Chapter 3
CREATING AN INSPIRING AND ACTIONABLE VISION
The future cannot be predicted, but futures can be invented.
—Dennis Gabor
Industry inflection points • Jobs to be done of the future • View of the world statements • An impressionist painting, not a photograph • Four archetypal implications for your future • Vision as aspiration and purpose • Strategic narratives
Future-back work begins with a series of structured dialogues in which senior leaders develop a compelling long-term vision or add definition to one that is already conceived but is meeting organizational resistance (as with William Hait’s). That said, future-back should never be thought of as a rote process with checklists and prescribed timelines. The phases we outline are more organic and flexible; you should work through their principles in the manner that is best suited for your organization and its strategic challenges.
Your first task is to explore what the future is likely to hold, targeting the right time horizon. Then, you grapple with the implications of that future for your organization, developing a high-level view of what your customers will value and how market dynamics will work, characterizing the major threats and opportunities that are likely to emerge, and assessing where business-as-usual would likely lead. Finally, you assert a point of view on how to best respond to and shape that future, defining the desired future state of your enterprise inclusive of both the evolution of its current businesses and the development of new ones. Put it all together and you’ve got a vision that’s ready to be translated into a future-back strategy.
Now, let’s take a closer look at each of the steps that make up this first phase.
Step 1: Paint a Picture of the Future Environment
Imagine the leadership team of AT&T convening in 1980 to address the rise of wireless communications, or a newspaper company in 2000 contemplating the impact of a future in which news will be available online anywhere, anytime—and classified ads will be free. This is the type of discussion you should start with, and to do so you need to hone in on the right time horizon.
Specify a Time Horizon and Its Inflection Points
Identify the potential inflection points in your industry and focus on the timeframe when they are likely to occur—when new paradigms will mature to the point of significance and new technologies will converge to open up both potential disruptions and new opportunities. Consider the emerging fault lines in and around your industry, the early signals of upheaval and potential disruption. Perhaps your customers’ needs are shifting or low-cost competitors are emerging. When might these trends begin to tip?
Even if you don’t expect a dramatic phase change in the years ahead, we suggest pushing beyond your typical planning and forecasting horizons to a point where business as usual won’t guarantee results, and the current trajectories of your markets are no longer certain. A defense contractor selling fifteen-year programs should look out twenty years or more. Conversely, an app development company operating at the speed of the internet should look out no more than five years or so for the next architectural shift.
The key is to focus on a date that is distant enough to stretch your thinking, but not so far-off that it is utterly unrelatable.
In 2016, William Hait and the Janssen team looked out to 2030, several years past the time horizons of their traditional drug development plans, zeroing in on four major shifts in the medical and life sciences ecosystem they expected to accelerate as new technologies and new biological understanding unlock new possibilities:
- Life Sciences R&D will change its focus from understanding the manifestations of disease to understanding its underlying mechanisms, processes, and risk factors.
- Disease diagnosis will shift from a reactive mode at the point of clinical manifestation to personalized, precision prognostics, with continuous surveillance of at-risk patients to detect incubating diseases before the onset of symptoms.
- Therapies will shift from one-size-fits-all treatments and management plans to personalized, integrated interventions that combine multiple modalities, from behavioral to biologic.
- Healthcare delivery models will shift from fee-for-service to fee-for-value and from traditional providers to integrated networks of in-person and virtual care settings.
None of these trends on their own were surprising; each was already apparent in various corners of the marketplace. That is not unusual. As the science fiction writer William Gibson put it, “the future is already here; it’s just not very evenly distributed.”1 The power of the analysis came from thinking carefully about a world in which those trends worked together to create a new normal.
Focus on the Jobs to Be Done of the Future—and How to Solve Them
Once you’ve determined the time horizon you’re targeting and the major trends that will shape it, describe what you expect will be happening in and around your relevant markets. What are the circumstances you think your current and targeted customers might be in given the confluence of relevant trends? As technologies mature, new ones emerge, and business models evolve, which of today’s jobs to be done (as described in chapter 2) will be increasingly satisfied (or not)—and, consequently, what new issues will arise, presenting new and valuable opportunities?
