In 1994, a best-selling business book declared that the world was â€œstanding on the edgeâ€ of a series of technology changes that would revolutionize our lives. Itâ€™s interesting to check in on those predictions to see how they have turned out. Here are seven predictions made in the book:
Live machine translation of speech, so people in different countries could talk to each other on the phone. Nope. The closest thing we have today is automatic translation of websites, which occasionally lets you dig out a useful fact from a Chinese or Korean website but is mostly good for a laugh.
For example, I used a prominent automatic translation service to convert the paragraph above into Chinese and then back into English. Hereâ€™s what happened to it:
Speech, therefore person’s live machine translation can converse with the different country mutually makes the telephone. Nope. We have the closest matter is the website machine translation, occasionally lets you dig but today is main good is smiles outside a useful fact from Chinese or the South Korean website.
Not only is it pretty much incoherent, but Korean was changed into South Korean, a subtle error that could cause big problems in certain political situations. If thatâ€™s the best we can do with text, how do you think weâ€™d do with live speech, which can be pronounced in a huge variety of ways?
Urban underground distribution systems that let companies deliver goods without tying up traffic. Right. Anyone have an update on the construction of that delivery tunnel system under, say, Paris? Or New York?
Microrobotic machines that could unclog arteries. We call it nanotech today, but weâ€™re nowhere near having autonomous surgical robots you could inject into the body.
Virtual meeting rooms so people can have meetings without travel. Weâ€™ve made great progress on this with Web-based conferencing systems, but they arenâ€™t nearly as ubiquitous as the book predicted.
Satellite-based communicators that would let anyone make a call from anywhere on the earth. You can actually buy these today, but satellite phones are incredibly unattractive compared to a cellphone. Here are typical specs:
|Per minute||$1.50||First 500 free, then 45Â¢|
|Phone weight||13 oz||4 oz|
|Standby time||24 hours||200 hours|
|Cost of phone||$1,500||Free with contract|
Not surprisingly, satellite phones are being used today mostly for specialized purposes like ship to shore communication. So does this prediction count as a hit or a miss? Since the context was helping businesses plan for the future, I think you have to call it a miss. A company that bet big on satellite communication in 1994 would have lost its shirt. In the case of Motorolaâ€™s investment in the Iridium satellite phone system (which Wired magazine kindly called â€œEdsels in the Skyâ€) the shirt cost about $2.6 billion.
Machines capable of feeling emotions. Weâ€™re not completely sure how emotions work in human beings, so putting them in machines may be a bit of a stretch for now.
Digital highways that bring torrents of information into the home. Right on! This one was correct.
The bookâ€™s batting average was .214: one correct, one partly correct, and five wrong. In baseball that would buy you a ticket to the minor leagues — but business isnâ€™t baseball. In business, a single wrong prediction can cost you billions.
Itâ€™s tempting to say the authors screwed up, but actually future business predictions are almost always wrong. Check any 10-year-old business strategy book and chances are youâ€™ll find celebrations of companies that subsequently collapsed, and technology predictions that turned out to be fantasies. And itâ€™s not just a book problem. Companies make the same mistakes internally, as Motorola discovered with Iridium.
The problems with the future are so common that I donâ€™t think we can blame them on dumb authors or dumb managers. Thereâ€™s something systematic going on. I think the trouble is that weâ€™re looking at the future the wrong way.
Our bipolar view of the future
Iâ€™ve been in the technology industry for almost two decades, which in Silicon Valley makes you a grizzled veteran. Iâ€™ve worked with a lot of different companies, spending much of my time on strategy and trying to figure out how the marketplace will develop. One of the most striking things Iâ€™ve noticed is that most of the companies I work with have trouble thinking about the future.
Silicon Valley likes to present itself as the place where the future comes to life, but in practice the companies are bipolar about it. They either try to beat the future into submission, or they surrender to it as an immutable force of nature. These two groups, which I call visionary and reactive companies, both mishandle the future in important ways.
Visionary companies represent the triumph of individual brilliance over mundane thinking. Theyâ€™re usually still led by founders who started the company with a strong idea of a new market or product that could change the world. Despite doubters (and there are always doubters in the backstory of these companies), the founders had a correct vision of what would happen, and they drove the company to success.
Visionary companies are usually focused and decisive. They are very good at tuning out distractions and staying on course, because they believe that with good execution they can force the future to evolve the way they want it to. These companies are often indifferent to market research and outside information from people who donâ€™t â€œget it.â€ Based on their own history, they usually feel they can do a better job of intuiting opportunities than any research can. Research would just get in the way of their freedom to create.
In my experience, the visionaries are completely right about this up to the point where they start being badly wrong. Even the most brilliant individuals have limits. Eventually inspiration runs out, and the companyâ€™s differentiators are copied by competitors. Or the vision hardens into dogma, and the company starts missing new opportunities. Visionary companies are the most likely to march into utter disaster as they cling to a vision thatâ€™s no longer valid. Theyâ€™re flying blind because when youâ€™re inside a vision, you canâ€™t see what its limits are.
Reactive companies are on the other extreme. They view the future not as something they can control (theyâ€™d call that arrogance), but as something they can predict, like the weather. Once they have predicted the future, they then make logical plans that react to that prediction. These companies are often superb at responding to changes in the market. Theyâ€™re very open to outside information, and are willing to learn from anyone.
But this same openness makes reactive companies vulnerable to industry groupthink. In the process of scanning the world for ideas and trends, those that have the most currency among analysts and press will naturally rise to the top of the pile. Itâ€™s almost like a voting process — if enough consultants and other credible people are saying satellite phones will take off, it must be correct.
