In his speech and conversation with Jill Hellman, Mark Johnson emphasises the importance of looking beyond the horizon as opportunities get missed by just dealing with the day-to-day and not looking ahead more than a couple of years.
The notion of leading for the future is that any enterprise or organization needs to address the immediate-term and short-term needs to sustain its growth. It needs to operate and execute it, it needs to marshal the resources and do what it does 90% of its time, but it also needs to plan for the long-term. It has to have a clear-eyed view of what the future can hold and the implications for that future, recognizing that it is not going to be a perfect picture but is going to set a direction for the organization and give it purpose. It is going to give a place to do the thinking on how things can change and indeed, things are changing with the coronavirus much more quickly, but it is the same concept to get past those points of inflection and think in a holistic way how things are different.
This is why visioning comes into play, that in order to develop the long-term and make it meaningful, you have to build a vision, more than just a vision statement, a way of thinking about the portfolio of your businesses beyond just your core capabilities and then planning how to translate that into a strategy. This is done by way of a planning process called “future-back”. This involves an “art of the possible” way of thinking- “what could be” as opposed to “what is”, how to think about it as a system as opposed to a point solution, how to think holistically, and how to think of it as the art of the possible. If we work through it this way, we can begin to bring together what we can learn from the future in a tangible way.
Vision is the art of the possible and is about determining how to define a whole new game to play as opposed to just getting better at the existing game.
The importance of looking beyond the horizon could not be more telling than now. Everybody is affected, and certainly, the threat is going to be a big piece of all this. However, opportunities getting missed by not looking out more than just a couple of years ahead are often overlooked, and especially when there is no immediate crisis and we are just dealing with the day-to-day. There are endless opportunities on the horizon that could create different ways to reach consumers, but there is a general bias towards fear and threat, which is a part of us being a human being. However, there is a real opportunity cost when we don’t invest in planting the seeds now for where things can be past the planning and forecasting horizon or past the turbulence to the area where things are going to settle out. So, we can try to move towards hope and opportunity, and begin to think. We are not going to have a perfect picture of the future but we can create a North star to work towards. For example, Steve Jobs and Apple were visionary in the way they thought about not just the personal computer but the digital hub, and then the computer and electronic devices that they could create as well.
The first step is to set a vision, and for that, understanding the difference between vision and strategy is critical. Vision is the art of the possible and is about determining how to define a whole new game to play as opposed to just getting better at the existing game. Certainly, when faced with all the things around disruption, it is important to recognize that the way things could be in the future -regardless of whether we have a crisis like COVID-19- could be fundamentally different. The market can move in different ways, job requirements can be different based on changing technologies and preferences. As Peter Drucker would say about the theory of the business, eventually that theory no longer works and we have to be ready to play a new game.
A vision should be defining the end destination and it should inspire the organization. More than a one-sentence statement, a vision should be a narrative about what the current business will be like and then about the future business opportunities that navigate that unknown future. Strategy, on the other hand, is the means to get to the vision. Typically, it is shorter-term, in the one to three-year horizon, and is about how to win whatever game you define or the existing game if you choose not to change the game. A strategy is about how to operationalize the vision and how to improve the ability to win the game.
Against the backdrop of this crisis, even though it may seem counterintuitive, looking out to this five-year-horizon and setting a vision of what your company could and should be is more important than ever. A lot of us think there is going to be a lot of change that happens in the short-term, and it is unclear whether it is going to take 12 months or longer, so there is a ton of uncertainty. Hence, there is no question that scenario planning would be very important, to think about options and implications for what are the different ways things may shake-up in the environment, and how do we prepare in terms of the different ways to address that. However, when we are past all this turbulence, we must have an intended vision that we can develop as our North star.
The first thing is to remember that as we think about the future, the vision that we are developing is driven off of not just an understanding of the environment but literally how we fit in that environment as a business portfolio. We need to think about it again in this future-back kind of way. It should be about understanding what could change about the environment based on disruptions like COVID-19, but also long-standing trends and how they could converge, and then being able to say what is the future of your business in terms of its core, adjacent, and new growth opportunities. The next important step is walking that back and converting it to a strategy of choices that ultimately lead to innovation and growth choices of today, in a mirror image portfolio of core, adjacent, and new. The last step is programming, especially for the breakthrough initiatives the right way and then implementing it along the path.
10% of the work needs to be carved out for future-back thinking, to get past all the volatility and uncertainty, and to be able to see how things could and should be in the future.
If organizations can develop their vision in an inspiring, purpose-driven way, they should engineer it through strategy to convert that into growth and innovation initiatives that start today, with the appropriate investment. Most important of all, this is an effort that needs to be conducted both by the leadership team, at least a significant subset of them, and innovation and growth teams, to be able to learn and learn rapidly. They are going to be things about these different scenarios that lead to different changes in the investments that are being made. One learns as they proceed forward over these next number of months.
