Every manager is on the lookout for disruptions in their business model. These disruptions could come from supply chain, customers, competitors, the regulatory environment, or even unseen factors. The idea for executives everywhere from the C-suite and board room down to line-level product managers is that large organizations need time – and lots of it – to deal with changes in complex system. Therefore, a strategic early warning system needs to be incorporated into the habits of every managerial culture. This means not to deal with disruptions as an entertaining thought exercise, but to learn how to spot disruptions and think about how to cope with them on a regular basis.
The video below is a webinar I did with Aurora WDC, one of Competitive Futures‘ key partners, entitled How to Spot and Cope With Emerging Complex Systems Transitions for Organizational Stability. Note that the terms “predict the future” or “manage the totally random” or “expect the unexpected” is conspicuously absent. The goal for executives is never to “future proof” an organization – it is instead to make the organization more robust in the face of disruptions to complex systems and to respond with resilience.
The fields of competitive intelligence and futures studies give us plenty of techniques and case studies to help design resilient responses to these disruptions.
Disruptions and Early Warning Intelligence
Why is this more necessary than in past moments? The world has changed and our approach to intelligence must change with it.
I argue that this generation of executives is managing the Post-Growth Era. As I explored in an article for Harvard Business School, “What Happens When There’s No More Growth Left to Manage,” the majority of our management techniques presume a constant level of growth in demographics, energy consumption, consumer spending, and finance. Many of our current economic realities are based on more steady state economics, and this is a major yet hidden disruption in how we think.
As a result, the fundamental challenges for intelligence collection and analysis have shifted:
- Then: We understand the narrative, we misunderstand the details
- Now: We understand (some of) the details, we misunderstand the narrative
Intellectual shock and a crisis of authority
This new reality has challenged the authorities on which we used to rely to tell us what the future would look like. In this new world of strategic disruptions, our old authorities no longer provide us with especially predictive pronouncements. Witness the statements of Ben Bernanke in the years, days, and mere moments before the financial crisis of 2008. He may have been the most authoritative figure on the United State economy, but he was one of the least accurate.
In an intelligence methodology that depends on authority to measure the credibility of its conclusions, this represents an important shift, forcing us to transition to a brand new approach. I map out the failures of the Last-Generation Intelligence model as such:
- Assumed stability of the system; few tools to incorporate disruptions
- Assumed institutional hierarchy; relied on one decision maker and one institutional source of intelligence
Several failures were inherent in this model:
- People are able to get away with “Nobody could see it coming”
- Bureaucracies are designed to insulate people from failure, not sensitize them to it
- Reporting structures are insufficient to allow rapid, relevant decisions in the face of strategic disruptions
- Intelligence models are built around 1980’s concepts of business competition, not full-scale systemic shift
I also describe what I see as the model for Next Generation Intelligence:
- Peer-to-peer, with a network reporting structure
- Custom to the organization, one-size-fits-one
- Iterative metrics, constantly asking if intelligence activities drive value
- Accountability and reinforcement after decisions, not blame