Martin Sheen as Josiah 'Jed' Bartlet. Picture: @Pres_Bartlet

Even by the standards of modern political media prattle, this was odd: the Guardian yesterday invited and ran a “response” to Barak Obama’s State of the Union address, from Jed Bartlet the fictional president in The West Wing.

One should immediately add that the response was not that of Martin Sheen (the actor who played Bartlet) or anyone from the show. It was that of an unnamed tweeter who can be found here.

The reader vox-pop box was quick to cry foul, asking what next: a piece on space exploration by Captain Jean-Luc Picard, or 007’s analysis of the War on Terror?

Fair enough. But if there is a serious point to be made, and I think there is, it is that fictional leaders do have a role in real world business and policy leadership.

Fiction and storytelling is important and enduring in all human societies because it is an excellent vehicle for considering complex human situations, reflecting on competing motivations and interpretations, assessing choices made with incomplete information, and following these through to their win-or-lose conclusion. Fiction allows multifaceted situations to be captured without losing the complexity.

Parallels

Incidentally, this is why scenario method, which tells stories of alternative future situations, is such an effective planning device. But the point here is that fiction captures complex human situations and senior executives would be the first to recognize parallels between the challenges that imaginary leaders are put through and what they do in a real working day.

If fiction captures and communicates tricky situations well, it therein becomes a learning vehicle. Whether reading a difficult modern novel or watching a soapy TV show, we put ourselves in others’ shoes, vicariously experiencing their conundrums and learning from the outcomes of their decisions.

Would-be successful leaders could do worse than take note of the leadership attributes of winners such as Sherlock Holmes or Superman or Andy Dufresne; or unpick the illusions and ultimate failures of dark lords such as Voldemort or Mr Kurtz.

Furthermore, a good way to learn is to judge real performance against an ideal template. (Judging me against my clarinet teacher, for example.) Whether your politics aligns with the positions and preferences of The West Wing White House or not, there is no denying that Bartlet is set up as a model president in a model administration. He is thoughtful, caring, effective; manifests an ideal balance of intellect, EQ, and decisiveness; is respected and loved by his staff who will go to the ends of the earth for him. He is a template leader.

So it’s hardly off-the-wall to wonder what Bartlet would have made of Obama 2012. That said, it would have been far more interesting to know what West Wing screenwriter Aaron Sorkin or even Sheen, rather than abitrary unnamed tweeter, thought of the State of the Union address.

For the record:

The Lion: President Obama. Mangy, patchy, apparently underfed. Definitely caged. But he has a heart. Whether it is the lion heart of the ruler of Narnia … time will tell.

The Witch: Here we have to go with Shakespeare; in fact there are three witches: Romney, Gingrich, Santorum. On Tuesday Obama called for a fairer country. Notice they responded: fair is foul, and foul is fair.

The Warmonger: he that exited the presidency in 2008, having wasted 4,000 lives and $800,000,000,000 on a war as poorly judged as that of Douglas Haig at Somme, 1916.

Bears are in a surprise squeeze. Not so long ago it was rebound-optimist Jon Corzine of MF Global publicly taking the hit that many others were privately taking too.

It’s certainly not news that markets don’t behave as expected, nor that emotion drives decisions, but Joan Foltz, author of  Market Whipped: And Not By Choice (Alsek, 2012) suggests something further: that we are going through a basic shift in how markets work and therefore how to succeed in them.

She says the financial markets have become a MMORPG, that is, a “massive multiplayer online role-playing game.” In gamer world, a MMORPG is a vast virtual world where an effectively unlimited number of players assume characters and interact with each other in a persistent and ever-evolving “reality.”

The same computation and virtualization platform technologies that have produced game worlds also underpin financial markets, and are therefore unsurprisingly producing similar effects.

Buy a stock and you have entered a virtual arena of realms and battles, with characters taking roles in stories that play out over a known (to insiders) time period. There are masters and magicians and druids and emporers, and who knows what else, all gaming for your money. Play the game right, and you win theirs.

