Freeman Cebu Business

If all you do is reacting, you are already late

INTEGRITY BEAT - Henry Schumacker - The Freeman

Now more than ever, organizations must be ready to react to the new world emerging around us.

Organizations can no longer wait to jump on trends once they are proven.

Now, new technologies are accelerating trends at such a fast pace that it is no longer possible to maintain growth by only playing catch-up. In fact, trying to play catch-up, i.e. reacting, is the perfect way to be disrupted and lose out. And this becomes obvious when looking at some figures from only 10 years ago.

Eight of the 10 most valuable companies in 2010 fell off that ranking by 2020. The two companies that remained in the top 10 are Apple and Microsoft. Apple only joined the top 10 in late 2009 with an approach focused on shaping the future rather than reacting to a new world, successfully developing new business models, but also taking bets that were to publicly fail like iTunes Ping.

Microsoft has been around for longer but like Apple focused on launching new business models rather than merely reacting to what others have proven to be successful.

Stakeholders today expect executives to structurally analyze different scenarios for what will shape their industry in the long run and to place certain bets to prepare for those shifts – similar to the approaches that have made Microsoft and Apple so successful. That is what corporate innovation must deliver: a future thinking that imagines possible worlds in 10 years from now and takes action today to be successful in that future world.

This approach can be implemented through strategic acquisitions of promising digital businesses or the structured building of new corporate ventures!

The right corporate governance structure must separate innovation units from the core business. This separation enables the innovation team to remove anchoring to the core business in their thinking and allows for the creativity to look beyond the short term.

Selective and well-structured risk-taking must be welcomed and budgeting and success tracking must reflect the difference in the nature of future   innovation compared to the existing business. Does this approach guarantee decades of corporate success? Off course not – there’s never a guarantee. But in today’s fast-paced environment, a future approach is the only chance a company has, to be ahead of the curve, driving growth through new business models. When implemented properly, it significantly increases the chances of long-term corporate success.

So what is the takeaway? Innovation efforts should not only be about reacting to a new world emerging around us. True innovation is about imagining possible future worlds and acting now to lay the groundwork for success in those worlds. Can we expect companies to exactly know what the world will look like in 2030? No. But we can expect companies and their executives to make a structured effort to anticipate it, to analyze likely scenarios and prepare for those. Because what we do know is that our world in 2030 will look very different to the world today.

Present forward or future backwards? How do we frame innovative thinking? Feedback is needed; contact me at hjschumacher59@gmail.com

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