No matter how healthy a company may seem today, a threat of impending doom shadows its future.
That fatalist conviction suffuses my instincts as a CEO, but that fatalism was borne of something that I've spent much of the last 20 years pursuing with all of my passion and intellectual vigor—technological progress and its application.
From the wheel to the semiconductor chip, technologies have always transformed and defined society. To survive and thrive, businesses must keep pace. That doesn't sound like a tall order until you survey the vast cemetery of businesses cut down by technological advancement.
We have seen airships, analog photography, dial-up internet and many brick-and-mortar book, music and video stores go the way of the Pony Express. Powerful artificial intelligence (AI) and cheap, high-quality micro-sensors will find swaths of new victims—and soon.
I didn't always consider the future to be such a menace. As a teenager in the 1990s, I was a locker-room missionary preaching the gospel of Ray Kurzweil, a computer scientist whose contributions to AI-based technologies include synthesized music, digital imaging, text-to-speech and speech recognition.
I believed what I preached: Near-term advances in AI and nanotechnology would eliminate poverty, lengthen life, increase intelligence and, eventually, entirely redefine what it is to be human. My faith was substantiated.
Kurzweil, by his own measure, has been 86% correct, having predicted driverless cars, wearable tech, computerized image recognition and much more. Only time will tell if his forecasts for a mid-21st-century AI-saturated science fiction reality will be similarly on-target.
His secret sauce was the law of accelerating returns. In short, because of positive feedback at each evolutionary stage, the pace of change in most evolutionary systems tends to increase exponentially. Thus, applied to technology's evolution, the next century will bring change equivalent to the previous 20 millennia. The world in 2117 will be as different from today as today is different from the late Stone Age.
Almost all executives claim to have an eye on the future, but most CEOs refuse to accept how fast the future will come. They're blinded by cognitive bias—the impulse to fall back on familiar narratives about how the world works. In a slowly changing world, cognitive bias wasn't so dangerous. Even if people weren't prepared for it, there was a window to pivot and adapt when change came.
That is no longer the case. The increasing pace of change is shrinking the window for adaptation. Simply being aware and having a clear understanding of the future is not enough. That's because accurately predicting the future and taking steps to survive the future are separate challenges.
How can you as a CEO stave off the scythe of inevitable technological progress? There are three ways.
1. You have to actively shun cognitive bias and try to be impartial and rigorously honest with yourself whenever you encounter a new idea or challenge. Attempt to discover the value in it that you should find rather than the value that you want to find.
Your bias tells you, "You've found these opportunities. You should continue building on those innovations in structured ways." This is the conventional strategy, if you will. However, it's not enough.
While you attend to your "now" business, you also have to embrace the fear of radical technological change to guide your leadership and planning. Constantly search for signs of change. When you see a new technology, business model or strategy (even if it looks raw, impractical, quixotic or bizarre), try to imagine a future where it is as commonplace as an internet connection is today. Then, consider how its ubiquity might impact your business.
2. Always seek to diversify by developing new products and multiplying potential applications for existing products. By building multiple parallel businesses, if technological change undermines one or more of your divisions, you'll still have revenue streams to sustain you and allow your growth to continue. Ideally, identifying the highest uses of your proprietary technology is its own defense against rapid change.
Generally, the diversification I'm talking about seeks to employ your technological competencies to exploit major markets to make money today. Of course, initiating more diverse "now" businesses only offers a limited buffer against change; it won't preserve a company forever if drastic changes come as rapidly as I anticipate they will.
3. Allocate significant resources to planning for the future—three years from now. A three-year window is close enough to be relevant and about as far off as we're able to predict with reasonably high accuracy. If three years doesn't sound particularly farsighted, then you've missed my point: When change is taking place at an exponential rate, technology undergoes radical evolutions more quickly.
For example, in that three-year window, I believe augmented reality and virtual reality interfaces will gain a foothold and begin to supplant present-day technologies. Though the market for them is currently small, (depending on the nature of your business), it may be remiss not to begin applying some resources to the development of AR- and VR-related solutions.
By investing where there's none to be made today (and regularly diverting your team members' attention away from present-day profitable enterprises to innovation programs), you can give your team the chance to be experts poised to lead in the field when a new technology matures. With the shelf lives of technologies contracting, there's a good chance of entirely missing the capitalization window if you're not ready before the next one arrives.
A three-year future is my insurance policy against change. It's not an all-the-marbles nor penny-slots bet, but we stand to lose everything if we don't make that bet. If I'm wrong and radical changes don't come as quickly as I expect, then fine. Like most businesses out there, we're still polishing our brass. If I'm right, we are less likely to become one of the many companies left without a seat on the lifeboat when the ship we're all sailing in hits an iceberg.