers only have a passing interest in the Internet. It remains generational and gender driven. The smaller 30-something generation spends the more time on it in chat groups and game playing. The Internet doesn't seriously replace other forms of entertainment, communications, and financial services in a broad, mass market way. Because, this story takes place in a geographical region capable of supporting boomers, and anyone else, as they answer their calling with non-conformist career changes and lifestyles, boomers feel little pressure to move according to somebody else’s schedule.
Unlike the first two, this one -- “Struggling Lone Eagle, Overpriced for Local Market” -- introduces the mobility theme. While the motivation may be similar to Trapped and Permanently Temporary – a layoff or some other event -- a mid-life baby boomer, or anyone else for that matter, leaves the region for a less expensive and more self-sufficient lifestyle. They blend environmental restoration, community building, whole systems thinking, and medical self-care with backyard biodiversity, electronic mail, eco-tourism, and green investing.
The underlying force in “It’s Wired, Doing What You Want – Anywhere, Anytime,” is fueled by impact of the global information economy. Specifically, how it primarily transforms industries into knowledge networks. The network is the computer. Organizations undergo reengineering and restructuring to continuously leapfrog the competition. Collaborative tools and networks bring together project teams of experts from around the globe on behalf of an enterprise. With the ability to operate anywhere there is a" wired" infrastructure, the boomers begin their move to smaller towns and rural regions, the penturbia migration.
Even the big, solid companies, the pillars of the society we live in, seem to hold out for not much longer than an average of 40 years. In this new era, that means we must involve more ideas and more ideas at all levels in strategy, innovation and value creation. Addressing the future of organizations at a cross-roads, an HR learning expedition spin four Talent Scenarios: “Agent: Me go-go Fast Scenario;” “Athlete: Running Together Scenario;” “Associate: Welcome Back Kotter / Learning Together Scenario;” and “Academic: Absent Minded Professor / Out to Sea and Treading Water Scenario”
The HR expedition played a card game that led them implication-by-implication to organizational life phases, issues of fit, talent portfolios, disruptive innovation, emerging knowledge, sustained excellence, transitional stages, embodied knowledge, business cycles, intangible assets and internal brands.
They realized that they uncovered a two-way interaction. They had been used to a training paradigm – in which an instructor conducts a class and imparts knowledge. The just-in-time requirements of an Agent and an Athlete frightened them initially, until they came to realize online tools, templates, and reference materials could significantly increase learning retention. The story opened the way for a training perspective to be turned into a learning and knowledge paradigm.
Extreme Agents -- the AGENT-Agents paradoxy-morons -- look at a well-established, mature approach from an offbeat perspective. And what they notice is how limited the traditional way solves the really complex problems. They don’t identify with the keepers of the tradition -- Associates on the one hand, and Academics on the other hand. Both of those groups gravitate to different versions of the Ninety Percent Solution clubs. The amount of time it takes Agents to move an idea from a .1% idea to a 1% prototype, and finally to a 10% niche in the marketplace (Innovation), is roughly the same amount of time it takes for that niche to accelerate up the curvilinear curve of market acceptance through 50% to 90% (Growth).
Agents and Athletes compliment each other bridging the challenges of survival, stabilization and rapid growth. Athletes, then figure out the formula for taking a prototype and turning it into a product on a repeatable basis. The emerging knowledge Athletes produce by building on the formula reduces the random experimenting required. Athletic organizations in early to growth stages can?t afford to staff up with more bodies. They contract with experts to eliminate the extra financial burden of benefits, but Athletes guard their organization?s core competencies while quickly managing increasing degrees of complexity.
During the hyper-growth period, extreme Associates come on board to fill in as expansion opens large cracks in the operations. Associates help Athletes build the organization as a brand, rather than the first product as the brand. As the organization grows, it becomes more complex. Functional structures evolve into looser divisional structures. Divisions tighten into matrix organizations which loosen into network organizations. Associates, through their loyalty, maintain the organization’s reputation. Through their behaviors they develop a trust mark that keeps bringing long term customers back again and again.
