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Nowadays it's difficult to discuss future business strategy analytics without including AI. But when asked, "Who is smarter — a human or AI?," ChatGPT’s answer is uncertain. It ultimately depends on the context and the specific tasks at hand. Humans possess the unique ability to think creatively and innovate, involving not only generating new ideas but also taking risks and experimenting. All these are limited for AI, because the technology can only use known data and replicate it. Replicating existing solutions won't address the modern challenging world, and companies require innovative approaches. Visionary or strategic thinkers can help generate new ideas and bring them to life. Who are they, and should you have them in your business or become one yourself?
In July 2022, temperatures above 40 degrees Celsius (104 degrees Fahrenheit) were recorded in the United Kingdom for the first time. These high temperatures heated railroad tracks to slightly over 62 C (143 F), causing the rails to bend. As a result, many train trips were canceled, and service on other routes slowed to 60 mph (96 kmph). By this case MIT Sloan Management Review illustrates how ghost scenarios haunt strategy execution. The rail tracks had been engineered for a future in which the air temperature did not exceed 27 C (80 F). In short, the British rail network was designed and built to work not in the scenario in which it found itself in 2022, but in a scenario based on the implicit assumption that historical climate trends would continue unchanged. Strategic planners are often unaware of the possible future scenarios. A strategic thinking mindset can help them to see what they and their businesses are missing. Strategic thinking involves creativity, innovation, and a long-term vision. Why is it necessary even if your business is currently successful?
Source: Gartner (May 2024)
62% of global CEOs selected growth as their top business priority in 2024, according to a new report by Gartner, Inc. This is the highest level since 2014, and an increase from last year’s survey where 49% of CEOs said their top business priority was growth. The PwC survey shows that 45% of global CEOs believe their company will not be viable in ten years if it stays on its current path. The respondents expect more pressure over the next three years than they have experienced over the previous five from technology, climate change and nearly every other megatrend impacting global business. Chief executives of small companies are more likely than their counterparts at larger companies to feel their company’s viability threatened. CEOs perceive enormous inefficiencies across a range of their companies’ routine activities — everything from decision-making meetings to emails — viewing roughly 40% of the time spent on these tasks as inefficient. A conservative estimate of the cost of that inefficiency would be tantamount to a self-imposed US$10 trillion tax on productivity. Generative AI, which about 60% of CEOs expect to create efficiency benefits, could help relieve some routine burdens. So what should be done? What can help to clarify the nature of the challenge and show the opportunities? 'The reinvention imperative appears to be accelerating', says the PwC survey. Another term for this is meaningful business reimagination.
Spurring innovation is one key to creating long-term growth and sustaining a competitive advantage. The Gartner R&D Innovation Report offers guidance to company leaders (strategic thinkers) on creating a nurturing environment to boost teams’ innovation performance and output. The report suggests transitioning from the current stage 'Too Many Inventors' to a phase called 'More Innovators'. Gartner’s five markers of innovation potential are behavioral competency groupings that are indicative of an employees’ innovation performance. These are results seeking, customer empathy, idea integration, influencing, and risk taking. One more recommendation is to cultivate innovation performance in the staff by focusing on these areas:
Create optimal teams by redesigning them to be behaviorally diverse.
Strengthen R&D innovation culture to boost innovative performance of project teams.
Build a leadership environment that better nurtures innovators.
Sounds great, but it seems like this is just a frame. Where can we find the core of future success? Who will draw the picture and put it in this frame? People – people from your command with the innovating vision mindset.
Source: Gartner (May 2024)
MIT Sloan Management Review writes about an effective mechanism which is adopted by some innovative companies — the portfolio team — for overseeing projects that might otherwise fall through the organizational cracks. The team is made up of senior corporate, strategic, and business managers who identify, monitor, and adjust the mix of projects to ensure that the best ones go forward and remain aligned with the corporate mission.
Dutch health technology company Royal Philips, for example, uses portfolio teams across its different businesses to make sure its large number of strategic projects are aligned with its long-term mission “to improve people’s health and well-being through meaningful innovation.” This could include projects that cross business units, such as scaling its website as a destination and e-commerce channel, or early-stage projects, such as piloting new subscription-based business models. New projects are being considered all the time, and existing ones can decline in importance.
The portfolio team requires a medium-term revenue focus. These projects are not expected to generate revenue for two to three years. The portfolio projects will help the company to stay on an innovative track. It fits into the Red Queen Effect (RQE). The term comes from Lewis Carroll's Through the Looking Glass, where the Red Queen advises that to stay competitive, one must run very hard, and to get anywhere, one must run even harder. This concept describes the need for businesses to constantly adapt, innovate, and find new ways to stay ahead of competitors in order to ensure their survival and success.
Never mind whether to call that person the Red Queen or Strategic Thinker, you need that individual or a team responsible for reimagining the company and innovation performance. You need them right now. The race is not stopping.
