Not So Obvious Strategies for 2024

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Futurist Frank Diana, speaks often about the importance of recognizing the converging forces that will ultimately deliver our future.  These converging forces come from a variety of different domains such as science, technology, societal, geopolitical, economic, environmental and philosophy.  It is these evolving, emerging and transforming forces from all of these different domains, mixed together, that generate our future.

When anticipating and planning for the future, it is important to understand that we are not without agency.  There are many things that we can know, do, implement and change that will enable us to navigate through these forces and be more prepared.  We can recognize patterns, signals, convergences and catalysts that will shape our world and prepare for it.  The following concepts, not often considered, can also be valuable in preparing us for the future.

How Our Minds Resist the Future

Rule #1. The future will always be tainted by our past, as we will attempt to apply our legacy perspectives, biases, moral frameworks and belief systems there, relevant or not. ~ Kevin Benedict

Humans display a wide range of psychological traits that can make us resistant to change, and fearful of the future. Understanding these traits helps explain why we sometimes struggle with change, even when it offers rewards and benefits. We will also consider how the influence of money, sex, power, and identity can further complicate these traits in hard to predict ways.

Psychological Traits Resistant to Change

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1. Loss Aversion: This tendency involves preferring to avoid losses rather than acquiring equivalent gains. The fear of losing what one already has (such as status, resources, or comfort levels) can be a more potent motivator than the potential benefits of gaining something new.
2. Status Quo Bias: Many of us prefer things to remain unchanged because the status quo is familiar and comfortable. Change introduces uncertainty, which can be stressful and anxiety-inducing.
3. Confirmation Bias: We tend to favor information that confirms our pre-existing beliefs or values. This bias can close us off to new ideas and lead to selective gathering of evidence, making change more difficult.
4. Fear of the Unknown: Change is inherently uncertain. Not being able to predict outcomes can lead to fear or anxiety, causing us to stick with known quantities, even if they are suboptimal.
5. Cognitive Dissonance: When new information conflicts with our existing beliefs, it can create discomfort known as cognitive dissonance. We often resist change because it challenges our worldview or identity, leading to discomfort we naturally wish to avoid.
6. Habit: Our behavior is largely driven by habits, which are efficient for cognitive processing. Changing habits requires conscious effort and can be mentally taxing, thus we often resist change to maintain cognitive ease.

Operational Tempo and Speed as a Competitive Advantage

The concept of speed as an advantage is not new. Over the course of 700 years, the Romans built and maintained a system of roads extending over 55,000 miles to enable speedy communications and the quick movement of troops and supplies across the vast expanse of the empire. 

Today digital technologies have altered our perception of time and space while expanding our expectations of what can be accomplished in a given time. We expect to accomplish one hour's worth of shopping in a brick and mortar supermarket, in seconds shopping online. These expectations significantly impact the way businesses must operate in a digital era to compete and remain relevant. 

Achieving Transformational Business Speed

It took Magellan’s crew three years sailing ships to circumnavigate the earth.  Today, at hypersonic speeds of 7,680 MPH, it takes just over three hours to circumnavigate the earth.  Data on the Internet, however, travels at 670 million MPH, which means it only takes milliseconds to circumnavigate the earth.  In this age of digital businesses and digital interactions, companies must digitally transform to work effectively in a world where mass information moves at these unimaginable speeds.

It's not just IT systems that are impacted by the volume and speed of information.  The creators of business processes that were designed and developed in an analog area, simply never envisioned a business environment that would require these operational tempos.  Analog business processes were designed to have humans involved.  These dependencies were designed to slow down the process to ensure accuracy, compliance and accountability.  Today, however, operating at the slow speeds of an analog, human dependent business process, will doom your company.  Analog business processes must be quickly automated via robotic process automation (RPA) using artificial intelligence and machine learning to effectively interact with impatient digital customers and B2B partners.