Says Foltz: “Keep the market in mind as you go through this list of features:

• a massive base of online players who create a dynamic environment that requires extremely complex strategies and sharp analytical skills.
• an extensive systems architecture with multiple regions and restricted levels of access, all of which are usually controlled by a Game Master.
• an online location that blurs the real and virtual worlds, where human and computerized players interact with real money that transfers into virtual currencies.
• automated programs (bots) that create situations to trig­ger reactions from other players.
• players who are classified by attributes, powers, and capabilities, which limit their territories.
• players who can take on multiple characters, each with a unique mission.
• social interaction that immerses players in role-playing opportunities.”

Who are the characters in the game? High-frequency traders, hedge funds, corporations, pension funds, celebrity investors, the media, the government, to name just the obvious ones.

Into this world walk investors who think the markets are what they used to be, and work how they used to work – that they are understandable through due-diligence in research, and winnable by well-considered valuations or by technical analysis. No surprise that they find themselves surprised. In gamer world, nothing is as it appears and nothing works out as expected.

Game on

Foltz’s argument is that traders of all stripes improve their results by acknowledging market MMORPG and thinking like a gamer. That is, seeking to understand where the battle is at any time; recognizing who battles whom, under what conditions, and for how long; knowing who the strongmen are in their realm and what story is playing out.

Investors should know their own token in the game, its attributes and ammunition, as well as its limitations. This will improve judgment of where to be, when to come and go (market timing), and encourage quick exits from realms that are best left to more powerful, and perhaps, darker forces.

The book itself has a chaotic, breathless, aspect, and is marred by a tendency to conspiracy theory. But it does provide a productive analogy that sheds light on unchartered territory. In other words, it does what “futurists” should do when they do their job right: identify and illuminate a change in the world, and describe why assumptions and practices that worked in the past may fail going forward.

Stan Litow, Director, IBM Corporate Service Corps

Warren Buffett surprised pundits when he revealed last month that Berkshire Hathaway had acquired a $10bn, 5.5% stake in IBM. “They have laid out a road map and I should have paid more attention to it five years ago… They’ve done an incredible job,” Buffett said during an appearance on CNBC’s Squawk Box.

Many of the dimensions of this incredible job – transition to service orientation and renewal of company culture, initiated by Lou Gerstner and advanced by just-retired CEO Sam Palmisano – have been well chewed over.

But one subtle and no less important part of Palmisano’s legacy has yet to play out. This is the renewal in leadership development itself at IBM, specifically via the IBM Corporate Service Corps (CSC).

Once upon a not very long time ago, IBM, like other classic Western multinationals, structured executives into the field for ex-pat experience in the form of long-term postings: a 1-3 year tour of duty in some far-flung office before recall to the mother ship.

The CSC format, since 2008, forms teams of 6-10 young executives from IBM offices around the world and sends them to emerging market locations where they work intensively for a single month on a high-profile local assignment.

“It’s not a business trip” says CSC Director Stan Litow. “They rent a house, live together, focus 24/7 on the problem. They make an impact. They learn to deliver value on the ground as a team in a global situation.”

CSC programs have run in more than 25 emerging market countries, from BRICS goliaths to African minnows such as Kenya and Tanzania. In Kenya, for example, CSC provided advice on implementing a “Digital Village”; modernized the postal service; and establish a framework for e-government and electronic voting.  In Tanzania, CSC helped develop an eco-tourism industry, and has put cutting edge technology into local universities.

About 200-500 IBM employees and executives are in the program at any one time. Teams are composed to represent all major skills in the company: information technology, marketing, consulting, finance. They spend about 2½ months in prep time, and the same afterwards in various forms of debriefing and handover to a new team.

Having this many people on a 6-month ‘sabbatical’ while delivering free consulting expertise and project implementation worth an average $250-400,000 per project, means IBM is footing a big upfront bill. But, aside from the venerable calling of doing good things with technology in the developing world, Litow maintains the costs are handsomely offset by benefits to IBM.

Cost-Benefit

First, the company builds relationships and goodwill on the ground, and so gains a foothold in growth markets, which becomes a platform for follow-on work. Around 30% of IBM revenue is international, a percentage expected to grow rapidly.

Second, program staffers – future IBM leaders – get skills enhanced and perspectives built, in globally sourced teams, via practical immersion, which all closely duplicates the demands of expected future paid assignments. Since inception, 1,400 executives and staff have been through the program; a reservoir of talent that has “been there.”

Third, the program attracts and rewards aspiring talent. IBM gets 8-10,000 internal applications for the few hundred spots on offer, evidence that CSC is popular and relevant in-company. According to Litow, CSC opportunities help retain executive staff and attract new talent to the company.

