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Most managers spend too little energy forging a long-term view of their company and industry.
ARE YOU COMPETING to dominate your industry? To find out, ask yourself three questions.
1. What percent of your time is spent on external rather than internal issues-understanding, for example, the implications of a particular new technology vs. debating corporate overhead allocations?
2. Of this time spent looking outward, how much is spent considering how the world could be different in five years, as opposed to worrying about winning the next big contract or responding to a competitor's pricing move?
3. Of the time devoted to looking outward and forward, how much is spent in consultation with colleagues, to build a deeply shared, well-tested view of the future, as opposed to a personal and idiosyncratic view?
The answers typically conform to what we call the 40-30-20 rule. In our experience, about 40 percent of senior executive time is spent looking outward, and of this time about 30 percent is spent peering three or more years into the future. And of the time spent looking forward, no more than 20 percent is spent attempting to build a collective view of the future (the other 80 percent is spent looking at the future of the manager's particular business). Thus, on average, senior management is devoting only 2.4 percent of its energy to building a corporate perspective on the future.
Our experience suggests that to develop a prescient and distinctive point of view about the future, a senior management team must spend 20 to 50 percent of its time over months. It must then be willing to continually revisit that point of view, elaborating and adjusting it as the future unfolds.
Industry Forsight
The vital first step in competing for the future is the quest for industry foresight. This is the race to gain an understanding, deeper than competitors' sense, of the trends and discontinuities-technological, demographic, regulatory, or lifestyle- -that could be used to transform industry boundaries and create new competitive space.
Industry foresight gives a company the potential to get to the future first and stake out a leadership position. It forms corporate direction and lets a company control the evolution of its industry and, thereby, its own destiny. The trick...