Welcome to the new challenges: we are facing climate change, geopolitical and military conflicts, polarization, and rapidly emerging technology such as AI. People aren’t great at change, but we have to respond fast and everything comes at once. How future-proof are your organization and organizational culture? Preparing for the future is more important than ever. Let’s learn from the book The Future Formula by Jo Caudron.
Caudron sees a combination of “perfect storms” looming for the next decade – a Metastorm of major societal challenges leading to the end of the old normal.
Turbulence during the transition
It will be an extremely turbulent decade of transitions, but Caudron hopes that by 2030 we will land with a plan for the new normal. Such a plan will include solutions for the major themes: climate, energy, economy, healthcare, living, working, mobility, circularity, education, and a “glocal” vision of the world. Preferably with good new rules of the game and within our democracy.
But right now we are still in the middle of it. Governments have gone into debt since the pandemic, and they are now mitigating climate disasters that are already happening (floods and forest fires) and funding military aid to Ukraine. Everything is getting more expensive, also because we need to make sustainability investments and because we want to produce crucial goods closer to home for security – which requires investments over here and de-investing elsewhere. Add to that mix the scarcity of raw materials and you can see that everything is getting more expensive. That also creates further social unrest and polarization. Now, more than ever before, we need to engage with each other to navigate this future together….
Are we stuck? Maybe not. Systems theory teaches that complex adaptive systems often do not change linearly, but suddenly transform when a tipping point is reached. For a long time, it seems like nothing is improving. Also, most innovations are more expensive and uncertain than “the way we’ve always done things” and established companies want to make a profit on their previous investments before starting something new. That’s why it feels like we’re stuck, but eventually, the innovations will become the new normal.
How standard is your strategy?
The best response to our current situation is to prepare for different future scenarios, says Caudron. Most companies have a pretty basic strategy: increase revenue, reduce costs, improve the quality of products or services, increase market share, strengthen the brand, and improve customer satisfaction. In addition, everyone wants to be more innovative, and more digital, and wants to do more with ESG (Environmental, Social, and Governance – based on the UN Sustainable Goals), and retain staff.
But that’s not good enough, states Caudron. It’s time to strategically prepare for the future. Caudron advises organizations to focus on 2050, 2030, and 2025.
2050
For 2050, develop a social vision by answering questions like:
- How do we operate then, in what political system?
- What is the composition of the population?
- How much has the climate changed?
- Do we live glocal, more focused on self-sufficient regions?
There is no certainty, but thinking about it is already prepping, and that’s good. For the 2050 scenario, you can use Caudron’s Wheel of Disruption which states the societal forces of transformation:
- Sustainability and purpose-driven pressures affect your organization. You must invest in sustainability and if you want to retain the new generations at work purpose is crucial.
- Societal changes in terms of migration, demographics, equality, and so on. Migration is increasing, but is also needed because of aging populations. Aging leads to high healthcare costs.
- New (geo)political playing field: international geopolitical challenges, but also our local political system.
- A ‘glocal’ world: possible deglobalization and the impact on local economies.
- The digital revolution: recent accelerations, complemented by new developments such as Al, virtual worlds, and the like.
Determine the impact of these forces. Also look especially for situations where the future is blocked because there is a conflict, for example, between necessity and affordability, between social logic and electoral goals, between the interests of society and those of shareholders.
For example: Europe wants to be climate-neutral by 2050. But before that, everything will first become more expensive and difficult. If a political movement exploits this conflict, it can block all future development.
Or: As citizens, we want a better world, as customers we want the best price. So at Unilever and Shell, shareholders are again turning back future developments.
But what if a Sudden Breakthrough occurs, leading to an unforeseen change of course, through the introduction of an innovation? Then, just like that, you suddenly have a tipping point.
2030
For 2030, develop a sector vision; what are all these developments going to mean for your sector?
The forces that will influence your sector are already present: new technologies introduced by new players; new demands and needs from customers; new sustainability policies that put pressure on your operational process; macro-economic and geopolitical evolutions that have an impact on what you make or buy and how.
Caudron looks at product innovation, sourcing innovation new business models, and different types of market disruptors. He also highlights hybrid channels; what do you do online, and where do you reach the customer locally?
2025
For 2025, develop a business strategy:
Based on scenarios for 2050 and 2030, what do you expect in the shorter term and what can you do about it? How can you respond agile with the long term in mind?
How can you start working flexibly, just like a “jazzy” organization where you improvise but move toward your goals?
“Jazzy organizations” show adaptive resilience and have a model of distributed trust, putting decisions where they are best made, which is not always at the top of the organization.
During COVID, companies showed whether they were jazzy or techno. Techno has a tight beat and organizations focus on efficiency. The jazzy organizations were able to quickly change course and make departments work differently; they improvised based on a theme.
In a jazzy organization, not everything is scarce – you need time and space to improvise. Caudron says: While this certainly costs a little extra, you have to ask yourself what will cost the most in the long run: structurally investing a little in being jazzy, or the great damage an organization faces when the whole machine falters.
Important future-fit skills for people and organizations are collaborating with AI, resilience, distributed trust, letting go and rebooting, continuing to learn, and also collaborating with partnerships and ecosystems in your industry.
Do you see the link to organizational culture? After all, culture eats strategy for breakfast. People do what they’re used to doing. So, what is normal now in your organization? Does that fit the opportunities and threats of the future? Better learning and collaboration, fast switching, and adaptation align well with the learning Create culture type and the people-oriented Collaborate culture type in the Competing Values Framework (on which the OCAI culture assessment is based). Check how your organization scores.
© Marcella Bremer, 2024
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