The next ten years will see an accelerated pace of change, driving many businesses to bankruptcy. Don’t be surprised to see more of Kodak’s, Nokia’s and Motorola’s of the world biting the dust. The emerging technologies driving the Fourth Industrial Revolution will eventually morph the world we know of in many ways. Thus, it will be the responsibility of the leaders of companies to make the team think outside the box by trying to anticipate the changes that could affect organisations. This is not akin to straight-line extrapolation of company’s projected performance over a period.
If you and your team do this diligently, it will push your management team to develop business plans that can accommodate a variety of interacting change factors. It will also build consensus among your team members on future opportunities and threats. As a result of this exercise, team members will know each other’s disagreements on critical issues and realise that is because of their different assumptions.
You will also find it valuable to involve and take inputs from external leaders who track industry trends, key customers or even our vendors at times. This allows the team to avoid being blindfolded and nudges them to the reality, as seen by different stakeholders in the industry. These are the steps; you use to complete the stargazing exercise.
Rank these factors
After you and the team have arrived at the laundry list of influencing factors, it’s time to rank them on a two-dimensional matrix of the degree of Impact, and it’s the probability of occurrence. The degree of impact refers to the intensity with which the change may affect your company’s performance. Rate these two factors on a scale of 1 to 10, with one signifying the least chance of occurrence and ten the highest.
Map key factors
Along with your team, brainstorm a list of external factors that are likely to shape the business environment in which your company operates. From this list select the top two elements with the highest score, and the leave the rest of them.
Create scenarios
For the top two factors that you have identified create an optimistic and pessimistic scenario, keep in mind that none of them should be highly improbable. There has to be a fair chance of them occurring in the future.
Combine scenarios
In this step you need to the combine the four scenarios in a 2*2 matrix, the matrix will have a pessimistic and optimistic scenario for both the factors. For each of these four scenarios script down a one-page document describing details of each scenario, the sequence of actions that could lead to it and how would you know that its happening.
Map probability & implication
Now it’s time to reassess the probability of occurrence of each scenario, use all the data to evaluate factors that could trigger the emergence of the scenario. The best case would be to arrive a probability score of occurrence, if possible. As humans, we tend to underplay scenarios that may not be right for us, Kodak after 128 years of existence filed for bankruptcy in 2012, mostly due to internal factors and the sense of disbelief in changing world. Kodak’s failure can be labeled as one of the biggest corporate blunders as it missed digital photography wave, ironically invented by the Kodak team itself. The leadership team was not ready to believe that its new invention would cannibalise its mainstream business.
This is part of the series from Yostartups.com