Listening to the Future: Why It's Everybody's Business: 11 (Microsoft Executive Leadership Series) - Hardcover

Rasmus, Daniel W.; Salkowitz, Rob

Hardcover

ISBN 10: 0470413441 ISBN 13: 9780470413449

Publisher: Wiley, 2008

Synopsis

Listening to the Future: Why It's Everybody's Business explores the challenges and opportunities facing organizations, the transformations that will ripple through the political, economic, and social environments, and the implications for different industries in the 21st century workplace. Written by Microsoft forecasters Daniel W. Rasmus and Rob Salkowitz, this important book equips your business to get out in front of new technology innovations in the consumer world with the knowledge, practices, and tools to differentiate your business in our competitive, fast-moving global economy.

About this title

About the Author

Daniel W. Rasmus is Director of Business Insights for Microsoft® Business Division, where he manages the development of long-range scenarios to inform how software will be used in tomorrow's work environment based on different social, economic, and political settings that may occur in the future. Prior to joining Microsoft® Daniel was an analyst with Forrester Research and wrote extensively about collaboration and knowledge management. His forthcoming book Management by Design will be published by Wiley in 2009. Dan lives in Sammamish, Washington, with his wife Janet and daughters Rachel and Alyssa.

Rob Salkowitz is a writer and consultant specializing in the social implications of new technology in the workplace, and author of Generation Blend: Managing Across the Technology Age Gap, published by Wiley in 2008. He works with Microsoft® and other clients to articulate business strategy, and writes and speaks on issues related to the changing workforce. Rob lives in Seattle, Washington, with his wife Eunice Verstegen.

From the Back Cover

Praise for Listening to the Future

"Turbulent times present businesses with the opportunity to rethink their value, their processes, and how they differentiate themselves in the market. Businesses need context to do this successfully. Rasmus and Salkowitz create a context for the challenges and opportunities ahead, and a lens for examination that can help businesses redefine themselves even in uncertain times. Listening to the Future provides practical advice on how to apply technology, not to solve specific problems, but to facilitate agility. Further, the authors don't just write about their thinking, they reveal the framework behind the findings, providing strong insight on the value of scenario planning in anticipating and navigating change.

Stephen Elop, President, Microsoft® Business Division

"As Arie de Geus suggested in his award-winning The Living Company, 'the only sustainable competitive advantage in times like these is the ability to learn faster than your competition.' Listening to the Future is an indispensable guide to that learning, a manual for managers faced as all of us are with the uncertain challenges of the future.

Lawrence Wilkinson, Chairman, Heminge & Condell (H&C); cofounder, Global Business Network (GBN)

"As we stand on the brink of a dramatic transformation in global culture and global business, we need good ways to think through the implications for ourselves and the world around us. Listening to the Future offers a panoramic view of the terrain, balancing vision with practical observations and useful strategies for organizational leaders. Rasmus and Salkowitz present a number of thought-provoking ideas that range from blended workforces to the rising complexity of business brought about by new relationships, new sources of data, and the failure of industrial age measurement.

Ray Kurzweil, founder, Kurzweil Technologies

"Dan Rasmus and Rob Salkowitz lay out how Microsoft®, the most powerful software company in the world, creates its internal crystal ball and takes advantage of accurately anticipating the future. Dan is one of those that constantly lives in the coming future and with Rob's help lays out a methodology that can help all of us do a better job of preparing for and taking advantage of the opportunities our future will bring.

Rob Enderle, Emerging Technology Analyst

"We get into scenario work as a vehicle for thinking more effectively about uncertain futures (and our decisions today); but we lack enough good role models of organizations that have adapted scenarios into their perspectives. Here's an example that can be followed in depth; the scenario leader at Microsoft® shows in depth how the practice illuminated the shift of mind among their customers and employees going forward, and how they must rethink their product line accordingly.

Art Kleiner, Editor in Chief, strategy+business; author, The Age of Heretics

From the Inside Flap

Listening to the Future

Why It's Everybody's Business

New business models, new sources of competition, sweeping changes in the workforce and information at the center of it all. Is your business ready for what's next?

In Listening to the Future: Why It's Everybody's Business, forecasters Daniel W. Rasmus and Rob Salkowitz present the perspectives of Microsoft®, the world's largest software company, on the challenges ahead for businesses, governments, and people around the world. How can we share knowledge and empower people in our organizations to act with insight and confidence in a world inundated with data? How can businesses get out in front of new technology innovations in the consumer world and the enterprise to unlock the potential of a new generation of talent? How can information technology provide strategic value in a dynamic and interconnected world?

