AUTHOR(s): Albrecht, Karl TITLE(s): The power of bifocal vision. (Planning) Summary: Business success depends on the ability to focus on the long-term horizon, as well as on pressing, near-term events. Methods of improving a business enterprise's ability to accurately perceive and respond to future events are presented. 'Futuring,' as opposed to conventional planning, acknowledges that future events cannot be known with certainty. Futuring involves exploiting trends and monitoring critical indicators. Management Review p 42(4) April 1994 v83 n4 DESCRIPTORS: Strategic planning_Technique Every business needs to have bifocal vision--the ability to perceive accurately things happening out on the horizon that will inevitably affect the enterprise, as well as the ability to focus on the more immediate, pressing events. This ability to see the far field as well as the near field, and to deal comfortably with both, is relatively rare. Indeed, it is often not an easy thing to do, even for the brightest of managers. For instance, what should you do if your view of the far field tells you that continuing to do business as usual will eventually bring disaster? What if your organization's success model for today is the failure model for tomorrow? At what point do you face that news? At what point do you start to get serious about changing the model? Suppose you're in the car-manufacturing business. Your current success model concentrates on making cars more stylish, more fuel-efficient and more feature-rich. Suppose, however, that your view of the future tells you that the internal combustion engine must be abandoned. With urban areas like Mexico City choking in polluted air to the extent that automobile use must be rationed, and other cities not far behind, the gasoline-operated automobile may very soon be the wrong solution. We may even come to a world one day in which the individual transportation unit will be obsolete. But if your firm has spent 50 years or more perfecting its version of the gasoline-run car, and you as an executive have built your career on doing that well, at what point will you begin thinking seriously about giving it up and committing to something else? Big Blue Vision Check Many IBM-watchers believe the company's business problems stem from faulty bifocal vision. As the personal computer phenomenon spread throughout businesses worldwide, and as PC prices kept dropping dramatically, the way organizations processed data began to change. Meanwhile, IBM's leaders focused their attention on the mainframe market, which was the company's traditional cash-cow product line. The wide availability of cheap computing power in small machines led managers to set up their own miniature computer departments. Then, the idea of networking all of these tiny computers into a collective distributed "organizational brain" began to change the paradigm of data processing. Some computer experts predict that the mainframe computer will eventually disappear as computing becomes fully distributed and networked throughout organizations, and as computing and communicating merge into a unified information technology. At best, they claim, the mainframe will have to be downsized from the typical million-dollar price tag to something below the hundred-thousand-dollar level. Even at that, it may be relegated to certain special-purpose applications that require dedicated processing. Yet when Louis Gerstner took over the helm of IBM in the aftermath of CEO John Akers' departure, one of his first pronouncements at a meeting of senior managers was, "The last thing IBM needs is a vision." Presumably he meant that the people in the company simply had to try harder, focus more carefully on results, and get the day's work done. While that is always a requirement, concentrating harder on the near field may not do much to change the prospect of the far field. Contrast Gerstner's disdain for visioning with the simple but compelling corporate philosophy of Microsoft. According to its founder and Chairman Bill Gates, Microsoft has built its whole concept on the far field. "Our vision," says Gates, "is very simple. It's a computer on every desk and in every home, running Microsoft software." Corposaurus Thinking Some scientists believe that dinosaurs had such primitive nervous systems that, if something bit a dinosaur on the tail, the nerve signal could take five seconds or more to reach its brain. If true, that would seem to be a serious handicap for the dinosaur. Yet many business organizations have somewhat the same kinds of reaction times when it comes to making major responses to the shock waves and major trends in their environments. Organizational inertia can be incredibly powerful, and more than one business has hit the rocks because it couldn't muster an appropriate reaction to a major threat. Government organizations in particular tend to exhibit this same paralysis in the face of approaching crisis. During the Persian Gulf war in 1992, for example, the Japanese government was severely criticized by other countries for its slow response to the immediate crisis and to the need to build up the logistical resources for the effort. Their response of simply providing funds was derided as "checkbook diplomacy." Their response was slow and inappropriate largely because their arthritic, consensus-bound governmental mechanisms just couldn't make decisions quickly. For some businesses, it may not be a problem of being unable to embrace the future so much as being unable to abandon the past and even the present. Management consultant and author Peter Drucker