The next ten years will see an accelerated pace of change that will unfortunately drive many businesses to bankruptcy. Don’t be surprised to see more of Kodaks, Nokias and Motorolas biting the dust. The emerging technologies driving the Fourth Industrial Revolution will eventually morph the world we know of in many ways. As a leader of the company, it is your responsibility to make the team think outside the box by trying to anticipate the changes that could affect your organisations and its members. This is not akin to straight-line extrapolation of company’s projected performance over a period.
If you and your team do this diligently, it will push your management team to develop business plans that can accommodate a variety of interacting change factors. It will also build consensus among your team members on future opportunities and threats. I have run this exercise at Platformax- a sales acceleration company, that makes you sell more. The biggest benefit was that the team members knew each other’s disagreements on key issues and realised that is because of their varying assumptions.
I find it valuable to involve and take input from external leaders who track industry trends, key customers or even our vendors at times. This allows the team to avoid being blindfolded and nudges them to the reality, as seen by different stakeholders in the industry.
These are the steps that I recommend you use to complete the star gazing exercise.
Map Key Factors
Along with your team, brainstorm a list of external factors that are likely to shape the business environment in which your company operates.
Rank These Factors
After you and the team have arrived at the laundry list of influencing factors, it’s time to rank them on a two-dimensional matrix of the degree of Impact and it’s the probability of occurrence. The degree of impact refers to the intensity with which the change may affect your company’s performance. Rate these two factors on a scale of 1 to 10, with one signifying the least chance of occurrence and ten the highest.
Rate The Factors
Now its time to do some calculations; multiply the degree of impact score with the probability of occurrence score for each factor. From this list select the top two factors with the highest score, and the leave the rest of them.
For the top two factors that you have identified create an optimistic and pessimistic scenario, keep in mind that none of them should be highly improbable. There has to be a fair chance of them occurring in the future.
In this step you need to the combine the four scenarios in a 2*2 matrix, the matrix will have a pessimistic and optimistic scenario for both the factors. For each of these four scenarios script down a one pager document describing details of each scenario, the sequence of actions that could lead to it and how would you know that its happening.
Map Probability & Implication
Now it’s time to reassess the probability of occurrence of each scenario, use all the data to evaluate factors that could trigger the emergence of the scenario. The best case would be to arrive a probability score of occurrence, if possible. Once you have mapped the probability, it’s time to map the implications of each of these occurrences on your business strategy. Remember, some of the scenarios could have hard-hitting consequences like the severe erosion of margins or market share.
As humans, we tend to underplay scenarios that may not be right for us, Kodak after 128 years of existence filed for bankruptcy in 2012, mostly due to internal factors and the sense of disbelief in changing world. Kodak’s failure can be labelled as one of the biggest corporate blunders as it missed digital photography wave, ironically invented by the Kodak team itself.
The leadership team was not ready to believe that its new invention would cannibalize its mainstream business. The morale of the story is, don’t try to ignore the new technology hoping it would go away by itself or deride it using various justifications, just because you have the seat of power.
We at Platformax help many clients in analyzing their sales process thereby making it efficient and effective. In case you want to shore up your sales number or launch a new product, please contact us for setting up the best sales process. Platformax makes you sell more!