Loving this!

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Might suit a map on the future of gardening!

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A real scenario?

I was going to add this as book of the month in brainmail, but I figured it was a little depressing. Here is fine, of course! One for the scenario thinkers at the Ministry of Defence and MI5 perhaps?

A State of Fear: Britain after a Dirty Bomb by Joseph Clyde.

Joseph Clyde is a pseudonym of George Walden btw, a former diplomat and government minister. The book is a novel

Amazon link here.

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Quote of the Week

Apologies, holidays and a book launch, not to mention brainmail issue number 99 to be dealing with. Here’s a little gem I found in the newspapers last weekend.

“Sex, drugs, rock ‘n’ roll, dancing; all the things we like doing are about surrender. Religion is the formalised social version of that.” Brian Eno.

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Man Vs. Machine: Gandhi

Don’t know how I managed to miss the thoughts of Gandhi on man versus machine, but I did…

“The supreme consideration is man. The machine should not tend to make atrophied the limbs of man.”

“What I object to is the craze for machinery, not machinery as such. The craze is for what they call labour-saving money. Men go on ‘saving labour’ till thousands are without work and thrown on the open streets to die of starvation. I want to save time and labour, not for a fraction of mankind, but for all.”

“I can have no consideration for machinery which is meant either to enrich the few at the expense of the many, of without cause to displace the useful labour of many.”

“My opposition to machinery is much misunderstood. I am not opposed to machinery as such. I am opposed to machinery which displaces labour and leaves it idle.”

“I want the concentration of wealth, not in the hands of a few, but in the hands of all. Today machinery merely helps a few to ride on the backs of millions. The impetus behind it all is not the philanthropy to save labour, but greed. It is against this constitution of things that I am fighting with all my might….”

“Ours has been described as the machine age because the machine dominates our economy. ‘Now, what is machine?’ one may ask. In a sense, man is the most wonderful machine in creation. It can neither be duplicated nor copied. I have, however, used the word not in its wider sense, but in the sense of an appliance that tends to displace human or animal labour instead of supplementing it or merely increasing its efficiency. This is the first differential characteristic of the machine. The second characteristic is that there is no limit to its growth or evolution. This cannot be said of human labour. There is a limit beyond which its capacity or mechanical efficiency cannot go. Out of this circumstance arises the characteristic of the machine.”

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Are libraries kennels for underdogs?

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I just has a flash of inspiration. Maybe. I’m supposed to be thinking about bookshops, but I keep getting drawn back to public libraries and a line has jumped into my head.

“Libraries are kennels for underdogs.”

BTW, book light above from here.

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The Future of Bookshops

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I’m trying to write something for the Bookseller about the future of bookshops. It’s not going especially well. However, I have been doing some research into good bookshops and there are some cracking ideas out there, most of which, incidentally, could easily be borrowed by other bookshops or indeed libraries. BTW, why don’t more libraries have bookshops in them? Conflict or compliment?

A very quick list of good bookshops

The Society Club in London – quite possibly the bookshop model of the future
Wild Rumpus Books in the US with its kid-sized front door
Herne Hill Books, the bookshop embedded in the local community
Reading ‘Spa’ at Mr B’s Book Emporium in Bath
Selexyz Books in Masstrict.
Plural Bookstore in Bratislava
Cook and Book in Brussels
Librería El Ateneo Grand Splendid in Buenos Aires
Atlantis Books in Santorini
The Tiny Bookstore in Rye

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Why Companies Die

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Why is it that the average lifespan of an S&P 500 company in the US has fallen from 67 years in the 1920s to just 15 years today? And why might 75% of firms in the S&P 500 now be gone or going by the year 2027 or thereabouts?

These figures come from a study by Richard Foster at the Yale School of Management and echo another from the Santa Fe Institute that found that public companies die at similar rates regardless of age or industry sector. In this second study the average lifespan of American companies was cited at just 10 years. The reason given for most of these companies dying or disappearing is a merger or acquisition.* A third US study** of S&P companies reports an average company age of 61 in 1958, 25 in 1980 and around 18 today, but the trend toward shorter lives remains regardless of which study you read.

