Two lessons stand out from the many that the recent past has taught to the business community. The future is still largely unpredictable, despite the advances in machine-learning and analytics. The most resilient businesses are those who are ready for uncertainty. These companies anticipate the future and develop strategies to protect themselves from obsolescence. By focusing on ways to reduce the stress and shocks that the future may bring, you can future-proof your company. How?
Do not put all of your eggs in one egg basket
Companies who rely solely on one product to generate most of their revenue or even all of it could put their futures at risk. Think about how smartphones have revolutionized the camera industry, or how the high-speed Internet has led to the demise of video rental shops. Future-ready businesses protect themselves against obsolescence through constant innovation. They diversify their product portfolios, increase their sales channels or update their products in order to remain relevant. If a company's future success is dependent on a small number of employees or suppliers, it faces similar risks. For a company to withstand shocks unexpectedly, the strength of its bench is important.
Risk identification and management
One of the risks to a business's viability is over-reliance on one product or aspect of its operations. Cyberattacks or data breaches that expose your customer's information or cause you to lose business are also threats. If you fail to meet regulatory requirements, it can result in fines or product recalls. Defective products and legal action may be the result of lapses in quality control.
You can't always predict the risks that could threaten your business at any time. But you can identify them and take measures to mitigate them. For example, a company that is at risk of fraud and theft might examine all possible ways in which an intruder could enter their facilities or systems to cause a "must-not-fail" operation to malfunction. Then, backstops can be built for vulnerable points that are susceptible to sabotage.
Trends that affect markets and customers
Companies that are future-proof look for inspiration and insight outside of their bubble. They keep up with new technologies and trends, both locally and globally -- even if they don't directly relate to their products or industries.
In our previous example of the smartphone and high-speed Internet, they did more than just disrupt the industry. The introduction of smartphones and high-speed internet also opened up the possibility for mobile banking, and new methods to make and process payments. The banks seized the opportunity to capitalize on these technologies and developed the innovative products and services which have changed the way consumers and businesses manage their finances. The forward-thinking companies stay on top of the curve because they anticipate customer needs and tailor solutions to meet them.
Listen to your customers
Future-proof companies understand that their customers' preferences and needs change over time. Before it became widely accepted, mobile banking was treated with suspicion by many. It is similar to online shopping and ride-sharing apps. You can learn a lot about how your customers feel and talk about your products by paying attention to what they say. Your customers can also act as an early warning system if your products and services fall short of the competition. Your customers' feedback is one of the most powerful tools you have to ensure your future.
Cultivate an environment that promotes innovation and agility
The strategies and tactics used to help your business achieve its goals today need to be adaptable in the future. The status quo rarely is future-friendly. You need to create a company culture that encourages innovation, rewards risk-taking, and is agile. Successful cultures are always looking for ways to improve their products, strategies and processes.
It takes time to develop a culture. It is often necessary to build teams of people with diverse backgrounds and viewpoints. Leaders need to adopt an innovative mindset and allow roles to diverge, as well as new approaches to projects.
Your workforce can also be future-proofed
In a company that is future-proof, the workforce and the nature of their work are always changing. Data science and digital skills, for example, may be more valuable in the future of your company than they were previously. These skills will need to be spread throughout your company, along with new tools and platforms.
This doesn't mean you have to look outside your existing staff for new positions. Recent Harvard Business Review research found that current employees can fill 60% of future roles in a company, provided they have adequate training. You may still want to reconsider your strategies for hiring, training, and compensation, as well as the skills you think will be most important in a future that is increasingly tech-driven. Companies that are future-proof prefer to hire people who are adaptable, creative, and comfortable with changes.
Although the future is unpredictable, we can manage and identify risks. Companies that are in demand and current do so because they remain flexible, using people, technology and system that allows them to pivot and adapt when necessary. Future-proofing means preparing for the future.