This is selection from a recent edition of Future Here Now, a weekly journal that explores how work, businesses and communities are changing, and how we can better capitalize on new opportunities.
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Our future businesses and organizations will face a very different landscape than the one we became accustomed to during the Industrial Era, and one key element of that is what an article below refers to as “the end of globalization.”
That’s a little oversimplified, but indicators point to a future where more and more of your products, people and other inputs come from nearby, not around the globe. At the same time, however, we’ll be drawing information and ideas — and products — more seamlessly than ever from across the globe.
A contradiction? Yup. Which is also a key difference between how we all came up, and how we will work in the future. More on that in a minute.
The overarching reasons for these trends are pretty simple:
It’s All Volatile. In the Guide to Surviving the Fusion Era (get your copy here), I talk about the VUCA world (Volatile, Uncertain, Complex and Ambiguous) We typically thought of the world of our Industrial Era upbringing as pretty predictable, and we designed our businesses and our communities to reflect that assumption. Think long complex supply chains, predictable annual sales cycles, advertising buy patterns that repeat from year to year, consumer growth that you can chart on a straight line.
Some of those examples probably seem antique to you even now.
Whether it’s a costly climate disaster across the world or a new social media platform no one had heard of six months ago, assuming predictability looks more and more like a losing proposition. And that’s so much part of the bedrock of our assumptions about the world that, even when we recognize the risks, we often keep doing the same things. Sometimes because we can’t imagine anything else.
Ecosystem dependence. One of the Industrial Era responses to the way we assumed the world would be predictable is that we offloaded from our businesses anything that we didn’t have to keep under our roof. Businesses large and small outsourced their payrolls, their accounting, their printing, their IT. Many Fortune 100 businesses got out of the business of running their own plants, and even sloughed off owning their office real estate. A far cry from the Rockefeller approach.
But this also mean that each individual business is not an island unto itself, but is interdependent on a dense network of suppliers, service providers, landlords, outsourced subsidiaries, and more. That gives a business flexibility — easier to cancel a contract with a provider than to fire an in-house department — but it also means that a single business gets directly impacted by factors they cannot control.
Supplier had a fire and now it turns out their insurance was inadequate? Your outside payroll screwed up and now your employees are furious? You might take comfort in saying it’s not your fault, but you have to live with the consequences of someone else’s poor decisions. Again, we know this and we recognize this, but we keep acting as though we have no other choice. Which costs us dearly.
Primacy of people, and the Yes-And. These two points together account for the interesting contradiction in the first paragraph. Whether you’re making tortillas or heading off cybersecurity threats, you’re dependent on people — maybe not as many people and their sets of hands as you would have in 1970, but you’re depending on their ability to people — to problem-solve, to collaborate, to head off problems.
And people are increasingly demanding flexibility — the ability to have options. Office workers are demanding hybrid employment — in the office or at home, depending on what’s going on in the rest of their lives. Railroad workers almost go on strike — not over pay, but over their need to get a modicum of schedule flexibility so they can see a doctor.
So the need for employees who can operate in a post-Industrial Era manner means that smart employers have to give as much flexibility as possible. More and more are moving in that direction, but often kicking and screaming. Which does not build the confidence of those highly valuable employees.
So what does this all mean for businesses? It means that:
- Managing the risk of any given situation — offshoring, friend-shoring, town-20-miles-away-across-the-state-line-shoring, subcontracting, suppliers — requires that we assume that we will need a Plan B (and probably C and D as well). Instead of assuming that a relationship will hold, that the political environment will hold mostly steady, that a location historically unaffected by natural disasters will stay that way…has pretty high odds of a losing bet. Instead of making detailed long-term plans, many businesses (and communities) may benefit more from preparing detailed scenarios, including key factors to look for that may signal change and the changes to put into place if (when) one of those happens. This is a very different approach to planning than most of us were taught in any field, and it demands a challenging mental and operational change in approach.
- We need to clearly understand the ecosystem in which we’re embedded. That doesn’t mean just listing competitors and complementors, it means knowing who can have an impact on our businesses and what that impact might look like. That might be as simple as knowing what the fire alarm on the building next door sounds like, or as complex as developing a shared maintenance agreement so that more than one building can use a parking lot. Business owners of all sizes get fed a lot of nonsense about being fully self-sufficient and cowboy-like independent, but that isn’t how an ecosystem works.
- During the Industrial Era, people were only important economically so much as they did the things that the mechanical technology at a given time was not able to do. My father spent a few months on a 1980s assembly line, and he spent each day carrying fender parts from one bin to another. As we transition away from a traditional manufacturing industry, businesses of all types need something very different out of their people. They need their brains. And that’s increasingly so every year: non-creative thinking tasks become automated (or AI-mated?), but we need people to solve the problems, deal with complex situations and create new products and services.
The problem is that most of the way we operate our businesses still look like we’re expecting them to carry fender parts without complaint. And then we wonder why we can’t keep employees. We who are accustomed to our own standard operating procedures might not see that mismatch, but people who go to work for us do. And they’re increasingly less willing to put up with it. And that’s not a short-term side effect of COVID-19; it’s a trend that has more to do with generations than with a couple of irregular years.