Part of my job has been and continues to be about predicting the future. A few weeks back, I shared with you my prediction about what was going to be the hot innovations of 2016. Most have been already validated by the buzz coming for the 2016 Consumer Electronics Show in Las Vegas. Lets be honest, predicting out one year is fairly easy and low risk. What about predicting 5 years out? .. or 10 years out? It's these longer timelines that help you and your team by providing a vision and direction. Is there a way to create better predictions?
So what I have learned over the years of doing longer range predictions? Predicting the future is the easy part. Creating the future is where the real work is at. Allen Kay, a pioneer in object-oriented programming and windowing graphical user interface design during his time at Xerox PARC and HP, is famous for saying:
Allen, who worked with with me at HP, also said:
In my mind, creating and sharing your predictions of the future is having an opinion.
So how do you come up with predictions? By asking questions. Here are the six (6) steps/questions I use.
- Over what time period are you looking across? I tend to focus on 3 to 8 years.
- What are the foundational elements in your industry that are exponential in impact? In the computer industry, that would be Moore's law. Come up with 3 to 5 that are meaningful to your industry.
- What demographic/customer segment/society shifts are happening in your industry? For eCommerce, this could be the role of social media plays in buying decisions.
- Look at each combination of foundational elements and society shifts and come up with ideas for each part of your timeline. You can do this by creating an idea grid (details given in the show)
- Go back and circle the ideas that seem to have the highest potential. You can do this alone or by inviting people to vote. The show gives details on how best to facilitate this.
- Create an innovation timeline that shows these predictions. Use graphics to help support the story behind why this is important.
Rather than just talk about, here is an example you can download of how I used what I've learned to create better predictions of the future.
Here is a video of this show that we did as a test. Let us know what you think.
The other day my daughter Rachel ordered some shoes from Zappos. She’s used them a few times in the past, and the next morning she got an e-mail saying her shoes had been shipped overnight as a reward for being a good customer. Now, one of Zappos’ gimmicks is that shipping is always free, but you can pay more to get your shoes sooner. Persuading customers to pay more for next-day shipping is a core part of many online retailers. It’s the same kind of upsell you get when your waiter convinces you to order the Italian artisanal water, rather than tap. What most people don’t know is that whether you opt for free shipping or expedited overnight delivery, your book or shoes still ship via the same service. It’s just that the goods shipped free get a bonus of going via the slow route.
FedEx and UPS have both taken interesting steps to maximize the speed with which they can ship their customers’ deliveries. FedEx has businesses that are actually located within its SuperHub in Memphis to minimize the turnaround and delivery time.[i] UPS has customers who stock their spare parts at the UPS hubs. For instance, car manufacturers who need to have parts available almost instantly to dealerships and mechanics, but don’t want to distribute them before they are needed, can store them with UPS and have the company pull and ship them as required. In some cases the part can get from one area of the country to another on the same day. These manufacturers see some savings by not stocking and tying up inventory. More important, they can offer a huge improvement of customer service by the quick turnaround of parts. The large express shipping companies have built an amazing business by creating a perception that overnight shipping is “the new normal.” Interestingly this new normal is often in excess of what the customer needs. I can’t be the only person who occasionally fails to open an overnighted package the day it arrives. Look at your own organization. What experience are you trying to give your customer through your distribution? Do their needs and yours align? If not, could they?
- What value does your customer apply speed of delivery? How does this value change depending on the buying season?
- Is there a way to use distribution to create customer loyalty?
- Is there a way to combine distribution costs with partners or suppliers to reduce overall costs?