One example the Janssen team wrestled with: there are massive markets for direct-to-consumer health solutions (such as herbal supplements) that are lightly regulated and have little or no clinical data to support their efficacy claims. But many people buy them hoping they will help ward off disease, reflecting a deep underlying job to be done. While they usually don’t have much clinical effect, most are relatively harmless and widely accessible. Many disease interception solutions will have to be similarly safe and accessible, since they’ll target people who are not yet sick. The opportunity lies in designing direct-to-consumer solutions that work repeatably and reliably, and developing the evidence to prove it.
Focusing on the jobs to be done of the future led to strategic clarity for the leadership team of a diabetes management company in 2012 and 2013. Their main product line, blood glucose meters, partially met patients’ underlying job to be done of managing their diabetes by providing a nearly instantaneous glucose reading from a drop of blood. But, after two decades of robust growth, the category was beginning to commoditize as competitors offered comparable devices at lower price points. Meanwhile, as the diabetes epidemic continued to mount, diabetes-related costs to private payors and health systems rose too, creating a conflict with their own driving job to be done, which is controlling costs. What’s more, emerging technologies such as continuous glucose monitors (small implants that automatically and continually track blood sugar) and digitally enabled diabetes management services promised to address patients’ underlying job to be done more effectively. They weren’t ready yet, but all indications suggested they would be in the next five to ten years.
Focusing on the jobs to be done of the future, the management team concluded that payors would increasingly steer patients to their competitors’ less expensive blood glucose meters. New products based on new technologies that better addressed patients’ needs would command premium prices from those same payors, further exacerbating the challenge to their existing business. The leaders resolved to devise a strategy to bridge from their current products to the new solutions before it was too late.
The leadership of a major automotive company had a similar epiphany in 2016. Cars are such an important part of our lives because of all the jobs to be done that they satisfy. There are functional jobs to be done, like simply getting from point A to point B—commuting to work, for example. There are more circumstantial jobs to be done, like occasionally needing to haul furniture. And then there are pure social and emotional jobs to be done, like wanting to impress your peers or knowing the car your teenager drives to school is safe. In the past, most Western families solved those jobs by owning a couple of vehicles—perhaps a sporty sedan for one parent to commute in and a minivan or an SUV to chauffeur the kids and fill with luggage when going on vacation.
But change was on the horizon. As the automotive executives contemplated the rapid growth of ride-sharing services, advances in autonomous vehicle technology, mounting global environmental concerns, and the megatrend of increasing urbanization, they realized the jobs to be done people rely on their personal cars to solve would fragment. Simply getting from point A to point B could be accomplished with increasing ease and at lower cost through ride-sharing services. Same for the occasional need to haul large items—just order an UberXL. Meanwhile, congested cities increasingly prioritize alternate forms of transportation—and all this would happen before the disruptions that fully autonomous vehicles will likely cause. If the auto executives didn’t redefine their company around an expanded concept of mobility it might become obsolete.
Developing these sorts of insights requires you to enter the learning mode we discussed in chapter 2 and diverge for a bit to explore trends and then, through debate and discussion, converge on a core set of assumptions about the future. This demands a highly intuitive approach, and intuition is fed by a diversity of inputs. You should prepare for these strategic dialogues well before they begin—reading extensively, having wide-ranging conversations with colleagues, making time to reflect on your emerging assumptions, and visiting start-ups, cutting-edge laboratories, and businesses in frontier markets.
Executives almost always push to get on with it at this point—to hurry up and get to the business decisions they need to make. It’s critical that you remain patient for two reasons. First, you don’t want your view of the future to be influenced by your business’s current priorities, which will inevitably distort it. Failing to spend the time you need to diligently probe the future environment makes it easier to fall back into present-forward thinking. Second, the picture of the future that you develop will have to feel as real to you as anything else in your purview.