In the UK it’s a similar story. Of the 100 companies in the FTSE 100 in 1984, only 24 were still breathing in 2012, although average corporate lifespans in the UK were somewhat longer. However, with start-ups it’s back to bleak, with almost 50% of SMEs failing to celebrate their 5th birthday. The reasons UK start-ups fail are said to include cash flow issues, a lack of bank lending, too much red tape, high business rates and competition.

With larger enterprises in the UK and elsewhere the situation can be somewhat different. The main reason that big companies die – beyond being consumed by larger or more aggressive companies – is that they fail to anticipate or react to new technology, new customer demands or new competition, all of which can be linked to each other causing considerable disruption.

This is Darwinian evolution applied to capitalism and the only solution is to keep your eyes and ears wide open for predators and to continually evolve what you do through a process of constant adaption and occasionally accelerated mutation.

The list of corporate casualties is certainly long. Most people are aware of how things developed at Kodak, but the list of companies killed off or seriously injured by new technologies, new competitors or new customer behaviours includes a roll call of previously proud British names including Ferranti, Psion, Acorn Computers, De Havilland, Marconi, Swan Hunter, Armstrong Siddeley, GEC and ICL.

Interestingly, in most cases the writing was on the wall long before many of these companies went bankrupt, but if there’s one thing that you can rely on with big companies it’s that, like super-tankers, they can take a long time to change direction and the view from the bridge is often obscured or contested.

Putting to one side new technologies, new competition and new customer demands, a key point is geriatric corporate cultures. Bill Gates once said that “success is a lousy teacher, it seduces smart people into thinking they can’t lose.” In other words, nothing recedes quite like success and large companies can become delusional about their fitness, their intellect or the speed with which young ideas and inventions can move.

If arrogance is one silent killer, another is that as companies grow management can become distanced from both insight and innovation. Peter Drucker made this point decades ago, although he used the word entrepreneurship. Managing and innovating are different dimensions of the same task, but most large companies regard them as separate to the point of putting them in different departments or locations. As the urgency to stay alive financially evaporates the focus shifts away from urgent opportunities and threats to lethargic internal issues and a kind of corporate immune system develops whereby new ideas tend to be rejected by the corporate body the minute they form.

If you drop down the organisation chart to departments such as customer complaints this isn’t always the case. People working in customer relations, IT, sales or even accounts can be extremely close to customers, and hence to the inception of new ideas, but senior management often writes off these departments as cost centres rather than hotbeds of insight and innovation. With R&D it’s often much the same story with scientists and engineers being regarded as grey suited bureaucrats offering up ponderous improvements rather than white-coated warriors fighting for discoveries that could transform the company.

The culture of organisations contributes to failure in other ways too. The dominant culture of most very large companies is highly conservative and quite rightly so. Publically quoted firms primarily exist to provide a regular return to shareholders and to keep workers in regular employment. But to do both these things they must also deliver constantly evolving products that create value for customers.

This is like a tightrope that’s not only swaying in the wind, but is being constantly moved and adjusted at one end while you’re still walking along it. Interestingly, Mark Vergano, an executive VP at Du Pont once made a similar point with regard to R&D saying that: “Research and development is always a delicate balance between maintaining a long-term view and remaining sensitive to short-term financial objectives.”

To sum up, if companies wish to remain healthy and grow old they need to do two things. Firstly, they need to remain young at heart. They need to remain mentally agile, constantly learn new things and question their own identity. This means repeatedly asking what business they’re really in and how best they can serve both current and future customers using current and future technologies, channels and business models.

Secondly, companies must look at innovation from a whole business perspective and make innovation truly cross-functional. If innovation exists purely at a departmental, product or service level it’s unlikely to proceed beyond incremental refinement. Continuous improvement is essential, but it’s merely a ticket to stay in the game. To win the game companies must consider more radical developments including the ground up reinvention of everything they do.

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* A merger or acquisition isn’t necessarily a business failure, but it is often a sign of weakness or long-term illness.
**Innosight study (US).

If you’re wondering, the world’s oldest limited liability corporation is Enso Stora, a Finnish paper and pulp manufacturer that started out as a mining company in 1288.

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I hate Easyjet

Do you know what I hate about easyjet? Everything. Late. Very late. As is often the case.

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Here we go again?