The Athlete’s emerging knowledge has become classified, categorized, tested and benchmarked - or embodied in an Academic’s system solution . Whereas the product leader value proposition is the best product, and the operational excellence proposition is the best total cost, the customer intimate proposition is the best total solution. the embodied knowledge becomes proprietary to the client. The customer intimate value proposition provides a learning laboratory for the Academics -- which is why they practically invented knowledge management. Because, they don’t have anything tangible to sell like a product.
The last two steps are to rehearse the future by playing out the original decision across each of the scenarios, and then to select relevant signposts or indicators to monitor. Those on the HR Executive team in mature organizations, responsible for thousands of employees and millions of dollars in budgets, examined their current talent capabilities. They questioned how long it takes to develop their talent pool to make up any gaps, and in worsening business cycles, how many of their surplus talent could they afford to let go? The critical challenge to HR executives is to find a new set of organizational initiatives that will become the basis for managing the next period of evolutionary growth.
Over the lifespan of an organization --the Start-up, Growth, Maturity, Decline, and Reinvention stages -- each phase is both an effect of the previous phase and a cause for the next phase. To move ahead companies must consciously introduce planned structures that are 180 degrees different than what worked in the recent past. Each stage evolves through a mostly incremental growth phase with only minor periods of upheaval, only to end with a chaotic period of turmoil. Every organization needs to master fundamentally two sets of competencies -- innovation and efficiency.
Taken together, the 8 scenarios (4 Lifework and 4 Worklife) help us figure out which organizations make the most sense for us to target as a potential employer, customer or client. We can figure out which might be the best fit for our current stage in our own lifespan. And by knowing the unique challenges to the potential organization based upon its state in its lifespan, we can propose several ways that we can contribute to the best of our abilities. AGENT-Agents, AGENT-Athletes, and ATHLETE-Agents team to bridge the leadership crisis from start-up to hyper-growth.
At the end of the start-up phase founders hate to step aside during this turning point, even though they don’t have the temperament to be managers. The early growth phase is about tightening and efficiency in the evolutionary part of the lifecycle. We see the addition of extreme ATHLETES, the so-called ATHLETE-Athletes. They form resilient project teams to accelerate new business formation. Initially, they convert their learning from experience -- the emerging knowledge about each new product -- into repeatable processes and a practical business formula. They become the experts at rapid product introduction. They form the foundation for stability. As the hiring ramp-up comes the focus shifts slightly to ASSOCIATE-Athletes.
In the late growth and early maturity stage,having weathered the challenges of rapid growth, the organization plateaus with significant advantages: size, financial resources, well-developed systems, and an experienced, competent staff. This is the time for two talent clusters to shine, both Associates. The first, the extreme Associate -- the ASSOCIATE-Associate -- takes on the responsibility for sustaining growth and innovation so the organization can survive. Extreme associates are particularly suited to build a culture based upon trust. Reputation matches external brand and is maintained through community-based values and informal knowledge sharing processes. ASSOCIATE-Academics provide analytical specialties, develop proprietary best practices and access external benchmark research.
A shifting environment refers to the expansion and contraction phases of the economic cycle. All you have to do is to figure out if the organization’s industry is currently in a divergent (loosening) or convergent (tightening) period, and then plan for the next cycle. In a period of industry divergence expect the turning point to be about efficiency -- cuts in total resource costs, optimization, productivity, and an improved competitive position. Efficiency turning points translate into consolidation, centralization, contraction, and tightening organization structures. When an organization survives the turning point ending the late growth and early maturity phase, it turns to the efficiency solution. The predominantly ACADEMIC-Associates and ACADEMIC-Academics -- the extreme Academic cluster -- take center stage.
The evolutionary and then revolutionary periods in the late maturity and declining organization: An overextension of COORDINATION triggers a RED TAPE nightmare that demands COLLABORATION for growth in the next stage. In that phase, if the organization doesn’t make it through the red-tape turning point it may go out of business. People in the system can’t see the changes that are happening in their environment this is so insidious that frequently the data that they ignore have to do with factors that could literally drive them out of business. These are the specialists who rely on data and analytical thinking. The AGENT-Academics pursue their own research and development as a think tank based upon original theories and multiple disciplines. To achieve growth the organization returns to loose control, COLLABORATION, and an evolved matrix to a network structure.
