Although it feels that our economy is back to normal and advancing at an expected, somewhat slow pace, certainty of the future growth is most probably misplaced. Given the global tensions and ever-speeding technological developments, our world the way we know it will most probably change not even 5 years from now … and coming changes may not be the familiar, evolutionary in nature, but more transformational and abrupt.
So if we assume that we, as a society, stand at a major fold that will transform our ways of life, can we risk assuming that businesses can go on making their products, offering their services and thinking about the future in the same way they did in their past?
How important then it is to peer into the future and create different scenarios of probable conditions (assumptions) that will lead to changes in your business strategy?
Here are a few examples from the past when businesses short-sightedly made a decision without considering possible scenarios:
We’re a serious business, thank you very much. In 1876, William Orten was President of Western Union, which had a monopoly on the most advanced communications technology available, the telegraph. Orten was offered the patent on a new invention, the telephone, for $100,000 (worth about $2M in current dollars). He considered the whole idea ridiculous, and wrote directly to Alexander Graham Bell, saying, ”After careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion that it has no commercial possibilities… What use could this company make of an electrical toy?” Two years later, after the telephone began to take off, Orten realized the magnitude of his mistake, and spent years (unsuccessfully) challenging Bell’s patents.
Say cheese! The Eastman Kodak company developed the first digital camera in 1975, then proceeded to sit on it (and the core technology for the cell phone, as well). They decided not to develop it because they were afraid it would cannibalize their film business (at one point they had a 90% share of the US film market.)
[source: It Seemed Like A Good Idea At The Time, Forbes.com, by Erica Andersen]
And here is a great article on why considering at least 4 different scenarios in business decision making is so important … The Use and Abuse of Scenarios