What’s your future potential? … How your everyday behaviours can transform the opportunities that lie ahead, for you and your business
February 21, 2023
As 1999 ended, optimism was sky high as a new millennium of possibilities approached. For me it was particularly exciting as my first child, Anna, was born just weeks before the start of 2000. As clocks chimed to ring in the new year, my wife Alison and I stood outside our home at midnight, our new baby asleep in my arms, as the most dazzling fireworks display I have ever seen lit up the skies around us.
However economies come in cycles, and within three months of celebrating a new century, I vividly remember the day of the dotcom crash. The starry eyed dreams of many online entrepreneurs came crashing down. Bezos survived, but many others didn’t, including my own venture. I realised that, now with a young family, I needed to be smarter at building a business, and at anticipating the future.
Most people took their inspiration from a Seattle-based start-up called Amazon. A few years earlier in 1993, Jeff Bezos was working on Wall Street, a 30 year rising star of the hedge fund world. On his desk a report landed describing how the emerging Internet could become a huge virtual marketplace, that could reach across the old boundaries of nations and markets. Tim Berners-Lee at CERN had just launched the World Wide Web earlier that same year, enabling anyone to start to build a business online, simply and cheaply.
Within a few weeks Bezos left his high-flying job, packed a campervan and drove west with his young wife still asking huge questions. In Seattle, where most tech people clustered around Microsoft, he set out his business plan with a dream to create the world’s largest bookstore. Initially he called it Cadabra, then considered Relentless, but eventually settled upon Amazon. Within three years, he took the business public with an IPO. Anybody who invested $5000 in Bezos’s company back then would be worth around $5 million today.
At that same time, Anne Wojcicki, a 25 year old junior investment analyst, was sitting at her desk on Wall Street, not far from Bezos’ old office.
She read that the future of healthcare was all about data, genetic profiling of each individual enabling personalised medicines and care. No longer would people need to rely upon standardised drugs with limited effectiveness, seeking to address already developed illnesses often too late. Instead healthcare could be transformed to become personal, positive and proactive.
Like Bezos, a passion to create a better future was stirred inside her, and within weeks she quit her job and headed to San Francisco to start up a DNA profiling business, 23andMe.
At the time it cost around $300,000 to sequence an entire human genome. Wojcicki sought to dramatically reduce the cost by using a technology called genotyping, which spot checks specific parts of a gene for mutations know to be linked with certain diseases, instead of a creating a full sequence. They launched the brand to consumers in 2007, with testing packs available by mail order for $999, and later directly from the pharmacy’s shelf.
The revolutionary genetics business combined ideas of new genome technology and crowdsourced funding, into a model that has since reduced the cost of DNA profiling to $99 and is likely to fall much further in the coming years. She now leads a healthcare revolution.
Look forwards not back
Too many people in business spend too much time looking backwards.
As a CEO I spent the vast majority of every day, reviewing and reflecting on our past performance, or otherwise fire-fighting through the issues of the present moment. Almost all the data I tracked was about previous quarters, compared to previous years. Most time in meetings was spent discussing the relative success of past activities, and what we needed to do now to fix problems or improve their efficiency.
Most business reports focus on what companies have done, most analyst reports evaluate business based on financial histories. Even most future projections, and ultimately investment advice, is based on an extrapolation of the past. Strategy is usually based on building on what we currently do, rather than what we could do. It assumes that the future will largely be a continuum of what has gone before.
Looking forwards is a rare luxury.
A few weeks in the year are typically allocated to future planning. And of that, only a few days maybe even hours, with a serious discussion of future possibilities, vision development, and plotting out new directions. Ideas for the future are captured on flipcharts, slides and slogans, before their magic is quickly lost in a furious round of budget negotiations focusing on limiting expenditures rather than unlocking new revenues. Inspiring ideas for tomorrow are quickly diminished by the machinery of managing today.
It shouldn’t be like this. And in a turbulent world of relentless change, it can’t be.
Business leaders need to have their heads up, not heads down.
Of course, we need success today in order to create tomorrow, but creating the future matters more. Most business leaders will claim they are powerless to jump out of this cycle, to spend more time looking forwards. They are slaves to quarterly reporting demanded by investors, and short term attitudes of many analysts. But that is largely an excuse.
Paul Poleman, when CEO of the British/Dutch consumer goods giant Unilever, famously decided to end quarterly reporting, arguing that he could never get anything else done, and that his projects to invest and develop future ideas were always compromised by an inevitable desire to make today’s result look as good as possible. In a showdown with investors, he made the case that they too should be much more interested in long-term growth, rather than short-term glory. He won his battle, and Unilever began to thrive.
