generation ago, when things moved more slowly, the
economic system was more tolerant of firms that
failed to anticipate change. Today, failure to
anticipate change can be abruptly fatal.That's why many large companies employ technological forecasters or futurists devoted to the study of future trends and their implications for the company.
Few doubt that technology will be a dominant political and economic issue of the future. Many believe that scientific prowess will be the key to world leadership. Certainly the art of predicting upcoming events--futurism--will also play an important role.
Thinking years ahead gives us warnings about such possibilities as global warming, ozone depletion, over-population, species extinction and many other hazards. Via futurism we can identify threats and gain lead time in which we can, it is hoped, take effective counteraction.
Futurism thus serves the early warning needs of nations and cities with regard to matters of security and quality of life. For companies and business ventures, futurism is a key factor in competitive survival and growth.
Futurists are generally concerned with events that may happen in the next 10 to 20 years. They are particularly interested in new technological breakthroughs and the impact of those breakthroughs on society.
A distinction is thus drawn between futurists and, for example, market researchers, who are interested in a 0-10 time scale, and who typically evaluate already-identified trends. At the other end are science-fiction writers and philosophers who look 30, even hundreds of years ahead. They speculate on what could happen, even if they do not know how it could happen.
t any point in time there are unseen forces at
work which will yield surprises in the days
ahead. No one, of course, can forecast all the
events which will occur.Examples abound, but consider the U.S. government's 1930s study of coming technical developments. It failed to forecast such innovations as television, transoceanic jet service, lasers or microcomputers.
More recently, during the war in Kuwait, there was much gloom-and-doom forecasting by certain prominent scientists who predicted that the smoke from burning oil wells would cause global climate changes--a sort of "nuclear winter." They were badly wrong because they made a number of incorrect assumptions regarding the amount of smoke, its color and composition, and the altitude to which it would rise.
There are similar questions regarding forecasts of global warming, ozone depletion and other atmospheric changes. Scientists cannot agree on past events, let alone the future--witness the variety of explanations for the death of the dinosaurs or the decline of various civilizations.
Our task is made more difficult by the ever-increasing speed of development. The transoceanic jetliner that flew in the late 1950s took about 15 years to advance from lab tests to commercial flight. The microcomputer exploded onto the scene during the 1970s in less than 10 years. With computerized design and automated manufacturing, we currently have the prospect of important new products having a gestation period measured in months or days.
he technological forecasting objective of most
business managers can be defined very simply--the
avoidance of surprises. Many will settle for
that. But the more astute managers want
something more. They are not just trying to
defend themselves against change--they are
determined to take advantage of change and
use it for their own benefit. They want to gain a
competitive edge by outguessing the
opposition.It is a long-established axiom that without change there are no new opportunities. Almost every change brings with it exciting new opportunities for someone. Further, we know that there are three essential factors in exploiting change: anticipating the change, being able to act quickly, and willingness to bet on one's forecast. Many people may anticipate change, but few are both willing and able to take advantage of it.
here or when does this
process start? The systems
must be customized, of course,
to fit the organization.
However, there are some
common denominators.The alert firm must have both a long-range plan and a long-range outlook. The former is a projected business activity and operations sequence. It is what the firm expects to do.
How far into the future should it go? There was a time when large corporations had formal plans for 10 years ahead, and some even prepared 20-year plans. Today, few firms attempt to develop operating plans covering more than five years, and many consider a two-year plan to be long-range.
A generation ago, a typical product life cycle was 15 to 20 years. A firm that obtained a patent could hope to enjoy a strong market position for the life of that patent, 17 years. A product that held market position for 10 to 15 years was commonplace.
Under such conditions, decision-making was much easier. Managers could make commitments for new plants and equipment and feel confident that they would see a good return on investment over a period of years. Similarly, they could recruit, train and develop staff and look toward years of service from them.
In today's volatile economy, good decision-making can be very difficult. Many product life cycles are measured in months, requiring great flexibility in the company's physical plan. Will the new plant being occupied this year be suitable for producing the new product--as yet unidentified--to be launched three years hence?
These are some of the reasons that many companies are depending heavily on detailed one-year plans plus very sketchy five-year plans.
The collapsing time scale also requires companies to prepare their long-range plans more quickly. A plan developed slowly and deliberately over a year's time may be obsolete before it is promulgated. To develop valid plans quickly, most companies need to maintain vital data bases and employ automated systems for interpreting data and making instant extrapolations.
nlike the business plan, the long-range outlook is simply a vision of
what may be coming. There are no
constraints, economic or other, on
the outlook. It can be "far out" and
purely speculative.The outlook should extend as far into the future as possible to foresee even a hint of change. It may include programs and projects that are now but a gleam in someone's eye.
In the days ahead, the CEO must become a practicing futurist. By observing business associates, by intuition, and even through such informal processes as reading the newspapers, the CEO must develop an educated guess about future possibilities.
Technological breakthroughs are happening more and more quickly. And while that makes it more difficult to predict future developments, companies that completely ignore this change of pace will pay dearly.