Anticipating your next battle in business and beyond

The temptation of the panic button

Jeremy Ghez, Affiliate Professor of Economics and International Affairs - December 8th, 2015
Anticipating your next battle (in business and beyond) by Jeremy Ghez @Fotolia

Meet any manager’s best friend: the panic button. It is what you hit in a time like ours – a time of deep stress or in the context of a broader crisis – when “business-as-usual” cannot possibly continue. By hitting it, you get a chance, as a manager, to prove to the rest of your colleagues, to your shareholders and to society your ability in terms of crisis management and in terms of leadership. No one will blame you for acting this way: after all, worrying about the burning issues of the present as the world seems to crumble down seems rather logical and reasonable and unlikely to attract blame from anyone. And in a favorable environment, you can simply ignore the panic button until the next crisis.

Jérémy Ghez ©HEC Paris

Jeremy Ghez is an affiliate professor of economics and international affairs at HEC Paris and the co-director of the HEC Paris Center for Geopolitics. His research focuses on (...)

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This sounds as good as any other business model, in particular in an ever-changing and complex business landscape. But here is the catch, managers: while you focus on the current burning issues of the day, who keeps an eye on what may come up next, on what could become tomorrow’s defining battles?

Managers usually do not need to be convinced that the future holds a wide range of threats that they need to hedge against. Moreover, the past decade – with its share of political instability and revolutions, natural (and nuclear) disasters and tectonic economic shifts – will not contradict them. What seemed to be solid assumptions about how the world worked and how stable it was are continuously challenged by – predictable and unpredictable – events that can unfold very quickly. Greater awareness about what the future holds can therefore be invaluable. 

But you should not merely limit the reasoning on the value of forward thinking to threats. Too many managers believe that they will also be able to seize any opportunity that comes their way when the time comes – expect that they may not be able to do so if their organization does not have the right infrastructure or the necessary monitoring abilities to seize such opportunities. Building awareness about what the future holds is therefore also about understanding how your value proposition is changing over time and the transformation efforts required in order to remain relevant over time – and not just fighting off existential threats. This modern-day form of creative destruction is a far more powerful form of leadership. It is perhaps what makes the GAFAs so powerful – and paradoxically, also, so vulnerable today. On the one hand, their ability not only to differentiate but also to continuously adapt to new global realities makes them rule-makers on global markets. On the other hand, by doing so, they set the bar higher each time and could undermine their ability to continue doing so in the future. Their efforts in terms of research and development are all the more crucial as a result.

The purpose of anticipation

Thus, instead of relying on a “panic button” approach – focusing on the most current items of the inbox and hoping for the best in the future – managers can alternatively look to broaden their horizons by considering a longer time horizon and a wider array of trends in their decision-making processes. Contrary to what they might believe, growing global complexity and uncertainty do not mean that decision-makers should not think about exogenous trends that, they presume, they cannot influence. Rather, growing global complexity and uncertainty should be an invitation to greater curiosity, to thinking about how it would be possible to harness a wider array of trends than businesses and policymakers have traditionally and usually been interested in doing. To be sure, not everyone can be Steve Jobs. But managers must know, at the very least, who their Steve Jobs is within or beyond their activity.

In practice, anticipating what the future holds and what will define your next battle is not about prediction, divination or any other possible form of witchcraft. It is about the ability of a manager to be mindful of the different trajectories that could materialize in the future and of how vulnerable his activity can be to unexpected events. And ultimately, it is about the ability of a manager to act upon that anticipation and determine what redefinition and reinvention efforts are required today so as to make sure you are as fit as possible to meet tomorrow’s challenges.

This is by no means an easy exercise to carry out – especially since it is more like an art, a state of mind, rather than a science. In practice, it takes time and resources. Issues pertaining to the future are rather uncertain and complex and the cost of considering these could seem huge for the shortsighted, but might payoff for the more persistent. It takes patience: you may need to try this more than once before you get it exactly right. In addition, it takes not only imagination and curiosity, but also the ability to transform the results of that imagination and curiosity into actionable information that can shape an organization’s current roadmap and strategy. That transformation can be a challenge, because it will require the manager to pay attention to a set of trends that go beyond the usual and traditional concerns of the firm, such as societal or geopolitical shifts. The more short-sighted managers have no choice but to concentrate on the crises of the day and to mobilize and commit their resources and energy to solving them – leaving very little to explore the deeper structural trends that are nevertheless likelier to affect future business opportunities and tomorrow’s landscape.

Ultimately, what makes this exercise significantly more challenging is that it requires a lot of courage on the part of the manager. Peering into the future and considering the mind-boggling number of alternative options can often be a humbling and time-consuming exercise. It is not one that leaders necessarily want to undertake in times of crisis, when the house seems to be burning down (or has already burnt down). It is an exercise that might not seem very useful or legitimate when an organization is thriving and when ‘business-as-usual’ seems to be the less costly option. So, in the end, there seems to be no perfect moment to undertake this exercise! The true leader will need to be legitimate enough and to own this analytical and anticipation effort enough in order to better impose it to his company.

Anticipation in practice

Again, since it is more an art and a state of mind rather than a science, there cannot be a one-size-fits-all approach to anticipation. However, some basic steps can help initiate your anticipation effort.The first step lies in drawing a map of the future – that is, mapping out what you can possibly and/or reasonably expect in the future. This means understanding the exogenous forces that shape the future, the ways these forces could interact with each other and the various outcomes (or scenarios) they could bring about. By doing this, you will be better able to imagine the different doors that will be presented to you in the future and think about how prepared you are to face each of these prospects. The Shell scenarios – developed by the global oil major – are perhaps the most famous illustration of this scenario-based approach, though many other companies increasingly rely on this type of analysis.

The second step lies in understanding the implications of uncertainty. As optimistic as a manager can be about the accuracy of the scenarios he expects from the future, he will necessarily need to recognize that nothing is predetermined nor fixed and that disruptive moments and strategic surprises will rock the boat of the most naïve. Uncertainty will require the manager both to be nimble and to maintain an ability to adapt over time and to be resilient – that is, to maintain an ability to constantly reinvent his other identity in order to better match the new realities of the landscape. General Electrics – the only firm that has been present in the DOW Jones index since its creation but which has profoundly evolved since – is a good illustration of a firm that is both nimble and resilient.

The third step lies in transforming your analysis of the future into an actionable plan. Being impressed by complexity, being fatalistic about what will happen – as is often the case, it seems, among decision-makers and executives – will rarely help. The real challenge lies in identifying levers of actions, that is, the channels through which you could twist dynamics to your own advantage and bring about better outcomes. In other words, after carrying out the analysis, you need to be the game-changer!

Ultimately, a true leader has to recognize that in an ever-changing landscape, thinking about the future isn’t a luxury or a form of heresy. It is, instead, what will allow organizations to persist regardless of future twists and turns.

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Anticipating your next battle in business and beyond  is the title of a new HEC MOOC available on Coursera