Rasmus and Salkowitz look beyond the near-term trends and the latest high-tech fads to expose the critical uncertainties surrounding globalization, workforce evolution, transparency, and the effects of networks and mass collaboration. By exploring divergent scenarios of possible futures rather than a firm set of predictions, they offer business leaders a framework to make their organizations resilient against a range of potential circumstances, while positioning themselves to take maximum advantage of new opportunities.

Part of Microsoft's Executive Leadership series, Listening to the Future: Why It's Everybody's Business examines specific industries, including manufacturing, financial services and insurance, retail, professional services, government and public sector, education, and healthcare, identifying how the key themes of the new world of business will play out in these segments of the economy.

This timely book explores:

• Strategies for managing a dynamic business

• Discovering and acting on insights developed from complexity

• Gaining strategic advantage through IT

• Maximizing the value of a blended workforce

• Recognizing how driving forces are shaping the business climate

• Sharing knowledge to improve business performance

Business-focused and jargon-free, Listening to the Future: Why It's Everybody's Business provides decision-makers with a clear frame-work for making sense of the critical dynamics and uncertainties shaping the next ten to fifteen years, and clearly explains the innovative technologies that may play a role in the new world of business and work.

Excerpt. © Reprinted by permission. All rights reserved.

Listening to the Future

Why Its Everybody's BusinessBy Daniel W. Rasmus Rob Salkowitz

John Wiley & Sons

Copyright © 2009 Daniel W. Rasmus
All right reserved.
ISBN: 978-0-470-41344-9

Chapter One

Listening to the Future

In ancient times, leaders would perform elaborate sacrifices and rituals in an attempt to gain some cryptic bit of foreknowledge that might give them an advantage against rival armies or palace intrigues. The future, after all, was just one of a great many mysteries that the human intellect had yet to penetrate. The Ouija board, the Zodiac, or the I-Ching seemed as good a technology as any to ascertain the unknowable.

Thousands of years of human history have passed, but accurately forecasting future conditions still requires more art than science. Today we possess more data about the world, better tools for analysis, and mature theories about how the universe works, but as these extremely powerful components come together to highlight trends and explain complex natural phenomena, they highlight the weaknesses of prediction just as often. Greater data about the universe brings into question fundamental beliefs about physics. The mapping of the human genome forces a reevaluation of "junk DNA" as previously hidden connections and functions are revealed. Economic theories that presupposed the existence of "rational actors" now increasingly contain footnotes about forecasts as underlying assumptions about behaviors and relationships in the economy shift. Although our interpretation of cause and effect is often accurate, many models still reflect outputs whose origins vary greatly with subtle changes to initial conditions. Despite the limitations of forecasting, we can use our analysis, combined with insight, to identify potential problems years in advance and start formulating policies to address them before they become a crisis; or we can spot opportunities and attempt to arrive at the right place, at the right time, to take advantage of them.

Ironically, it is the vast and growing power of our analytical and observational tools that can cause the most trouble in our efforts to plan for the future. Information breeds expertise. Experts become vested in their positions and confident in their analytical powers. Careers are built on knowing things. As confidence hedges toward certainty, experts and those who listen to them start sketching their visions of the future in heavier lines and more vivid and vibrant colors, until these schematics become so convincing that no other alternatives seem plausible. As a result, the market for futures has come to resemble a Middle Eastern bazaar, crowded with gaudy hawkers crying out their wares:

"Globalization is inevitable and irreversible!"

"No, nationalism and fundamentalism will bring down the global order!"

"Aging populations will doom the developed world!"

"The economy is headed for collapse because of peak oil!"

"Technological innovation is pushing us toward a `singularity' that will trigger the next phase of human evolution!"

Each of these positions, and dozens of others, has its adherents, armed with reams of data and internally consistent modes of analysis that point inexorably toward their mutually incompatible and wildly contradictory conclusions.

The diversity of expert opinion about the future is worse than useless to business leaders, policy makers, and ordinary people who have to make decisions in the here-and-now based on reasonable expectations of what is to come. At least in the days of sances and sacrifices, the spirits would not argue among themselves about the prophesies they handed down to the faithful. But today, placing a bet on one school of expertise or one convincing method of analysis means placing a bet against a score of competing and potentially just-as-likely futures. When the stakes are high, the consequences of leaning the wrong way with unjustified confidence can be disastrous.

