Here is an excerpt from an article by Howard Yu and Alyson Meister for the MIT Sloan Management Review. To read the complete article, check out others, and obtain subscription information, please click here.
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The macrotrends reshaping society demand strategic reinvention from businesses, but leaders must not lose sight of their current reality.
Everyone wants to be future-ready, especially in uncertain times. Inflation has hit its highest level since the early 1980s. Many technology stocks have plunged dramatically from the beginning of the year. And the pandemic has pressed into its third year, with recent lockdowns in China deepening the supply chain crisis.
Despite the volatility, the future is still arriving at an accelerating pace. Climate change, quantum computing, Web3, AI and machine learning, and the metaverse are just a few examples of the deep trends that are reshaping the ways companies innovate and compete.
These important trends offer opportunities to dream even bigger — but dreaming big does not mean escaping reality. Companies cannot afford to lose sight of their core customers and the present economic environment. Here are four common mistakes that can derail leaders as they strategize for the future.
[Here’s the first.]
Derailer 1: Hoping to Run Before You Can Walk
It’s easy to think that because others are doing it, you can do it too. Take the metaverse as an example. It’s becoming shorthand for describing the future of the immersive internet, where a new digital economy lives across both virtual (digital) and augmented (digital and physical) reality. Platforms like Roblox, Decentraland, and The Sandbox are all distinct metaverse platforms. Technologies that can transition between the digital and physical worlds are already emerging. For example, non-fungible tokens (NFTs) allow users to transfer digital clothing, artwork, or other purchases from one digital realm to another.
For a consumer product manufacturer, therefore, the prospect of selling virtual experiences is very real. Nike, for one, has doubled down on NFTs. It has acquired RTFKT, which creates, sells, and stores digital goods. On the online gaming platform Roblox, a virtual Gucci bag now fetches more than its real-life equivalent. Dolce & Gabbana has auctioned a $300,000 tiara that can be worn only in the metaverse. But the question executives must ask themselves is this: Are these eye-catching examples of NFT sales scalable or one-offs? How can an organization turn the emerging opportunity into a sustainable shift in business models?
Capitalizing on a new trend always takes preparation. It materializes via incremental evolution. That’s why what’s suitable for Facebook, Nike, or Microsoft might not be suitable for others.
More than 15 years ago, Nike created the Nike+iPod Sport Kit.
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Here is a direct link to the complete article.
Howard Yu is the Lego Professor of Management and Innovation at IMD Business School in Lausanne, Switzerland, and the author of Leap: How to Thrive in a World Where Everything Can Be Copied (PublicAffairs, 2018). He is also the research director of IMD’s Center for Future Readiness. Alyson Meister (@alymeister) is a professor of leadership and organizational behavior at IMD. She specializes in the development of resilient and inclusive leaders, teams, and organizations. She was recently recognized as a Thinkers50 Radar thought leader.
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