Agility is going to be critical and that comes by being explicit about a learning process, being able to be humble as an organization to learn from different sources, be able to test the strategy and be able to pivot quickly when things are learned. It all needs to be planned in getting towards the 12 to 24-month horizon, but then ultimately to be able to move towards that vision. Even the vision needs to be revisited and shaped based on new learnings and ideas.
Future-back is a process of iterative learning, an explore-envision-discover process, which is different than an execute-and-operate process that organizations predominantly spend their time on. It is essential to have the explore-envision-discover process running parallel to the execute-and-operate process, otherwise, the learning from happenings in the present would be lost. At the same time, we need to be anchored to the vision of what the organization needs to become.
Between present-forward thinking and future-back thinking, present-forward thinking is 90% of what you do. It is about operating and executing the business. It is the “What is”, it is about continuity, about focusing on the managerial side of things, it is data-driven and analytical and so, coming up with answers is important. On the other hand, 10% of the work needs to be carved out for future-back thinking, to get past all the volatility and uncertainty, and to be able to see how things could and should be in the future.
This should be the way that not only the innovation but also the leadership teams work on an ongoing basis, and that there is time divided between both present-forward thinking that deals with strategies and hard facts and future-back thinking that deals with vision and ideas.
Jill Hellman in Conversation with Mark Johnson
Jill Hellman: Usually, and especially now, when leadership is so focused on today, how do you get them to look into the future?
Mark Johnson: Firstly, you have got to think about building a common language in the organization. You can be a practical visionary, that you can look into the future and discern insights from it. So, you have to build some way that the organization can appreciate that the future is urgent, even if it may not be vital. It’s vital to be able to understand what the organization now needs to be planning for and preparing for, in addition to what it has to do right away. It’s important therefore to think about language to get the organization to be able to get past the tyranny of the urgent. The other thing is to recognize the notion that it is not only about what threat you might miss, but more importantly, what opportunities you will not be able to fully flesh out, or you’re going to get left behind because you’re too late in going after them. More than anything else, it is important to try to build a language and a vocabulary that there is a way to think about the future, there is a way to make it real through envisioning, and then incorporate that in terms of what teams do but also what leadership does to make it real.
Hellman: With this convergence of all this technology and these new business models coming, and the future coming so quickly, how does a leader learn to learn what he should learn?
Johnson: We had Peter Senge in the ‘90s talking about the learning organization and the fifth discipline. If the learning organization is not top of mind, it should be more than ever. Interestingly, when Satya Nadella took over Microsoft, his wife gave him a book that enlightened him that his organization had become a culture of know-it-alls, and they needed to be learn-it-alls. Things are coming at us so fast and in so many different ways, no one person can be able to understand and make sense of all of it, but it still needs to have this North Star, this direction that the organization wants to take and this has to start from the top. Then, when you think about all these convergent technologies and what it means, you have to, again, think about where you can plant seeds, where you can invest a little to learn a lot. We have to be very focused on how fast we can learn.
Nobody knows exactly where a technology could go in the future, but you still can set direction, and the organization that learns the fastest is going to win. There is no hardcore answer to say other than, leadership teams should no longer just operate and execute, and just be informed by the chief innovation officer. They need to be active participants in the learning process. If they are in concert with appropriate teams and in sync with external efforts, they will be able to make sense of these and will be able to pivot appropriately and move in the right way towards the future.
Hellman: Can you tell us more about visionary future-back sessions?
Johnson: If it has to do with setting the vision and developing that enterprise strategy, it involves the leadership team or the composition of a leadership team. A majority of them do not have to be everybody, but it should be a critical map. It is because it is going to be as much about getting aligned and getting a fundamental understanding of the assumptions as it is about making decisions. Also, people come from different backgrounds, they have different lenses by which they look at things, and if you don’t immerse your group, your team in a set of dialogues where they diverge before they converge, they have the ability to go backwards as well as go forwards, making it a messy process. This ‘explore and vision-discover’ process is best suited for a group of people who can debate and discuss with each other and get to the truth; truth, in the sense of not hard facts but truth in the sense of where they are getting aligned about core assumptions about the way the world works and the way the world is going, and with that, they can get aligned and committed so that they can effectively sponsor and govern efforts, and stay committed to them as they go through some of the trials that happen as these projects go along.
Visionary future-back sessions can thus be thought about as a group of people going through a set of dialogues. Maybe there is a dialogue once every couple of months and in this case, it might be more often as you are going through a crisis, in order to be able to debate and discuss. It’s very much a team effort, just the same way you think about an innovation team because you are dealing with not only the unknown and the uncertain but also with a creative process to be able to get beyond just the orthodoxies of today.