EMBRACING UNCERTAINTY

Fortunately, a more humble path can lead to more robust results. For years, many organizations have positioned themselves for success by embracing the concept of uncertainty. That doesn't mean throwing up your hands and saying "I don't know!"-and dispensing with the concept of planning altogether. Rather, it involves sifting through the possibilities, identifying the antipodes of extreme positions, and considering multiple future scenarios instead of one concrete future vision. The goal of the planning process is to identify strategies that are effective and resilient across the widest range of potential futures-not just to hedge bets against unforeseen risks, but to ensure that the organization will be watchful for future events in time to respond with appropriate agility to their forecasted opportunities and contingencies at the lowest possible cost-and with the hope their careful anticipation was more robust than their competitors.

Microsoft's approach to forecasting is modeled on the scenario planning methodology developed by Royal Dutch Shell in the 1970s, and later formalized by the Global Business Network consultancy. Starting in 2003, Microsoft began a series of structured visioning exercises with internal and external groups, including Microsoft employees, customers, partners, and several groups of college-age students (The Information Work Board of the Future) that led to the development of four scenarios, or possible futures, against which we could test ideas about the future of business, technology, and work.

Scenarios start by recognizing the importance of driving forces that will likely shape the new world of work and business: globalization, demographic change, the spread of networks and information technology, the drive toward transparency and regulation, the blending of work and life, and mounting concerns over energy and the environment. These forces are real and are supported by statistics and data, by anecdote and experience, and by the weight of expert opinion, as we will explore in later chapters. However, the driving forces by themselves don't predict any certain outcome or set version of the future because they are individual vectors in a complex world. How these forces interact and play out precludes any definitive answer about the future, regardless of how certain we may be of the elements.

Each driving force suggests questions rather than answers. Will globalization continue on its current course, or trigger a backlash of resurgent nationalism and regional conflict? Will aging workers leave the workforce, stick around beyond traditional retirement age, restart careers late in life, or shed the "workaholic" tendencies associated with Baby Boomers throughout their working lives in favor of a more balanced view of work and life? Will networks and technology help large organizations consolidate their power by leveraging their scale, leaving ever smaller opportunities for competitors, or will power shift to nimble players able to collaborate in opportunistic partnerships in a more innovative, dynamic world?

The outcomes of these and other similar questions don't point to one future but to many, each with its own attributes and implications for work and business. The scenario planning methodology helps lay out the possibilities like points on a compass, with the axes determined according to the two most important uncertainties, per the consensus of the planning group(s). At Microsoft, we chose to define our north-south uncertainty axis as the predominant organizing principle of the world: centralized and hierarchical or distributed and networked. The east-west axis is defined by the trajectory of globalization: towards greater global integration or towards a more bordered, regionally focused world. The resulting grid defines four quadrants, each representing a different combination of characteristics-centralized and global, centralized and bordered, distributed and global, and distributed and local. Starting with those basic defining qualities, our small teams built up stories around each future scenario, giving each a distinct personality and a distinct name (see Figure 1.1).

Because the poles of the compass represent the most divergent outcomes of critical uncertainties, the scenarios force the reader to accept a new set of logic that is beyond any individual experience or constrained intuition. That is by design. The scenarios create a framework for stories about the future that don't predict what will happen, but that create environments that help challenge assumptions, spur creativity, and create a canvas of possibilities that can be monitored.

Although two uncertainties define the scenario matrix, all of the driving forces and the other uncertainties act as characters in the stories about the future. The scenarios gain the richness of logic and direction so that other elements, when played out against these stories (see Four Visions of the Future: Microsoft's Scenarios, below), behave according to the logic of the scenario, and therefore very differently from scenario to scenario. The completion of the stories creates the groundwork for testing assumptions, for exploring the answers to strategic questions, and for asking open-ended questions and seeing where they lead.

Scenarios often recoup their investments within days or weeks of their development because they create a new way of sorting strategic imperatives, starting new projects, or helping shut down projects that prove questionable in light of the scenarios. But scenarios best prove their value over the long-term as entry points for monitoring the future and as a windtunnel for new ideas.

Windtunneling borrows a metaphor from aerospace and automotive design. In traditional windtunneling, air is blown over a design with colored smoke, or in more modern versions, sensors, to help visualize the aerodynamics of a design. Windtunneling has also been used to refine the way ski jumpers hold their bodies and skis for maximum lift. With scenarios, the stories act as windtunnels for ideas, with the narrative blowing over them to see how the design of the idea holds up within the logic of the world. And like traditional windtunneling, an idea that doesn't fare well can be redesigned and retested until it is robust against multiple futures. Ideas can also be deconstructed until certain elements prove their resilience against multiple futures. This helps designers sort out core features, which are robust in all scenarios, from contingent features, which can be added, removed, or modified depending on the direction of future events. It also prevents overinvestment in areas that are most vulnerable to uncertainty and disruptive change.