Wasting time at the hell hole known as Gatwick Airport and reading the New York Times. Not sure which is more of a worry, Donald Trump or the European Central Bank paying banks to take their loans (basically, you pay back less than you borrow, which is a bit like getting a free small car with a large car loan). I see trouble ahead! Also reading about the cooling off of prime real estate in New York and auctions that fail to sell things.

I’m almost certainly reading too much intro this, but the fact that six near identical Ferrari Testarossa’s from the late 1980s and early 1990s were on sale at Bonham’s auction in Paris last month may say something significant about the state of the global economy. The fact that half of them failed to sell may say something too. In short, the bubble seems to be reaching its peak and the top end of this and many other markets may be calming down, which might be a prelude to a crash. Weak signal? Quite possibly.

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Sensing the Future

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Here’s a prediction. You are reading this because you believe that it’s important to have a sense of what’s coming next. Or perhaps you believe that since disruptive events are becoming more frequent you need more warning about potential game-changers, although at the same time you’re frustrated by the unstructured nature of futures thinking.

Foresight is usually defined as the act of seeing or looking forward – or to be in some way forewarned about future events. In the context of science and technology it can be interpreted as an awareness of the latest discoveries and where these may lead, while in business and politics it’s generally connected with an ability to think through longer-term opportunities and risks be these societal, technological, economic, environmental or geopolitical. But how should one use foresight or otherwise think about the future? What practical tools are available for companies to stay one step ahead of the future and to deal with potential disruption?

The answer to this depends on your state of mind. In short, if alongside an ability to focus on the here and now you have – or can develop – a corporate culture that’s furiously curious, intellectually promiscuous, self-doubting and meddlesome you are likely to be far more effective at foresight and futures thinking than if you doggedly stick to a single idea or worldview. This is due to the fact that the future is rarely a logical or singular extension of future ideas or conditions. Furthermore, even when it looks as though this may be so, everything from totally unexpected events, feedback loops, behavioural change, pricing, taxation and regulation have a habit of tripping up even the best-prepared linear plans.

Always look both ways
In other words, when it comes to the future most people aren’t really thinking, they are just being logical based on small sets of data or recent personal experience. The future is inherently unpredictable, but this gives us a clue as to how best to deal with it. If you accept – and how can you not – that the future is uncertain then you must accept that there will always be numerous ways in which things could play out. Developing a prudent, practical, pluralistic mind-set that’s not narrow, self-assured, fixated or over-invested in any singular outcome or future is therefore a wise move.

This is similar in some respects to the scientific method, which seeks new knowledge based upon the formulation, testing and subsequent modification of a hypothesis. The scientific method is perhaps best summed up by the idea that you should always keep an open mind about what’s possible whilst simultaneously remaining somewhat cynical about new discoveries or ideas.

Not blindly accepting conventional wisdom, being questioning and self-critical, looking for opposing forces, seeking out disagreement and above all being open to disagreements and anomalies are all ways of ensuring agility and most of all resilience in what is becoming an increasingly febrile and inconstant world.

This is all much easier said than done, of course. We are a pattern seeing species and two of the things we loathe are randomness and uncertainty. We are therefore drawn to forceful personalities with apparent expertise who build narrative arcs from a subjective selection of so called ‘facts’. Critically, such narratives can force linkages between events that are unrelated or ignore important factors.

Seeking singular drivers of change or maintaining a simple positive or negative attitude toward any new scientific, economic or political development is therefore easier than constantly looking for complex interactions or erecting a barrier of scepticism about ideas that almost everyone else appears to agree upon or accept without question.

Danger: hidden assumptions
In this context a systems approach to thinking can pay dividends. In a globalised, hyper-connected world, few things exist in splendid isolation and one of the main reasons that long-term planning can go so spectacularly wrong is the over simplification of complex systems and relationships.

Another major factor is assumption, especially the hidden assumptions about how industries or technologies will evolve or how individuals will behave in relation to new ideas or events. The historical hysteria about Peak Oil might be a case in point. Putting to one side the assumption that we’ll need oil in the future, which we may not, the amount of oil that’s available has always depended upon its price. If the price of oil is high there’s more incentive to discover and extract more oil. A high oil price also fuels a search for alternative energy sources, and incentivises behavioural change at both an individual and governmental level. It’s not quite an equal and opposite reaction, but the dynamic tensions inherent within powerful forces means that significant balancing forces do often appear over time.

