Picture of the Future
This article is for more advanced Business Designers, who want to bring their Business Design projects to a more ambitious level. We consider a tangible and aligned "Picture of the Future" as one of the most important ingredients and pre-requisite for successful Business Design projects. We want to shed light into the questions what a "Picture of the Future" looks like and why it is so important for innovation projects.
1. What Picture...?
At the end of the day, Business Design can't work if the management of an organisation has no clear picture of what customers and their own organisation should look like in the future. Again, it won't work! But most companies have a vision and a strategy, haven't they? The initial reaction of some managers to the question of whether they have a clear vision or "Picture of the Future" for the organisation they are accountable for is:
Sure! We want to become the Nr. 1 in our industry XYZ and increase our gross margin by 3%.
Well, this is neither a "Picture of the Future" nor a strategy. It is a goal. And by the way, terms such as "purpose", "vision", "mission", "strategy", "goals", "KPIs" etc. are often mixed up and create more confusion than clear guidance. Also buzzwords such as "digitalisation", "sustainability", "customer centricity" are a good starting point but not precise enough that they provide any guidance for innovation activities and management decisions around these activities. And this misconception is prevalent in many companies. What we need instead is a "picture" of what the "life" of customers and a company may look like in the future. And this picture needs to be as tangible and visual as possible that employees of an organisation are able to grasp it and organise themselves. Why is such a "picture" so important? If your vision of the future is vague and more a goal than a concrete idea of your future you want to build, pretty much everything you do in managing innovation will be difficult. Hence, a picture of the future is a very essential leadership tool for modern managers across industries.
Without a picture of the future, you will have challenges to derive your "innovation playgrounds" and eventually an innovation portfolio. You will also get vague decisions at the end of a Business Design sprints and never 120% commitment for new ideas. You won't get the best people for a project team. Managers will always rely on numbers and business cases to make decisions in the context of innovation. It will be difficult to kill a project or to get full commitment for an idea. Nothing is really good, nothing is really bad. And it is even worse for us: You need to have very sharp senses to realise that the missing vision is the reason for all that. Because everyone tells you the opposite ("sure, we have a strategy!").
A "Picture of the Future" is barely driven by pains and challenges your customers experience today. Your vision should be driven by an entrepreneurial idea what kind of future YOU want to build with your company. Sounds scary? It shouldn't and, by the way, your picture of the future can be revisited and revised over the years.
2. Key Components
So let's build your "Picture". A good way to visualise a "Picture of the Future" that truly enables us in the innovation space consists of five aspects:
The purpose of your organisation
The future "life" of your customers
The future "life" of your organisation incl. core assets
The connections between 1. and 2. in terms of products, services, relationships, sales and marketing
Ways to measure success (KPIs) for these connections
Here is a list of questions we love to ask as a starting point in order build a "Picture of the Future":
Purpose of your Organisation
Why will your organisation still exist in the future?
What are the most relevant playgrounds in the future?
What do you want to be famous for?
"Life" of your Customers
Who do you want your customers to become? (see book from Michael Schrage)
How will customers live and work in the future?
How many customers are potentially available in key markets?
What will be relevant to them? What won't (but is today)?
What product and service categories will be key for your customers?
"Life" of your Organisation
Who (= role) will be sitting in your organisation?
What will they be doing all day long?
What will be your core assets?
What will be your "unfair advantage" in the future?
What do you need to "unlearn" in order to build our future?
We know that finding answers to these questions is difficult and the answers may change over time. That's the way it is. But it is absolutely essential as a leader to have answers to these questions in order to steer the organisation, decide and prioritise. Visualising your answers to these questions in a visual format (mind map, video, LEGO Serious Play, visual illustration) can be a good idea, but is not always necessary. Running a couple of Business Design projects is a great way to shed light into the questions above and find brutally honest answers where you are today and where you should be tomorrow.
Try consider the famous quote from the famous sociologist Karl E. Weick in the context of your strategy process: "An organisation can never know what it thinks or wants until it sees what it does."
Well, we think this statement is true but a bit too extreme. You can imagine the future (top down) but always need to consider what your organisation is capable of doing in reality (bottom up).
Answers to the questions before can be grouped and visualised with the so called "golden circles"- a term initially coined by Simon Sinek.
The "Why?" question refers to the purpose of an organisation, its beliefs and reason why the organisation exists and should exist in the future. It is usually an emotional statement that makes employees or members of the organisation proud and 100% committed.
The "How?" question links to the "secret sauce" how an organisation creates value for customers, partners and / or the society. This can be guiding principles, processes or special skills.
The "What?" question is usually the easiest to figure out: The answer may include products and services an organisation sells or provides to the outside world.
3. Development Process
A "Picture of the Future" can be build in many ways. Basically, we distinguish between two distinct perspectives to tackle this:
Top down: You hire a traditional management consultancy to run a strategy project resulting in 50-200 Powerpoint slides with an impressive analysis of mega trends, market dynamics, promising customer segments, capabilities of your organisation incl. SWOT analysis and, of course, a list of recommendations for you organisation etc. Based on theses insights you build your "Picture of the Future".
Bottom up: You run a couple of challenging innovation projects with Business Design for selected "lead users", in best case, at the edge of your comfort zone, to learn under real conditions what "lead users" really anticipate, how pretty new technology really works and what your organisation is capable of doing in the far-stretched innovation space...and what it is not.
Well, the combination of both perspectives entails a certain sort of magic. Define strategic guiding principles "top down" and then bring them to life with real life projects "bottom up", learn and continuously adapt your principles along the way.
The illustration above shows how Business Design can be embedded into a strategy-building process to find reliable and authentic answers to the questions before. Based on the learnings from running Business Design projects, we unveil the "naked truth" about an organisation, specifically around the "What?" and "How?" question and help leaders of an organisation to even find answers to the "Why?" question. Then, building a tangible picture of the future with (usually financial) KPIs is the logical next step.
4. Next Step "Playgrounds"
Now it is time to define your strategy as your way to realise your "Picture of the Future". One of the next steps in this context is to use this picture as a reference point to derive so called "playgrounds" and to create and prioritise ideas as well as upcoming innovation projects in a portfolio matrix (x: distance to success, y: strategic fit). These ideas and projects are then supposed to be executed in a Business Design manner to build the future incrementally. Playgrounds are framed spaces in which you aim to innovate. They are always derived from the "Picture of the Future" and can be defined around new technologies, trends, new customers or even new skills of your organisation. Examples are:
"New products for young families following circular economy principles" or
"new platform-based solutions around democratising our data for the greater public good".
And finally, the loop is closed to ideation, our Business Design sprints and the preparation needed to kick-off real-life projects.
Try to be as concrete as possible when designing your "Picture of the Future" and use visual tools for this (e.g. LEGO Serious Play). Once we have a clear picture, it is easy to derive further conclusions for the strategy process: