Yes, the world is changing quickly. With its promise of chaos and opportunity, it may seem overwhelming. But I have good news for you. Understanding the future, as it affects your decisions, can become an everyday part of the way you think. You don’t need a Rolodex of experts on speed dial to interpret everything for you. You may never become a professional futurist, but everyone can be vigilant about the major changes coming for our businesses, our governments, even our families.
Exploring the future is about finding a few trends that could change your world and keeping an eye on them on a regular basis. Futuring is about paying attention to both society and technology and asking yourself: “Yes, but what will this mean in five years? What about ten years?” These simple acts change the way we think about the future, such as whether to sell a small business and retire in a decade, or build three new factories in Bangladesh that will take six years to become profitable.
You are about to discover the tools that will help you take all the information you have available to you and turn it into a cogent view of the future. Once you have that vision, you can use it to enhance every decision you make. That way, you won’t be making plans believing that film is the future of cinema. You will not miss changes like the MP3 and end up making lamentable decisions. You will see new opportunities before your competitors, just as Nokia did. You will understand your role in a bigger world.
Futurism and Strategic Planning
Professional studies of the future have been part of the executive arsenal for around 40 years. Futurism is the process of discovering what trends will change our world, analyzing their potential impact on specific activities, and then communicating to colleagues what lies ahead. As part of strategic planning or regular collection of business intelligence, futurism has a long history of success.
In 1999, consumer goods companies wanted to know how the future would change packaging. They wanted to know about the soup can and the shampoo bottle of the future. Packaging engineers are regular folks. They live for cardboard boxes, extruded plastic bottles, and aluminum cans. Typically, peanut butter jars are not at the vanguard of the sciences, but, in this instance, there was a lot to learn about the future.
The key was to take a broader view of what packaging meant to consumers around the world. With the help of professional futurists, they tore apart the trends in society and technology. Looking at society, they learned that future packaging designs would really mean something to the developing world, where people reuse bags, boxes, and cans, often for years.
Their study of future technological advances hit pay dirt. They looked at the shrinking size of electronics and realized that soon radio-frequency ID (RFID) tags would be cheap enough to include in packaging. RFID tags are tiny radio devices that send out a few bits of information, like a bar code, to a small area around the package. Looking further ahead, they saw that their biggest customers, big box stores like Wal-Mart, were digitizing their operations as much as possible to improve efficiency and reduce inventory loss.
Because of this study, consumer goods companies realized packaging would need to become part of the digital economy—your cans, bottles, and plastic bags would need to be smart! Today, seven years later, you can see IBM capitalizing on this, selling “slap and ship” RFID tags to retailers. These technologies aren’t on every box (yet), but these packaging engineers were able to anticipate the needs of their customers years in advance, which gave the industry time to decide what the right technologies would be and when the right time was to launch the new design.
Governments use this kind of thinking in a variety of ways. This scary but potentially real scenario is an example of one such application. Terrorism, unfortunately, is on most people’s minds. National governments use futuring to predict the capabilities of the terrorists of tomorrow. They monitor developments in both society and technology to see where terrorists might gain an edge.
Some forecasts show that the cost of biotechnology will fall far enough that smaller groups could afford to obtain the equipment needed to alter bacteria. Futurists working for the federal government envisioned a scenario in which terrorists might one day genetically engineer a bacterium or a virus that would target Ashkenazi Jews (originally from Eastern Europe) or Japanese people, but it could be any group with a distinct genetic makeup. For this reason, agencies constantly monitor the power of biotechnology as well as any terrorist networks that are showing an interest in science. The goal is to limit the terrorists’ weaponry to homemade bombs and razor blades instead of genetically engineered plagues. In this way, governments are designing policies for biotechnology that allow scientific progress as well as protection for their citizens.
These are just two examples. Hundreds of organizations use future studies to make sure their strategic plans are on target and to help them design new products and services. Smaller companies can keep abreast of the future to anticipate the needs of the larger companies that make up their customer base.
Futurism is flexible enough to improve planning for all kinds of organizations.
What Understanding the Future Will Do for You
If you are going to spend your valuable time and money studying the future, you should know what you could expect to get from it. Although the specific insights may vary from industry to industry, leaders who study the future gain the following:
A Broader Perspective
In general, people don’t have time to consider what is going on in the larger world. Their daily lives are so full that just managing the present is tough enough. They are constantly concerned with the crisis of the day. The larger perspective about where the organization is headed and how the world is changing is often lost. Two years ahead begins to seem like the distant future; even the next quarter could be a completely different world. In addition, as businesses seek more precise niches in order to maintain profitability, we are becoming a world of specialists. This is a good thing when it means we find a competitive, profitable niche. The danger is becoming so focused on our little part of the world that we miss the bigger picture.
A Challenge of Their Basic Assumptions
You already probably know how the future will turn out, right? Come on, you probably have a hunch about what will and will not change, if you are like most people. But when you compare your assumptions with hard data from future-trend research, are they correct? Without a study of the future, you always take the chance that you are harboring dangerous unexamined assumptions about the future that could trip you up and cause a strategic misstep as the future changes around you.