frequently counsels executives to practice "planned abandonment." "Make a list," says Drucker, "of all the things you are doing today that, if you were not already doing, you would not be willing to start doing. These are your candidates for abandonment." Virtually all business organizations are saddled with one or more commitments, processes, investments, structures or policies that do not serve their interests well. Yet abandoning them is often difficult because they are woven into the psyche of the culture and they have become so fossilized that no one thinks of them as options any more. The difficult truth is that we human beings are not good at abandoning things. Most homes have at least a closetful of "stuff" that nobody needs, wants or uses, and yet we can't bear to throw any of it away. Organizations have their own figurative junk closets. Letting go of the known in exchange for a commitment to the unknown is not something most human beings do comfortably or well. Even in major disasters such as impending hurricanes or floods, people will cling to their homes. In many cases, police must drive people from their houses in order to save their lives. And organizations, or more precisely, people operating in organizations, have the same attachments to the known. From Planning to Futuring There is a better way to think about the future. We need to change the vocabulary we use to think and talk about guiding our business into the future. Planning is the appropriate word for designing a set of actions to achieve a clearly defined outcome, when you have high certainty about the situation in which the actions will take place and nearly full control of the factors that ensure success in achieving the outcome. You need to plan if you're going to build a bridge, fly an airplane, transplant a kidney, open a new office in a foreign city, or launch a new product. But if you're going to venture into a marketplace in a formerly communist country, move from a national presence to a global marketplace, or defend your core business in the face of massive technological and competitive changes, you need something beyond planning. You need a thinking process that is exploitive rather than deterministic. For want of a better word, let's simply call it futuring. Planning, as it is conventionally done, has little to offer in any highly ambiguous venture. The elaborate documents, forecasts, action plans and timetables are often nothing more than an intellectual mirage. And in some cases, the illusion of precision they create can distract you from concentrating on the means for achieving your success. They can misfocus your attention on following the plans rather than exploiting opportunities, most of which will certainly not be in the plans. Think of futuring as an approach that explicitly acknowledges the fact that you cannot know the future with certainty. You probably cannot even anticipate the most important changes that lie in store for you. You will face shock waves, trends and events you cannot control--and in most cases cannot predict. Futuring should acknowledge the fact that achieving the outcomes of any plan you could possibly write would be a sheer accident. So it sets aside the planning process and substitutes for it a more versatile, adaptive, proactive and responsive action-strategy process. Futuring is not as easy as writing a plan and putting it in the filing cabinet. It is a constantly active mental process that generates action strategies for capitalizing on the unfolding environment. With a futuring approach, we need outcome measures, or critical indicators, that help us gauge the effectiveness of our action strategies. But we do not delude ourselves into thinking we have set realistic goals and are working to achieve them. Instead, we are developing action strategies to exploit what is happening in the environment, and we are using the critical indicators as criteria for further deciding what to do. We don't victimize ourselves with worries about succeeding or failing. Instead, we are continually adapting to the consequences of our action strategies. It may seem like a subtle distinction, but it can be profound in its effect on our thinking process. From this point of view, the typical planning cycle that so many organizations religiously follow may actually impair their agility in responding to changes, threats and opportunities. Writing the annual plan and budget is typically such an exhausting process that thereafter nobody wants to change it, even if some major environmental event occurs in the middle of the year. We need both planning and futuring to make an enterprise successful. We need individuals skilled in both disciplines. And we need leaders who are comfortable with both. Whereas futuring is the process of deciding how to behave based on what's happening in the immediate and near-future environment, planning is the translation of that decision into manageable actions. Let's not feel guilty because we can't plan for a confusing and ambiguous future. But let's have the skill and discipline to continuously interpret that future into strategic actions and responses, and then use our planning skills to accomplish the plans that make sense. In short, in planning, you must define outcomes or goals, determine actions, commit resources and aim for defined targets. In futuring, you must ride shock waves, exploit trends, manage events and monitor critical indicators. Futuring and planning must merge at the point where we can devise an action strategy and translate it into a goal or target. In this sense, planning becomes