Performance Management

Seeing the Future

By Erica Olsen ⋅ June 29, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

How much time do you spend thinking about your company’s future?
Chances are, not much. For the most part, putting out fires and taking
care of the day-to-day tasks consume most of your time. But to be
strategic in your business, you must discover how to spot future
opportunities as soon as possible. Yes, you do need to identify the
immediate forces at work, but you also want to think about and plan for
the future operating environment and industry trends. The value lies in
anticipating change before it happens, instead of mindlessly reacting
to whatever comes at you next. This is especially true in our modern
world where the life cycles of goods and services are increasingly
short. Technology and instant word-of-mouth by the Internet have
created an "unpredictable landscape of instant markets that require new
levels of speed and agility".

Smart
companies have learned how to adapt to the changing business landscape.
David H. Freedman of Inc. magazine identified the "spin-up" trend in
early 2005 when Apple launched the iPod and handed that company its
first runaway hit in years. And we’re likely to see history repeat
itself with the launch of the iPhone later this month. The basic idea
is simple: Instead of thinking in terms of expanding the company as a
whole, Apple has focused on new, fast-growth, "spin-up" business units
with their own identities - even if it meant letting other parts of the
company languish.
                  
Hewlett-Packard’s
photo-printer business likewise exploded, and the same approach works
in other industries too. Savvy restaurateurs create entirely new
concepts and occasionally even close or reinvent existing ones when
their cachet fades. Smart fashion and sporting goods firms whip up new
independent brands to "surf the fad of the moment". According to
Freedman, the "trickiest part of the spin-up is to have the flexibility
to bring a promising new aspect of a business quickly to the fore
without worrying about what gets left behind." Unlike traditional
businesses that tend to be so fixated on preserving the same core
business that potentially hot new markets are poorly served (if at
all), a "spin-up creates a new brand identity". This way of thinking
about a company encourages you to see the business not as a seamless
whole but as a "fractured conglomeration" of potentially independent
units.

It’s important to take a high-level look at your
market when you need a complete picture of your company. Consider these
steps:

1. List the three to five main markets you compete in. Also list one or two that are new potential markets.
2. For each market, determine if it is growing, shrinking, or staying the same.
3. Determine the size of each market.
4. Determine if serving the market presents an opportunity or if the market is not worth focusing on.
5. Summarize the markets you want to focus on in your opportunities section of your SWOT.