Hellman: Which trends do you think will be more relevant at this moment and are going to shape the next five years because of COVID?
Johnson: I think telemedicine, telehealth, teleconferencing, higher education, and how things are going to be done online will be the trends. These trends, particularly the tele-side are going to be huge and tied to that are other things around artificial intelligence and big data and the way things could be used.
Hellman: Is the future-back person the same as the present-forward person or do they need to be different people in the organization?
Johnson: There are some people who can navigate between them and can very much be execution-, delivery-oriented, but they can also be creative and think conceptually and abstractly. So, the short answer is that there is a set of people that can actually do both and there is a whole set of leaders that are going to need to do both, but then there will be some leaders and individuals in the organization that are so far on the spectrum of delivery-orientation that they should stick with delivery oriented things, and then there are some people who are so discovery-oriented and so focused on that side, like people in strategy or marketing, that they should probably spend most of the time there. The answer, therefore, is that it depends. There are some that are ambidextrous and some that just cannot navigate that, and you shouldn’t force it.
Hellman: Are the corporate venture capital groups who are acquiring disruptive start-ups a threat to corporate innovation thinking?
Johnson: They could be, but they can also be opportunities. If organizations struggle to do in-house corporate venturing, they can work with disruptive start-ups, invest in them, and decide if they have the right to buy, depending on the milestones that are met.
They also are early signals. We often times like to utilise the start-up world to be able to further help anticipate what is in the future, to see what kinds of things are developing, what kinds of technology roadmaps are there, what kind of market development roadmaps are happening. You can see that by examining and having surveillance on a host of start-ups and by figuring out how they can unfold your industry.
Hellman: How can we connect the purpose with strategy and vision?
Johnson: The purpose piece of it, in my view, is embedded in the vision. The purpose is something along the lines of “why are we here?” and then the vision is how to see that unfold in the future. So, the purpose piece is important to the process of developing a powerful vision that inspires the organization. It’s harder to explain more but all of our envisioning efforts have included an exercise to incorporate aspiration and purpose as part of creating that narrative about the way the world works and how you fit in that world.
Hellman: How do we help the executors value the visionaries, and then the visionaries value the executors inside an organization?
Johnson: If you think about it as having a lot to do with change, the ability to change and transform, our change agenda always starts with language, with a vocabulary. In other words, it is like developing the Physics principles before you do the Physics experiments, so we have to get the principles right and build a language such as present-forward and future-back can help a lot in having the visionaries appreciate the execution-oriented people and the execution-oriented people to appreciate the visionaries. It enables visionary-thinking in the creative piece to tie together with the engineering and execution piece.
If you can build vocabulary on a case basis, it’s a huge step forward. Demonstration is another important piece; demonstrating that you can create a practical vision gets the organization excited. That demonstration helps the organization, whether you are an execution-oriented person or a visionary, appreciate as a whole what the organization is trying to do to be sustainable.
Hellman: How do you plan five years out right now with so much uncertainty?
Johnson: It is not just about planning five years. You are walking that back, to plan 12-24 months as well. You have to make sure that 12-24 months is as much informed from the future-back as it is from the present to that 12-24 months future. The other thing to keep in mind is that this is 10% of the time only, and it is not the level of planning for the next 12-24 months. The development of the vision is an impressionist painting, it’s not a photograph. It’s a view about the future and your business that helps set direction, so it doesn’t mean that you have to go and research till the cows come home, and have every piece of data and perspective to develop a vision. You may not have a lot of time to spend on the vision, with all the dealing, with planning for the 12-24 months, but without vision, you are not going to create the inspiration and the hope that the organization needs. That is going to be essential not just now but over these next 12-24 months. Organizations should therefore do what they can on the vision, but also make sure it’s there because it’s the inspiration for the organization and the linkage to better inform how to think about the 12-24-month horizon.
Hellman: Do you have anything else you want to add in closing?
Johnson: I want to reinforce that learning is more essential than ever. These conversations about having a vision for the future or even a strategy for the 12-24 month-horizon are as much conversations in evolving and developing points of view as opposed to anything that can be exactly factual. But they do create perspective and insights and those insights lead to a way of acting now that you might not think about, had you not done that work. It’s important to recognize that this process is a learning process, so being open to where you can learn from, that humility which is on the other side of learning, is essential. If you tie those learnings together, vision, strategy to today, and connect it all with a process of learning, you can actually do this. Even if it is 10% of your time or less, it’s going to be an important part of what you do each week and each month to make sure that you are doing the right thing for what’s going to be out there in the 12-24-month horizon and beyond.