The future back strategy for product managers
Innosight is an innovation management consultancy founded by Clayton Christensen and Mark Johnson.
Mark has a new toolkit for visionary thinking that leads to breakthrough growth, which he writes about in his book, Lead from the Future. The foundation of the toolkit is “future back” thinking, which we talk about.
Mark is also the author of the previous books Dual Transformation and Reinvent Your Business Model and the McKinsey award-winning Harvard Business Review article “Reinventing Your Business Model.”
Summary of some concepts discussed for product managers
[6:07] What are the limitations of traditional strategic planning?
Traditional strategy drives core business but doesn’t create breakthrough products or new business models. Traditional strategic planning is too anchored in extrapolating present-day norms into the future. As Alfred Chandler said, “Don’t let structure dictate strategy.” In many organizations, the core organization is insufficient to sustain long-term growth. You have to be able to think about white space beyond the core and plan from the future back as well as performing traditional annual strategic planning.
[9:56] How does your future back approach to strategy work?
Future back is a process and a way of thinking. As a process, it’s just like it sounds—planning from the future back. It’s about envisioning the future of a portfolio of businesses. You define the future of the core, adjacent, and new growth businesses and increment backward to determine what initiatives need to start today.
It’s also a way of thinking that allows you to take the past and the present out of the equation. It’s clean sheet, systematic thinking that allows you to envision what could be as opposed to what is and to get out of being stuck in an existing paradigm.
To use the future back approach, you must put in place both the thinking and the process. It’s an iterative, learning loop approach involving exploration, experimentation, and discovery. You frequently revisit the vision and initiatives and adjust along the way.
It’s especially important that the leadership team carve out 10% or 20% of their time to explore the vision and discover at an enterprise level to plan for the future.
[16:15] How do we define the time horizon?
The time horizon is how far into the future to envision. You want to be in a place that’s uncomfortable and that captures the convergence of a set of trends that may cause the world to work in a whole different way. Discussing how many years away that place might be is an important way to gain understanding.
Your growth aspiration can also define the time horizon. Determine your goal and discuss how viable it is for the core business to attain that growth over several years. Discussing this growth gap can be very galvanizing to the organization as people realize that merely incrementing off the base isn’t going to fill the gap. You need to think beyond and find new and different ways to fill the gap.
[20:16] What do you look at to identify the forces that are shaping your industry?
Trends play a big role. Study trends to answer, “Where is the customer going?” Use trends to determine the job that the customer will be trying to get done and what will be most important and least satisfying.
We tend to do the most experimentation around new growth. In these experiments, we spend a little to learn a lot and plant a few seeds that incubate over time, because new growth is the area of greatest uncertainty. We do fewer experiments in the adjacent area and the least in the core.
[26:19] What are some examples of organizations using the future back approach?
In the late ’90s, Steve Jobs led Apple in a process similar to future back strategy. They looked ahead to 2010, imagining a future in which the computer became the hub of consumer electronics products. The created their digital hub strategy and went into new growth by deciding to create consumer electronics products, starting with the iPod, iTunes, the iPhone, and the iPad.
An automotive company had decided that they would be fast followers in the electric vehicle market. When we walked them through future back, they had a profound change in their mindset. As they looked at converging technologies and trends, they realized they had to be much more proactive in developing electric vehicles.
Johnson and Johnson’s pharmaceuticals division created a vision by looking 12 years into the future and envisioning a world without disease. They saw the convergence of many technologies, and decided to move into products for the interception and prevention of disease.
Once we’ve used future back to create a strategy for our organization, what do we need to do to take action?
Strategy is never more than 49% of the solution. About 70% of transformative strategies completely fail. So before executing your strategy, you must do strategic programming. This includes setting up leadership governance, driving a test and learn process, and setting up a transformation management office.
If a product leader wants to bring up the future back approach with their CEO, what’s the best order they can suggest for putting it into action?
There are four steps that must be completed in order: alignment, commitment, sponsorship, and ongoing governance. It’s critical that leadership partner with innovation teams. Leadership provides the resources, so they must be aligned and committed. They also must have a disciplined approach to continue to sponsor and govern the teams.
“You can’t connect the dots looking forward. You can only connect them looking backwards.” -Steve Jobs
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