This makes it very difficult for a reactive company to form a differentiated strategy. Instead, it tends to pursue whatever everyone else is pursuing. You could see the process at work during the Internet bubble, when the tech industry consensus said the most valuable thing to own was an online service. Many of the established companies in high tech threw themselves into the creation of online services, or paid enormous sums to acquire online service companies, even if those services didnâ€™t actually have much to do with their core businesses.
In response to thrashes like this, reactive companies sometimes evolve into fast followers. They become convinced that you canâ€™t really predict the future at all, so they focus instead on quickly co-opting new opportunities and products that other companies produce.
Although American business culture tends to admire renegade visionary leaders, thereâ€™s nothing shameful about being a reactive company. Itâ€™s the strategy followed by many of the worldâ€™s largest consumer electronics firms, most of them headquartered in places where renegade behavior is discouraged. But whatever your cultural attitude, reactive companies are flying blind when it comes to the future. If the consensus prediction of the future turns out to be wrong, or if they donâ€™t spot a major change early, they wonâ€™t be able to react in time to survive.
The middle road: Anticipate, donâ€™t react
I think thereâ€™s a third approach to the future, one thatâ€™s more powerful than either the visionary or reactive path. In this approach, you have to take a different view of how the future works. Itâ€™s not something you can control completely through sheer will, and itâ€™s not a single force of nature you can predict perfectly through logic and research. The future is a series of possibilities that might or might not come true. Although you canâ€™t predict what will happen, you actually can predict pretty accurately what might happen, and how you can change it.
Once youâ€™ve made a list of these potential futures, it works like a road map for a family vacation. It shows you cool destinations, routes to get there, and potential hazards along the way. It also shows places that you canâ€™t possibly reach, no matter how badly you want to drive there. Unlike a vacation map, a futures map also shows you the competitors traveling those same roads — where they are, and where theyâ€™re likely to go.
Once you know what the routes are and where they lead, you can pick ones that take you to the best destinations.
To a visionary company, this means the right kind of futures analysis can help you extend your vision, to give you new ideas on possibilities and to anticipate the cliffs before you march off them.
To a reactive company, this means you can free yourself from responding to either rigid predictions or marketplace events. Instead you can identify the best possibilities and the risks along the way to them, and guide the future toward the outcome you want.
Specifically, mapping the future lets you:
–Anticipate the development of new markets, allowing you to seize the best position in them before your competitors even know they exist.
–Predict how competitors will react to actions your company takes, so youâ€™re ready to counter their responses before they even happen.
–Identify major technological turning points that will change your industry (and learn to disregard the changes that wonâ€™t really matter).
Most of the companies I work with are not organized to map the future. The people who know critical parts of the map — competitive analysts, market researchers, and advanced technologists — are usually scattered in different parts of the company, where they perform mostly support tasks for the business. These functions often donâ€™t communicate with each other, and donâ€™t even respect one-anotherâ€™s work. To map the future successfully, they need to be organized differently, taught how to work together, and in some cases staffed with a different type of people.
In other words, they need to be treated like a single strategic asset, rather than three separate service groups.
In this blog I’ll give my ideas about how to map the future — how to manage the groups that build the map, how to tie them together, and what sort of benefits you should expect from them.
Think of this as a how-to manual. Itâ€™s based on almost two decades of competing and partnering in fast-changing markets with large, aggressive companies like Microsoft, Intel, IBM, and Nokia, often with very little budget or headcount.
Sometimes I’ve been successful, sometimes not. But I’ve learned a lot, and one of the things I’ve learned is that most companies don’t think about the future the way they should. I’d like to fix that.
Disclaimer: “What works for me”
Gardening is supposedly the most popular hobby in America, and there are an incredible number of books and websites telling you how to do it. Somebody smart once pointed out that every one of them ought to carry the disclaimer, “this is what works for me.” Conditions vary incredibly from yard to yard and from state to state. The exact same treatment that grows a pine tree at my place might kill it in yours. The best I can do is say what works for me, and hope you can adapt it to your needs.
I think the same is true of business advice. Companies, industries, and national cultures differ so much that what’s brilliant in one firm may be disastrous in another. In my case, I’ve worked in high tech, in Silicon Valley, in the United States, for most of my career. Our company cultures here are very informal; information flows up and down the org chart readily. For example, it’s commonplace for a CEO to exchange e-mails with an individual contributor — and woe to the middle manager who gets in the way.
Darwinian competition dominates our economy; firms grow up fast and die even faster. Almost no one builds a long-term career at a single company. In fact, you’re viewed with suspicion if you stay in one place for too long — it must be a sign that you couldn’t get work elsewhere.
The lessons and techniques I’ve learned are adapted to conditions here. If you’re in a hierarchical company, in a conservative industry dominated by 30-year veterans, some of my advice may be irrelevant, if not downright dangerous to your career.
On the other hand, if there’s one dominant trend in the world’s economy, it’s that the pace of change is accelerating. Companies are becoming more flexible, information needs to flow more freely, and the days of lifelong employment in a single company seem to be coming to an end.
In other words, like it or not, the business world is becoming a little more like Silicon Valley. Maybe some of my experiences will help you, and your company, compete better in that future.
This is a book in progress. Please Click here to rate this section (the link will open a one-screen anonymous survey, and you’ll get to see the results after you take it). I’d also appreciate comments and suggestions.