One of the problems every company has is that tactical problems tend to eat up all of the bandwidth so firms don’t spend time thinking strategically. As a result, even though it can take decades for some trends to emerge, these same companies are surprised and often crippled by those trends. A few weeks ago, I took part in Dell’s 1-5-10 Discussion Series, and it struck me that the 1-5-10 process is an excellent way to bring strategic thinking back into the mix and perhaps avoid these unnecessary surprises.
Let’s talk about the 1-5-10 process and how it could bring strategic thinking into your company.
What often strikes me when I do a corporate review is how few executives think strategically. This has gotten worse over the years as financial pressures and related performance metrics have increasingly forced managers to focus on monthly and quarterly metrics. You see them cut budgets for things like R&D and Marketing because they see no direct connection to the bottom line, but then when their market collapses around them, they act like it as some act of nature.
Look at PCs in particular. When was the last time you actually saw an ad for PCs? During an evening of watching TV, you’ll see ads for other TV shows, for consumables like beer or makeup, for cars, and maybe a smartwatch. And, with the exception of the smartwatch, most of those industries are doing just fine. But no ads for PCs or tablets anymore.
Cognitively, we know that if no one works on building the demand for a segment, consumers of the related products will likely spend their limited funds on something where demand is being built. Or, to put it more succinctly, if you want people to buy a product more aggressively, you need to convince them they want it.
If you don’t, these same folks are likely to spend their discretionary money on something else and, even if they are replacing your product, are more likely to buy someone else’s. This was most pronounced recently with the iPad. Apple marketed it well initially and it rose magnificently in sales, then it pulled the marketing and the entire segment fell like a rock. Apple shifted its marketing from smartphones to smartwatches. It has the most successful smartwatch, but phone sales are weakening. There clearly is a cause and effect but because the folks at Apple are so tactically focused, they can’t see it.
So can you force strategic thinking and, if so, how do you do it? Dell appears to have the answer with 1-5-10.
This is a moderated discussion roughly based on the Delphi method of making predictions about the future. You empanel a group of experts on a particular topic and the moderator then asks defining questions about the way the world will be, consistent with the topic under discussion, in 1, 5, and 10 years. It’s important you have a diversity of views and people who aren’t afraid to speak out, otherwise you won’t get the benefit of the process, which is a melding of the minds. Instead, you’ll simply get the view of the most outspoken people in the room.
What makes this more powerful when done right is that the experts revise their positions based on what the other experts say will happen and the combined thinking can create a reasonably accurate model of what will come. Granted, the accuracy typically falls off as you move to later periods because unforeseen events will change the actual timeline, but if you do this every one or two years and adjust the firm’s view of the future, then the forecast alters itself and becomes more dynamically accurate as time proceeds. Kind of like headlights on a dark night: The things that are closest are the clearest, letting you better avoid obstacles. But the farther away something is, the harder it is to make it out.
The trick is to keep your eyes looking so you are more ready to react to unknown obstacles when the headlights finally make clear what’s coming. And, in all cases, the result is better than if you didn’t have headlights at all.
In Dell’s case, the 1-5-10 effort wasn’t focused on PCs but on the Internet of Things (IoT) and we talked a lot about how this market is emerging. We have a lot of old players in the segment that are largely being ignored as the new players reinvent the wheel. And there are core strategic issues surrounding existing technology that need to be integrated by firms that can’t spell “interoperate.” Intelligence will likely quickly move from on-premise to in-cloud, and the biggest long-term issue is the combination of poor security and hostile governments who want to use it to do harm. The biggest opportunity, short term, is for a firm that can just make this all work.
Thanks to the 1-5-10 effort, Dell walks away with a clearer idea of what is coming and how to benefit from it than its peers and that is a lesson that you might want to think about this week. When was the last time your team thought about anything beyond this year and really fleshed out what is needed to benefit from it or avoid being harmed by it?
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+.