The positive cost-benefit of the program for IBM is perhaps most proved in requests from a half-dozen other companies – including FedEx, Deere, Dow Corning, Novartis, PepsiCo, and Best Buy – for help in putting together similar programs, or to piggy back on IBM’s program.

In mid-2011, IBM announced a partnership with USAID’s Center of Excellence for International Corporate Volunteerism to provide resources for companies that are interested in pursuing strategies based on IBM’s model.

Herman Kahn

Interesting times we live in, when most of the world’s business media has a front-page tab on their Web sites that says something like “Euro Crisis – Live – Follow Here” as if there was a hostage drama or bank heist on the go.

Perhaps it is a bank heist of sorts, in the frantic run up this week and next to the Brussels summit in on 8-9 December, where the 27 Eurozone leaders are expected to make some binding, if not bold, decisions.

There has been short-term market relief following the US and China’s undertakings to make dollars more easily available into the European banking system. But everyone knows that liquidity, while a problem in itself, is a symptom of the larger problem of sovereign debt. And sovereign debt is only a problem when lenders don’t see future growth such that loan capital looks safe at less than, say, 7%.

In the world of foresight we talk about the need to “think the unthinkable,” a phrase coined about Herman Kahn in the 1960s when he was making scenarios about the road to US-Soviet thermonuclear war. So I was curious to see this exact phrase pop up in various media analyses where implications of Euro-demise, such as redenomination risk, cross-border contract liability, and so on are getting a thinking through, at least in the media, for example here in the WSJ.

Adaptive Measures

This is scenario planning “lite”: thinking down the path to, and implications of, a plausible operating environment — even if it is highly unlikely — and determining best responses, necessary hedges, and other adaptive measures. (Non-lite would be to do the background work, not just the journalistic summary.)

As the unthinkable forces itself to be thought, even the Corporate Executive Board was motivated to put the injunction to their executive partners as follows: ”As the threat of a potential euro zone breakup looms, we strongly advise companies to enhance their scenario planning disciplines. Leading companies in our network begin by documenting project assumptions and building scenarios off of those variables to test profitability under a range of outcomes before committing capital.”

But to this they add the intelligent real-world rider, often missed by scenario-ists: ”Don’t make the mistake of assuming that entire projects, P&L’s, or budgets need to be reconfigured under volatile outcomes. Instead, build your contingency plans around critical, controllable line items.”

A fun and instructive example is the ongoing developments in Exhibition Road, a kind of ‘museum mile’ in London, where the distinction between road and sidewalk is being abolished to make way for a car, bike, and pedestrian free-for-all.

Have the city’s planning wonks finally, truly, verifiably gone mad?

Since the automobile first reared its fearsome fender, road-management wisdom has always been that pedestrians are safest when kept separate from 5,000lb of moving metal.

Evangelists for livable urban areas usually clamor for pedestrian-only streets; or failing that, bigger, better-marked walking, running, and cycle lanes from which drivers are banned.

But pedestrian-car segregation has its own systemic effect. It means drivers are less likely to expect people in front of them, and so less likely to be vigilant and more likely to speed.

Exhibition Road planners say making the street a mixed area makes drivers anticipate something crossing their paths at all times.

Monderman

The mixed-use-street idea is not new: it was pioneered by town planner and traffic engineer Hans Monderman in the Netherlands in the 1980s and 1990s. According to a Guardian obituary, Monderman “succeeded in challenging many long-established assumptions about safety and the relationship between pedestrians and traffic…

“Monderman pioneered an approach that respected the driver’s common sense and intelligence instead of reliance on signs, road markings, traffic signals and physical barriers. He recognised that increasing control and regulation by the state reduced individual and collective responsibility.”

The jury is out on how effective mixed-use streets are; or exactly where they are most effective.

But the leadership lesson is clear: all decisions and resulting directives rest on foundational assumptions. The more robust these underlying assumptions, the better the decisions.

In this case, the assumption that greater safety is achieved by separation of vehicle and pedestrian is being challenged, and may turn out not to hold up at all for specific city areas.

Where assumptions are weak — or become weak over time due to changes in technology or values or market needs — poor decisions follow.

