Enno Däneke
Identifying surprises in the market at an early stage is always a major challenge. The only thing that is certain is that there will be surprises. No one knows where and how. They can come from a wide variety of directions and pass in a wide variety of ways.
The problem is: you can’t put much pressure on yourself to come up with new ideas. Suggestions and impressions from outside are therefore indispensable if you want to be prepared for surprises in the future.
Competition as a source of surprises
Probably the most important source of surprises is competitor activity: a new competitor suddenly does things radically differently. That is why wargaming is indispensable to secure your business. What does that mean? They place themselves either in their main real competitors or in imaginary competitors that might enter the market in the future. Then look at the market from that perspective and attack your own business.
Alternatively, you can ask yourself how well-known companies would serve your market? What would BigTech from Silicon Valley or an innovative Chinese company from Shenzen do? How would RyanAir or IKEA change your business? How would the Aldi brothers, Elon Musk, Jack Ma, Steven Jobs or Richard Branson run your company? You look at the market from the perspective of your competitors and ask yourself, “If they can do something, can we?”
In the next step, you address threats that could come from other competitors. If competitors are in a position to attack you, this raises the question of what you can do about it. Could you maybe just do what the attacker is doing yourself? What could you do to be less at risk? What can you do preventively to be prepared and react flexibly? What would be a strategy you have up your sleeve to respond if this attack scenario does occur?
The benefits of wargaming in the application
We have done such wargaming with many companies. The findings are always impressive. It is actually very exciting to see what kind of creativity one’s own employees are capable of in this setting. An impressive example is a large automotive supplier. There, we brought the top 70 executives worldwide together in one room to wargame. People then had to look at what the main competitors in the market could do.
On Saturday evening, the CEO said. We now have two Immediate Actions for Monday. Two business unit heads were directly tasked with addressing these as quickly as possible. Clear vulnerabilities were identified that were so threatening in certain situations that immediate action was needed.
Surprises due to new technologies
The second main factor for surprises is new technologies. How can you spot surprises here? Just think through the further development of technologies in your business area. What if the performance of a technology increases tenfold in the next five years? What would that mean for your business?
It is not at all unrealistic that the performance of technologies can increase so much in this time horizon. This has already been observed many times in the past. By looking at technologies that are still in the experimental stage and thinking them through further, you can arrive at valuable insights. Ask yourself how these technologies might challenge your business or replace your own technologies in the future.
The outcome of these thought experiments is not intended to instill fear, but rather to prepare you to deal with potential surprises. You could, for example. invest in certain new technologies today in order to be involved, or simply gather more information about new technologies today.
Extreme extrapolation for early detection of social and political upheavals
Social and political surprises are often the hardest to spot. Politics and society have a certain inertia. They change either because of an impulse from outside or because continuing to do so becomes impossible. So here we are looking for developments that cannot continue indefinitely in their current form. In a sense, you are making an extreme extrapolation. To discover surprises, all you have to do is keep extrapolating certain developments. They will then eventually reach a point where development cannot possibly continue as it has.
One example is the population development of Nigeria. If this continues to develop as it has in the past, Nigeria will have more people than India or China in a few decades. It is obvious that something will change before that. It is simply impossible that 1.5 billion people will live in Nigeria in the current social and economic structure.
This is exactly the kind of development you can find in other areas. If you look at social developments and find areas where something is moving in a direction that cannot continue permanently, then you have found a point where a surprise will occur. Only the timing and the form in which the surprise occurs remain questionable.
Take surprises into account in the strategy
If, after these steps, you come to the conclusion that a certain development is to be expected explicitly, then this surprise becomes your base assumption. If that’s the case, you need to question your entire business. But only if you expect the surprise to happen.
If it remains merely a possibility for you that could possibly occur, you should not base your entire business on it. In this case, your goal is rather to deal with this risk and position yourself flexibly. You want to be aligned so that you can benefit when that surprise happens.
Follow these links as well:
► The Future Strategy Program for SMEs
► Free video crash course THE FUTURE OF YOUR BUSINESS
► BUSINESS WARGAMING for robust business and future opportunities
► KEYNOTES by Pero Mićić for your employees and customers
Have a bright future!
