Most enterprises, afraid of losing ground to competitors in the digital era, are moving at such a rapid pace that they often miss warning signs that portend disruption before it's too late. But companies can head off this innovator's dilemma by capitalizing on emerging trends and anticipating where their respective industries are heading.
That is what futurist and author Daniel Burrus proposes in his new book, The Anticipatory Organization: Turn Disruption and Change into Opportunity and Advantage, slated for publication on Oct. 10. His thesis? Change is linear, exponential and predictable: Burrus found that 93 percent of 1,000 companies he surveyed said their biggest problem had been predictable — they just weren't looking.
Burrus recently shared his philosophy with more than 100 IT leaders at the CIO100 Symposium in Colorado Springs, Colo., emphasizing that one of the main reasons companies are disrupted is that they are so busy looking in the rearview mirror that they miss opportunities looming in their front windshield. If brick-and-mortar retailers had paid attention to ecommerce trends and a startup called Amazon.com, they wouldn't be closing hundreds of stores a year. If Blockbuster and others had moved quicker to streaming video perhaps Netflix wouldn't have starved them out of business. If BlackBerry, then Research in Motion, had moved more quickly to address the iPhone perhaps it wouldn’t have been left scrambling for purchase. If, if, if.
Disruption is there — if you look for it
"Every disruption that has ever happened was there to see," Burrus said. "Why didn't a cab driver think of Uber? Why didn't the big hotel chains think of Airbnb? They're all really busy. You can busy yourself right out of business."
[ Get an inside look at 10 real-world digital transformations at today's leading organizations, find out why companies struggle to cultivate digital strategies, and learn what digital transformation really means. | Get weekly insights by signing up for our CIO Leader newsletter. ]
Tuning the opportunity antenna to the anticipatory channel is not any easy task for IT leaders. CIOs, many of whom are juggling roles that require them to be transformational, functional and strategic, are busy reacting and responding to threats and challenges to their businesses. And when CIOs do spy opportunity, getting the C-suite and board to buy into what they're selling is a tough task. Burrus offered some strategic recommendations to help CIOs get executive buy-in and fend off disruption.
To avoid disruption, CIOs must be aware of hard and soft trends. A hard trend is a projection based on measurable, tangible, and fully predictable facts, events, or objects. It’s a future fact that cannot be changed. A soft trend is a projection based on statistics that have the appearance of being tangible, fully predictable facts. Think of it as a future maybe.
Hard trends include the fact that employee demographics will skew younger as Baby Boomers retire and cede the workforce to Generation Xers and millennials. It makes sense for CIOs to leverage these trends to drive innovation. Rather than eye younger employees with distrust, CIOs should "cherry pick" some and loop them in to senior-level meetings. That will empower and inspire millennials to help drive the company forward.
Another hard trend is that industries will become more regulated. Burrus pointed to how Tesla CEO Elon Musk has capitalized on regulations to grow his multiple companies under the banner of efficient energy solutions. "Every single business he got into he used government regulations. He's played that regulation card, why don't you? If you spend a little more time looking at regulation you can see amazing opportunity," Burrus said.
Soft trends include the assumption that retail sales will increase over the next year and that it will become increasingly difficult to attract talent. The good news? Soft trends can be applied to hard trends to trigger change and CIOs should look to do so where possible. Hard trend: Cloud, mobility, analytics, artificial intelligence, machine learning and blockchain can enable companies to transform their business processes. The soft trend question: Will your company transform its business processes? Ultimately, by understanding the differences between hard and soft trends CIOs can more accurately understand and predict future disruptions and identify and solve problems before they happen, Burrus said.
Other key points:
When the cost of "no" is greater than the cost of "yes." You've all seen this movie. A CIO identifies an opportunity and appeals to the business for money to drive it forward. But the CIO who admits to his C-suite that the outcome is uncertain struggles to get the budget to proceed. Burrus says CIOs should identify and articulate the impact of NOT implementing X, Y or Z. "Go in with hard trends and help them to know the price of no is far more than the price of the yes. Certainty gives you the confidence to make bold moves and write a big check. Uncertainty does not."
Opposites attract more sales. Burrus also encourages CIOs to take a leap into the unknown. For example, he said FedEx could disrupt the logistics industry by abandoning shipping fees and instead leveraging the data it collects from sensors tracking its packages. "You have to get enough people to use FedEx shipping to get enough data to make it worth more than charging them to ship. How do you do that? If all shipping is completely and totally free they will make a lot more money. Similarly, he suggested that a drug company could charge based on patient results instead of the medications it sells. "If you charge for results instead, what happens? You create an ecosystem that's committed,” Burrus said. "It's a game-changer."
Agile is only one side of the coin. Every enterprise is moving to become more nimble, adopting emerging technologies such as cloud, mobile, artificial intelligence and machine learning, as well as agile and devops principles to shrink development cycles. But with everyone rushing to embrace these tools and practices they cease to be a competitive advantage. "We need to be good at the other side of the coin and that is the ability to anticipate. Agility is an ideal strategy for unpredictable change. Anticipatory is the way to turn change into opportunity because you can see it coming. Act on change before it happens and solve problems before you have them. If it can be done it will be done and if you don't do it someone else will."
“Your position as the CIO or IT leader has never been more important or more vital,” Burrus said. “How you view the future shapes how you act in the present and how you act in the present shapes your future. In other words, your future view will determine the future you. Right now our future view is a rearview mirror, it's not a windshield with bright beams. Your job is to create your future based on where we are going."
What CIOs think of ‘anticipatory IT’
Burrus' points resonated with CIOs who attended the keynote.
Matthew Lasmanis, CIO of GlaxoSmithKline USA, said that GSK took its own shot at disruption by becoming the first pharmaceutical company to abandon the industry practice of paying health care providers to endorse the company's products publicly.
"It's not about us delivering technology platforms; it's delivering technology that creates value by being able to predict change," Lasmanis said. "It's a core part of how I think about being a CIO and how I think about the technology I deliver as part of the organization."
Dr. Pepper Snapple CIO Tom Farrah said Burrus’ presentation is another shine on how CIOs can use technology to change the way a business achieves its outcomes. “That's what he was talking about when he was talking in terms of being forward looking and trying to predict the future,” Farrah said. “Technology is a means to make it happen but it's not about the technology it's about the business outcome.”
By way of example, Dr. Pepper Snapple has transformed its direct sales and distribution model for getting beverages to retail partners by digitizing and automating the order-taking process. The company is continually refining its order and sales systems with AI and ML to generate recommendations and provide other information to sales representatives that is “contextually relevant,” a key aspect of being anticipatory.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.