Leaders who don’t identify and regularly revisit the assumptions that underly their past decisions abdicate the ability to manage reversals and transitions when required. And will be surprised and blindsided when others initiate them.

Jeff Bezos

When I was at INSEAD for my MBA, I noticed it was fashionable for young men on the move in their careers to wear genuinely expensive watches. We’re talking $5,000 a pop and more (and no doubt they would upgrade in time.)

Me, I’d rather invest in my wine cellar: each to his own. The point is, it’s nothing new for rich men to spend handsomely on their timepiece. And nothing new for even richer men to lavish a fortune on signature and-or vanity projects.

So it’s all to type that Amazon founder and CEO billionare,Jeff Bezos, is spending $42m on his timepiece. The clock the size of a building, which will still take a number of years to complete, is being constructed deep in the Sierra Diablo Mountain Range, Texas. It is designed to run for 10,000 years.

On the clock’s web site Bezos says: “It’s a special clock, designed to be a symbol, an icon for long-term thinking… As I see it, humans are now technologically advanced enough that we can create not only extraordinary wonders but also civilization-scale problems. We’re likely to need more long-term thinking.”

This is partly the standard, “world-going-to-hell-in-a-handcart unless we wake up and change our lifestyle” plea for a long-term, sustainable, perspective.

But, in fact, the general thrust of communications around the 10K Clock is refreshingly low on planetary doom. Long Now Foundation founder member Steward Brand says of the clock: “Ideally it would do for thinking about time what the photographs of Earth from space have done for thinking about the environment.”

Builders in clock tunnel. Image: http://www.10000yearclock.net/

So the clock is in fact about exactly what it says on the tin: just a symbol of long-term thinking, a monument to the value of a long-term perspective.

And while 10,000 years is no business horizon, it’s possible to interpret the clock as symbol not just socially, but also in terms of dollars and cents. In a short-term world, where most businesses are rated by the quarterly numbers, it is a living monument to making scaled-up and lasting investments, and not pulling the plug too soon.

Who better than Bezos to put up this monument? In his first report to Amazon.com shareholders in 1997 he said: “because of our emphasis on the long term, we may make decisions and weigh trade-offs differently than some companies.”

The company was founded in 1994, listed in 1997, and but didn’t post profit until 2001. But by the time it did, it was far bigger and more influential than imagined. It was on the road to becoming what it is today: the world’s biggest online retailer, period. Reflecting a final coming of age after 15 years, the share price (AMZN) has doubled and doubled again in the last two years.

Arguably Bezos’ true leadership genius at Amazon in the early days was not just seeing the long-term and scalable possibility (beyond book retailing) but also being able tactically to hold the short-termers at bay for long enough to do the building required.

As a business culture, we’re locked into annual reports and rapid product life cycles. We’re quick to say “fail-fast” and pull the plug on a fledgling project that’s in the red. Or we make a return, so good, let’s cash it in and do something else.

But Bezos was able to see and to say that a critical component of business leadership success is looking beyond your own or your competitors’ time horizons and scale horizons.

The leadership message in the clock is “Don’t think small. Forget short-term wins. Look beyond your time horizon. Give weight to the long-term possibilities. Build for tomorrow and allow the full potential of a project to evolve.”

Mansueto Library: robots and underground storage vaults

The University of Chicago’s new Joe and Rika Mansueto Library is, it seems, a caricature of futurism. Under a vast glass dome sits an 8,000 sq-ft reading room, complete with flat screens, a circulation desk, ergonomic furniture, and … no books.

Turns out the books, all 3.5 million of them, are packed efficiently – by size – into 2 x 4 x 1.5 ft metal bins stored in vaults below ground. If you need one, you go tap-tap at your keyboard, which sends enormous rolling robots to fetch the right bin and crank it up to the circulation desk, allegedly in less than 5 minutes.

A number of things are interesting here, the first being that this “library-of-the-future” is about paper books at all. In a Google-digitize-the-planet world where Amazon says that more than half of its books sales are for the Kindle, the University of Chicago’s $81m bet on “dead-tree” storage and retrieval is quite a bet.

It is a good bet. Hype aside, it will be still many generations before “paperless” is any kind of on-the-ground reality, as paperless office evangelists have found out. Imbedded human habits and systems just don’t move that fast.

