Posted by A million dollar question – what does the future hold. Those who claimed they knew what the future had in the cards for them in 2020 were unquestionably mistaken. So does that mean it is useless to plan for the future? I would not go so far as that. Understanding the future is not the same as knowing what will happen to the detail. And understanding the future is important to define direction – the North.
You are having a CEO moment. You have looked at opportunities, weaknesses and you have assessed your resources. But have you taken a chance to step back and really think about the future? What will the future bring? What needs to happen for your to succeed? And for you to fail?
What do you believe in?
When developing a strategy, it is important we define what our beliefs are about the future. What do you think will happen with your customers, with your suppliers, your employees, your competitors, the world at large. When you understand your beliefs, it means you also understand your assumptions. When you are making business decisions, you make those on the basis that certain things will still hold true. Such as customers wanting to buy your product, such as your stores being open, or such as a large launch event for a new product line. Or such as growing into new customer segments, regions or markets that you believe to be lucrative.
Assumptions can also be called guesses, but they are meant to be slightly more informed than that. They are based on what you have studied and about what you know. Which is why it is important to put them down on paper. If you have done so, the moment one of your assumptions fails, you know you need to act.
If people stop buying leather products on eco concerns, what does that mean for your leather shoes brand? When do you start worrying?
What do you want to ask?
You can go macro or micro. What does this mean?
Well, you can talk about high level industry trends – do people want to buy electric cars, is coaching in vogue, are people going to go back to cruises any time soon. Or you can talk about smaller partitioned assumptions – what extras do people value in a car, what type of coaching are people after, where do people want to go on cruises?
Both sets of questions are important, but they serve different purposes – a tactical response and a strategic response. If you believe people still want to go on cruises then the question is deciding their format, duration, destination, and all the details. But if you believe that demand will not be there anytime soon you need to financially plan for a large period of disruption. I know I am using controversial examples, but the point is really to make us think about the big picture and the small detail.
When doing strategy, we do incur the risk of going too quickly to the detailed questions. We rarely give ourselves time to think and plan, so when we do, the ideas flow to our head and most of them are short term and require action yesterday. But let’s face it, if you don’t have the big picture, your business may not even be there tomorrow to need the details. So, even if once or twice a year, think of what really drives your business long term and what could go wrong (and right).
An Example: Yoga studio
Let’s play this out. If you are a chain of yoga studios, you need to look ahead to a few important bits:
- You offer the types of yoga that you think are the most popular – what if a new one shows up where you have no expertise nor teachers?
- You offer a pay per class model that people always valued – what if people are getting too used to a subscription “all you can eat” model. The Netflix of yoga?
- You offer large studio lessons but in a post covid environment, what are the trends that will emerge for what is virtual, what is physical indoors and what is physical outdoors?
- People are used to large classes but that may not be the case in the future. Safety measures aside (say we are covid-19 free), do you understand how customers will want to live their yoga experience going forward?
- People used to hang out in your lounge, have tea and small bites together post yoga. Will this be there in the future? Are you better off converting your lounge in a 1-on-1 studio for VIP and exclusive lessons?
I am not sure why I am using a yoga studio as an example, I don’t even go to yoga studios anymore. I was going to Pilates and I still remember the pain of each of those lessons back in February, courtesy of Heartcore. As for yoga, I have been living off youtube for years for short lessons and I now do a weekly private lesson via zoom. I could not imagine it otherwise. Maybe I will do a retreat at some point, but the convenience of getting out of bed 10 minutes before my morning lesson is priceless. Am I a trend? Unclear, but I can’t be the only one.
Keep Learning
We spend years of our life in school. It is our full time job when we are “children”, as my dad would have put it. And then, as we start work or businesses, we move to an “on the job” learning mode where all our wisdom comes from what we experience. What about what you can still learn throughout life?
Experience can be widely complemented with reading and researching about the industry, the competitors, the clients, other markets, other regions. More importantly, adjacent not so comparable markets that suddenly become a new norm and it spreads to our market – like amazon prime or Netflix for anything else.
Professor Clay Christensen developed his theory on our pure inability to innovate if our business is established. Our incentives are just not there. And if you are an entrepreneur launching a new company, chances are we are barely getting any sleep that allows us to keep our eyes open when we start a new book or article. Whatever is the case, as CEO of a business, knowing what is going on is your job. And that means you never stop learning.
That will allow you to imagine the future.
So what does the future hold? Lots of uncertainty no doubt. Identify the known unknowns. And brace for the unknown unknowns. For that, you need to be ready.
Photo by Drew Beamer on Unsplash