The challenge is to focus on the future, to engage everyone in exploring and creating your future potential. A business’ economic value is measured as the sum of future cashflows, not past profits. These can only grow through more future-focused initiatives. The alternative is to squeeze ever more revenues and less costs out of the existing business with diminishing returns. That’s not much fun, and certainly not the way to a better future.
Investors who understand, through better information and dialogue, the future potential of longer-term future initiatives, will reward the business with their confidence. This flows through to stock markets and market capitalisation.
Intangible assets, in the forms of everything from brands and patents, to contracts and customer bases, are the building blocks of innovation and future performance. Around 52% of the cumulative enterprise value of all publicly traded companies is intangible, worth $57.3 trillion according to Brand Finance’s “Global Intangible Finance Tracker”. The majority of business value is therefore about its future potential.
If business leaders can more clearly articulate future strategies for changing markets, new business models for engaging customers better, and innovation portfolios to drive new ideas into action, then even more of this future potential can be captured in the value of their businesses.
What is your future potential?
The world has progressed rapidly since the industrial revolution – steam engine to telephones, automobiles and aeroplanes, space travel and digital revolution. Today’s tech-fuelled revolution will be just as dramatic, but much faster.
The next decade’s accelerating change, proliferation of technologies, rapid speed of adoption, and the exponential impacts that result, will dwarf the scale of previous progress. How will we rethink and reinvent our worlds?
Markets are malleable things – they rise and fall, collide and evolve. Power shifts economically and politically, culturally and collectively. Entrepreneurial start-ups grab the attention, whilst the larger, older incumbent companies struggle to respond and adapt. Technology disrupts the rules of play, and the possibilities by which we can win. Huge opportunities, but where to focus?
We have more choices than ever before – in terms of who, where, what and how. Global or local? China or India? Online or physical? Human or machines? Make or partner? These are not binary choices, but a huge spectrum of options. How will you make the smarter choices, the right choices for your future?
“Future potential” is the ability of an organisation, and an individual, to utilise the future for its advantage. It is latent or unrealised ability, the capacity to do better. How you will unlock this ability is not always clear. However it is not simply by doing what you’ve always done, a little better, faster or cheaper, by working harder.
Potential lies in your ability to unlock the talents of yourself, and your organisation, in new unimagined ways. It lies in your ability to embrace new contexts as the world around us changes – economies and markets, customers and capabilities. Of all these, technology probably changes the context more than anything today.
How will you unlock your “future potential”?
- Future potential of your business: what you could achieve together, embracing the best opportunities, unlocking the most valuable assets, extending capability through partners, driving faster innovation and new types of growth?
- Future potential of your yourself: what you could achieve personally, embracing your dreams and ambitions, building more capacity to do more, amplifying the potential of those you work with, looking further ahead.
Future potential isn’t just about improving your existing business, but also about where you can go beyond it. Finding this future space, be it an entirely new space like Jeff Bezos found, in areas adjacent to what you do now, creates more opportunity.
Some businesses are always in “survive” mode, typically resisting the need to change, seeing it as a threat. Others are in “thrive” model, looking ahead for change, seeing it as an opportunity. Some people have the ability to change, others don’t. As leaders, we need to encourage the visionaries, the future seekers, those prepared to embrace change. We need to be those people.
The future is yours to shape, in the way you want, to your advantage. Far better to embrace a future of your own design, than to live in the shadow of one shaped by others.
Leaders need to be farsighted
When I asked Jim Snabe, former co-CEO of SAP, and now chairman of Siemens, how he makes sense of his business world, he paused. His first reaction was the obvious, to understand his specific industries, his customer and competitors, today. But then he reflected on the inadequacy of that current view. If what comes next will be different, then he needs to look differently for it, he said.
Seeing the bigger picture, is one way to change our viewpoint, but it’s probably still not enough. We still put ourselves at the centre, and then explore the obvious adjacencies. Instead we need new perspectives, seeing the emerging patterns of change, the parallels and possibilities, how to react to them, to seize the best new opportunities first. Put simply it’s about being farsighted.
Beth Comstock, former chief marketing and commercial officer of GE wrote about her leadership experiences as the business faced the challenges of rapidly changing markets. Her book Imagine it Forward: Courage, Creativity and the Power of Change is a call to action for all those executives who felt that they could continue doing what they had always done, and they and their company would be ok.
Comstock starts with a passion “The pace of change is never going to be slower than today.” She points out that 50 years ago the life expectancy of a Fortune 500 firm would have been around 75 years, whereas now it’s 15 years.
Futurist Ray Kurzweil goes further in an article entitled The Law of Accelerating Returns, saying “We won’t experience 100 years of progress in the 21st century, it will be more like 20,000 years of progress.”