Options open to a maturing organization trending rapidly toward decline are: Old Game, New Game, Turning Point, and Breakpoint Strategies. Each addresses 5 change scenarios: No change, continuous change, sporadic change, discontinuous change, and collapse. Breakpoint strategies succeed or fail the last two scenarios -- discontinuous change and collapse. In the Old Game Strategy, an organization’s response to a major threat is to resist, so they don’t initiate any internal changes. They’ll be successful depending upon their ability to contain the change forces -- a disruptive innovation, technology, business model, or industry breakpoint.
Any organization that plans to survive longer than a decade in today’s environment will have to master most of them at one time or another. They’ll have to initiate old game, new game, turning point strategies, and breakpoint strategies. If they don’t they will succumb to a fatal breakpoint and collapse. The four options for leaders to mobilize their employees are resistance, revitalization, renewal or restructuring practicing four leadership styles: Committee, Cultural, Collaboration, and Commander.Leadership by committee is needed for old game strategies, because of the high degree of resistance. With a closed attitude towards change prevalent in the organization, the committee executives have to sell their decisions to the rest of the organization and then implement them in their respective business areas.
Revitalization is appropriate when resistance that is open to change must be adapted to a strong and growing change force. Under these conditions, lowering the resistance usually stimulates the change forces. By converting status quo advocates into change agents that results in a stronger force of change. The pace of change is slow, but continuous and all encompassing. The company's internal organization is mainly involved. The cultural style involves the delegation of both decision-making and implementation to frontline executives. The strengths of the cultural approach are also- it's weakness.
The Collaborative Leader capitalizes on both weaker resistance and weaker external industry change forces. Sporadic changes show up from time to time, but they’re only contained to parts of the organization. Renewal takes advantage of periodic of stepwise change. For renewal, using a collaborative leadership style, the chief executive and his team share ideas and facilitate decision making throughout the organization. Their subordinates are typically able and open to change but unwilling or insecure. The forces of change are weak, so it is not clear in which direction the company should change.
Breakpoint strategies respond to discontinuous change. A dramatic restructuring of strategies, structures, and systems can be implemented rather quickly within a few months because it does not attempt to change behavior and skills, nor the organizational learning process. Organizational restructuring via acquisition, divestment, reorganization, downsizing, and so on is a common way of trying to respond to an external breakpoint. The rapid, decisive style of the commander is needed to implement restructuring.
Reinvention is the most difficult period in an organization’s lifespan, assuming that the company didn’t fall victim to infant mortality – unable to bridge the breakpoint between start-up and hyper-growth stages. Unlike restructuring, realignment succeeds when companies have learned from their experience. Sustained excellence requires nothing less than the capability to create breakpoints developed by mastering strategic options aligned to internal innovation or efficiency paths and external stakeholder relationships.
Frequently the resources and competence needed to journey to the other side of a breakpoint gap cannot be developed in-house, especially under time pressure. The resource commitment may also be too large or risky for one company alone. Cultivating external relationships provide both missing capabilities as well as development opportunities for managers. The best way for selecting the right alliance is to complement the internal change processes – incremental or fundamental innovation and cost reduction or business process initiatives.
The future belongs to companies that can create competitive breakpoints by drawing on the talent and commitment of their people. They need to have 4 unique talent blends in place to master the internal innovation and cost reduction initiatives, while at the same time to cultivate the external partnerships necessary to fill competence gaps – ASSOCIATE-Agents, ATHLETE-Academics, AGENT-Associates, and the ACADEMIC-Athletes. It takes a special knowledge creation function – an information and intelligence capability to gather and evaluate the information for sensing the forces of change. The on-going fundamental innovation process is enabled by monitoring and scanning systems to trigger new thinking. The knowledge system has to be capable of supporting the scenario building process.
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Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
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