Thus we should always think in terms of technology plus psychology or one factor combined with others. In this context, one should also consider wildcards. These are forces that appear out of nowhere or which blindside us because we’ve not seen or discounted their importance. For example, who could have foreseen the importance of the climate change debate in the early 2000s or its relative disappearance due to economic conditions in the 2010s?

Similarly, it can often be useful to think in terms of future and past. History gives us clues about how people have behaved before and may behave again. Therefore it’s often worth travelling backwards into history to explore the history of industries, products or technologies before travelling forwards into the future. As a rule of thumb, for every year you want to look forward, look backward for five.

If hidden assumptions, the extrapolation of recent experience, and the interplay of multiple factors are three traps, cognitive biases are a fourth. The human brain is a marvellous thing, but too often it tricks us into believing that something that’s personal or subjective is objective reality. For example, unless you are aware of confirmation bias it’s difficult to unmake your mind once it’s made up. Back to Peak Oil hysteria and Climate Change scepticism perhaps.

Once you have formed an idea about something – or for that matter someone – your conscious mind will seek out data to confirm your view, while your subconscious mind will block anything that contradicts it. This is why couples argue, why companies steadfastly refuse to evolve their strategy and why countries accidently go to war. Confirmation bias also explains why we persistently think that things we have experienced recently will continue into the future. Similar biases mean that we stick to strategies long after they should have been abandoned (loss aversion) or fail to see things that are hidden in plain sight (inattentional blindness).

In 2013, a study in the US called the Good Judgement Project asked 20,000 people to forecast a series of geopolitical events. One of their key findings was that an understanding of these natural biases produced better predictions. An understanding of probabilities was also shown to be of benefit as was working as part of a team where a broad range of options and opinions were discussed. You have to be aware of another strong bias – Group Think – in this context, but as long as you are aware of the power of consensus you can at least work to offset some of its more negative aspects.

Being aware of how people relate to one another also brings to mind the thought that being a good forecaster doesn’t only mean being good at forecasts. Forecasts are no good unless someone is listening to you and is prepared to take action. Thinking about who is and who is not invested in certain outcomes – especially the status quo – can improve the odds when it comes to being heard. What you say is important, but so too is whom you speak to and how you illustrate your argument, especially within organisations that are more aligned to the world as it is than the world as it could one day become.

Steve Sasson, the Kodak engineer who invented the world’s first digital camera in 1975 showed his invention to Kodak’s management and their reaction was: ‘That’s cute, but don’t tell anyone.” Eventually Kodak commissioned some research, the conclusion of which was that digital photography could be disruptive. However it also said that Kodak would have a decade to prepare for any transition. This was all Kodak needed to hear to ignore it. It wasn’t digital photography per se that killed Kodak, but the emergence of photo-sharing and shared group think that equated photography with printing, but the end result was much the same.

Good forecasters are good at getting other peoples’ attention through the use of narratives or visual representations. Just look at the power of science fiction, especially sci-fi movies, versus that of white papers or power point presentations. If the engineers at Kodak had persisted, or had brought to life changing customer attitudes and behaviours through the use of vivid storytelling – or perhaps photographs or film – things might have developed rather differently.

Find out what you don’t know
Beyond thinking about your own thinking and thinking through whom you speak to and how you illustrate your argument, what else can you do to avoid being caught on the wrong side of history? According to Michael Laynor at Deloitte Research, strategy should begin with an assessment of what you don’t know, not with what you do. This is reminiscent of Donald Rumsfeld’s infamous ‘unknown unknowns’ speech.

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know….”

The language that’s used here is tortured, but it does fit with the viewpoint of several leading futurists including Paul Saffo at the Institute for the Future. Saffo has argued that one of the key goals of forecasting is to map uncertainties. What forecasting is about is uncovering hidden patterns and unexamined assumptions, which may signal significant opportunities or threats in the future.

Hence the primary aim of forecasting is not to precisely predict, but to fully identify a range of possible outcomes, which includes elements and ideas that people haven’t previously known about, taken seriously or fully considered.
The most useful starter question in this context is: ‘What’s next?’ but forecasters must not stop there. They must also ask: ‘So what?’ and consider the full range of ‘What if?’

