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“I look to the future because that’s where I’m going to spend the rest of my life.”
George Burns offered that insight as a comedy line. But it applies to strategic planning more than he likely ever imagined.
Business people everywhere are struggling to recover from disruptions and tensions caused by a perfect storm of pandemic and social unrest. For most, life will never be the same as it once was.
That reality holds opportunity as well as risk. Now, perhaps more than ever, could be a good time to re-think how we think.
That’s the view of Mark W. Johnson and Josh Suskewicz. They’re the co-authors of Lead from the Future: How to Turn Visionary Thinking into Breakthrough Growth.
Listen in on this conversation for some good tips on how to reimagine both your personal and professional life.
Rodger Dean Duncan: Unlike present-forward thinking employed by many leaders, you introduce a process you call “future-back.” What does that mean?
Mark W. Johnson: Many of the governing norms and intuitive habits we employ in our businesses are built on an unconscious method of thinking we call “present-forward.” Quite literally, this takes present-day truths and assumptions and projects them into the future in a linear fashion. This is entirely appropriate for business operations and decision-making that are more predictive, data-driven, and near-term.
Future-back inverts that. We intentionally start by envisioning the end state, and then work our way back to the present. Future-back thinking is essential for leaders grappling with change in and around their industries, and the future-back process lays out a path for the development of visionary strategies.
The process unfolds in three stages. First is Vision—you carefully consider the ways your business environment is likely to change, tease out the implications for your current products, processes, and business model, and then describe what you would need to become in order to thrive in that anticipated environment.
Second, you translate your vision into a strategy by converting it into a portfolio of businesses, strategic opportunities, and capabilities and then walk it back to a portfolio of growth and innovation initiatives.
Finally, you program the strategy and implement it in the right way.
Duncan: You say future-back thinking doesn’t replace present-forward thinking—it complements and completes it. How so?
Josh Suskewicz: About 90% of the time your primary tasks as a leader are to work off of today’s paradigm—setting and meeting budgets, hiring and firing, improving quality, adding new features to or otherwise improving your existing offerings, and in general keeping your ship on course. Present-forward operations are relatively straightforward. They draw on the abilities that are said to reside in the left side of your brain, which is more analytic and methodical. The problem comes when you apply that kind of thinking to challenges that are new, unformed, or discontinuous—to anything that requires you to think creatively and out-of-the-box. It’s not an either/or proposition. You must be able to manage day-to-day and explore and discover.
Duncan: Planning for the future requires vision. How can leadership teams develop a vision and “flesh it out” so it helps guide strategy and implementation in meaningful ways?
Johnson: You start by targeting the right time horizon—which is likely to be much further out than your typical planning horizon, but not so far out that it’s completely unrelatable (5-10 years for most organizations). Then, by tracing trends and assessing their implications, you develop a high-level view of what your customers will value and how market dynamics will work. Typically, the wave of the future is already visible in one corner or another of your marketplace. As the science fiction writer William Gibson put it, “the future is already here; it’s just not very evenly distributed.”
What makes this process work as well as it does is the dialogue approach—you and your team work collaboratively, debating and discussing, diverging and converging. Each of you knows more than you might realize, plus you all will have prepared for the work by reading extensively, talking with colleagues and external advisors, and ideally doing some immersive work like visiting relevant startups, cutting-edge laboratories, and businesses in frontier markets. Developing insights in this way can be frustrating. There’s a lot of “two steps forward, one step back.” But it can’t be rushed.
After developing a set of insights about what the future is likely to hold, we push to convert them into a point of view, or what we call “view of the world statements.” Create a list of specific and measurable assumptions about the future (e.g., in the automotive space, “by 2030 more than 50% of global new cars sold will be electric”) and test and refine them with your colleagues. Before long you have a set of foundational beliefs about the workings of the future environment. Then you can craft your strategies accordingly.
Duncan: What’s the process for converting a vision into an actionable strategy?
Suskewicz: In a nutshell, you have to switch your mindset from that of a storyteller to an engineer. Your vision for the future should describe the markets you’ll be in, the role you’ll play, the types of products you’ll offer. Then, convert that to strategy by creating three closely interlinked portfolios that methodically translate your assumptions about what you are going to become into dollars and cents.
The first is your future state portfolio (which represents your target end state), and which rolls up revenue from each future state business. The second is your innovation and growth portfolio, which captures the initiatives you will need to begin today to meet your long-term goals. The third is your investment portfolio, in which you formalize your decisions about where the resources to fund all this innovation activity will come from. You will likely need to create a new governance system to ensure that these initiatives get all the leadership attention they need and that they are able to draw on the capabilities of the core business.
Duncan: What can leaders do to embed future-back thinking deep in the organization as well as in the C-suite?
Johnson: Really powerful visions imbue people with a sense of purpose. When everyone is inspired, they work that much harder to make it a reality.
Future-back thinkers are learners. So to build a visionary organization, you need to create structures that incentivize collaborative learning at every level. Your people should feel empowered to explore. It should be relatively easy for them to get approvals to launch test-and-learn initiatives. Customer-facing middle managers should be allowed to make as many of their own decisions as possible. No one should feel they are putting their job into jeopardy by trying to solve a problem or develop something new and better, even if it doesn’t ultimately pan out. In fact, your performance and bonus metrics should capture and reward just those kinds of initiatives.
As for leadership teams, a critical skill is the ability to toggle back and forth between present-forward and future-back thinking and processes, depending upon the challenge. Some CEOs divide their senior teams into unequal parts, with the bulk of their members tasked with ongoing operations and a much smaller group chartered to focus on the future.
One thing almost every CEO we talked to said was how helpful it can be to have a far-seeing board. After all, it’s a director’s fiduciary duty to be a guardian of an organization’s future. CEOs themselves must constantly remind their teams to think less about their domain, whatever that may be (finance, legal, operations, sales and marketing) and more about the interests of the organization as a whole.
This column was first published by Forbes, where Dr. Duncan is a regular contributor.