I recently read the business classic by Gary Hamel and C.K. Prahalad “Competing for the Future” and even though the book is 20 years old, a lot of its wisdom resonates with me today.
20 years ago was back in the day when Bill Gates was viewed as a computer industry challenger, where CNN was the radical innovation and where Motorola was king of mobile. Perhaps not the labels you would adhere to them today, but still they have each had a tremendous impact on their industries and on virtually every person on earth’s lives.
I want to share some of Hamel and Prahalad’s wisdom with you – and save you reading some 330 pages.
Lesson nr. 1 – Learn to forget
A fundamental life lesson really, is the ability to not become a prisoner of ones past experiences, an ability that can dramatically enhance your life, and an ability that for business managers can mean the difference between existing tomorrow or become categorized together with tyrannosaurus X.
Every manager carries around in his or her head a set of biases, assumptions and presuppositions about how their industry is structured. How one makes money, who the competition is, what the customers want, what technologies are available and so on. On top of that comes the cultural mental framework of beliefs, norms and values. Together these preconceived notions of “how we do things” can form a bomb under the very survival of a company if they are allowed to become too settled, too ingrained, too much part of a company’s dna.
In 1994 Microsoft might have been the new kid on the block, but by 2007 they were famously the old “stuck in their way” company that laughed at the iPhone because it didn’t have a keyboard. Business is always changing, fall asleep at the wheel, and you will surely crash.
As, Peter Drucker, another revered business scholar has expressed the need to learn to forget “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”
Learning to forget is incredibly hard, but fortunately businesses can learn to do this and re-code their corporate genetics.
Lesson nr. 2 – Be a rebel
Do not allow industry conventions and best practices to go unquestioned, to re-code corporate genetics managers must dare to ask questions about everything. Including questions about themselves.
Managers have a knack of elevating their own knowledge to equal fact, believing that what they think and do is, by virtue of their status, inherently correct. And when managers gather they are incredibly adept at confirming this notion with one another, spawning a general acceptance of business as usual and delivering little more than a blurb of sameness.
This creates the perfect opportunity for a rebel to make his or her mark. Companies that create the future support these rebels. They encourage their subversive behavior and celebrate their passion for breaking the rules. It’s the rebels that spot the white spaces and the blue oceans, because they are not prepared to accept established dogmas and traditional industry boundaries. Back in 1994 it was companies like The Body Shop or Swiss watchmaker Swatch that celebrated these rebels, today it’s companies like Google and Airbnb.
Lesson nr. 3 – Dare to sound a bit wacky
Since customers are notoriously lacking in foresight, companies have to lead the way. To re-code company genetics, managers must become leaders. They must be able to envision the distant future and communicate their vision, even when the response is rolling eyes and ridicule.
In the book, Hamel and Prahalad provides their 1994 contribution to visionary thinking by proposing that, instead of having to drive all the way to the supermarket, hike across vast parking lots, wander endless aisles and wait impatiently at the checkout, why can’t the supermarkets just mail us a weekly cd on which we can wander a virtual supermarket and place our order? Now in 1994 that was CRAZY talk. Now, in 2014, of course the only crazy part about that is the cd! I buy 50% of my groceries, 80% of my shoes and 100% of my books online.
Companies that create the future offer more than incremental innovation and feature enhancements, they amaze customers with new products that they didn’t even know they wanted. Not saying that listening to your customers is not important, of course it is, it is vital in order to stay in business today, but to carve a path to the future you need incredible foresight.
To me it seems the recipe for foresight is one scoop deep industry knowledge, two scoops knowing your customers and three scoops of imagination. It’s a fine art being able to balance knowing what could potentially be possible and recognizing the limits of it. Rush off in some headless burst of innovation enthusiasm and you could find yourself hurtling over a cliff. On the other hand, stay constant and watch your business become obsolete. Boy, business ain’t easy!
As the saying goes, it takes a village to raise a child, so too does it take a community effort to bring innovations to life. Hamel and Prahalad speak of a company’s strategic intent as being the underlying point of view that emanates throughout the company, a shared belief in the company’s long-term vision and a communal sense of direction.
Lacking a compelling sense of direction, few employees feel an urgent sense of responsibility to contribute to the company’s future competitiveness. Most people won’t go the extra mile, if they don’t know where they are heading.
Unfortunately businesses are too often caught up in a quagmire of bureaucracy, designed to keep checks and balances and preventing people from turning left and right. Bureaucracy blocks initiatives and creativity by constraining the range of available tactics. Managers become frustrated by orthodoxies about which channels to use, the definition of products and markets and the lack tactical freedom.
The point is; companies have to trust their employees enough to give them a map marked with a desired future destination, and then let them discover the best way to get there. Appeal to every person’s internal explorer, let them relish in the joy of discovery, and you will cultivate a sense of destiny in your employees that will make them feel like they are part of building a legacy – something that is bigger and more important than anything anyone could accomplish on their own.
I think Hamel and Prahalad are as relevant today as they were 20 years ago. I am fortunate enough to live in a country that celebrates freedom and work in a company that celebrates the team as well as the individual.
Still every day I think about how we can become a lot better at daring to do different.