If you and your team are going to believe in your future state vision on a gut level—and you will have to if you are going to be able to convince others to feel the same way—you will need to take the time to really soak in it and reflect on its implications together. This can’t be rushed.
View of the World Statements
One effective tool for consolidating all your inputs into a distinct point of view that your whole team can align on is to develop a set of view of the world statements. These articulate specific assumptions about how things will work in the future environment in a way that is precise and quantifiable when possible, and that will ultimately shape your strategic response. For example, an automotive company might focus on rapid increases in the production and sales of electric vehicles. A corresponding view of the world statement might be something like, “By 2030, 50 percent of all new cars sold globally will be electric.”
We often develop these statements by collecting twenty or thirty key assumptions about what the future might hold. Then we survey a broad group of executives, asking them to rate each assumption on its likelihood and impact. As themes emerge from their responses, we pressure test the outliers—things that are assumed to be unlikely but might reflect organizational blind spots. After the list has been culled and synthesized, we bring it into a strategic dialogue, where the leadership team can debate it further, ultimately landing on a handful of factors that represent a consensus view. The act of pinning down these assumptions—and even more importantly, of going through the exercise as a team—forces them to focus on their strategic implications.
Remember, the goal is not to predict the future with certainty (nobody can) but to paint an impressionist painting of it detailed enough to build clarity and alignment on what will have to be done to meet its challenges and opportunities. To this end, we often design meeting formats different in tone and approach than the typical PowerPoint-driven strategic review. Unconventional meeting formats risk coming off as contrived if not facilitated well, but they can powerfully engage and align a group of leaders when managed effectively.
An example of this is a meeting a group of our colleagues led with the vice chancellor, deputy vice chancellors, school deans, and functional leaders of Australia’s Deakin University.
The meeting was called to assess the future of higher education and the university’s readiness for it. The executives gathered in a room hung with five visually engaging posters. Each poster focused on a macro theme, such as what, where, and how students will study in the future and the resulting key strategic questions each posed. We developed the posters through our own research, interviews with each member of the leadership team, and a survey of the university’s top three hundred leaders. Participants started the meeting sitting around a big U-shaped table with the presenter in the middle but then quickly did something different: they got up and moved around, with small groups forming around each poster. We gave them time to absorb and discuss the material, rotating the groups from poster to poster every ten minutes. After that, we split the group into two: one half of the room was designated “optimists” and charged with making the case for a bright future in which Deakin is ready to embrace the changes implied by the posters. The other half were “pessimists,” charged with making the case for why change would be difficult and even unmanageable. They prepared their arguments and then had a spirited debate across the room.
“The end is not near—it’s here,” argued one group. “We have evolved in the past, and we’ll evolve again,” countered the other. As the teams went back and forth, exploring different facets of the future and what it meant for them, a resolve to embrace the future became apparent.
After a short break we asked the participants to locate themselves, physically, along a spectrum we had laid out on the floor, with the most optimistic at one end and the most pessimistic at the other. Then, we called on each of them to explain why they were standing where they were. By the end of the meeting, all of the leaders, self-described pessimists and optimists alike, agreed to seize a set of future-oriented opportunities.
Step 2: Identify the Major Implications of the Future for Your Enterprise
Now that you have a sense of the mechanics of the world you’ll be designing for, it’s time to put your company into it. You’ve asserted what your markets will be like; next you have to figure out what that means for you. To do that, imagine how your current businesses will fare in that envisioned future. Will they still have a role to play? What will have to be true for them to thrive? What does that mean for your growth prospects?
