AXIS Performance Advisors

Demystifying sustainability

Are you really ready for the 21st Century?


Copyright 1997 AXIS Performance Advisors, Inc.

Are you really ready for the 21st Century?

The new year always gets us thinking of the future.
This is especially true as the millennium looms closer. While none of us
has a crystal ball, we all recognize that our future success depends on
our ability to anticipate and prepare for what’s coming. How good are you
and your leaders at preparing your organization for the 21st century?

Fads or Foresight

Ask any executive what they’re doing to prepare
for the next century, and most likely you’ll hear a litany of buzzwords
including reengineering, high-performance teams, restructuring, mergers,
outsourcing. We’re ready, they say. We’re doing all we can. We’ve got it
under control.

Maybe they do and maybe they don’t.

Don’t get me wrong. All these improvement strategies
have their place. They can all radically improve your productivity. So what’s
the problem?

“A good deal of corporate
planning…is like a ritual rain dance. It has no effect on the weather
that follows,

but those who engage in it think it does….Moreover, much of the advice
related to corporate planning is

directed at improving the dancing, not the weather.”

­Brian Quinn, Dartmouth

All these strategies focus on doing what you do
better. But your future success will be determined by your ability to do
something radically different. Don’t believe me? According to Don Tappscott,
author of The Digital Economy, most of Hewlett-Packard’s revenues come from
products that didn’t exist a year ago and 90 percent of Miller’s revenues
come from beers that didn’t exist 24 months ago. Executives need to spend
roughly an equal amount of time envisioning their future business as they
do improving their current one. Few executives do.

Looking backward to see forward

To get a sense of how much change is in store for
us, consider how different life was in 1982, only fifteen years ago. Think
back to where you were. Reagan was president. We’d just come out of the
energy crisis. The Berlin Wall was still up and the Cold War was still waging.
At work…

  • There were no faxes, answering machines, or cell
  • Rotary phones and typewriters were commonplace
  • If people had computers at all, they were dumb
  • Semiconductors, cable TV, and the Internet were
    not major industries
  • “Made in Japan” was just beginning
    to connote quality, not junk
  • Many of what are now the world’s largest markets
    were closed to outside trade

    “To effectively ‘manage’
    the strategy-making process, then, is not to preconceive strategies

    but to recognize their emergence and intervene when appropriate.”

    ­Henry Mintzberg,

    The Rise and Fall of Strategic

    Now imagine as much change in the next ten years.
    Remember, the pace of change is increasing.

    So what’s a leader to do?

    How do you plan for discontinuous, radical change?
    Many don’t try. But according to Gary Hamel and CK Prahalad, authors of
    Competing for the Future, there are three kinds of companies: drivers, passengers,
    and road kill. Only the drivers have any control over the direction of change.

    “Organizational commitment
    and perseverance are driven by the desire to make a difference in

    people’s lives­the bigger the difference, the deeper the commitment.”

    ­Gary Hamel and CK Prahalad,

    Competing for the Future

    Being in control of your future requires that you
    establish foresight about where your industry is going and develop strategies
    to control or influence its future. If you do not do this, your competitors
    will, and then they can position themselves to benefit the most. You have
    three choices to become an industry leader.

    • Fundamentally change how business is done in
      your industry (e.g., Charles Schwab and discount brokerages)
    • Redraw the boundaries between industries (e.g.,
      Time Warner and “edutainment”)
    • Create entirely new industries (e.g., Netscape
      and web surfing)

    Notice that increasing market share is not on this
    list. If you want to be an industry leader long-term, you can’t get there
    by just doing more of the same.


    Three legs of the race

    Most people define market leadership as being the
    first to market and the biggest in the market. However, true leadership
    is determined not just by market predominance, but by two other attributes
    as well. And these two additional attributes must be in place before an
    organization can gain market supremacy. The order in which they must be
    achieved are:

    Industry foresight and intellectual leadership

    You must be able to envision a realistic future
    for your organization that is radically different from what you do now.
    Imagine, for example, that you own Hollywood Video. Your business involves
    people coming to your stores to rent videos. You own millions of prime retail
    square footage. What happens when customers can download Robocop XX directly
    off the Internet or from their cable provider on demand? Will they still
    want to come by your store, just for old times sake? I doubt it. So what
    is the future of the video/entertainment industry?

    Foreshortened migration paths

    Next, you must develop the capacity, often across
    traditional industries, to position yourself for that future. What technologies
    will Hollywood Video need to compete? Should they get into the cable TV
    business, learn about satellite technology, or develop CD-ROM capabilities?
    What industry lines must they cross to develop the core competencies necessary?

    Market position and market share

    Finally, you must get to the future first and become
    the world leader, for in the global market place, only a world-wide presence
    will provide the preeminence necessary for leadership. To remain a leader,
    Hollywood Video will need to deliver entertainment in Beijing and Nome just
    as easily as in your home town.

     Try This: It’s better than twenty-questions

    Here’s a set of questions we suggest you ask your
    leadership to answer in writing:

    • What 5-6 industry trends most threaten our firm
      over the long term?
    • What new types of benefits do we want to offer
      customers in the next 5, 10, and 15 years
    • What new competencies will this require and how
      will we acquire them?
    • How will we need to change our interface with
      the customer in the near term?

    Then analyze their answers:

    • How consistent were their answers?
    • What did they take “over the long-term”
      to mean­how far out are they looking?
    • What radical, wacky ideas might just be worth
    • What does this imply you should start doing and
      stop doing?

    Source: Competing for the Future

    Thinking in the future tense takes time and practice.
    Ironically, most leaders are “too busy” managing day-to-day matters
    to do this visioning work. But you can’t be an effective driver if all your
    attention is on the gas gauge. Unless you’ve got your eyes on the road and
    the horizon beyond, you’ll likely end up in a ditch.


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