Napoleon, True Competition and Pandemics

Napoleon

In 1809, a British military expedition of 40,000 soldiers was sent to Walcheren in the Netherlands to defeat Napoleon’s troops.  After a few light skirmishes, the French army evacuated and left the British occupiers to themselves.  After a few weeks the British began to get sick with “Walcheren Fever.” Soon over 4,000 British soldiers were dead and 12,000 were too sick to continue.  The competition for Walcheren was less about the French army and more about the fever.

On June 24, 1812 Napoleon’s French army of 685,000 soldiers invaded Russia.  Over the next six months the French army won a long series of bloody battles.  Although winning nearly all the battles the French army still found itself in deep trouble.  The cold and wet of autumn and winter destroyed them.  They were forced to retreat back to France with only 27,000 out of the original 685,000 soldiers left.  Historians say that Napoleon didn’t lose to the Russian generals, rather to the weather.  

Napoleon mistakenly thought Russian army was the true competition. Today, during the Covid-19 pandemic, businesses must also understand the true nature and source of their competition.  Recognizing that the pandemic, pandemic related economic impact, and the pandemic inspired behavioral changes of consumers are the sources of our competition today is critical for us to respond appropriately.  

If the pandemic and its impact on customers is the true competition of 2020, how might your company’s business plan need adjusting?  

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Kevin Benedict

Partner | Futurist | Leadership Strategies at TCS

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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I work with and have worked with many of the companies mentioned in my articles.

A Pandemic Inspired Tsunami of Channel Switching

In Boise, Idaho our local downtown retail chocolate shop, “The Chocolate Bar” transitioned into a chocolate factory and direct delivery service seemingly overnight as a result of the COVID-19 pandemic.  We have also seen other stores quickly reacting.  Costco now limits the number of shoppers inside their stores, while dramatically ramping up online ordering with home deliveries.  Whole Foods is now providing three ways of shopping locally: in-store shopping, online ordering with drive through pick-up and online ordering with home delivery.  All of these new and expanded options represent fast transitions to new or additional sales channels.

Fast transitions, or what military strategists often refer to as “fast transients,” are the ability to quickly transition from one position to another.  Today we are seeing examples of fast transitioning across many different areas including retail stores, restaurants and businesses as they attempt to meet their customers where they are.  In a recent interview my colleague, Rich Sherman, Senior Fellow, Supply Chain Centre of Excellence at Tata Consultancy Services called this, “Channel Switching.”

Culture and Humility as Competitive Advantages

In 2019, I interviewed over one hundred business leaders.  In the course of these interviews and follow up discussions I learned a great deal - some of which I want to share here.  I have seen workforces that are united with their leaders in a desire to change and improve.  I have seen organizations that bring in all new leadership eager for change, but watched them fail because of institutional resistance.  I have seen leaders and workforces passionate about winning, but without the humility to learn from their customers.  I have witnessed how difficult it is to change.

I have learned the human-work of solving problems, facing challenges and overcoming obstacles tends to share a common purpose: creating stable, secure and predictable environments. The tendency for most humans is that once we solve a challenge, we want to be done with it.  That propensity, however, does not fit with today’s reality of perpetual change.

Technologies Without Strategies

Layers of GIS Maps

Fingerspitzengefühl: The literal translation of this German word is finger tip feelings.  It is used to describe one's ability to maintain situational awareness by receiving real-time data. 

The problem with fingerspitzengefühl, in addition to difficult pronunciation - is knowing how much data a person needs in order to maintain situational awareness without it being too much.  Today we have data coming at us from every direction.  In fact, as I am writing this article I was notified that my security camera detected humans at my front door.  I now have situational awareness, but at the cost of distraction.  What is really needed is not just any information, but information that will materially impact one's ability to succeed.

Measuring Enterprises' Capacity for Change

Change is difficult.  The default mode of most organizations and people is to resist change.  It's like a helmsman who steers a ship straight into an iceberg because he doesn't want to rock the boat.

