How many times has your business been caught off guard by a major market change? Imagine you’re the CEO of a taxi company, for example. When Uber was introduced in 2009, the entire taxi industry suddenly had to rethink their business model.
- Should they change their service delivery method?
- Should they develop their own app?
- How do they incentive customers?
Those who couldn’t make those decisions quickly enough ultimately went out of business. And even those who did lost significant market share to Uber.
But Uber didn’t come out of nowhere. The necessary market conditions had been in place for years. The internet was now a widespread phenomenon. Everyone had a phone in their pocket, and apps were already the primary interface for mobile internet connection. Concerns over climate change had policymakers and consumers looking for alternatives to traditional vehicle ownership.
So what happened here? The taxi companies had all the right pieces in place, all the infrastructure set up, all the know-how and experience. The ride share game was theirs to lose. But the problem wasn’t their lack of ability, or even their lack of drive (pun intended). It was their lack of futurecasting.
What is futurecasting?
Futurecasting is the practice of considering possible futures in your industry and how your organization might respond to them. Consider the Uber example again. If the taxi companies had taken the time to do some futurecasting of their own back in 2008, they might have come up with a number of possible futures 10 years down the line:
- All taxis would be self-driving, requiring a restructuring of their workforce
- In-office culture would evolve into work-from-home culture, resulting in diminished usage, or a shift in peak times from morning to evening
- Communications technology would evolve to the point that people could summon a taxi at the push of a button, requiring a shift in their delivery model
Not all these possible futures would come true, but having a plan for how their business would evolve and address each of them would help them be prepared to make the necessary changes if they did. Not only that, but understanding how the industry might evolve in five to ten years provides an opportunity to get ahead of these changes and be a leader in innovation, rather than simply reacting to it as it happens.
How to do futurecasting right
This all sounds great—but how do you do it? Thankfully, it’s not as difficult as learning how to read a crystal ball. But it does take a willingness to re-examine your “business as usual” and be open-minded about what your business could be. And often, it takes an experienced partner who can guide you through the process, expand your team’s thinking, and fully explore the spectrum of future possibilities.
In our 40+ years helping organizations of all sizes design a new vision for the future, we’ve found that true effective futurecasting boils down to these four steps:
1. Do your research
No matter how much industry knowledge your teams have, it’s no substitute for a comprehensive market analysis. Take the time to analyze current trends in your industry. Where are your competitors investing? What are the top influencers in your field talking about publicly? What technologies are being developed that may have impact on the way you do business? These are some of the people and factors that will ultimately shape the future of your industry, so it’s important to understand where big moves are being made.
2. Listen to your customers
Many new innovations spring up in response to customer wants and needs that have gone unmet for too long. To stay ahead of industry disruptors, consult your customers continuously. Not just about their impressions of your product—but about the difficulties they’re facing related to the problem your product solves. Keep a pulse of what needs are going unmet, both by your organization and by your competitors. This gives you a great place to start when thinking about what directions you should head in the future.
3. Plan scenarios
Once you’ve taken the pulse of both your competitors and your customers, it’s time to get creative. Think about where the market and technology trends intersect with your customer needs. Based on this, imagine the ways your business could fail or what gaps other disruptors might be able to fill. Don’t limit yourself here. There are no possible scenarios too grand or too specific. Just get it all out on the page.
4. Design the future
If what you’ve predicted does come true, what are you going to do about it? Start with the most likely scenarios and consider your current capabilities. Using the principles of design thinking, consider the ways you can use what you have to address these issues. What capabilities or new technologies would you need to build to address them? Once you have some preliminary solutions designed, take them back to your customers, get their feedback, and continue to iterate.
Futurecasting has many benefits. For starters, it gives you an arsenal of possible reactions. Solutions you can keep in your back pocket for the day when your darkest predictions come true. But it also gives you the opportunity to be proactive. If you feel strongly (and the evidence supports it) that a certain market disruption is likely to happen, it may be a good idea to get started now. Invest the time and resources to pivot your operations or develop a new product or service that will help you get ahead of what’s coming, and you can turn yourself from the disrupted into the disruptor.