Do you have an extra $35,000 lying around? That's what it
costs to become a member of the Global Business Network (GBN), an
Emeryville, California, think tank that specializes in helping some
of the world's biggest companies anticipate what tomorrow's
business climate may look like. Subscribers include Royal
Dutch/Shell, AT&T, Ford and dozens more corporate titans.
Just what makes GBN so special? The quality of its staff,
foremost among them co-founder Peter Schwartz, former head of
planning for Royal Dutch/Shell and author of The Art of the Long
View (Doubleday Currency), and co-founder Stewart Brand, former
editor of the Whole Earth Catalog and founder in 1984 of San
Francisco-based The WELL (Whole Earth 'Lectronic Link), a
computer network.
Schwartz is widely credited with helping propel Shell to its
giant status among multinational corporations. As for Brand, as far
back as 1972, in an article in Rolling Stone, he wrote: "Ready
or not, computers are coming to the people"-and that was a
decade before IBM introduced its PC!
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Fortunately, you don't have to shell out $35,000 to find out
what's on these progressive thinkers' minds. In this
exclusive Entrepreneur interview, Schwartz gives us the framework
for thinking about tomorrow, while Brand-himself a lifelong
entrepreneur-joins in with a few well-honed observations especially
suited to the entrepreneurial mind-set.
Entrepreneur: Why do we need to think about the
future?
Peter Schwartz: It used to be in business that you could
count on the near-term future being fairly similar to the present
and the rate of change being manageable.
What has happened in recent years is the nature of change-how
substantial it is-has altered enormously. And the rate of
change-how fast it happens-is also different. Change, today, comes
much faster. Worse, if you wait for change to occur, it's
almost always too late to catch up.
Entrepreneur: A problem with thinking about the future is
that today most of us are so busy dealing with the present, just
thinking about next week can be difficult. I understand, Stewart,
that you recently logged onto The WELL and found 288 e-mail
messages waiting. Have we entered an era of information
clutter?
Stewart Brand: The problem with those 288 e-mail messages
is that I needed to read about two-thirds of them. This wasn't
clutter but essential information.
Technology basically is forcing us into the now rather than the
future. But just because more is going on now doesn't make the
long term go away. We still need to think about it.
Entrepreneur: Besides not thinking about it at all, how
do we think incorrectly about the future?
Brand: A problem we deal with is people still think of
the future as the year 2000-which, basically, is the week after
next at this point. You need a much longer view than that now.
The other problem is that most of us have an
"official" future. This means we have an expected set of
things we believe will happen over a period of time. This future
often reflects what's happened before and what we are prepared
for. But many businesspeople now have had it with that viewpoint
because they find the "official" future keeps not
happening.
Schwartz: When I look back at my own errors [in thinking
about the future], it's that the boundaries of the problem were
drawn too narrowly. How we draw the boundaries of the issues we
face is critical because often, the real threats come from
outside.
IBM, for instance, saw mainframes as the future of computing and
PCs as little, pesky things. The Detroit car makers saw their
significant competitors as each other, and maybe the Europeans, but
not the Japanese. We have to work to stretch the boundaries of what
we see as possibilities for the future.
The second mistake most of us make is imagining that the future
is predictable-"If we only had the right seers, we could
predict the future." An enormous amount of effort goes into
trying to predict what is unpredictable.
What we can do is develop what we call scenarios. Basically,
these are short stories about what tomorrow may look like. But they
are also powerful planning tools that help us think systematically
about the different possibilities and how we might best respond.
[For more details about using scenarios in your business, see
"Competitive Edge," June 1993.]
Entrepreneur: What exactly is scenario thinking?
Schwartz: It's a state of mind where you challenge
your thinking by asking difficult questions such as, What would
make my business a greater success than I could possibly imagine?
What would kill it? And, finally, What could happen to change it
fundamentally?
Next, you want to identify appropriate sources of information
that challenge your perspectives and broaden them. A small business
clearly cannot go out and pay big fees to consultants. But the
honest truth is, most of the good information is out there to be
had relatively inexpensively.
