The Future and how to survive it

As part of my monthly reading I catch up with the Harvard Business review and this month I found an article 'The Future and how to Survive it, by Richard Dobbs, Tim Koller and Sree Ramaswamy really interesting. Whilst is it focussed on big macro themes and the long term prospects of large multinational companies I think the responses they outline are equally valid for companies of all sizes so I thought I would set them out. 

1. BE PARANOID. Companies of all sizes tend to focussed internally or on their home market. However, current and future competitors frequently play by different rules. A lesson I have learned is never underestimate your competitor. Assume they are behaving rationally and know what they are doing. Assume they will get their act together quickly and will exploit your weaknesses like you try and exploit theirs.

2. SEEK OUT PATIENT CAPITAL.  My version of this is to make sure you focus on what sort of investor you want as not all money is equal. If your vision is to build a great company over ten years or so then don't get investment from a fund with a three to five year exit horizon. If you want to target capital growth then don't promise a running yield. If you want expertise as well as money seek out the people and funds that can give you the advice you need.

3. RADICALLY SELF-DISRUPT.  To quote "in this era of technology disruption, companies need to be willing to disrupt themselves before others do it to them". Large companies with legacy assets and vested interests find this difficult but small companies can be too wedded to their first idea or product when the market is saying it wants something different. 

4. BUILD NEW INTELLECTUAL ASSETS. Again a quote from the article to illustrate. "Half the world's most valuable brands are in idea intensive sectors......assets such as data, alogorithims and software are also becoming more valuable" I would add assets such as business model innovation, insight on customer behaviour and contact networks.

5. GO TO WAR FOR TALENT. This is true for businesses of all sizes and will lead to radical changes in organisational structures and patterns of working. Two specifics spring to mind. Firstly many small businesses suffer from a shortage of hard sales skills and should prioritise sorting this quickly. Secondly, as a society we need to get better at using the knowledge and experience of people engaged on their 'second career'. We will want or need to stay economically active for longer but business needs to think about how it uses people as they wind down their careers. We have graduate programmes and mentorships for the 20+ year olds. What do we need for the 60+ and 70+ people?

As the article concludes 'vigilance, agility and optimism have always been prized assets of successful companies' to which I would add innovation and forward planning. The future may be challenging but challenging is what brings out the best in the best businesses.