The technologies we see today are capable of radically transforming business models, customer experience and organisations. You must take yourself away from the present and beyond tomorrow into the day after tomorrow, with a pioneering, radical approach to business.
Humans look at tomorrow from the viewpoint of today. Understandably, we find it difficult to imagine ourselves in a situation that hasn’t yet happened. We don’t buy shorts and sun lotion in the winter, even though we know summer is coming. We wait until the heatwave when the stores are all selling out. If we want our organisations to stay ahead amid this rapid acceleration of technology, we need to think beyond tomorrow. It’s what I call ‘day after tomorrow thinking’.
Business as usual
Most organisations are still doing business as usual. When I ask them how they carve up resources, budget and talent between today, tomorrow and the day after tomorrow, they realise that more than 90% of their efforts are still allocated to today, with the rest going to tomorrow. The day after tomorrow gets nothing. This has to change. Of course today is important: today generates your current value. But when your plans for your future value don’t extend beyond tomorrow, you miss your chance to change industries, markets and the world itself. One thing that the ‘category kings’ – the paradigm shifters such as Google, Amazon and Uber – all have in common is that they focus more attention on beyond the immediate future.
If the day after tomorrow doesn’t become part of you or your organisation, you won’t make it there. It’s that simple. The good news is that you’re not alone, and that there are ways to prepare for the day after tomorrow that work. I’ve seen hundreds of organisations begin to radically and bravely innovate after years of stagnation. How?
Each organisation has a different solution. What works for one won’t work for another. I’ve met amazing innovators from all kinds of companies – from disruptive start-ups to traditional players – and they’ve all managed to embed radical thinking into their structures. Old-school management is not an automatic bar to progress.
Some companies innovate radically by creating a separate arm of the organisation. ‘Silos!’ I hear you cry. Admittedly silos aren’t usually a good idea, but in this case, protecting your innovators from a management still stuck in today and tomorrow thinking can be a wonderful idea.
Separation, not isolation: successful innovation at Johnson & Johnson
Johnson & Johnson’s headquarters are in New Jersey, US. A five-hour flight away, in San Diego, is the company’s innovation labs, where until recently the head of innovation, Diego Miralles, led a team of 200 people whose focus it was to plan for the day after tomorrow. For Miralles, the distance from head office was the reason he could reinvent aspects of his organisation. You don’t get caught up in office politics when based three time zones away from the powers-that-be.
There are caveats though: if you remove yourself too much, you risk disconnection. Xerox PARC has bestowed upon mankind some of the most game-changing inventions in history: the PC, laser printing and the graphical user interface, to name a few. But Xerox isolated PARC, and with such a big disconnect between them and the helm of the organisation, not many of its best inventions made it to market. When Steve Jobs came along, he hired 70% of Xerox PARC’s people who ended up making him the Mac.
Remote Silo Innovation – as it’s known – is a great thing. But only if you’re careful. If you disconnect too much, you’ll drift away. And, although you don’t want management breathing down your neck, they do need to be on board. You need an absolute top-down commitment from leadership. If you don’t have that, the best plans in the world will come to nothing.
The existing and emerging business: accepting the contradiction
Contradiction is hard to accept. Many animal lovers eat meat. Most illegal downloaders would never shoplift. But leaders of organisations that want to innovate need to be able to operate an existing business model at the same time as one that potentially cannibalises it. I call this balancing the solid (focused on exploiting) and the liquid (focused on exploring). Some level of separation is always necessary for this to work. This is because everything that works for your existing business – ways of thinking, structures, talents and processes – will clash with everything that will work for your emerging one.
Creating just the right amount of distance – geographically, financially or structurally – between your day after tomorrow efforts and your core business is the key to making it work. You want enough distance for difference and enough closeness to retain a shared culture. You want the businesses to be cousins that think of each other as cool, not siblings who fight in the back of the car.
Cutting the cord: radical separation
CLAAS tractors is, unsurprisingly, an organisation that sells tractors. Except that now it sells a lot more than tractors. When leaders at CLAAS realised that machines were becoming so powerful and intelligent that their tractors were now capable of providing a service, they conceived 365farmnet: a cloud-based farm and agricultural activities manager. Using sensors that pick up information about the farm, such as cultivation planning, harvesting and operating analysis, 365farmnet has put software at the centre of its business, not tractors. CLAAS, as an employer of hundreds of tractor engineers, had little in common with a day after tomorrow software company, so today 365farmnet is a successful Berlin start-up. The gulf between the existing and the new was too large to bridge, so CLAAS made 365farmnet a subsidiary. That decision has served the parent company very well indeed.
Even if your emerging business is ‘only’ a separate subsidiary of the established one, it’s still important for them to be connected. And if the new business is an in-company silo, a connection to management is still important too. Unfortunately, this is the part that most organisations get wrong. But even if the established company is very siloed, as is often the case, it’s possible to create the common ground that is so vital to bridge the gap between the two.
Radical innovation: the glue that holds silos together
Radical innovation doesn’t have to be separate, of course. In fact, some of the best examples of radical innovation come from organisations that have interweaved it through every facet of the existing company and by doing so have brought it closer together.
International Airlines Group (IAG) – the parent company of Aer Lingus, British Airways, Iberia and Vueling – regularly separates eight of its senior executives from their own teams in an intensive eight-week programme. Why? To focus on the day after tomorrow without yesterday or today getting in the way. During this time, they dive in to new experiences, and ideas, and explore pioneering start-ups.
At the end of the experiment, each participant comes up with a potentially game-changing, industry-disrupting idea. Then one of them is chosen to do it. The radical programme is weaved through the whole organisation by means of inclusive programmes, with no dedicated innovation team and no protective measures. The potential challenge here, as there always is with any kind of innovation, is that the initiative may not be daring enough: the project owners may still be heavily invested in business as usual.
Day after tomorrow thinking: a little goes a long way
You don’t need to dedicate a lot of time to generating day after tomorrow ideas, because just one new concept, perspective or piece of inspiration can produce an enormous amount of value. Like the acorn that makes a forest, it takes one seed to generate a new world. It takes one radical thinker among hundreds of rule-followers to change an entire market or a whole industry. You can keep your 90% effort on today. Just make sure you save your remaining energy for the day after tomorrow.
There is no magic recipe for success in the day after tomorrow. You may find that taking your brightest and best away from the rest for a period of experimentation works for you. It might be better to create a separate wing of your company specifically for innovating, especially if you create a radical off-shoot that’s markedly different to the rest of the organisation. There is a right way for you to do it – and you need to look for that way, today.