HOW TO BECOME ‘FUTURE READY’

Adapting to tech for the future is smart – Kiran Dhanapala explains

All of us – the world over – are feeling our entry into the ‘exponential decade’ but more so in Sri Lanka with a decade of multiple crises, uncertainties and changes… and few constants.

Being ‘future ready’ is a source of resilience. It is demanded as never before in this exponential decade of individuals and organisations, given the rising uncertainty and associated risks. But how exactly do we define ‘future readiness’?

Being ahead of trends, using technology, and moving fast are all hallmarks of being future ready. Fashion brands and retailers that shifted early to e-commerce didn’t go bankrupt. The ability to pivot between technologies is also vital. All these capabilities are scaled up to meet future competition and remain business relevant.

Future readiness has been developed as an indicator to measure corporate preparedness as highlighted by Howard Yu et al. in a 2022 Harvard Business Review (HBR) article titled What Makes a Company ‘Future Ready’?

A composite indicator of corporate preparedness consists of seven equally weighted factors.

They are: financial fundamentals (cash flow); cash and debt; investors’ expectations of future growth; employee and board diversity (gender, nationality, industry background etc.); openness to new ideas; early results of innovation (new product roll outs); and business productivity (operating revenue per employee).

An analysis of 86 companies by revenue including four industries led to identifying universal and industry specific insights among leaders to help other businesses become future ready.

These are the universal lessons:

Explore early to exploit knowledge fast – go beyond a short-term focus. Dedicate a part of the activities to exploring the new (even if unclear), and commit to challenging choices and tradeoffs.

Have a strong visionary view of the future in guiding learning that gets updated with new evidence. It allows experimentation, pivoting and evidence-based scaling. A strong learning bent by senior management allows for a shared future oriented perspective.

To move fast, decision making also needs to be quick and must identify reversible decisions so as to be able to backtrack fast. Being clear on the decision type aids speed. Be more concerned with finding a new perspective than in keeping up with competitors. Explore and experiment with staff diversity.

These are the industry lessons:

Financial services: It’s not an either/or with competitors – you can partner and collaborate to everyone’s benefit. You can compete and cooperate at different times.

Fashion: When all are digitalising, it pays to go deep as a differentiator. This means digitalising an entire supply chain rather than only a customer interface. For example, using data analytics on behavioral data to make changes in production, stocks etc.

Vehicle manufacturing: See how vertical integration can help differentiate – this may mean working with suppliers directly to tackle challenges and innovate rather than simply outsourcing to conventional tier 1 suppliers.

Technology: A high-speed sector necessitates moving quickly to branch out with new offerings or verticals by being willing to get fresh capabilities and enter the unknown. Being ‘asset light’ works better in high-speed sectors with ‘asset heavy’ businesses also being usually more conservative.

Top corporates that are future ready were identified on the basis of hard data in all aspects of the relevant indicator.

Another perspective on future readiness is offered by sustainability careerist Dr. Wayne Visser. He postulates six keys to thriving based on the science of living systems.

Firstly, complexity seen in the relationships of living systems promotes interconnectedness. It implies small causes can have big effects – such as Greta Thunberg and the climate movement worldwide.

The second is circularity as seen in nature and its cycles – such as water.

Thirdly, we need creativity for thriving. It allows us to adapt and evolve to the unexpected, and promotes diversity in thinking that enables solutions.

The fourth is coherence in our systems, which organises purpose with goals. A shared purpose by a critical 25 percent (maximum) of people in an outfit is enough to move the entire group in the same direction.

Fifth, convergence is the least understood and most underestimated principle of complex systems. It’s also called a ‘positive feedback loop’ and it leads to tipping points for scaling change.

Finally, continuity is designed to ensure survival. This means long-term thinking and strategies for resilience. Visser suggests that we test any proposed action or decision by checking against these six keys.

Future readiness is a key to moving forward – are you ready?