Mapping The Future in Uncertain Times
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Alonzo Canada
Defining Both the Island and the ‘X’
What good is a treasure map with no X on it? It’s about as useful as a piece of paper that has an X on it but no drawing of the surrounding island. Good Opportunity Maps include both ‘fields of interest’ (large possible areas for investment and development) and points (specific ideas for offerings and businesses.) This not only provides an overview of the realm of possibilities, it highlights where to concentrate efforts for the greatest return.
For decades now, it has been apparent that clean technology and alternative energy had the potential to become remarkably lucrative fields. BP made its first investments in solar energy in 1973, but the promised ‘big green ship’ still hasn’t come in. The last half century is, instead, littered with the detritus of countless ambitious projects that promised to propel the economy and save the earth at the same time. Forty years later, breakthroughs are still in short supply. How could this be? Perhaps the answer is that past green technology efforts have been too broad and too ambitious. Companies have had maps that show them the islands where a green economy might one day be built, but they don’t have the Xs marking the spots where treasure is buried.
GE has been one of a very small handful of large corporations that has driven measurable growth through its investments in green technologies and alternative energy generation, and it has done so remarkably quickly. In 2005, the company announced Ecomagination, a major initiative to tackle the big challenges of sustainability that have vexed so many others. But GE didn’t merely declare that it was going to the island of green technology. CEO Jeff Immelt very carefully noted the specific targets most appropriate to his organization’s strengths and capabilities. Specifically, he started with efficient lighting (literally the company’s founding business), hybrid locomotives, lower-emission aircraft engines, and highly-efficient wind turbines. Following this targeted approach within the vast landscape of environmental possibility, GE has rapidly realized returns from its Ecomagination investments. By next year, after just five years, it expects those efforts will constitute more than $20 billion in revenue, nearly 15 per cent of the entire company’s contributions. By creating a map containing both the islands and the Xs, GE has turned the perpetual money sink of going green into, well, green.
Defining Your True Competition
Executives often live in fear of being blindsided by their competition. Unfortunately, many traditional strategic frameworks are inadequate to anticipate possible game-changers, in large part because they focus heavily on existing activities. It is doubtful that anyone applying Michael Porter’s Five Forces Model to the passenger rail industry circa 1874 could have guessed that their most threatening substitutes would turn out to be automobiles and flying machines. Opportunity Maps, by contrast, synthesize a wide variety of data on both current and future activity, making them particularly effective at identifying potential moves from incumbents and new entrants. Moreover, a focus on needs and cultural phenomena means that seemingly unrelated competitors aren’t missed. This knowledge can lead a team to discover unique insights about how it might best address such competitive threats through direct competitive moves or strategic partnerships.
Several years ago, the Explore team at Nike was given the mandate to help the larger organization become not just a shoe company, but a sports company. The team met the challenge by creating a map to identify its most promising opportunities, defining a strategy for growth and setting first steps toward a future vision. The team ascertained opportunities beyond shoes, like sunglasses, watches, MP3 players and sports apparel. The data on their Opportunity Map included consumer needs, societal and technology trends, and their usual competitive set of Puma, Adidas and Reebok. To maximize the map’s utility, however, the team also considered indirect competitors like MTV, who had a competing opinion about what kids should do after school: Nike wants you playing sports, and MTV wants you to sit in front of the tube. Because the team also looked at indirect competing points of view, their work led Nike to consider opportunities that it might have otherwise overlooked, such as new partnerships that marry sports and digital entertainment, including the wildly successful Nike+iPod platform.
Charting a Path to a Better Future
Long-term opportunities are seductive. After all, they’re bigger bets, which means that they carry significantly greater potential rewards than ideas with a closer horizon. Of course, this also means that they carry far greater risks, cost more to develop, and don’t show results for a longer period of time than most organizations find acceptable. As such, it’s rarely a good idea to focus exclusively on far-out new ventures, just as it’s a bad idea to pursue only the opportunities that are easiest for your organization to develop given existing strengths and capabilities.
Successful Opportunity Maps don’t just help companies see which opportunity areas they should develop, they allow them to set a clear, phased path from the current state of affairs to a new long-term strategic position. This is one advantage to making a visual map – it literally depicts far-off opportunities as being further away from your current position. Moreover, it shows how success in a few key near-term opportunity areas can set you up to get the most out of more audacious long-term goals.
The San Diego Zoo recently took on several initiatives to explore new opportunities for growth. Working closely with Jump, the Zoo defined more than a dozen new opportunities that would potentially strengthen its business model while increasing its impact as a global conservation and education leader. Some of these were extremely ‘close in’, such as using the Zoo as a showcase for sustainable technologies and leveraging the Zoo’s unique skills to provide consulting and research services in the emerging field of Biomimicry. These were made immediate priorities, and the Zoo began executing upon them virtually from the day the project ended. But promising as they were, these close-in ideas did not, on their own, constitute a strategic vision for Zoo’s future. Instead, they are territory to immediately expand into before stepping toward more ambitious opportunities that would be nearly impossible to develop today.
Rather than leaping to the biggest prizes, Opportunity Maps create a clear sense of priority and a set order for development. With a good map, an organization can get a clear sense of why it is going after certain ideas today, and why it is ignoring dozens of other interesting ideas.
In closing
Any way you slice it, charting a path to a better future is an act of faith. Rob McEwen had a hunch that there was hidden value on Goldcorp’s Red Lake property, and Fractal Graphics and Taylor Wall & Associates remodeled the existing data and redrew the map to discover where to dig. Like McEwen, leaders must navigate uncertainty by following the courage of their convictions about what is best for their company and the customers it serves.
Forging such conviction can be challenging when sifting through the tangle of choices pertaining to a firm’s future prospects, but Opportunity Maps can help leaders navigate this complexity as they chart a path to future growth for their company. Ultimately, hunches must be substantiated and insights discovered so that the organization is clear about why it chooses to do some things and not others – the very essence of strategy.
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