Here are three examples: The World Bank publishes its World
Development Report every year. It's an extremely insightful
guide to what's going on around the world, and it costs only
$19.95. Second, good information is increasingly available online,
relatively cheap or free. Third, there are conferences. An
entrepreneur probably wouldn't hire GBN, but I go to many
conferences as a speaker.
Entrepreneur: Let's make this more concrete with a
for-instance. What scenarios do you see for the U.S. economy over
the next decade?
Schwartz: I see two plausible scenarios. One is for slow
growth of the sort we have experienced since about 1989. That's
based on the assumption that we will continue to become more
protectionist and the world, too, will become more protectionist.
It also assumes we don't meaningfully invest in our economy or
education.
Conversely, if we take global leadership and we have an open
trading system, if we invest heavily in the quality of our labor
force, and if we are adaptive with new technologies, somewhere
around the year 2000 to 2005 we could see a significant
acceleration of economic growth. This would be a period of new,
huge growth.
Entrepreneur: Those are sharply different scenarios. What
is an entrepreneur supposed to do with them?
Schwartz: What I want is for them to ask themselves: How
will my business fare under both scenarios? What are the
consequences? Am I prepared to deal with both of them? If one of
them would do great damage to my business, how can I prevent that
from occurring? If one represents huge opportunity, how can I be
prepared to act on it quickly? You want some detail in the answers
you come up with, too.
Entrepreneur: Are you telling us to find a strategy that
lets us straddle as many scenarios as we can come up with?
Schwartz: Yes, with one important qualification-I
wouldn't use the word "straddle." I would say, be
prepared for different scenarios. In some cases, that may mean
finding a strategy that works in all scenarios. Or you may choose
to commit to one view of the future, but also keep your eyes open
so you can act in a timely manner and change strategy if it turns
out you're wrong.
Entrepreneur: For entrepreneurs, isn't a core problem
of scenario thinking that often they cannot afford to hedge their
bets?
Brand: It's true that if you spend too much of your
scarce resources hedging bets, you may not be able to win with the
bets you can afford to make.
Another approach is the adaptive strategy. This requires an
organization to be very light on its feet. This is hard for major
corporations. They basically are like ocean liners, and they have
to start making their turn several miles before they hit the rocks.
Entrepreneurs are more like speedboats. They can turn fast. But to
do that they've got to be alert.
Entrepreneur: Alert to what?
Brand: That's the question, of course. But here's
where scenario planning can equip you with leading indicators-signs
that show where the flow is shifting and enable you to adapt in the
early stages of change. To do this, you need to develop your
attenae so they're more sensitive to the world. That can be
especially difficult for an entrepreneur.
Typically, an entrepreneur is in a world of trying to make it
happen. Starting something from zero is a huge undertaking, and
it's easy to lose sight of what's happening in the world.
But scenario thinking can help you watch for things out of the
corner of your eye.
Entrepreneur: What are some scenarios for the structure
of business in the years ahead?
Schwartz: Today, we have three primary business
structures-multinational corporations, medium-sized companies and
small businesses. In many ways, their structures have outgrown the
management styles and technologies available to operate and
organize a business. But it seems to me we are moving into a world
where information technology makes it possible to organize business
very differently.
It's plausible to me that in 10 years we will not see
today's multinationals but, rather, large "umbrella"
organizations that act as hosts for many small companies that come
together for brief periods to do short-term but big projects-for
example, the production of a new car. But the umbrella organization
may not be an enduring organization in the way, say, GM has been.
The model is more like a movie studio where the studio coordinates
a project but doesn't actually do it. The work is done by many
different small contractors who come together for a project that
may last three years, from the time a movie is born as an idea
until its release.
Today's information technologies make it possible to link
people in ways they weren't linked before. If I'm right,
this will create a huge opportunity for small business-if
you've stayed alert to the signals and have taken steps to make
the most of this scenario.
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