Agile businesses, however, that can redirect energy to fast and positive change and transformation can exploit many more opportunities than enterprises mired in resistance.  The challenge for leaders today is to create an organization that is not only prepared and willing to change, but that also has enough energy and resources to succeed.

One of the rules of the First Law of Thermodynamics in physics is, "Energy can be changed from one form to another, but it cannot be created or destroyed.”  I propose there is an application of this rule in business as well.  If energy is being consumed on resisting changes to your business, then it is not available for making positive changes to your business.

If markets are changing due to economic conditions, competition, technological innovations or rapidly changing customer behaviors and preferences, then companies must be able to quickly redirect their energy to implementing positive change in order to win.

Change consumes energy, and energy is finite.  That means in order to make changes to keep up with a rapidly changing market, energy must be conserved and stock piled so it is available.  Expending scarce energy resisting intelligent change is a huge waste.  Making investments and taking your business down a path that cannot quickly be undone if the market moves a new direction is also a big waste.

Speed as a Competitive Advantage in Digital Transformation

The concept of speed as an advantage is not new. Over the course of 700 years, the Romans built and maintained a system of roads extending over 55,000 miles to enable speedy communications and the quick movement of troops across the vast expanse of the empire.

What’s different today is that digital technologies have warped our perception of time. As an example, a person might say they live five minutes from town, but that can have widely different meanings based on whether they were referring to walking or driving a car.  Digital technologies compress our perception of time and space while expanding our expectations of what can be accomplished in a given time. We expect to complete the equivalent of one hour of shopping in a supermarket in one minute online.  These changes significantly impact the way businesses must operate in a digital era to compete and remain relevant.

Culture as a Competitive Advantage in Digital Transformation

The human work of solving problems, facing challenges and overcoming obstacles tends to share a common goal: creating stable, secure and predictable environments. The tendency for most humans is that once we solve a challenge, we want to be done with it.  That propensity, however, does not fit with today’s reality of perpetual change. 

In the digital business world, organizations have no choice but to operate in an unclear, uncertain and continuously shifting environment that requires a new mindset and approach to formulating business strategies.  Digital winners recognize that change is part of the game, and that they need to develop ways to exploit continuous ambiguity.   In fact, in our surveys of high-tech professionals, when we asked how long they thought digital transformation initiatives would last, about one-third of the surveyed technology professionals answered “forever” – and as we all know, forever is a long, long time.

Fast Tempos and Digital Transformation

“What matters most is the tempo of change.” ~ John Boyd

Few businesses would argue that data collection and analytics are not important to their current and future success.  Data can provide situational awareness, enhanced customer service and more personalized experiences.  It also supports vigilance and the ability to recognize both problems and opportunities early.  The problem, however, is not many enterprises can act on the data fast enough to matter.

In most companies, organizational structures, decision-making processes, business models and business cultures aren’t nimble enough to change at a tempo fast enough to capture competitive opportunities and respond to challenges.  In today’s world of digital transformation and fast changing mobile and online consumer behaviors (see Cutting Through Chaos in the Age of Mobile Me), businesses must be as nimble as their customers, or they risk losing market share to a nimbler competitor.

The First Law of Thermodynamics states, "energy can be changed from one form to another, but it cannot be created or destroyed.”  In a business context that means if energy is being used to resist change, then it is not available for making change.  Change is difficult.  The default mode for most organizations and people is to resist change.  In order to overcome this resistance, a new reality must be created.

Companies need to transform in order to minimize resistance and reward behaviors and environments that support a fast tempo of change.  Companies that can support a fast tempo of change have a big competitive advantage, while those that can’t risk obsolescence.

The military strategist John Boyd found some fighter planes with poorer performance numbers on paper were actually better in competition because they could transition at a faster tempo.  The ability to change directions quickly trumped speed and performance.  There are lessons there for businesses.

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Kevin Benedict

Writer, Speaker, Analyst and World Traveler

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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.