“Past performance is no guarantee of future returns.”
Ever seen that disclaimer on an investment ad? Despite this standard warning, history is often used as a weapon with which to fight arguments about the future. “It has never happened like that before so why should this time be any different?”
I’m all for a level of conservatism: every prediction (and particularly those with the most hype around them) should be subject to challenge and question. But as the Cambridge historian David Runciman says, “history is a poor guide”. Now is different to then, and tomorrow? Well, tomorrow could be anything.
The question is, how different do we want tomorrow to be? And how fast do we want the change to come?
The one lesson I do think we can take from history — and that has direct parallels in my original discipline, engineering — is that rapid change is often less stable change. When the pendulum swings too far, too fast, the resulting correction is often pretty violent as well.
This is in part why democracy has been so successful: it promotes a relatively slow and steady pace of change with regular swings back and forth. Two steps forward, one step back, but ultimately towards a healthier, wealthier population.
The ideal would perhaps be consistent slow steps forward. But how do we achieve this?
Democracy maintains slow progress because of the competition between two distinct ideologies. One government may reverse some of the steps of the predecessor and vice versa. But in business we should be able to avoid this oscillation.
Futurism — strategic planning in general — needs to be conducted at two speeds, or rather focused on two distinct intervals.
There is the long term, potentially a 25–30 year vision: what do we want to be, to see, to deliver? How do we believe our ability to deliver that vision will be affected by the influence of macro factors?
Then there is the near term: inside the agreed framework of our vision, how will we be affected in the next 2–5 years by macro factors? What will have the greatest impact — positive or negative — and how do we respond?
In the immediate term, there is a process of constant innovation, driven by the near-term challenges and opportunities identified. In theory we should be able to maintain most of the changes of direction within this process through experimentation and testing. Occasionally the whole company will need radical change. But if this innovation process is run consistently, and at sufficient scale, it should be possible to minimise these dramatic changes of direction.
Should and do
Of course, few people or companies operate like this. Change programmes are generally undertaken when there is a clear external motivation: falling profits or market share, mergers and acquisitions. It’s hard to devote a sufficient proportion of our time and effort to changing the business. I’ve rarely met a small business owner, large company MD, or frankly a CEO, who didn’t want to spend more time ‘on’ the business and less time ‘in’ it.
But somehow we must.