the tactical result of futuring, but we do not expect planning to solve the strategic puzzle for us. It is a dynamic puzzle, pieced together day by day, month by month, year by year--not assembled in advance in some document called a plan. Threat or Opportunity? A time-worn but still effective method of strategic thinking is the "SWOT" analysis: strengths, weaknesses, opportunities and threats. When you take this approach to measure the challenges that lie ahead, bear in mind that the same event or trend can represent both a threat and an opportunity. It's the way you respond to it and how well your response works out that puts an event or trend either on the "win" side of the scorecard or on the "loss" side. In working through the possibilities for your company, it helps to think carefully about what it takes to distinguish between an opportunity and a threat. What do they look like through the window of strategic thinking? This thinking process can build a basis for a flexible strategic direction that will minimize the risks of being wrong and maximize the possible benefits of circumstances as they actually unfold. The following steps will help you move from planning your future to actually living it: * BUILD THE "STAGE." Form a concept of the arena in which the action will take place. How do you choose to model your strategic environment: as a global economy, as a field of fast-moving technology, or some other dynamic construct? It is crucial to get consensus about the conceptual framework for the scenario analysis. This clarity should come from careful thinking about the basic uncertainties that led you to a scenario approach in the first place. * CAST THE KEY ACTORS. There are the big players whose actions have big side effects or direct consequences for your enterprise and others that compete with you. Are they nations, national governments, legislatures, political parties or groups, large government agencies, dominant corporations in your industry, suppliers or capital, owners or developers of critical technology, or even journalists and media producers whose products shape public opinion? * SCRIPT THE ALTERNATIVE ROLES FOR THE ACTORS. What are the two or three major variations in behavior that each of the actors or "interactors" could exhibit? How many combinations of variations are there, and which ones deserve primary attention? Keep this to a manageable number, not only for conceptual simplicity but to focus on the most significant consequences that might occur. * LAY OUT THE KEY SCENARIOS. A scenario is one particular combination of actors and actions that creates a distinct business reality. Consider each scenario and put the results into some kind of graphic picture or other useful comparative form. This includes identifying any shock waves, critical trends and potentially critical events you need to deal with. * FIND THE COMMON STRATEGIC THEMES. What organizational capability must you have that is common to dealing with all of the major scenarios? What kinds of customer access, what kinds of technological solutions, what kinds of alliances and partnerships are in the cards regardless of which scenario actually unfolds? This kind of analysis can be invaluable as input to an executive strategy retreat. Even better, if possible, is having the executives themselves work through the formation of scenarios. They are likely to use the approach much more effectively if they personally develop the scenario model. Success Isn't Final J.W. "Bill" Marriott often said that "success is never final." This is a useful reminder that the leaders of any enterprise must keep reinventing the organization over time. Failing to do that is what has trapped many large corporations in some very unpleasant circumstances. In many ways, the Western habit of planning on an annualized basis contributes to annualized and ritualized thinking. Annual strategic plans, annual operating budgets, annual performance reviews and annual reports tend to cause executives to think of strategy formulation as something you do according to a schedule rather than something you do continuously. Because of the pressure of near-field events, many executives don't have time to prepare properly for the annual strategy retreat. If that happens, the creative possibilities are already reduced to a fraction of what they could be. If executives think strategically all the time, working with both near-field and far-field issues, they will be gathering useful information, cooking up provocative ideas, identifying interesting opportunities and provoking ongoing discussion and debate about all of it. The annual strategy gathering is the chance to make something useful out of everything they've discovered, learned, and thought about through the year. Strategic thinking, after all, is a process of educated guesswork. It is neither all science nor all art; maybe it's a scientific art, or maybe it's an artistic science. There is no divinely inspired truth to be discovered in charting the destiny of any enterprise. There is only the most enlightened concept for success that is possible given the information, energy and talent applied to the issues. It requires a certain degree of humility, a willingness to question one's own certainty and, at the same time, the willingness to commit fully to a common cause and get on with it. Karl Albrecht is chairman of The TQS Group, a management consulting firm based in San Diego. He is the author of 18 books, including "The Northbound Train" (AMACOM, 1994), from which this article is excerpted. To order, call 800-262-9699 ($22.95).