Perhaps examining assumptions is not the primary reason people commission or perform a study of the future, but it is one of the most useful side benefits. That’s not to say it’s comfortable; questioning your assumptions is like yanking your comforter off on a cold winter morning. But that’s what futures research is there for. After all, remember, it is impossible to know exactly how the future will turn out—and if anyone ever promises that, keep one hand on your wallet. The value of a futures study is to shock you and change your mind—to get the message that records could soon fit in an e-mail—no matter how painful the realization.
The cardinal rule of futurism is if the findings confirm everything you ever thought about the world and where it is going, it is useless. You have learned nothing. The true benefits come when your basic assumptions about the future are challenged and explored; only then can you perceive new information about the future and act on it. In addition, because most of us don’t discuss the future very often in our daily lives, you may not know what you assume to be true about the future until you talk about it.
For example, back in 2000, while discussing the impact of information technology on construction, an executive from an engineering firm was having real trouble accepting what the job site of the future would look like. Although he could imagine advanced software coordinating mega projects, he really resisted the idea that the construction worker of 2015 would have the computer skills to run handheld devices that update plans and check out tools securely—advances that would improve efficiency and reduce loss.
The futures study we conducted forecast that construction devices in 2015 would be wireless, simple, tough, and powerful. The construction company would just need to make certain that when a tool is checked out of the shed it leaves a digital trail. The supervisor or construction-site boss would just need to tell the carpenter on the job site that the engineer altered the plans and moved the staircase two feet to the right. Today, Bluetooth wireless communications, Java software, and the IPv6 Internet protocol are converging to make this scenario not only plausible, but also fairly likely.
The executive, however, was adamant. “It simply won’t happen that way,” he claimed. After all, he reasoned, many construction workers don’t use computers on the job. Because they had not been trained on computers, he reasoned, a forecast that showed the use of handheld computer devices on construction sites didn’t make sense.
One simple observation jarred the client loose from his assumption: Even poor kids [in 2000] have PlayStations. Even the least skilled construction workers of 2015 will have grown up with gaming consoles like PlayStation and Xbox, devices that depend on software, menus, and simple controls. In addition, computers were dropping in price every day, which indicated that the class divide between households that owned computers and those that did not would be reduced by 2015.
This executive could imagine the project manager of 2015 using sophisticated software on and off the job site, but the chief assumption he was harboring was that the construction workers of tomorrow would be the same as they are today, with minimal IT skills. He could not imagine a world where even the poor kids knew how to use simple software systems and, therefore, that by 2015 artisans at all levels could use software-driven devices.
Some assumptions are like that—they are ideas or beliefs we hold, the reasons for which are hidden even to us, that subconsciously color our visions of the future. Assumptions become dangerous, or can at least ruin your day, when they obscure your view of what lies around the corner.
The Ability to Detect Potential Threats and Opportunities
Threats are a major reason to keep an eye on the future. The future is not always rosy. In well-entrenched, successful orga¬nizations, people often forget that bad stuff happens to nice organizations every day. Companies go out of business. Foreign powers act unexpectedly and attack other nations. Stakeholders turn hostile. The value of futures research is that once a potential threat is revealed, you can watch it like a hawk and take countermeasures if and when necessary.
For many businesses, one threatening trend might not be too bad, but if several trends hit at one time, the consequences could be severe—just as they were for the record industry, which had to contend with several new technologies simultaneously. To protect your business from similar disasters, futurism gives you the tools to track potential threats well in advance.
Consider the impact of the convergence of the following trends on farm stores in New England:
- A housing boom, the consolidation of retailing.
- The increased power of information technology, which allowed the rise of big box stores such as Home Depot and Tractor Supply throughout the country.
- The increased use of biotechnology and satellite information systems that increased the economies of scale in large-scale farming.
- The migration of farms from New England to the Midwest and California.
- The move of big box stores into smaller markets to sustain their revenue growth and impress Wall Street.
The result for New England farm stores? Farm revenues drop off at the exact moment a giant “category killer” retailer establishes stores in small towns in Vermont, New Hampshire and Maine. Agway, Inc., a farm store cooperative with a 100-year history in the region, finally sold all its assets to Southern States, another cooperative in a similar strategic fix.
As scary as some of these stories are, don’t forget: although analyzing the future helps us avert facing terrible situations, it also can be used to search for positive developments.
An Understanding of Your Role in History
One thing most people who use studies of the future have in common is that they are leading large organizations that will probably be around in 15 to 20 years. Coca Cola, the Pentagon, Finland, and other organizations of this size study the future to improve their destinies and to choose the best outcome possible. These groups have another thing in common: They are large, powerful, and are responsible in one way or another for people’s lives. They influence people’s diets, their health care, war, commerce, communications, and, in some instances, all of human life.
The individuals who run these organizations are often aware of the massive power they have to alter history. They can change the lives of generations of people. Studies of the future allow these leaders to look out and recognize the kind of world they are creating for their children.
Once you understand the tools, you can study the future to make your next decision. If you are an entrepreneur, you could use your insight to start a new business. If you are in the corporate world, perhaps a new product or service will suddenly seem obvious to you, or you may see a new threat on the horizon. If you are in government, you will see the needs of tomorrow’s constituents more clearly. No matter what, once you understand how to see what’s coming next, it will change how you see the world and where it’s heading. Onward, then, to the future!
© 2007 Eric Garland. All rights reserved.
Adapted from Future, Inc.: How Businesses Can Anticipate and Profit from What’s Next, by Eric Garland (AMACOM, 2006).