Driving Forces II: A critical component for informed decision making
July 1, 2005 By Pulp & Paper Canada
This second report of a recent overview of key driving forces trends (Marvin Cetron and Owen Davies The Futurist, May-June 2005) covers: technology, labour/work, management/business, and environment….
This second report of a recent overview of key driving forces trends (Marvin Cetron and Owen Davies The Futurist, May-June 2005) covers: technology, labour/work, management/business, and environment. Taken together (see Futureviews May 2005), these driving forces will provide a useful backdrop for strategic decision-making over a five-year time horizon.
An internal “foresight intelligence” discipline is required to make effective business use of driving forces information. This discipline identifies the key driving forces relevant to a particular business issue and looks for early warning signals that would indicate a particular trend, outcome or new direction. Business scenarios may also be constructed from driving forces five-year projections; scenarios are a useful framing tool for business planning.
Technology will increasingly dominate both the economy and society. Accelerating technology obsolescence means that companies will face increasingly tight competition based on new technologies and in order to stay competitive must continue to invest. Higher efficiencies will continue to drive costs down. By 2010, artificial intelligence, data mining and virtual reality will assist most companies and government agencies to assimilate data and solve problems beyond the scope of today’s computers. The Internet is growing both logarithmically and geographically, with cost-saving consequences for B2B commerce.
Education and training are expanding throughout society. Knowledge turnover in professions is a growing challenge requiring continuous training and lifelong learning – the half-life of an engineer’s knowledge today is only five years. Motorola estimates that it reaps $30 in profits for every dollar spent on training. Corporations are increasingly turning to consultants, small businesses and contractors that focus on increasingly diverse niches of specialized knowledge. Regarding work ethic, the new generation of workers cannot simply be hired and ignored; they must be nurtured and made to feel appreciated. Opportunities to learn, and personal fulfillment, are of growing importance for employee retention; companies must accommodate increasing worker stress and two-income families. For many employees, particularly Gen-Xers, self-employment is becoming an increasingly attractive option. For society as a whole, true retirement, a permanent end of work, will be delayed until very late in life.
Information-based organizations are quickly displacing the old “command and control” model of management. Information-based organizations set performance expectations and require more operational flexibility, fewer levels of management and more specialists. While downsizing continues, many companies find it necessary to bring back workers in order to preserve an effective “corporate memory.” Government regulations will continue to take up a growing portion of management time. However, these provide stability and a competitive edge over many developing countries. Companies must also take account of growing consumer power regarding social responsibility and accountability; dissatisfaction by special interest groups (e.g. regarding environment and health) can translate into more litigation for global companies. Lastly, organizations are continuing to transform into a bimodal distribution – the big get bigger, the small get specialized, and the mid-sized are squeezed out (this effect extends to nearly every industry sector and was described in Futureviews, June 2003).
People around the world are becoming increasingly sensitive to environmental issues, particularly now that there is a growing recognition of impacts on personal health. Stick and carrot regulation (e.g. life-cycle product tax) will be an increasingly significant business factor. More aid and diplomacy from developed economies will be required to aid in the industrialization of developing economies without the associated environmental degradation. Water could become a new focus for business in the pulp and paper sector.
Why is this important?
The understanding and analysis of driving forces information is a critical component for well-informed decision-making in areas such as capital projects, partnerships, business unit focus, corporate organization, innovation processes, supply-chain relationships, product development, etc. Many driving forces pull in divergent directions with outcomes that can be synergistic or offsetting. An influence analysis can be used to rationalize such information. Driving forces analysis can be incorporated into a broader “foresight intelligence” discipline. Barriers to competitive Foresight Intelligence are:
* Planning based on a continuation of the current situation; this avoids unpleasant news or the need to change
* Foresight knowledge capability is disconnected from an organization’s strategic decision-makers and planners
* Reliance on outside resources that employ trend analysis rather than alerting to trend-breaks or unexpected situations
* Reliance on electronic information scanning (googling), rather than critical human intelligence.
Alan Procter is an international consultant and strategic adviser. He can be reached through www.alanprocter.com
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