But systems do. Ingrained human preference for tactile objects doesn’t mean that storing, finding, and retrieving of the objects can’t be improved overnight, which is the essence of what is going on here. The automated search-and-retrieval system creates efficiencies as all automation does – by dumping human beings out of the process. Specifically, it copies advanced manufacturing systems such as those used in automobile assembly plants, which effects just-in-time finding and retrieving of components this way.

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The first industry foresight principle at work here is this: where the same problem applies, a solution that creates value in one industry will turn up to create value in another, even if apparently unrelated. Innovation doesn’t respect sector or management thought silos. Ergo, leaders who are able to comprehend challenges at a systemic level and look across industry boundaries for solutions that already exist elsewhere, find the future before competitors do.

Second, although the book definitely survives in the University of Chicago’s forward view of the library, note that the solution is not simply head-in-the-sand “nothing changes.” What changes, they are arguing, is the system aroundthe book, the storage, finding, and shlepping thereof. Moreover, the new system is a radical departure. It turns the status quo upside down, to make the physical book a relatively minor element of the online system, not the other way around.

Finally, the solution on offer is one more piece of evidence that inexorable advances in single-purpose (non-human-like) robotics and sensors are quietly yet absolutely changing the world around us. If we drop the Frankenstein image, and see robots for what they really are in our time, that is, sensors + wheels + software, many imminent changes in industry and society come quickly into focus.

The World Bank on May 18 released a report “Multipolarity: The New Global Economy” with outlook for the geo-financial system to 2025.

“Multipolarity” catches the World Bank up with what has been clear for a long time: an actually, genuinely different global economic order is unfolding as growth moves to emerging economies, with countries such as China, India, South Korea, Russia, and Brazil accounting for the majority of economic growth in the next decade and beyond. And, on the back of this, the dollar will lose its pre-eminence as global reserve currency.

The report is nevertheless important at a meta-level. When the World Bank puts out a perspective, that means the perspective becomes more-or-less institutionalized wisdom. Global financial revolution, effectively, is no longer a theory out there. It is the “official future,” and financial and political institutions are more likely to act in line with it. Therein a reinforcing feedback loop.

Renminbi

A couple of things stand out. Report author Mansoor Dailami says the euro and renminbi will establish themselves on an equal footing to the dollar. This seems plausible, but one is left wondering – given the pace of innovation in finance, and in computing, and in communications and networking, and the 14 years to 2025 – will we still be looking at a system where national or regional currencies are  “dominant?” Could the world financial system not evolve differently, for example away from a global reserve requirement altogether, or towards more multi-currency baskets? (The report does entertain the adoption of the IMF’s Special Drawing Rights system.)

The foresight principle: In looking at the future it’s tempting to see new agents dominating current structures, but often the structures themselves change.

The other point that pops out is an expectation that cross-border M&A deals originating in emerging markets will be an increasing feature of the new corporate landscape.

This is as solid a prediction as one will find. But it surely will not be one way. While cash-flush emerging-market companies will look to diversify into European and American companies, or take them over entirely – particularly ones that have Asian brand recognition and prestige (remember the Japanese corporate shopping trips of 1980s) – developed-world companies will be returning the favor, buying their way into emerging market companies to get a piece of their growth.

And we’re not talking passive investment here. The action will be immersive developed-meets-emerging market M&A (and surely also corporate raiding, hostile takeovers, etc.)

M&A is “speed” for corporate leaders. A big high, often followed by acrash. But if history is any guide, the lure of buying someone else’s growth, not to mention instantly enhancing a company’s industry size-power footprint, is more intoxicating than the sirens of Odysseus, so one can confidently predict it going forward.

Which is to say the spreadsheet-anticipated wins in economies of scale, scope, market synergies, or vertical integration of M&A will be up against the problems of marrying company cultures, systems, products, brand values and business models — a vexing problem that routinely defeats even the best business leaders.

But add to this, here, very significant cross-cultural management and staff issues, problems of distance, and regulatory systems that are often purposed to different ends, and you have a leadership challenge indeed for firms that venture down this path. But venture they must, because companies in low-growth markets can only buy back their shares for so long (aka “we’ve got no ideas about what to do with investor money, so we’re giving it back to you”) — witness GE’s $12bn share buy-back announcement this week.