At this stage leaders often realize that business-as-usual has a greater downside risk than they’d supposed and that there will be unrealized upside, as new opportunities will arise that are beyond the scope of their current businesses. Projecting the current status and health of your core business into the future allows you to define your growth gap—the difference between what you aspire to (or are expected to) deliver and what you are likely to. The relative size of the gap bounds the relative size of the response you’ll have to muster, as we will discuss further in chapter 4.
The major implications for your business generally fall within one of the four archetypes that we describe below. Note that we call these archetypes rather than scenarios because scenarios, in the classic sense of scenario planning, are different views of what an uncertain industry future might turn out to be. They generally present a variety of best and worst cases that are extrapolated from your present circumstances; their purpose is to help you prepare to respond to one contingency or another. Developing multiple scenarios does not provide the North Star that a single powerful vision can.
Our implication archetypes, in contrast, describe what the future is likely to mean, based on a tactile, multidimensional understanding of the major changes likely to occur in your markets and your customers’ needs. The mental processes you and your team use to develop and align on these assumptions may overlap with some you would use in scenario planning, but the aim is not to cover all your bases but, as much as possible, to develop a perspective on what will truly matter so you can respond to it in the right way.
Sometimes leadership teams know immediately which archetype best describes their outlook, but usually it is difficult for them to converge on one. Once again, no one has a crystal ball; there is no data that can tell us with certainty how things will actually play out. We often lead our clients through an exploratory assessment, relying on judgment and nuance, and requiring time for debate and reflection. Together, we think through questions such as, At a high level, across the totality of your businesses and markets, under which rubric do you fall? Are you facing a revolution or an evolution? Then we prompt them to take a more granular look: Which archetype best describes each of your key product lines? Are there geographic differences? What would have to be true for your key business units to be described by one implications archetype or another?
Then we ask our clients to pull back and consider things from the outside in. What will your customers have to say about your offerings in the future state? Will they remain loyal, or will they look elsewhere for new sources of value? In order to comfortably place yourself in Major Opportunities or Maintain the Status Quo, you would have to believe that your current model will still deliver unsurpassed value to your customers. That should be a real gut check.
The aha moment that comes out of this work isn’t always a brilliant new thought or a penetrating analysis. Often it comes from a place of emotion, as leaders let go of their defensive denials and embrace a reality that they had subconsciously anticipated or feared.
We often see this happen with businesses on a path to commoditization that aren’t yet in crisis. Growth is more difficult to come by, competitors are moving faster than before, customers are less loyal. The platform isn’t burning, but it’s smoldering, and if you’re paying attention you can smell the smoke. And yet, one way or another, you’ve managed to pull a rabbit out of a hat and hit your profitability numbers, quarter after quarter. Maybe you believe you can keep on doing that indefinitely—“We’ve figured it out before, we’ll figure it out again.” Confronting the future head on, when procrastination is no longer an option, can have a salutary unsticking effect.
The executive team at the diabetes management company we mentioned earlier had an epiphany of this sort. Prior to the exercise, commoditization had never been far from their minds, though it was never squarely in focus. Once they acknowledged the threat, their anxiety turned to excitement as they realized that the same forces leading to commoditization could open up much bigger opportunities for them, much as the commoditization of the PC had led Apple to develop its digital hub strategy. As products in the diabetes company’s space became increasingly software-oriented and digitally enabled, value would shift from hardware (blood glucose meters) to services (personalized diabetes management solutions). Freed from the need to think solely within the boundaries of their existing product lines, they began to pursue those new possibilities.
We’ve seen this dynamic play out with a wide range of other clients, from a professional services firm that came to terms with the likelihood that its people-focused model would be increasingly disrupted by AI-fueled digital services, to a medical device company that began to shift its customer focus from product performance-oriented surgeons to bottom line-oriented hospital executives.
