This week’s post is relatively short, but it lays out my central argument. Think of this as a road map to where we’re going in the book.
Nobody can predict the future of a market or business perfectly. If I could do it, I’d be retired someplace living off my stock income. If the authors of all those management books could do it, they wouldn’t have to write books and give speeches for a living.
Part of the problem is that the world’s very complex, and any absolute prediction is bound to break down as unexpected things happen. But the biggest challenge is that the future doesn’t yet exist. It’s no a single deterministic thing, it’s a set of possibilities. We change the future every day with our own decisions. So what we need for the future isn’t a prediction. We need a map, showing all the possibilities and consequences of various decisions: if you go here you’ll end up in a valley, if you go there you’ll end up in the mountains â€“ and if you go over there you’ll run off a cliff.
The better you draw the map of possibilities, the better your company can choose a good future for itself and its customers.
Mapping the future of a market or industry requires input from three different perspectives. You need to know first what’s going on with the customers. Not just what they’re doing today, but how they think, what they want out of life, and how they’d react to changes that might happen in the future. You need to know the insides of their heads so well that you can speak for them reliably.
Second, you need to know how technology is going to change, since that determines what your company can create. I’m using “technology” in a very broad sense here, meaning not just physical hardware like computer chips and paint formulas, but also processes companies can use to deliver services. The internet, for example, is a technology change that’s changing business processes in almost all companies, and creating a lot of new opportunities. The telephone did the same thing in the early 1900s.
And third, you need a good understanding of what your competitors will do. It’s not enough just to know their products and org chats, you need to understand how they think and operate, and what their basic personalities are, so you can anticipate what they’ll do in future situations.
Lots of other information can also be useful for predicting the future. For example, it’s very helpful to factor in future changes in government regulations (if you know what they’ll be). But I think customers, competition, and technology are the most important factors in mapping the future, and they need to be brought together very intimately because there’s so much synergy between them.
To understand how a future map is used, picture yourself as a Roman general leading your army to a winter camp. To the north there’s a sheltered valley that would be perfect for your needs. The fastest path to the valley leads across a river most people think is impassable, but your engineers say they can bridge it, so you set them to work. You know the barbarians from the west are also searching for winter shelter in the same area. You don’t want them to reach the valley before you. Your scouts have identified a hill that dominates the road from the west. You send your archers to fortify the hill immediately, to cut off any advance.
The valley’s a potential market your customer research team found. The people building the bridge are your advanced technologists. The scouts who found the western road and the hill above it are your competitive analysts.
None of these people, working alone, could have drawn the map and told you where you could go on it. But once you had information from all three, you could see the likely future, plan out where you wanted to travel, and prevent the other guy from getting there first.
Unfortunately, this sort of map-making doesn’t happen naturally in the business world. In most of the companies I know, the people doing competitive analysis, market research, and advanced technology mix together like oil, sand, and water. Good market researchers are practical and methodical, deeply grounded in data and in the processes by which they gather it. They’re very uncomfortable with future speculation and unfounded predictions. Good competitive analysts are intuitive, prone to making wild predictions based on little or no evidence. They hate being tied down by process. And true advanced technologists often have very fixed ideas about the world, ideas that are linked to the intellectual problems they want to research (ie, I want to work on speech recognition, therefore I believe that many important problems can be solved with speech recognition). They can be very impatient with anyone trying to impose customer or competitive realities on them.
On top of the basic differences in outlook, the people who gravitate to these teams come from different academic backgrounds, so they often have different vocabularies and different professional standards. The work also attracts different personality types, which often don’t mix well naturally.
Because of the differences, these teams often have pretty low opinions of one-another, sometimes bordering on contempt.
To make a good map of the future, you have to figure out how to mix data with intuition, to blend science and art. To do this, you first have to understand and appreciate each of the groups separately. Then you have to teach them to work together.
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Are there specific things you’d like to know about mapping the future, and in particular competitive analysis, customer research, and advanced technology? Please post a comment. I’ll incorporate your feedback into what I write.
Next week: The Fall of Competitive Intelligence.