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Know where you’re going: Identifying driving factors that influence your business

“On the cruise ship of life, is your deckchair facing forward to see where you’re going or backwards to see where you’ve been? Or are you having trouble getting the deckchair unfolded?” – from Peanuts…

“On the cruise ship of life, is your deckchair facing forward to see where you’re going or backwards to see where you’ve been? Or are you having trouble getting the deckchair unfolded?” – from Peanuts and Charlie Brown, by Charles Schulz.

As Alice discovered on her trip through Wonderland, if you don’t know where you’re going, then what you do today doesn’t matter. As was covered in last month’s column, there are critical uncertainties as we enter a new business cycle, and the companies that are better prepared for this new competitive business environment will gain the competitive advantage.

A useful tool for both individuals and organizations involves identification of the Key Driving Factors that can influence the outcome of your particular future focus-issue. Useful Driving Factors have uncertain outcomes over a 5-year period; they are not trends whose outcomes are predictable. For an industry that is primarily technology focused, it is difficult for us recognize the non-technical “fringe” issues that are often so critical. For this reason, the Driving Factors Tool uses eight primary categories [“The Drivers Range,” see Figure], within which there will be several sub-categories. The eight categories force out-of-the-box thinking. The process of identifying Driving Factors can be accomplished using an internal brainstorming process, but more valuable results are achieved by combining this with external competitive intelligence resources. Outsiders are frequently not “contaminated with internal baggage” and can identify and research a richer list of influential Driving Factors. By way of example, eight possible Driving Factors — perhaps not intuitively obvious, but with significant impacts, are identified in the Figure as file folders for the focus issue of The Future of Paper Use. An organization would normally identify up to 100 Driving Factors and then select 16 – 20 Key Driving Factors for more detailed scrutiny, research, scanning and tracking.

As an individual you can establish your personal scanning system with a simple paper-based file folder for each of the eight categories, together with some deep pre-thinking for a few sub-categories that address the focus issue for which you will be scanning. Having “conditioned” your subconscious, you will read journals, newspapers, magazines, listen to radio, TV, and “hear” your network in a different way. You will recognize useful information to clip into your filing system. Visit your files from time to time and prepare a status report. The process is similar for organizations, except that a more formal and extensive protocol for focus-issue identification, Driving Factors Portfolio development, information scanning, evaluating, summarizing and reporting is required. This should be followed by an appropriate decision-making and communication system at the senior management level. Such a procedure has been successfully implemented in a number of corporations.

Why is this

important?

“By the turn of this century, we will live in a paperless society.” – Roger Smith, Chairman of General Motors, 1986. Many well-intentioned individuals and organizations have tried to predict the future — with some spectacular failures. Clearly, getting a better handle on the future is important, yet many organizations build their business plan upon around a single perception or vision of a future business environment; this is called a Five-Year Forecast. By establishing a Driving Factors Portfolio and the complimentary Scanning System, an organization provides some protection against “future shock” by accepting the ambiguity of the future and seeking ways to profit from it. At a higher level, a Driving Factors Analysis can be organized into Scenarios for Future Competitive Business Environments; the scanning protocols may be organized into a high performance Early Warning System. It is important to remember that it is not about getting the future right; there are no bad scenarios, only bad strategies for dealing with them. It is a business’s response to external challenges that determines its success or failure, not the external challenges themselves. P&PC

Alan R. Procter is an international consultant helping organizations exploit the future in their business strategies. He can be reached through futureviews@alanprocter.com