Work, business & professional services

Is the future a thing of the past?

Membership of the World Futurology Society has declined by 20% since 2003 (did they see this coming?) and some observers say that futurists are now a thing of the past. The problem is partly caused by the fact that the 'profession' has something of an image problem due to a history of bad predictions. Other reasons include the lack of success-measuring metrics and the fact that the world is becoming more short-term and more specialist, which leaves longer-term generalists out in the cold. So why is predicting the future so difficult? The simple explanation is that things are so complex. One way to deal with this is to use what scientists call 'coarse grained models' which basically means leaving out the detail and focussing on the overall patterns. Another trick is to map past events onto possible future scenarios while another is to look at what's already happening and extrapolate. The latter can be dangerous because it ignores the confluence of ideas and events but it can work because in many cases the future is already here. For example, the computer mouse has been around since1964 and was in widespread use in places like Xerox PARC in the 1970s. However it didn't make a public appearance until 1984 when Apple introduced it with the Macintosh. It usually takes 10-20 years for new ideas to take off and the problem is invariably that futurists are simply too early with their predictions.
What is increasingly certain however, is that in an age of uncertainty we all need prophets, even false ones, to narrow the number of possible futures.

Stressed out by work

In the UK there were 6.5million workdays lost to stress in 1995. By 2001 that figure had jumped to 13.4 million and the issue has become costly enough in financial terms to warrant a discussion chaired by the Prime Minister on issues surrounding work/life balance. The traditional argument is that increased work hours are to blame, but historically this simply isn't true. Average hours worked have actually been declining for a century. Another explanation is the increased pace of modern life caused by technology. But again this doesn't stack up either. In the 1870s the term 'neurasthesia' was created to describe the nerve-racking effects of modern inventions like the railway and the telegraph. What has undoubtedly changed is the willingness of people to say they are suffering from stress - a badge of honour in some industries. There is also the argument that as societies become richer there is more time for introspection and people feel a sense of entitlement, which lowers the anxiety threshold. Whatever the reason something needs to be done. The risk of having a heart attack increases by 600% in the face of high-pressure deadlines and 20% more heart attacks happen on Mondays than any other day which might say something about the stress caused by going to work.

Sleeping with the enemy

Companies generally see the developing world as a source of cheap labour or a potential export market for homegrown innovations. As a result significant sums of money have flowed from companies like Wal-Mart into countries like China (Wal-Mart imports account for 1% of Chinese GNP). However, the tables may be turning as companies in countries like China and India take on foreign rivals at their own game. A good example is the motorcycle market. Chinese motorcycle brands account for half of the global market and companies like Honda have seen their share slide from 90% to 30% in five years in places like Vietnam. 'Victim' companies cry foul play citing theft of intellectual property but this misses the bigger picture. If companies can't compete effectively in emerging markets they won't be able to complete back home either if companies from China and elsewhere start to export disruptive innovations of their own. The solution is to re-engineer products, services and processes from the ground up in such a way that distinctive skills and capabilities are magnified. The only other solution is to orchestrate local (and global) process and innovation networks.

A radical idea - conservative innovation

The theory of first mover advantage is bunk according to Nicolas Carr (author of 'Does IT Matter') who says that when a disruptive technology arrives the real growth opportunities lie in fixing the disruption. In other words pioneers get scalped. His argument is that the future arrives in “fits and starts” and many of the most profitable innovations are inherently conservative. Innovators (especially technology innovators) often get too far ahead of customers who are fundamentally change adverse. A good example is the Internet. Many of the early dom.com firms failed, not because they had a bad idea, but because they had an idea too soon and lacked the patience, managerial or marketing smarts to hang around. Another example is Netflix. The company is a wild success because it doesn't fight current technological restraints. You could set up a movie rental company that delivers films via huge downloads but it's currently a much better idea to let people order over the Internet and let the US postal service deliver the movies. Economists refer to this as 'compliments' - the fact that innovations need critical components and infrastructure to work before they'll take off.

Big ideas for 2005 and beyond

Every year the Harvard Business Review (HBR) comes up with some predictions for the next wave of breakthrough ideas. This year HBR teamed up with the World Economic Forum and developed some of the themes at the annual gathering in Davos. Here are some of the highlights:

Demand side innovation

Most companies are focused on supply side innovations - new products, features and functions. However, it looks increasingly as though the future will be about how rather than what. This is somewhat akin to value innovation which seeks to reinvent business models and processes, but it's also concerned with alliances ('re-skinning' products and services with borrowed identities), personalisation and using customers to co-design the products they consume.