What’s consuming your time and energy these days?
What’s harder, coming up with a plan or the planning? Today, numerous automation technologies make modeling and planning easier and more widely accessible . In fact, automation is just one of the many values upgrading to digital technology tools offer.
This is not why, John Hagel of Deloitte, notably suggests organizations should look ten, if not twenty years out when when developing digital strategies. He found that of the 2% of companies who say their thinking makes use of truly long term horizon, they derive considerable benefit.
Yes, I swapped the word thinking for planning to be truer to Hagel’s observations. Technology changes’ inescapable link to organizations’ Financial Performance forces everyone to keep up, and that’s both good and bad, he recently told the MIT Sloan Management Review:
“[Hagel’s] sense that the old approaches are just not sustainable, and some senior executives have seen the need for fundamental change driven by this technology. The big issue for them is how to get that change to happen in a large traditional organization.”
Wait, he’s not talking about scenario planning, a worthy tool in the strategic tool box that proved advantage to Royal Dutch Shell with lengthy timelines for oil discovery and extraction. This contrasts with Digital technologies timetables, stuff that changes faster than anyone has been able to imagine.
This short term focused impact thinking Hagel and others suggest proves self-limiting and injurious to organizations.Particularly because both changing culture and enabling learning are time intensive activities and rarely get priority, and arguably leads to performance failures in too many organizations.
Thinking through a technology change
Global Positioning systems (GPS) technology, for example, everyone now recognizes removes the pain and uncertainty of time, distance and routing. The tools also deliver greater efficiency and optimize resource utilization. In 1973, when the US launched its first GPS satellite project, few organizations began to imagine how geolocation capabilities could enhance their business.
What did they have to understand? What were they waiting for? When did it become obvious and inevitable that Geolocation was an imperative in every business? I imagine thinking through this change might go something like this.
Built in navigation tools became available in the first mobile phones and improvement has been continuous; however the new opportunities and new businesses they have created were described as disruptive. The number of people who fully know or understand how these navigation tools work may be limited but didn’t stop them from successfully scaling and spreading. Geolocation has become so embedded in our lives that many of us feel lost without them. Likewise businesses like UPS, UBER or your local coffee shop depend on them to drive revenue, though only one may have incorporated the development and evolution in their long term planning.
Not everyone recognized how to turn the possibilities Geolocation enabled into successful business opportunities. The questions and issues associated with longer term technology changes were the focus of the January Chicago Booth Strategic Management practices discussion. The following summarizes some of the conversation exploring the merits of planning with exceedingly long horizons, such as 10-20 years versus the common place three to five years.
A few caveats.
The discussion did not reference methods for engaging in really long term planning, and all acknowledged that predicting the future was not really the point. Instead we relied on a few articles (see bottom of the post), participants previewed in advance, to set up the conversation that focused on the necessity and benefits of formulating digital strategy.
We discussed the relevance of the horizon itself, and its power to dictate the frame of reference , “fix” the focus of planning that misses the ripple effects. As one member explained, planning that focuses on the future, should also consider and think through how the choice and change in capabilities that your methods, processes and market dynamics preserve or inhibit your advantage.
In summary, we uncovered several strategic advantaged capabilities enjoyed by only a handful of organizations who do indulge in a holistic long term digital strategy planning. Take a look at what we discussed and tell us what you think.
Value of Subsystems
If we use the example of automated on the ground navigation systems , in hindsight, it’s easy to imagine how many different industries and benefits would benefit from this capability. For example, the benefits to Triple AAA differ than those that would accrue to UPS. Imagine the steps in the plan that the former might have initiated. Digitize the original triptik and triple AAA could distribute route maps cheaper, better and faster, right? Nice plan, but much harder to execute.
The steps we can imagine might have been something like these.
- Digitize maps by converting the physical visual information into searchable and thus manipulative format. Note, the task simplified by adopting pre-existing map making standards coordinates for longitude and latitude, as well as specifications for road type, elevation, distance, population density, geographic features, infrastructure etc.
- Working in the address system, which varies in consistency within an area and across areas. For example, Chicago’s grid system makes it easy to pin down an address, than the numbering in New York city. Naturally, these numbers need to be linked to the map longitude and latitude coordinates.
- Determine the accuracy of a given map and then keep them up to date. Roads are constantly undergoing improvement, and construction often adds or removes existing buildings changing addresses in the process.
Did you notice the subsystems that make this one idea easier to realize? There are many more than I’ve mentioned, and consideration for each of them expresses why planning takes so long and can easily get very complicated.
Value of Experience and Re-use
Re-use, that was one of the first lessons I learned when I began to code (or write the instructions that allowed the computers to read/write different inputs to generate specific outputs. use, change data into output. To code from scratch was just plain silly. Chances were exceptionally high, that someone before me had code that worked and could accomplish at least part of what I was trying to accomplish. It’s a simple lesson in systems too. Systems, like problems, when broken down into smaller parts become easier to manage when you see and understand how they work.
The plan, or the idea may be inspiring but as Dwight Eisenhower remarked, it’s nothing, as planning is everything.
The value of planning often exceeds the plan because the experience of thinking through the subsystems can be re-used. The experience when shared also builds trust in the method and in your people.
Too often the focus is placed on generating a plan, and then backing out the projects that when successful will produce the results desired. In a rapidly changing and dynamic environment, creating opportunities to challenge and improve our judgement coincide with opportunities to practice and strengthen competitive advantage by strengthening and promoting behaviors such as responsiveness, adaptiveness and risk taking.
Behavioral change, learning and knowledge acquisition take time and improve with practice. Notably it’s difficult to plan for disruptions, but we all accommodate and assimilate changes, the challenge is how to leverage this inevitability at an organizational level.
The obsession for clear return on resource investments compromises organizations’ long range planning or fully work through the possibilities of disruption and its effects. Similarly, few firms create the capacity and preserve time and talent permission for open experimentation and playing out multiple possibilities, such as Google’s Moonshot or Amazon’s generative experimentation. At the other end of the organizational spectrum, start-ups do take considerable risk to prove out their ideas only to change their focus and curtail their experimental capacity once they begin to scale.
So why do organizations continue to engage leadership in near horizon planning and even make use of social network technologies to broaden the input to include customers, employees and/or investors? Perhaps it’s a coping mechanism for the inevitability of change and a response to the dynamics of the marketplace while also garnering investor confidence, customer loyalty and employee engagement. The tools that permit prioritization or even selection are more often based on the ability of the organizations to cope as well as adapt to the suggestions.
Leadership obviously plays a role. Perspective and ability to manage, versus address, the continuum of known possibilities limits their risks and accountability to short term while excusing their failings.
If timing is everything, then dealing with the here and now, and near, minimizes risks and costs necessary for survival but fails to secure competitive advantage.
This folly of short term thinking preserves alternatives over pursuit of a specific scenario of indeterminate future.
It was hard to explain whether the size of the organization determined its immunity from the dangers of failing to engage in planning with a longer horizon. No one had any experience that suggested larger organizations feel the pains of change sooner, or prove more or less resilient, adaptive to long term planning.
All agreed that understanding ecosystems, the dynamics of change warrant every organization to think through how these forces affect their organization not just in the near term but also long term. More over leadership produces benefits when they increase adaptiveness and open mindedness.
Below are the articles we reviewed as the basis of our conversation. Got anything to add, or suggestions for where we might find cases or evidence of the impact of long term planning would be most welcome.
Predicting the future, how to engage in really long-term strategic digital planning
In the age of Autonomous cars, can your organization also be driverless
AI, Self-driving cars and cyberwar, the technologies to watch for in 2017