In order to anticipate the future operating environment, it has become increasingly important for leaders across all areas of organisations to have an understanding of the strategic potential of emerging technologies, coupled with the imagination to envisage the innovative business models and propositions that they might enable.
History points to successive waves of technological disruption that have dramatically impacted our lives, the nature of work and economies. Over the last decade or two, multiple waves across several distinct technologies have been developing concurrently, and are about to crest, leading to veritable tsunami of change.
Layered on top of these new technologies of the fourth industrial revolution, the current global pandemic has resulted in the ‘great acceleration’ of several disruptive trends that were already in play, from a step-change in ecommerce penetration, to the embrace of remote working and adoption of tele-health.
Rick Steele, CEO of the Australian based, global fund manager Loftus Peak, which invests in disruptive innovation, shared this insight in a recent article in the AFR:
“Never in my working lifetime have benchmarks been less relevant. An index reflects past success among companies. Future success is far less certain in disrupted markets. The index will not pick up unheralded companies or the next generation of winners. You need active fund managers who can identify that disruption”.
This perspective reflects the same tension that often derails growth and prevents focus on truly strategic innovation within organisations.
You cannot rely solely on data, which necessarily has been generated by activities in the past, to either accurately forecast your future performance, or inform your future strategy.
If you’re not actively exploring what’s happening at the edges, you risk becoming aware of new threats to your current business model only when it’s already too late to catch the new wave of opportunity.
It has never been more necessary for leaders of established companies to adopt the same approach as the venture capitalists who place a wide range of bets across a portfolio of promising start ups, or the fund managers investing across a portfolio of market listed scale ups, leveraging these new technologies to deliver innovative propositions through novel business models.
Certainly, you must invest in analytics and interrogate and augment your proprietary data optimize your current business. But you must also invest in developing your strategic foresight, your ability to ‘see around corners’, to imagine and experiment across a range of ideas that have the potential to create your future growth.
Dashboards and performance reporting are the output of the equivalent of ‘passive managers’ - can provide a false sense of security. Even a trend line that is still heading ‘up and to the right’ today will not pick up the fact that the next generation of winners are making accelerated progress in your wake.
In times of accelerated change, more than ever you need to enlist the skills of ‘active managers’ - innovation strategists, strategic designers and subject matter experts across disciplines - deeply aware of shifting market preferences and global megatrends, expert in systems thinking, well informed around the strategic potential of emergent technologies, and able to collectively invent the new business models that they enable.
By now it must be abundantly clear that, in order to survive, every established organisation needs to embrace digital technologies to transform the key elements of their business model, whether within their core operating processes or activities, their product offering and platform, their go-to-market model or, for many, all three.
But that won’t be sufficient. One of the biggest shifts that the digital era has ushered in is the collapse of industry boundaries and the formation of new ecosystems of value. You only need to consider Apple to realise that twentieth century thinking, that constrained strategic ambition within industry silos, for example to financial services, media, or consumer goods, is redundant in the twenty first century.
As we accelerate into the ‘post-digital’ era, the opportunities for where to play are unbounded spaces where those with laser-like consumer insights can address the needs of their target market across a suite of the most strategically compelling arenas.
Prospering through the next decades requires you to explore the possibilities of the next wave of enabling new technological platforms - from Artificial Intelligence and Robotics; Augmented Reality and the IoT enabled Metaverse; a spectrum of Biotechnologies; Blockchain; 3D Printing; to Energy storage.
You can choose to view changes in technology, operating environment or society as a threat or an opportunity. In the face of rapid change across all three, it has never been more imperative to embrace a mindset of ‘active’ exploration – curiosity-fueled, collaboratively-conducted, and customer focused – in order to catch the next wave.