Kate Middleton's new coat of arms

Tomorrow’s wedding of Prince William and Catherine Middleton dominates the airwaves around the world, and even Harvard Business School professor Rosabeth Moss Kantor has an HBR blog post offering business insights thereto, including that it is an example of the coming of the “experience economy,” where people pay for the chance to participate at particular times, and expenditures on goods and services come in bundles tied to particular events. She councils how the “soft stuff” and “joy factor” can offer big audiences and revenues; romance and ritual matter…“sentiment sells.”

Fair enough. To this, permit me to add a thought or two about how the fact of the royal wedding can improve out judgment of future business environments and opportunities.

First, in the race to the future, leaders should never underestimate the power of traditionalism and continuity –particularly in changing times. Business leaders may be tempted to view the latest gizmo or the new lifestyle choice as the future. But this would be thinking poorly about tomorrow. Yes, new things get adopted all the time, and real and rapid change happens, but at the same time the broad market also has a vast, seemingly unquenchable, appetite for tradition.

The point is, the two are closely correlated. The faster society and technology moves the more people cling to apparent past certainties and traditions.

If you’d looked at the future of the British monarchy anytime through the turbulent, democratizing 20th century you might have be tempted to say it must soon be phased out, given the estimated $65m-a-year cost to the taxpayer (not including the spiraling cost of security.) You would think that the public would tire of upper-class toffs prancing around from polo matches to garden parties, wearing Chloe and drinking Krug at their expense.

Popular

But, in fact, no. The British monarchy is as popular as ever. There is some truth in the view that royalty is good for UK tourism. But mostly the monarchy survives because the public wants vestiges of the past as it peers at the changing future and the steady erosion of tradition and other fixed points from middle class lives.

A handsome military prince, a girl in white, a horse-drawn carriage, a bishop, a cathedral … is a psychological balm for most of us, even if we are, or more exactly because we are, viewing it all streamed on an iPad.

In industry foresight, we call this a “counter-trend.”

Another counter trend at work here is marriage itself. The figures are clear that people are marrying later, if at all, and staying married for a shorter time. William and Kate represent a minority: the number of weddings that are a first-time marriage for both parties is down to 150,000 a year, 35% what it was in 1940. That’s the trend. So the royal couple and their public ritual affirms publicly what most ordinary people are denying or denied privately.

The point not to be missed is the middle-class compromises most people are making drives counter-trend nostalgia for what once was, and marketing campaigns or business units, if not entire companies, can be built thereon – not only on traditionalist revivalism specifically, but on any strong counter-trend.

American Dream

Finally, the wedding of Prince William to “commoner” Catherine Middleton shows us how, despite all its apparent protestations, the UK is yet still Americanizing faster than one might think, and not just in splurging on cheap Chinese imports or putting university education on a pay-to-play basis.

Kate is very much an “American” princess, in the sense of being from a self-made family. Her mother was a flight attendant, her father too, before becoming a flight dispatcher for BA. (Rumor, hotly denied, is that Prince William’s friends used to snigger “doors-to-manual” among themselves on Kate’s arrival, in reference to her parents’ profession.)

But then “the American dream” could and did happen: The Middletons hit it rich with an online party supplies company (Party Pieces), were able to send Catherine to the right schools, and the rest is history.

The new axis in world diplomacy and global leadership flexes its muscles next week on Hainan Island – the southernmost tip of China – with the BRICS summit on April 14 in Sanya, and the Boao Forum the following day.

BRICS (Brazil, Russia, India, China, and South Africa) is already something of a “G5” of non-Western nations. Next week its leaders (China’s Hu Jintao, Brazil’s Dilma Rousseff, Russia’s Dmitry Medvedev, India’s Manmohan Singh, and South Africa’s Jacob Zuma) will set themselves to discuss their joint concerns in international affairs, economics, development, trade, security, etc.

More than anything, the event signals growing intention to coordinate views and act in closer alignment, and press towards future empowerment and responsibility of non-Western world leaders. Political clout has always gone with economic clout, and in this respect the future can be depended on to “rhyme” with the past.

BRICS countries already account for 40% of global population and 20% of global GDP – and they are the nations expected to grow most rapidly in GDP terms in the next decade and beyond, and to provide primary succor to neighbors in their regions.

Hainan 2011 is the third summit of the BRIC countries. The acronym BRIC was coined by Goldman Sachs (NYSE: GS) in 2001 in a chicken-and-egg prophesy: causing Russia, China, Brazil and India to see their interests as potentially aligned, and politically worth aligning. South Africa was accepted into the group in February.

