Eric Garland - Getting Ahead While Looking Ahead

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By Eric Garland

Getting Ahead by Looking Ahead A practicing futurist explains why foresight can make the difference between success and failure. A funny thing happened in the music industry a few years ago. Record companies began suing their customers. The Recording Industry Association of America (RIAA) filed lawsuits against, among other defendants, 13-year-old girls in order to stem the Internet at home the rising tide of Internet downloading of MP3 or at work. files. Most would agree that lawsuits are a less than If you recognize the perfect way to relate to people who buy your prodword “Napster,” the ucts, especially since the industry normally spends renegade free filemillions to attract teenagers. The record compasharing site, then you nies’ peculiar choice illustrates why, in this rapidly remember the chaos changing world, foresight is so essential. that resulted. By late When you look back to the 1990s, it is important 1999 and 2000, free to recognize that record executives are not stupid. music poured out of Eric Garland The marketing and strategic planners at companies the Internet with no like Sony, Atlantic, and Universal were and concost to consumers and tinue to be experts in finding talent, market segmentafew technical difficulties. Napster was so terrifyingly eftion, retail channels, branding, and promotion—all the ficient at connecting consumers with one another to things you need to compete in the entertainment indus“share” their music that anyone with a computer could try. They were right on top of their competitors, scanquickly find any song with a simple Web search. Music ning their marketplace for new trends in customer taste, no longer was a physical product made of plastic; it was tracking the moves of other record companies, and even now an ethereal concept that could be stored on a hard looking out for substitute products. Video games and drive and shared at will, broadcast to anyone with a few cable television were as much potential competitors as moments to do a Web search. another record label with a hot band. These executives Moreover, market research showed that young people did what most people do—they looked at their competitrading MP3 files had significantly different values than tion and their customers and tried to anticipate the next their elders when it came to the legality and morality of move. downloading. Appeals to younger consumers by the What they did not do was follow a couple of key techRIAA to equate the trading of MP3s with shoplifting fell nological trends outside of their industry. Throughout flat. The industry sued, and came off looking like bullies the 1990s, home computer ownership was increasing. At in the process. the same time, more and more computers were capable If industry executives had spent a little more time of accessing the Internet. On the horizon were new imthinking about how technologies could affect their busiprovements in software that enabled audio to be comness, we might have had iTunes five years earlier and pressed into a small amount of data while retaining fewer teenagers hiring attorneys to defend themselves good sound quality. The file format called MP3, or “Mofrom record labels! tion Picture Engineering Group Audio Layer 3,” was born. Unlike previous attempts to digitize music into a The Transformative Power of Trends small package, MP3 files actually sounded like music. Unlike copying music onto cassette tapes, you could In today’s world, you need to think not just about make an unlimited number of copies at the touch of a your own future, but also about the future of nearly button. This technical revolution occurred at the exact continued on page 66 moment that consumers everywhere were connecting to

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THE FUTURIST

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■ A Prominent Role in the Future

fully in one of my earlier books (The New Rules of Corporate Conduct). I, for one, would not argue that “such concerns are tangential to the crafting of scenarios. . . .” Social values and expectations are an integral part of the corporate environment—and so of nearly every scenario project. Ian Wilson San Rafael, California

Thank you for sharing Ed Cornish’s memoirs in THE FUTURIST. I found Cornish’s account of the development of futures studies and his personal role in it truly fascinating. When the definitive history of the field is someday written, his memoirs will figure prominently in it. Wendell Bell, Professor Emeritus, Department of Sociology Yale University

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continued from page 68 everything. Now, if you are a record company, you aren’t just worried about other entertainment providers; you’ve got to be looking at electronics in the home and computers in the workplace and the next technological innovation to see tomorrow’s competitive challenge. Like the record industry 15 years ago, businesses today are facing a special kind of challenge. They aren’t just dealing with traditional threats from new competitors, substitute products, and shifts in the market, but are instead seeing entire industries turned on their heads in incredibly short periods. This significantly more difficult phenomenon occurs when too many changes occur at one time and, in effect, begin to fold in on one another. I call this superconnection, or the interaction of multiple forces in society and technology at one time. Of course, there have been disruptive technologies and social trends in the past, but today, things are accelerating so rapidly, and globalization spreads change so quickly, it’s as if it were all happening in your backyard. Today, the sciences have begun to overlap as biotechnology, chemistry, and physics advance to become nanotechnology. Globalization meets new information technology, and

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THE FUTURIST

July-August 2007

your customer service reps suddenly speak with a foreign accent. Your biggest market segment is suddenly retired people, because the baby boomers are aging. India’s middle class is nearly as big as the population of Europe. Traditional competitors fade; completely new ones appear. Your own customers become as big a threat as your fiercest rival. Companies in countries you’ve never heard of begin outproducing your factories. Chaos seems to reign. But chaos is not impossible to manage if you give yourself enough time to look at external forces before the problem lands in your lap. Competitors, product substitutions, and changes in the market are not new. But the speed and complexity of these changes are giving leaders whiplash. One minute, you are selling records; the next, you are deposing little Brittany Johnson from down the street for swapping MP3s with her friends. The changes are circling around us, popping up in the headlines and appearing in the form of new realities in our businesses. The population of Italy is getting older, just like Japan, Russia, the United States, and most Western nations. Biotechnology is getting cheap. Nobody has a solution for the addiction to oil. The ethnic face of France is changing. China has too many boys. The

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rich–poor gap is increasing. It is interesting to read about, but leading an organization in the face of this seems daunting at the very least. This brings us to the subject of you. Not every industry is facing such dramatic changes forcing life-ordeath decisions. Maybe you run a bowling alley and just want to know what the customer of the future will want for entertainment. Maybe you are considering a second career and wonder what jobs will be hot in the next few years. You could be an investor trying to get in early to profit from what the future holds. Once you understand how to see what’s coming next using such tools as systems thinking, trend analysis, and scenario generation, your view of the world will change and you will be better prepared. Onward to the future! ■ About the Author Eric Garland is the principal of Competitive Futures Inc., a futures consultancy, www.competitivefutures.com. His last article for THE FUTURIST, “Can Minority Languages Be Saved? Globalization vs. Culture,” appeared in July-August 2006. Adapted from Future, Inc.: How Businesses Can Anticipate and Profit from What’s Next. Copyright © 2007 by Eric Garland. Published by AMACOM Books, a division of American Management Association, New York, New York. Used with permission. All rights reserved. www.amacombooks.org.