William Hait’s team had its aha moment at an offsite, where senior leaders absorbed case studies of disruption in other industries and drew connections to their own experiences. They didn’t expect the world to change overnight or for the pharmaceutical business as they knew it to be eclipsed (Major Threats). At the same time, they couldn’t imagine a world in which Janssen wasn’t playing a key role in the emerging new paradigm (Maintain Status Quo). On a case-by-case basis, they believed their circumstances fell under either Moderate Threats or Major Opportunities. The new disease interception paradigm, they realized, would manifest at different rates for different disease areas. The old paradigm might persist for decades for conditions in which scientific understanding was less mature, whereas the new one was already present in areas like cholesterol management.
Ultimately, they agreed they weren’t talking about displacing their current business with a new model but rather augmenting it with a set of future-facing growth platforms (Major Opportunities). Janssen’s highly successful core business would continue to innovate on its current trajectory, while new efforts that accelerated the development of what they came to call a World Without Disease would be launched alongside it, focused on innovative drugs but also on whatever else it would take to realize the vision—be it consumer health products, medical devices, or digital therapeutics. This allowed them to leverage J&J’s unique assets and capabilities across all of its sectors as well as its open innovation ecosystem, which features a leading venture capital arm and a network of innovation centers and start-up incubators around the world.
Step 3: Envision the Future State of Your Business
Having developed a point of view on the future and come to terms with its implications for your existing businesses, it’s time to focus on what you will offer as part of your envisioned future state, how you will create value, and how you’ll address your looming growth, positioning, and capability gaps in doing so. We find it helpful to systematically think through three tried and true growth categories:
- Core: Opportunities to extend or evolve your core offerings to maximize their relevance in the future environment.
- Adjacencies: Distinct new products and services that can augment your core offerings or opportunities to take your core offerings into different geographies and markets, with either option (or combined options) leveraging the existing business model.
- New growth: Growth initiatives that may leverage core capabilities of the organization but in new and distinct businesses, typically with new business models.
Comprehensive future-back strategies leverage all three. Apple continued to make computers (its core business), but it also developed new software like iTunes, iPhoto, iMovie, and so on to enable its digital hub strategy (an adjacency). Finally, it began to create new products in new categories to fully realize the strategy—the iPod, the iPhone, and the iPad—that also unlocked new business models, like profiting off of media and app sales on their platforms.
The need to focus on both core and new categories is obvious to most of our clients. Less obvious, but always critical, are adjacencies. When done right, adjacencies offer near-term revenue while building bridges to the future. For example, a pharmacy chain we worked with asserted a vision in which it excelled at delivering healthcare to its customers, powered by a range of new technology-enabled capabilities. But a first, low-tech step—an adjacent move—was to reframe the role of the pharmacist. After receiving targeted training on key drivers of outcomes like medication adherence and care management after discharge from the hospital, pharmacists were moved out from behind their counters to meet with customers in more consultative settings. This simple move yielded immediate value while opening up further possibilities for healthcare delivery down the road.
As with the exercises described earlier, the visions you develop for your core, adjacent, and new growth businesses will be richer if you engage in multiple rounds of debate and discussion, supported by targeted analyses. Put ideas down on paper, tease them out with colleagues and outside experts, and refine them. Start by asserting—at a high-level, in snapshots—who your customers will be, the main product lines you’ll offer them, the geographies you’ll cover, and the business models you’ll leverage. Ground your ideas in analysis, but don’t rely too heavily on data, as no data set will be accurate enough to drive your decisions.
Aspirations and Purpose
Use your deepest aspirations as your touchstone. A medical technology manufacturer we worked with was struggling to commit to developing robotics platforms. They saw their potential, but they also recognized that they would necessitate difficult and expensive changes to their sales and service model. What finally got them over the hump was an appeal to their sense of purpose. They’d always been a leader in surgical technology; this was core to their identity. Could they still think of themselves as leaders if they passed up this opportunity? Going back to their sense of purpose gave them the fortitude to make the leap.