The ability to be forward-looking and focused on the future, the capacity to imagine and articular future possibilities, sets the great leader apart from others. Whilst the rest of the organisation is focused on the shorter-term deliverables, they look to the leader to put what they do into the context of where they are going, and how it contributes to the journey.
Leaders as strategists are intensely curious about the future, looking beyond their own organisations and industries, to make sense of a changing world. They look to the changing dynamics of markets, of how organisations compete, but also of the shifts in macro-economics, politics and society. Indeed, the real catalysts for change are outside, not inside, an organisation.
The ability to look forwards, say Barry Posner and Jim Kouzes in The Leadership Challenge, is second only to honesty as the most admired trait in leaders. They found that 70% of employees say forward looking is the attribute they most look to in their leaders. This is not just about communicating a compelling vision, but being able to make sense of complexity, connecting the dots into a bigger picture, and to anticipate events before they happen.
My new research at IE Business School explored the reality of farsighted leaders.
We found that forwards thinking escalates with levels of leadership. Front-line supervisors need to look months ahead, mid-level managers who lead complex projects need to look 1-3 years ahead. C-suite executives should be thinking 5-10 years forwards, even if they plan and focus their actions on a shorter timeframe.
Yet the research also showed that most senior executives currently spend around 5% of their time thinking about the future – which could be a few hours every week, or more likely one or two weeks every year.
Contrast this to some of the great business leaders. Talking at his annual Berkshire Hathaway AGM in Omaha Nebraska, Warren Buffett claimed to have spent around 80% of his career reading and thinking. That seems extreme, but so is his performance as one of the world’s great investors.
Richard Branson told me how he always tries to take a swim for around an hour each morning, often a lap around the shore of his Caribbean island, giving himself time to think before anything else in the day. He also famously drinks 20 cups of tea each day, saying it gives him time to pause amidst the daily chaos, and just think a little. Jeff Bezos schedules “thinking” meetings about future ideas at 10am every morning, when he is fresh and alert, and never in the afternoon.
The future is an infinite array of possibilities – for you to decode as options and choices. Firstly, we need to make sense of what those options are, then explore what they could mean for us, and then decide how to make the right choices.
Forward-looking leaders embrace four important tenants
- The future is fast: while the speed of change accelerates relentlessly, we shouldn’t be intimated by it, or jump to knee-jerk actions in panic, but take our time to think longer-term, and how to achieve progress.
- The future is complex: while the search for simplicity is admirable, it is not always possible or the best solution, instead we need to recognise that today’s world is not about reducing things to 2×2 matrices, or binary choices.
- The future is unpredictable: while we have a desire to be complete, and right, the future does not offer such precision, instead we need to embrace uncertainty as a positive force, to define our north star then embrace the journey as it evolves.
- The future is there to be created: while we like to limit ourselves to what we know, what markets and sectors we are in, there are no boundaries or rules that limit where we can go. Imagination is our guide to write the future we want.
In his book “Farsighted: How to Make Decisions that Matter” Steven Johnson asks, if the most difficult choices are the ones with most consequences, why do we spend so little time thinking about them. It is fashionable, he says, to argue that we live in an age of short attention spans, requiring quick thinking and rapid action. Yet he argues that we have become much better at holistic thinking – connecting multiple ideas together, connecting the dots, systems-based approaches. Speed of change requires bigger thinking, he says.
Adam Grant reflected on Johnson’s challenge. He argued that a good way to think bigger is by reading novels, enabling us to transport our brains into new spaces and gain new perspectives – including exploring ideas for the future, through science fiction. Star Trek, for example, is a lifetime obsession of Jeff Bezos.
The IE research suggests that many leaders are averse to future thinking because there are no absolutes, no detailed analytics on which to base decisions. Indeed, over the last decade we have embraced scientific method into our business to such an extent that we now feel exposed without it. Instead making future choices requires intuition and imagination, and courage.
Psychologist Ellen Langer’s advice for making difficult choices about unpredictable futures, is “Don’t make the right decision, make the decision right”. Her point is to think about how we might explore the opportunities ahead of us, and their implications. Given you are never likely to have as much information as you’d like, don’t search for the perfect answer, consider how we can make the best choices from what you know.
However these choices will be infinitely better, if you open your eyes to broader horizons – to new perspectives and new directions – and thereby increase your future potential.
© Peter Fisk. Excerpt from his book “Business Recoded: Have the courage to create a better future” published by Wiley.
More for business leaders from Peter Fisk:
- Next Agenda of best ideas and priorities for business
- Megatrends 2030 in a world accelerated by pandemic
- 49 Codes to help you develop a better business future
- 250 companies innovators shaking up the world
- 100 leaders with the courage to shape a better future
- Education that is innovative, issue-driven, action-driving
- Consulting that is collaborative, strategic and innovative
- Speaking that is inspiring, topical, engaging and actionable
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