Transformational Growth – Why companies should look to the future
Thanks to digitization and biotechnology, the pharmaceutical industry is changing from a product business to a platform business. Mineral oil companies refine waste into renewable fuels. Chemical companies are replacing oil-based plastics with circular biopolymers. And, automotive manufacturers are developing into software corporations at breathtaking speed.
Almost every day, we are discovering that old certainties have become outdated and previously successful business models have no future. We will get used to the fact that change will be at an even faster pace in the coming years, in view of the coming major upheavals in terms of demographic shifts, technological revolution, environmental limits and re-globalization. These diverse challenges will lead to a discontinuity in everyday life and business, worldwide. In effect, these developments and their unexpected consequences for society, companies and politics will be transformative.
But why are some companies future-oriented and innovative when the economy and society are completely changing around them? Strategic foresight is the key to better understanding the future. Many innovators have already internalized the fact that the world of the future will be different from that of today, and that innovations for a new world are called for. They have initiated a transformation process and questioned their established growth logic.
This is how they can achieve what we call "Transformational Growth". This is growth through which companies open up new, often surprising markets and prepare themselves for the future in the long term. However, this presupposes that the companies can align value creation, organization and innovation differently and rethink them holistically.
I. On the way to the biological age, we need a new value creation logic
The company that shaped the Corona period like no other has the future in its name: BioNTech. And the success of mRNA technology is just the beginning. In the coming biological age, biology and technology will merge. With biotechnological potential, humans can become creators, for example, able to increase the performance of biological systems. We call this phenomenon "Deep Design".
At the same time, we are developing a new relationship with the natural ecosystems around us. Companies should be prepared for the fact that value creation in the future can also consist of rebuilding resources and not just mining them, because we no longer just want to exploit our ecosystems, we want to restore them. That also opens up new opportunities. For example, when companies embrace the circular economy and thus redirect material flows in a new way.
A central success factor for future value creation is that organizations must understand life at the smallest level of matter as well as the interrelationships of large ecosystems. Foresight provides the vision necessary to understand both the potential and limits of biological transformation and its consequences for one's business and society. It is also important to discuss the responsible use of technologies in corporate strategy and innovation contexts, especially when it comes to meddling in the fundamental principles of life.
II. The new organizational logic must be pre-adaptive
Companies are important components of the social and economic system and are helping to shape the digital and biological age. They should not only be prepared for the cyber-physical and bio-digital levels to merge. They must also be able to face increasingly complex challenges, such as global networking, geopolitical risks, uncertain trading systems, scarce resources and the consequences of climate change. That requires realigning your organization and adapting it to the future.
The aspiration of the "pre-adaptive organization" thus replaces the paradigm of agility. This is because an agile approach, which usually implies reacting quickly, reduces the strategic room for maneuver for organizations if the major upheavals have to be absorbed into organizational thinking at an early stage. The term pre-adaptation comes from biology and describes evolutionary developments that anticipate a transformation of the environment. A pre-adaptive organizational logic thus makes a major change superfluous in the future because companies synchronize with their environment in the long term and with foresight.
This method is called micro-futuring. How does it work? At the end of each meeting, teams evaluate all ideas, projects and processes according to whether they match the company’s vision for the future. Organizations that have developed such visions for the future using foresight can employ this technique.
III. The new innovation logic is based on forward-looking competence development
Changing the value creation and organizational logic in companies will also impact their approach to innovation. Biotechnical transformation is coming into focus and leading to new interfaces in markets. A variety of impulses can be expected, particularly with regard to health and nutrition, the environment and the climate. In order to anticipate this potential at an early stage, it is necessary not only to look at the markets of tomorrow and the day after tomorrow, but also to take a strategic look at the competencies that will be required in the future.
The difficulty for companies is not so much coming up with ideas per se, but to determine which ideas to pursue from a long-term perspective. And every company must find its own answer for the future innovation portfolio – both in terms of methodology and content. A targeted innovation perspective beyond the previous core business helps to increase the company’s resilience. An appropriate innovation logic, based on anticipatory competence management, will focus on questions regarding the control of one’s own supply chain and the direction of the product-service portfolio and the markets.
Better starting position with structured foresight
But how do companies get ready for the future? How do they know whether their key competencies are also viable for future markets? For this purpose, Z_punkt has developed a foresight process that defines in five steps how the transformation can be realized. We understand the transformation as a process and not as a target state at some vaguely defined point in time in the future.
1. Competence Mapping
In the first step, we determine together with the company what they are really good at and define their current competence profile. When describing the future competence portfolio, we combine external and internal perspectives and ask ourselves what they will need in the future in order to pursue their mission in a changing world.
2. Future Analysis
In this phase, we clarify whether companies are ready to move away from their current core business to embrace transformative trends. Together with the client, we analyze the drivers for new growth markets, as well as the uncertainties in the company’s environment.
3. Growth Field Exploration
What new customer and market requirements and innovation needs are emerging in the future? Which relevant growth areas can we derive from this? These are the core questions that companies deal with in this phase of the foresight process. It is important to think in a networked way when it comes to future innovation requirements and to avoid the “We’re not experts here” trap.
4. Opportunity Identification
Have you identified new markets? Then it's all about core ideas and concrete solutions to win the new market. Your own growth options must be clearly defined and examined. In this phase, companies should identify their competence gaps and formulate their adjustment plans.
5. New Strategic Narratives
Before companies can conquer a new market, they have to convince the relevant stakeholders of this need. You have to develop a future story that is as strategic as it is emotive. And you will probably need a new partner ecosystem to help implement the future plan quickly. This phase is also about ensuring transparency in the development and implementation process.
Two principles will guide companies in the future: "Transform the core", which means deepening biological understanding on the basis of digital structures; and "Scale the new", which refers to the ability to industrialize solutions even in the biological age. To do this, companies must plan new value creation and innovation networks and align their organization with the future. With our expertise in strategic foresight, Z_punkt has the necessary tools to successfully guide you on this path.