The executive team at Ascension, one of the leading nonprofit health systems in the United States, had a similar epiphany when going through a future-back process to define their strategic direction for the next decade. As a Catholic institution, Ascension is deeply mission-driven, focused on delivering spiritually centered, holistic care to the communities it serves. Early in the process, they undertook jobs to be done research to make sure they were in touch with evolving consumer expectations, and they were confronted by a difficult reality: most consumers did not define their health in terms of hospital care or many of the other services Ascension offered. Rather, they defined their health in terms of their broader life goals and their day-to-day needs. In fact, many regarded their ability to stay out of the healthcare system altogether as a measure of their long-term health. For Ascension to become truly central to the health of its communities, it had to become much more than a hospital system.
So they developed a transformational vision for the future of healthcare and their role in it, one that addressed consumers’ wellness needs in a variety of physical and virtual settings. “Fundamental to this shift,” Ascension’s former CEO Anthony Tersigni wrote in The Journal of Healthcare Management, “is reimagining all aspects of care from the point of view of consumers rather than addressing their needs based on traditional volume-based, hospital-centric models.”2
In many ways, this was a return to the spirit of the religious women and men who founded the original hospitals that became Ascension Health, and better fulfilled its stated mission of serving “all persons, especially those living in poverty and who are struggling the most.”3
To do this yourself, ask what your company could be in its envisioned future. What role could and should it play? What would best serve its legacy and values? What would be deeply meaningful and inspiring to your employees and other stakeholders? Once again, don’t let your current structure—your product lines, the markets you’re in, how you’re organized—get in the way. This is your opportunity to design the ideal company of the future, irrespective—for now—of what it is today. This is the essence of future-back thinking.
While innovative drugs would still play a prominent role in Janssen’s envisioned future, they would also develop adjacent and new solution areas—novel ways to screen for and identify people on the path to disease, better ways to measure and monitor them to determine the right moment of intervention, and digital and consumer-oriented health products for people who, in many cases, are not yet patients and therefore face different cost/benefit and risk/benefit tradeoffs than people who are already sick. Just as crucial were the new business models that would allow both patients and nonpatients to take advantage of those solutions by ensuring their affordability.
Strategic Narrative
At this point, your vision should take a narrative form: you should be able to tell a succinct story about what the future will hold, what it means for you, and how your company will shape it. It should be exciting, galvanizing, and imbued with purpose, so it will inspire your internal and external stakeholders, breaking down at least some of the barriers to long-term thinking described earlier in this book.
So many executives complain that they have no choice but to stick to their knitting, lest Wall Street, with its short-term expectations, punish them for trying to do something new. We’ve worked with many Wall Street analysts, and all of them have addressed this issue in more or less these words: “Tell your clients to explain the what and the why of their vision and where they’re trying to take their companies. If they treat us like mushrooms and keep us in the dark, of course we’re going to be skeptical.” To get Wall Street on your side, you need to tell them a hopeful story.
Here is what the Janssen team wrote:
Janssen’s Vision of a World without Disease
We envision a world in which widespread disease is a historical artifact; where all people live healthier lives promoted by technological and medical advances; and where life science companies discover and deploy solutions that effectively prevent, intercept and cure disease. In line with our commitment to transformational medical innovation and our mission to change the trajectory of health for humanity, we will accelerate the development of healthcare solutions that eliminate disease.
We will develop comprehensive strategies in disease areas most ready for the new paradigm, identifying people at risk of developing disease, monitoring disease-causing processes, and intervening with clinically proven therapies to intercept the development of disease. We will work closely with partners across Johnson & Johnson to develop world-class healthcare products, and with partners in the broader biomedical research ecosystem to develop the technologies, solutions, regulatory protocols and business models that will accelerate the realization of our vision.4
Compare that with a typical corporate vision statement: “We will be the number one preferred supplier of health products and services, dominating in the markets we choose to serve and recognized as the top place to work.” Which company would you prefer to devote your energy, creativity, and time to?
Having developed your vision, now it is time to translate it into a strategy, which is the subject of chapter 4.