Consider the improbable
A key point here is to distinguish between what’s probable, and what’s possible. Sherlock Holmes said that: “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” This statement is applicable to forecasting because it is important to understand that improbability does not imply impossibility. Most scenarios about the future consider an expected or probable future and some then move on to include other possible futures. But unless improbable futures are also considered significant opportunities and vulnerabilities will remain.

This is all potentially moving us into the territory of risk management rather than foresight, but both are connected. Foresight can be used to identify commercial opportunities, but it is equally applicable to due diligence or the hedging of risk. Unfortunately this thought is lost on many corporations and governments who shy away from such long-term thinking or assume that new developments will follow a simple straight line. What invariably happens, though, is that change tends to follow an S-Curve and developments have a tendency to change direction when counter-forces inevitably emerge.

Knowing precisely when a trend will bend is almost impossible, but keeping in mind that many will is itself useful knowledge. The Hype Cycle developed by Gartner Research is helpful in this respect because it can separate recent developments or fads (the noise) from deeper or longer-term forces (the signal). The Gartner diagram links to another important point too, which is that because we often fail to see broad context we have a tendency to simplify.

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This means that we ignore market inertia and consequently overestimate the importance of events in the shorter term, whilst simultaneously underestimating their importance over much longer timespans as technologies or other forces develop and counter-forces or contingencies start to emerge. An example of this tendency is the home computer. In the 1980s, many industry observers were forecasting a Personal Computer in every home. They were right, but it took much longer than expected and, more importantly, we are not using our home computers for word processing or to view CDs as predicted. Instead we are carrying mobile computers (phones) everywhere. This is driving universal connectivity, the Internet of Things, smart sensors, big data, predictive analytics, which are in turn changing our homes, our cities, our minds and much else besides.


Drilling down to the real why

What else can you do to see the future early? One trick is to ask what’s really behind recent developments. What are the deep technological, regulatory of behavioural drivers of change? But don’t stop there.

Dig down beyond the shifting sands of popular trends and ephemeral technologies to uncover the hidden bedrock upon which new developments are being built. Then balance this out against the degree of associated uncertainty. Other tips might include travelling to parts of the world that are in some way ahead technologically or socially. If you wish to study the trajectory of ageing or robotics, for instance, Japan is a good place to go. This is because Japan is the fastest ageing country on earth and has been curious about robotics longer than most. Japan is therefore looking at the use of robots to replace people in various roles ranging from kindergartens to aged-care.

You can just read about such things, of course. New Scientist, Scientific American, MIT Technology Review, The Economist Technology Quarterly and Wired magazine are all ways to reduce your travel budget. But seeing things with your own eyes tends to be more effective. Speaking with early adopters (often, but not exclusively younger people) is useful too as is spending time with heavy or highly enthusiastic users of particular products and services.

Academia is a useful laboratory for futures thinking too, as are the writings of some science fiction authors. And, of course, these two worlds can collide. It is perhaps no coincidence that the sci-fi author HG Wells studied science at what was to become Imperial College London or that many of the most successful sci-fi writers, such as Isaac Asimov and Arthur C. Clarke, have scientific backgrounds.

So find out what’s going on within certain academic institutions, especially those focussed on science and technology, and familiarise yourself with the themes the best science-fiction writers are speculating about right now.

Will doing any or all of these things allow you to see the future in any truly useful sense? The answer to this depends upon what it is that you are trying to see. If you aim is granular – to see the future with 100% precision – then you’ll be 100% disappointed. However, if you aim is to highlight possible directions and discuss potential drivers of change there’s a very good chance that you won’t be 100% wrong. Thinking about the distant future is inherently problematic, but if you spend enough time doing so it will almost certainly beat not thinking about the future at all.

Moreover, creating the time to peer at the distant horizon can result in something far more valuable than planning or prediction. Our inclination to relate discussions about the future to the present means that the more time we spend thinking about future outcomes the more we will think about whether what we are doing right now is correct. Perhaps this is the true value of forecasting: It allows us to see the present with greater far clarity and depth.

This essay was first written as a series of blog posts for the Technology Foresight Practice at Imperial College London. Future essays and posts will concern the use and misuse of scenario planning and global trends.

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