A feature of many of the companies that come to us for advice is their apparent lack of awareness of what is going on in the outside world. Business people ‘focus’, naturally, on their own markets, running their business economically and productively and meeting their KPIs. Knowing your market and your product is a prerequisite to successful management. If you understand the reasons for your KPIs you will be fortunate; if your bosses understand them, you will be very blessed.
The senior people will talk of strategy, not often but when they have done well and there is money to spare. Their deliberations will be about shares buy-back, higher dividends and their own pay. They may install a (second) pension scheme to ensure their retirement home and yacht. They may discuss the world of politics over a brandy as a diversion from what ‘really matters’.
It will be rare for them to relate this ‘other’ world to the future of their own businesses. Certainly they will see the impact of new or changed taxes, laws, rules and guidelines requiring compliance. These will be narrow, immediate problems that the more adept will turn into additional profit. But they will not see beyond the end of their production lines. ‘Too busy’ they will say.
They know the world is moving fast, especially the technologies they deal with. They will find it hard to keep up, let alone innovate, though they will swear innovation is the future. If you ask them what innovation means they will say new products, additional profit sources. They know little of where those are coming from and nothing of how they relate to the big, outside world.
It is time companies and other organisations remedied this. Exhortation to look beyond the current P&L and This Year’s Balance Sheet, will be agreed, then ignored. The CEO, may well have appointed a Chief Strategist, unaware of the fact that it is the CEO’s job. The Chief Strategist will be compiling statistics to prove the correctness of his (and the CEO’s) diagnosis of the business and where it is going. It will all be very internal, rather narcissistic.
They should engage a Chief Outward-Looking Officer (COLO) to relate to the world’s goings-on and identify potential developments. COLO’s primary quality will be an ability to perceive the relationship between the external world and the existing businesses, markets and assets. The job will be about opportunities and threats. The KPI will be ‘innovation’.
The aircraft industry has some COLOs. They perceive that there is a growing gap between the big, long-haul airliner and the small personal plane, a sort of minibus for short hauls with quick take-off and landing processing. The automobile industry has good COLOs looking out for the role of the journey rather than the purpose of the vehicle. One I know has recently hired someone to fill this particular job. Over a recent lunch we worked out the title COLO.
The finance industry, on the other hand, seems to be heading backwards into itself. The customer is seen as of lower IQ than the not-yet-remotely-developed Artificial Intelligence. “Please say it another way, I don’t understand you” is as big an indictment of a service as you can get. COLOs are rather urgently required there.
There is a rude saying that used to define any service offered. It is “What you see is what you get”. We need to turn this around and look outwards for the next stages of life.
“What you perceive is what you are going to get” is a better description of tomorrow’s world. Because it will happen whether you see it or not.
Only, if you don’t, you will fall far behind, for sure.