Without stopping for breath, the diplomatic caravan moves 125 miles overnight up the coast of Hainan Island to Boao, where President Hu will give the keynote address the next day at the annual Boao Forum for Asia (BFA).

Boao is an undisguised knock-off of the World Economic Forum in Davos (with skiing replaced by snorkeling perhaps): a high-level gathering for policy and business influencers, with a similar nudge-and-influence mandate, here with an Asian focus. In attendence, in addition the the BRICS representatives, will be by Korea’s Kim Hwang-Sik, Spain’s Jose Luis Rodriguez Zapatero, Ukrainian’s Mikola Azarov, and New Zealand’s Bill English.

Fukushima plant, Japan. Picture: digitalglobe.com

At the time of writing, Japan is battling a nuclear meltdown and radiation emergency, and Fukushima could become a word suddenly the whole world knows, like Chernobyl.

Bloomberg News has called the whole tsunami crisis Naoto Kan’s “Katrina moment,” and one can only hope and pray for all concerned that the Japanese prime minister is a more competent leader than Bush was at this moment of human catastrophe.

As to the nuclear meltdown: If ever we have been warned about anything in the future, we have been warned about nuclear plant catastrophes. Not only have there been, as it were, verbal warnings going all the way back to the 1950s, but real-world events such as Three-Mile-Island and Chernobyl have fully fleshed out the scenario of nuclear reactor failure or near failure in populated areas.

If nuclear-generated electricity makes sense anywhere, it makes sense in Japan, which famously has no coal or gas reserves. But these are nuclear plants … built right on the Pacific Ring of Fire? Japan is a small island with 125 million people densely packed into urban areas. As we face the possibility of this many people put at risk, however the next few days play out it’s clear the risk and reward of nuclear energy here is out of alignment.

This is hardly news. The question is, why are the plants are there? And the answer is not a simple one of collusion or corruption of government, or shenanigans of power companies, although there may be some of that. It comes down to a misapprehension of probability and risk among leaders and decision-makers such that it appears that risk and reward are in balance, when in fact they are not.

Year 869AD

To think about this, consider yesterday’s BBC Story: Japan tsunami ‘could be 1,000-year event,” saying last week’s tidal wave was equivalent to a giant wave that hit the Sendai coast in 869AD. The report says: ”It is not unusual for undersea earthquakes to generate tsunamis in this part of Japan. Offshore quakes in the 19th and 20th centuries also caused large walls of water to hit this area of coastline. But previous research by a Japanese team shows that (only) in the 869 ‘Jogan’ disaster, tsunami waters moved some 4km inland, causing widespread flooding.”

The point is, tsunamis are common, but “the big one” is a one-in-thousand year event — an extremely low probability outcome.

Here I’m strongly reminded of the days following the depth of the Credit Crunch, Bear Stearns’ collapse, and general world financial system meltdown of 2008. If bankers said one thing sensible through the whole period it was: “this was a one-in-ten-(hundred, etc.)-thousand probability outcome, and extreme ‘outlier’ event!”

A low-probability event means we can relax, right? Wrong. The problem is probability says zilch about impact. “Wild Cards,” or now more famously in Nassim Taleb’s terms, “Black Swan” events are low probability but of game-changing impact.

Taleb’s point, made repeatedly across his various books and articles, is that standard probability theory and Gaussian statistics lull analysts into thinking that because an event is low probability – an outlier in a normal bell-curve distribution – it is of low or lower consequence.

Ignoring the tail of the Bell Curve is okay if events are genuinely assessed as low impact. If they are high-impact aka “fat-tailed” events, they are the most important events we face in the future, in building or maintaining any system or organization.

A probabilistic framework misleads decision-makers because it degrades their attention to crucial events (by tagging them low-probability,) which means next thing they are betting banks on mortgage-backed securities, or building nuclear plants on earthquake fault lines.

As the 24-hour news caravan moves on from Cairo to Libya in search of the next news fix, I’m reminded how poorly the media caravanserai thinks about the future: in this case, what real changes (if any) the fall of Mubarak may cause in Egypt, or in the political and business environment in the Middle East, or the world at large, going forward.

