Humans aren’t so hot at assessing risk.
In general, our fears are stoked by emotion and not reason. So it’s no surprise that surveys show that common modern fears include terrorist attacks, Ebola virus and plane accidents.
The risk of your pajamas catching fire is twice as great as catching Ebola. And, by the way, the risk of your pajamas catching fire is really, really small. Risks that are more likely to cause an untimely demise? Car accidents, flu, heart disease and cancer are the biggest risks to your life. Do they instill that same level of panic as a terrorist attack in most people? No.
Ken Norton, a partner at Google Ventures, pointed out some of those inherent, very human, biases that we bring to viewing the world (and our businesses) during a talk at the recent Industry conference in Cleveland.
He mentioned two other things that we tend to be lousy at – predicting the future and time perception. We are in the middle of an exponential curve when it comes to technology. Things are rapidly changing. But when you’re in the middle of exponential change, it doesn’t necessarily feel like it. His example was the iPhone. Within 30 years, the first desktop Mac has basically been shrunk into a portable, handheld device (that’s exponentially more powerful). In terms of human experience, that’s the blink of an eye. And yet as we live through these changes, it feels more evolutionary than revolutionary.
So when you’re in the midst of exponential change, predicting where products and services will be in five years gets really tricky. Six to 18-month plans feel more realistic. The average lifespan of an S&P company has dropped from 67 years in the 1920s to 15 years today. In today’s tech-driven economy, five years is a very long time … but maybe not long enough to see the bigger picture.
In our daily lives and work, we tend to view the world like a worker ant that reacts to the landscape around him – taking in data and making adjustments on the fly. It’s efficient and productive from an operational standpoint. But if we want our organizations to last beyond that 15-year S&P average, Norton said it’s a good idea to board a rocket ship and view the world like an alien from time to time.
Maybe it’s time for your organization to build its own Area 51.
From an alien perspective, can you identify some of the broader forces at play in the world now? Where could they lead us to in 30 years? What could they mean for your organization?
A 30-year plan isn’t a road map, Norton said. It’s understanding forces, not focusing on product features. It’s not attempting predictions but rather a forecast with a range of possible outcomes. Norton suggested The Inevitable: Understanding the 12 Technological Forces That Will Shape our Future by Kevin Kelly as a good resource to inspire your thinking.
Using the STEEP analysis method, he stepped us through a brief exercise with Lego. What will the venerable brand look like 30 years from now in a society where products aren’t necessarily “finished” anymore, every item is “smart,” data is shared on all types of devices, ownership is replaced by access, and plastic is being regulated out of existence? Does Lego become a subscription service where you get access to plans that are sent to your home 3D printer? As the population ages, do Legos become an increasingly adult toy? As you can quickly see, the possibilities are radical and inspiring.
Considering multiple futures opens up multiple opportunities. Revisit those futures every six months or so and tweak as the world rapidly changes. Look at how the decisions you are making today might impact your options in the future.
Famously, Kodak invented digital photography and then underestimated the imminent threat to its business. Blockbuster made a similar miscalculation with streaming services and Redbox. It’s predicted that about half of the companies in the S&P 500 will be replaced over the next 10 years. What forces are you ignoring that could render your organization obsolete? Looking out 30 years and assuming the forces of change are moving faster than you might like starts looking like smart strategy.