Peter Drucker famously said, “The best way to predict the future is to create it.” Strategy manifests visions of what shall be, and builds the road to it.
Over the last two days on LinkedIn we’ve explored the temporality of strategic thinking. My impetus for this article was a realization about the god Janus. Janus has always been depicted with two heads looking in different directions. And a strategists we must look in even more than two different directions. Toward the past, and the lessons and principles it gives us; toward the future, and the goals that reflect unprecedented possibilities; and the present, where we must keep the boat afloat and content with the constraints we have.
When you were developing your own strategy for your organization, it’s often hard to get past the present. well, we craft ambitious strategic plans, it’s often difficult to take the steps that get us to those goals. And even the most granular project plans are usually offended by operational challenges, technological limitations, and, of course, a dearth of resources .
The future can seem distant and inaccessible.
The Foundation for a Future
Portuguese prince Henry the Navigator never actually took to the sea. But, he was the patron of countless expeditions over the course of his life. Although he himself never journeyed beyond his native Portugal, he was fascinated with the possibilities of foreign places. Moreover, he could see the potential for a business breakthrough.
In the 15th century, there was already significant trade with Asia. Europeans had been traveling Overland to and from India and that sufficed for current market demand. But Henry could envision a future beyond expeditions—to include ship-borne trade in the exotic goods that would soon be discovered.
His unique vision of the commercial opportunities available for those with sea access inspired his strategy. And so, in 1415, he founded a navigation school that would provide him with would-be seafaring explorers, and would bolster the age of exploration.
Present by us is often a mistake and judgment. We choose a smaller reward today than a larger one later. Sometimes, we talk about present by us as a function of self-control, or delayed gratification. But in the case of strategy, while that is at play, often it’s a more complex phenomenon.
One benefit the companies that have raised a great deal of venture capital funding have, is that they can afford to build without regard for current profitability—or even solvency. For lifestyle and bootstrapped companies, building, for the future is only possible if you can sustain yourself long enough to get there.
So the question is, how can you combine those two necessities? Building for the future, and keeping your eye firmly planted there, using that future as the heuristic against which you judge current decisions; and, the need to keep the lights on today?
Planning From the Future
Fortunately, I am not the first person ever to acknowledge this dilemma. And so, there are multiple tools to facilitate building that roadway from here to there. But they all start with a sharp and crisp depiction of the future you are out to create. The more clearly you can describe, quantify and characterize that vision, the easier planning will be.
With a clearly depicted vision of the future state, that includes all of the business parameters, you can begin the work of backtracking to the present business reality. This is not exciting work, but it is revealing. Bridging from the future to the present lets you confront the places where something extraordinary must happen to cause an order of magnitude of growth, or where you must take some kind of discontinuous action to cause that result.
For example, you will discover as you backtrack from the future to the present, that there may be a place where you simply have to acquire another company. Or where you must release a new product in order to cause growth and revenue.
Tell the Story
Scenario exercises map multiple potential futures, revealing new challenges and opportunities. Backcasting starts with a future vision, then works backwards to identify milestones. This structures a pathway from imagination to reality. What is the best tools for thinking about the present and the future as a continuum, is scenario planning.
Because, a scenario is literally a narrative of the journey from the present to the future, with all of the anticipate of all problems that arise. If you do the work of crafting that scenario plan, and build it upon careful analysis of all of your current conditions— political, socioeconomic, competitive and technological—than your scenarios will capture both the present and its imminent dilemmas.
Because of how much uncertainty is involved in planning for even a near future, ideally, you build multiple scenario plans that each include a different variable and each has a different probability of likelihood. That way you’re not relying on any single scenario as the only map to your future goal. Pierre Wack, who pioneered scenario planning at Royal Dutch Shell, called this “riding shotgun over multiple futures”.
The trick is to avoid continuously applying the rules of today to the future. Constraints that you have right now may not apply as conditions change. So, as you build a plan to achieve the next two years of progress, you must constantly reassess what you anticipate the conditions will look like then. For example, your team size today is a very real constraint. But, as you progress along your strategic plan, you’ll have to reinforce your resources based on the increase in your revenue.
So, your team will grow. And, that growth will relieve part of the resource constraint that you have right now. That constant reassessment of assumptions and conditions lets you anticipate what the conditions will look like then.
Keep asking questions that challenge your assumptions. Because every assumption that may be accurate now could evolve as you build . Is your industry evolving? Do new technologies enable disruption? Don’t be lulled into complacency by near-term success.
That was how the railroad barons of the 19th century approached their own strategies. Cornelius Vanderbilt understood that wherever railroad hubs were, commercial growth would follow. So, he envisioned the trade routes and distribution of commercial centers as he built out his network and hubs. That literally created the trading geography of the United States, making it possible to move goods without the constraints of slow overland travel.
Gary Hamel describes this as having “chronological ambition” – the will to envision and pursue dreams not easily actualized in one lifespan. I’ll be your plan, but it certainly has turned out to be the impact of Vanderbilt’s strategy.
Temporality and Teams
Present-bias divides organizations into believers who embrace future vision and skeptics who grudgingly do as told but have no fundamental belief that anything can ever change. Recently, I worked with a client on their strategy. It is a venture-funded SaaS company in the data analytics space. The new strategy embraced a complete paradigm shift in the business. Fundamentally, it would shift the company’s value proposition from being service-based to being technology-based.
Not surprisingly, the founder and creator of this new vision is a technologist—the CTO. And he could see the huge future for computer vision and AI providing the problem-solving benefit that the company currently provides through service and a very complicated but manual process. The CEO was completely on board. But, he acknowledged that it would take something to transition existing customers to the new model, because they had become used to lots of personal service. The existing platform was nowhere near as robust and user-friendly as the future, AI enabled platform would be—so until then, customers needed the company’s help.
All of the resistance came from the Customer Service portion of the organization. The COO and Head of Customer Success both claimed that customers would leave in droves. They simply could not let go of the current paradigm long enough to consider the possibility that all of the people who are not customers right now, might become the future revenue stream.
The CEO, CTO and I worked together to generate a way of talking about the future that could help to retain current clients, while bringing in new customer verticals that could benefit from the more robust model. But the most difficult thing was persuading the skeptics in the organization. Since the CTO was usually not the one in front of the room, he was having a hard time playing defense. But ultimately, the nay-sayers got on board.
It’s critical that the entire organization be committed to the future vision. Everyone must see the path there—even when it is so different from the present. But, there is much in our mental wiring to argue against it. Knowing that we are easily anchored to the present and the past can help to distinguish when that is happening. And asking pointed questions and directly confronting people about their skepticism is also important.
Yes, we always demand that our teams “disagree and commit”. But, what is more empowering is for them to be able to distinguish the limitations of their own current assumptions, so that they can try and suspend them. As a leader, persuading them to do that is a big part of your job. .