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Brain Circuits
What lessons can we learn from future-ready companies?
Do you know what being fit for the future means in practice? Here are three key lessons that can be learned from companies that are truly well-prepared for what the future may – or may not – hold.
1. Explore early to exploit know-how sooner
Sustaining competitive advantage demands constant exploration of new business models, but the window of opportunity is fleeting – because, as soon as your competitors have had the chance to explore potential new business models, they will pivot to exploit that new knowledge base to their advantage.
Example: US technology company Nvidia began life specializing in manufacturing graphics-based processors but pivoted constantly as the gaming industry matured. It has been investing heavily in AI and deep learning for over a decade, long before the technology became mainstream. By exploring this path early, Nvidia built an insurmountable lead in AI hardware and software that it is now exploiting through its data center business.
Lesson: Even when early evidence is inconclusive, companies must dedicate significant resources to continuously exploring the new – and commit to making tough trade-offs when the evidence becomes compelling.
2. Hold strong opinions, loosely
Learn aggressively with a strong viewpoint. Future-ready companies guide their learning with firm convictions yet remain open to change. Such behaviors – high learning and high commitment – sound paradoxical, but it’s how visionary leaders update their mental model when new data emerges.
Example: Nike CEO John Donahoe has a strong vision of digital transformation but encourages experimentation and pivoting. He greenlit the acquisition of data analytics firm Celect in 2019 to boost Nike’s predictive capabilities, showing a willingness to change direction based on emerging trends.
Lesson: Be open to experimentation: if pivoting is required, pivot – and commit at scale. Big bets that are difficult to commit to without a high learning attitude and a top management team must be aligned around a shared view of the future.
3. Know which decisions are reversible to move quickly
Knowing how to make decisions quickly is essential. To do so, identify reversible choices to move fast. Amazon’s Jeff Bezos calls such decisions “two-way doors” – they can be reversed down the line if you don’t like what you see, so you can go fast on them.
Example: Mastercard launched the Mastercard Developers platform to open its APIs to third parties, a decision that could be scaled back if unsuccessful. But it proved highly popular, attracting thousands of developers.
Lesson: Maintaining a clear distinction regarding what kind of decision you’re making enables rapid decision-making – a vital attribute in dynamic industries.
Key takeaway
Focusing on innovation in the long term and adaptability in the short term is not a trade-off. You must excel at both. This proactive dual approach is key to the resilience needed to be successful in an ever-changing global economy.
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