In Microsoft's case, windtunneling can help ensure that a core set of capabilities envisioned at the beginning of a long product development cycle remain relevant to the needs of customers when the product comes to market, perhaps years later. Although it is not possible to precisely predict future business conditions and customer needs, the next best thing is to deliver a product, service, or strategy resilient against different scenarios and contexts, rather than optimizing for one possibility that may or may not actually materialize.

The final purpose of the scenarios is to serve as conceptual guide-posts to help make sense of developments in the world. In the corridor outside Dan's office at Microsoft, there is a large bulletin board divided into a four-quadrant grid of the scenarios. Clipped news stories are posted on the board according to which scenario they reinforce. In the Proud Tower quadrant, you might see a Wall Street Journal article about the uptick in corporate mergers and acquisitions (M&A) activity, or a piece from PC World talking about a new technology for watermarking digital documents. In the upper right ("Continental Drift"), perhaps a story from The Economist on the increasing integration of regulation regimes in the EU, or a newspaper editorial advocating increased trade tariffs. Over time, the entire board becomes thickly carpeted with stories, each providing a scrap of evidence for the emergence of one scenario or another. The framework helps us contextualize the constant stream of information and provides early warnings for a swing toward one of the competing poles of uncertainty. It also helps create visceral proof that relying on any one forecast might prove a dangerous assumption.

Although scenario-planning method does not tell us exactly where we are going, it creates a useful frame for conversations and observations, which can then be translated into action. When Microsoft engages in business discussions with customers, the scenarios help define meaningful questions and act as a framework for interpreting the answers. Perhaps most importantly, the scenarios help create a learning dialog about the future priorities and strategies with customers that refines what is important to the market. As Microsoft learns from its customers, the scenarios become ever-richer canvases for strategic conversations.

THE SHAPE OF THINGS TO COME

Listening to the Future is the distillation of Microsoft's efforts to think about the future of business and work-the challenges and opportunities facing organizations, the transformations that will ripple through the political, economic, and social environments, and the implications for different industries. The scenario work provided a way to test ideas, and the best and most resilient of those ideas are explored here in depth.

In the first part of the book, we investigate four central challenges of doing business in the second decade of the 21st century:

1. Managing a Dynamic Business: What are the changes in markets and business models that will shape the future landscape, and how can businesses make themselves resilient?

2. Prospering in a Blended World: How can large organizations thrive in an environment of unprecedented diversity in the workforce, the marketplace, and the IT landscape?

3. Gaining Insights from Complexity: How can businesses transform the flood of data into useful intelligence to drive decision-making?

4. Building Strategic Advantage Through IT: How can the right investments in software and systems help organizations compete in a world where requirements and processes change continuously?

From these four themes of change, the book pivots to a discussion of several factors that are shaping the work experience from the perspectives of the employer, the employee, and parties interested in workforce development and productivity, such as governments, educators, non-government organizations, consumer groups, and industry associations. We have grouped the themes into four main topic sections:

1. One World of Business: The drive toward globalization, its implications and consequences, and the role of people and technology in a more integrated global labor market.

2. Always On, Always Connected: How pervasive networks and mobile devices are reshaping our understanding of the workplace and workday, and the new set of choices facing people and businesses that arise from an expanded set of possibilities.

3. Transparent Organizations: As the costs of opacity grow increasingly unsustainable in a world of constant information and conversation, will the pressure for transparency come from the top down (through regulation) or from the bottom up, via community pressure and new technologies?

4. Workforce Evolution: How demographic change, new approaches to education and training, and the diversity of backgrounds and perspectives in the global workforce are challenging workers, managers, educators, and governments.

Knowledge and Talent in the New World of Work brings all of the elements to bear on a single problem: the renewed recognition that knowledge capture, learning, and collaboration will be a major competitive differentiator in a world where high percentages of skilled workers will retire over the coming decades, a world where their successors may not be interested in learning the skills of older workers leaving the workforce, and a world in which ever increasing amounts of work are distributed, along with the knowledge and skills to support that work.

(Continues...)

Excerpted from Listening to the Futureby Daniel W. Rasmus Rob Salkowitz Copyright © 2009 by Daniel W. Rasmus. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Edition details

• Publisher: Wiley
• Publication date: 2008
• Language: English
• ISBN 10: 0470413441
• ISBN 13: 9780470413449
• Binding: Hardcover
• Edition number: 1
• Number of pages: 256