A Radically Unpredictable World Needs Agility — Not Strategy
At this very moment, in meeting rooms everywhere, business teams and leaders are at work devising what has become a routine organizational practice: a strategic plan. Businesses have defaulted to developing strategies to manage the future by predicting it and narrowing it down, informing the investments geared toward growth and success.
But in a world that is increasingly unpredictable, the premises behind “strategizing” are increasingly questionable. Strategy only makes sense if you believe the future is predictable. We no longer live in such a world. The digital revolution, spawned first by the internet and now artificial intelligence, has taught us to flourish in a radically unpredictable environment.
Indeed, businesses have found themselves embracing tactics, for fully pragmatic reasons, that make a virtue of the internet’s unpredictability.
For example, it’s common these days to launch minimum viable products that studiously avoid trying to anticipate exactly what the market will want. Instead of delivering products that anticipate a consumer’s reaction, companies are putting forth digital products that allow users to extend and expand them. Video game-makers, for instance, have a long tradition of being made “moddable” by their creators so that users can add maps, characters and rules to make versions the game-makers could never have imagined.
Many online products also come with open platforms that allow external developers to extend the product or integrate it into their organizations’ unique and unpredictable workflows. The open-source and open-access movements see the value in making code and texts freely available for reuse in ways that the authors and publishers could not foresee.
It’s an approach that has proven successful for Tesla, which has open-sourced its patents; Google, which has made much of its most important AI code freely reusable; and Apple, which has allowed app developers outside of its company to make the iPhone a success.
Each of these approaches purposefully refrains from anticipating the future in order to enable outsiders to multiply the value of products. They’ve each embraced “unanticipation” — the very opposite of a strategy.
Now we’re entering a second phase. If the internet has changed our practical approach to the future, machine learning is providing a conceptual framework for understanding why unanticipation works.
Traditionally, to predict the weather, a model would need to be built that includes the determining factors, such as air temperature and moisture, and their interrelationships. Likewise, to estimate the next quarter’s profits, information about the number of salespeople, the number of leads, marketing costs and so on would be included and connected via formulas.
Businesses are already devising ways to succeed in a future more unpredictable than ever by embracing unanticipation to turn unpredictability into a business advantage.
But machine learning doesn’t start with generalized models. Rather, it builds its models based on oceans of data without any sense of the factors the data represents or how those factors interrelate. It iterates on the data, looking for statistical relationships among them, building a model of connections so numerous and complex that we often cannot understand exactly how a machine learning application comes up with its results.
This lack of explicability raises many important issues about ensuring that machine learning’s outcomes are fair. But the success of machine learning in using models without generalizations is leading us to acknowledge that the future is determined by the unknowable and chaotic interaction of a universe of particulars, each affecting every other simultaneously.
The alternative is not to give up and scramble like a hamster on a hot plate, although it can feel that way sometimes. Rather, businesses are already devising ways to succeed in a future more unpredictable than ever. Indeed, embracing unanticipation turns unpredictability into a business advantage, enabling more responsiveness to change, and a readiness to exploit the unexpected.
But the landscape is changing at such rapidity that guard rails are in order. Here are some that businesses are discovering:
- Small signals flag large truths. When tiny changes can have huge effects — Chaos theory’s famous “butterfly effect” — it’s not enough to look for large emerging trends. Instead, the organization needs to be highly sensitive to the small signals that portend major changes. But that requires treating everyone in the organization — and even those outside of it — as sensors who, in the course of their daily lives inside and outside of business hours, may provide clues that something significant may be afoot. You never know where these signals may occur, such as knowing the intricacies of how customers use a certain product, or a new development about a supplier changing its focus that’s fallen under the radar. So, rather than trying to segment and direct the flow of information, open it up to as many as possible.
- Increase organizational attention. Opening the flow is of no use if the organization has no way to separate the signal from the noise. Your experts can’t spend all day curating it. Instead, build internal networks where everyone in the organization can share and discuss early signals. They won’t do it if it’s presented as a task, but they will if the networks facilitate open conversations among all about their shared interests. Most of this will sound like noise and include personal conversations, but it’s often within these networks that an unexpected signal can forestall a looming disaster or open up a surprising new line of business.
- Distribute decision-making. Discovering the signals is of no use if the organization can’t act on them. But traditional hierarchical decision-making requires that information be reduced for the person at the top. In an increasingly unpredictable world, we can no longer afford to throw away information. So, organizations should leave decisions to as many local folks they can and view the escalation of decisions up the hierarchy as a sign of a weakness in the structure.
- Play well with others. A strategic commitment to interoperability improves the resilience of businesses in the post-strategic age. That means building products and services that work well with others, including your competitors’ offerings.
- Let your customers make your products their own. If you enable and encourage your customers to adapt and extend your products in ways that you may never have thought of, they will do so. This enables your customers to multiply the value of your offerings, while instilling a sense of loyalty to your brand.
To sum all of the above into a single phrase: Embrace unpredictability and practice unanticipation.