To remain successful, executives must have the focus to anticipate the future of business. It is not cash that fuels the journey to the future, but the emotional and intellectual energy of every employee. Well, think about this. Imagine you were an investor who, a decade or two ago, was asked to choose between the following pairs of firms as long-term investment opportunities:
|Pan Am||versus||British Airways|
Where would you have put your money? Without the benefit of retrospection, most investors would probably have been tempted to invest in the firms in the left column. Why? These firms had strong reputations, technological riches, and deep pockets. They could hire the most talented people in their industry, had sizable market shares, and, in most cases, had a worldwide distribution presence. In short, they had resources. Yet, in varying degrees, they lost much of their leadership to firms with far fewer visible resources.
“The best way to predict the future is to create it.” – Peter Drucker
Future First, a Function of Resourcefulness
Investors can be excused for having failed to anticipate the success of the challengers, but what about industry executives? What excuse do they have for, in so many cases, being unpleasantly surprised by the more vital and aggressive firms in the right-hand column? What would Volkswagen executives have concluded if they had traveled to Japan in 1970 for a close-up view of Honda? Honda’s first attempt at a car was rather pitiful—certainly not up to the standards of German engineering—and Volkswagen managers would have been scornful. And what about RCA and Sony? RCA had almost single-handedly created the color television industry in the United States, and every competitor relied on RCA patents, products of one of the world’s outstanding research laboratories. How could Sony out-innovate the United States’ consumer electronics pioneers?
Executives tend to dismiss competitors with meager resource legacies. To the extent that challengers even register on the radar screens of leaders, they produce such small “blips” that they are easily ignored. Yet if there is one conclusion to be drawn from the endless shifting of competitive fortunes it is this: Starting resource positions are a very poor predictor of future industry leaders. A firm can sit atop mountains of cash and command legions of talented people, and still lose its preeminent position. Likewise, a firm can sometimes overcome enormous resource handicaps and successfully scale the heights of industry leadership. Getting to the future first is more a function of resourcefulness than resources. Resourcefulness stems not from an elegantly structured strategic architecture, but from a deeply felt sense of purpose, a broadly shared dream, a truly captivating view of tomorrow’s opportunity.
The Sense of Business Direction
Ask a third- or fourth-level employee in your company, “Where are we trying to get to as a company?” only a few employees will be able to articulate anything more than vague ideals (“be market-led”) or short-term operational goals (“improve profitability,” “lower costs,” or “achieve faster cycle time”). In most companies, employees don’t share a sense of purpose above and beyond that of short-term unit performance. Lacking a compelling sense of direction, few employees feel a compelling sense of responsibility for competitiveness. Most people won’t go that extra mile unless they know where they are heading.
We’ve all heard, in one form or another, the familiar middle management lament: “We could be so much more successful if the head office would just butt out and let us get on with the job.” But the lament has a chorus: “We could be so much more successful if only we had a clearer sense of direction. We just don’t seem to have a clear idea of where we’re trying to get to.”
How can we make sense of these seemingly conflicting demands? What are mid-level managers really saying about top management? We believe it’s pretty simple: Most companies are overmanaged and underled. It is fair to say that in most corporate headquarters, far more effort goes into the exercise of control than to anticipate the future of business.
A senior executive at Nissan remarked in 1992 that “GM is a powerful company, but they aren’t clearly directing that power. If some [employees] turn left, and some turn right, a company cannot move forward.” Not that Nissan doesn’t have its own problems, but the point being made was that although GM was powerful in terms of resources, its lack of a unifying sense of purpose meant that individual efforts were unlikely to be cumulative. A lack of direction almost ensures that units will work at cross-purposes, that priorities will be set unpredictably, and that consistency will too often be sacrificed on the altar of convenience. No wonder unit managers are frustrated.
Way-Ahead to Merge with Future
We have limited working time in a day, if executives are involved in the more managerial roles then they are left with very little time for a leadership role. If the organization is not having a clear long-term goal then, the top boss decides his or her own goals and tries to align the complete team towards them.
The problem with this strategy is, it changes each time when the top boss changes. Even it happens at the middle management level as well. Without a clear vision and mission, most people focus on existing work and try to improve it rather than looking for future prospects.
Let’s understand it with one simple example. If you are in the role of a top executive in a car manufacturing company. You are trying hard to increase the efficiency of the plant, the best utilization of resources, closely monitoring financial parameters, etc. Most of your time is going on these activities, then can you imagine the future of your organization after 10 years? If you are not aware of ongoing electrical or upcoming hydrogen-related future technologies in the automobile section, then be ready to lose your companies position. All these are disruptive technologies and can dent your ongoing business in a very short span of time.
Another example we can take is banking-related service, nowadays there are plenty of small or medium level companies performing various core operations of banking. These are not master of all the functions, but picked up a few operations and putting best effort to make them best for users. These services include various types of loans, stock market trading, payment transactions, etc. By making operations hassle-free, customizing them for users, they are becoming popular. If big players are ignoring them now, then they will have a dent in their future business.
Overall, executives must reserve some time for their business future. This can be very well done by creating a research and development cell. The goal of this cell is to understand new technologies/ operations, implementing them on prototypes (model). Once you get the desired result on the prototype, then you can merge it with business operations. So, we must keep our eyes open for future changes through this small R&D cell set-up, while focusing on existing business. (Excerpt inspired from ‘Competing for the Future’ by Gary Hamel & C. K. Prahalad)