That a 30-year despot was toppled by people-power is without doubt a good outcome story for those with broadly democratic and civil-liberties biases. But the breathless pundits have been quick to call the Tahrir Square events “the ‘Berlin Wall’ of the Arab world.”

Is it? The Tahrir Square revolt tells us there is economic hardship and rumbling social discontent in Egypt, and that the populace is emboldened, but it doesn’t tell us much about the future.

Yes Egypt is the bellweather of the region. And yes, it has gone through a cataclysmic moment. But the future is all about momentum. Can we expect momentum? Is there reason to anticipate follow through? Can we expect the “fast-forward” button from now, or is it going to be the pause button that defines outcomes?

The fall of the Berlin Wall fall was symbolic: the symbol of Eastern bloc demise – a crack in the national prison that held back human aspiration. But it was also more than a symbol. In reality, on the ground, the political will that sustained the Wall was gone by 1989. Tricky as it was, and still is, the then West German government had a stake in and a will towards reintegrating the East. The situation went into fast-forward mode.

Egyptian protesters have dislodged a few boulders, and shaken a few certainties. But what is the political will in Egypt and among its Western allies going forward? That’s what will tell us about the future.

Head chopped off

The army is in charge, but the army is more closely allied with the ruling elite than the common protesters. The elite has had its head chopped off, but it can easily grow a new one. The issue it will highlight – as we have already seen – is stability, raising the specter of (a) chaos or (b) Islamists, or both, to stoke the military and cow the population.

Genuine chaos is in fact a high likelihood. Whenever the glue of power melts, and power (over the future) is up for grabs, agencies and interests will contend for it, seeking to win absolutely while the chips are in the aire, or to be in the best pre-pax position when they fall. A merry-go-round of tottering regimes, interspersed by chaos, or even a Lebanon-style multifaceted civil war between army, ruling elite, Islamists, warlords, students, etc., is surely a more-than-possible scenario.

The deeper story, as many have pointed out, is the economic, infrastructural, and civil weakness that defines Egypt, whoever takes over. It has a young and growing population, a stalled economy with chronic high unemployment, inequitable wealth distribution, poor local and regional governance, and corruption.

This is why it should not be believed that any party or interest can deliver a new future. Without considerable change at the grassroots, democratic fanfare, would be just that — fanfare.

So if the political will in Egypt is both fractured and hamstrung, what about outside interested parties and the West?

Friendly dictator

What will be future-defining is whether the US and its allies drop the “friendly dictator” policy — propping up corrupt despots because they are externally benign (and better than the Islamic alternative.) If they keep this up, the outcome for Egypt and the region is a fractured “pause” situation, no matter what blather about democracy, elections, human rights, new constitutions, makes the airwaves, from Hillary Clinton down.

But if, by some albeit unlikely turn of events, the external political towards Egypt was reshaped to transcend self-interest and neglect; and starts to support quiet, consistent, financial and non-financial development of the mechanisms and institutions of civil governance, backed by education and micro-loan economic stimulus – then the future is on the move and business managers should start realigning their thinking towards stable long-term growth for the region.

In the pivotal moment of the movie “Remains of the Day,” US Congressman Trent Lewis (Christopher Reeve) in England in 1936 declares to the “gentleman-amateurs” around him who are blunderingly cosy-ing up to the Nazis: “leave politics to the professionals.”

It’s an expression of the 20th century zeitgeist shift to professionalization of not only politics, but all significant decision-making and management. Business certainly led the way through the century with the rapid rise of managers as a distinct class of professional, expecting the commensurate erosion of family-run firms of any real size and clout.

The problem with family firms are legion: under-qualified if not downright incompetent heirs thrust into positions they can’t cope with or don’t want, family wrangles, inheritance disputes, relative non-accountability of management leading to quixotic decision-making, secrecy mitigating against access to capital and therefore growth, and so on.

So the wisdom became that the family-firm management was appropriate in start-up mode, and then as companies scaled up and moved to external funding and responsibility to multiple stakeholders, professional management should take over for the good of everyone.

Generations

Or so we thought. There is a long-running counter-argument that family firms do many things better, even at scale. Key decisions are made with the fearless straight-talk that is often required, and without bureaucracy up and down the chain. Families may have their politics, but they don’t have the chronic office politics nor resume-polishing that besets so much of corporate life, wasting countless person-hours.

Furthermore, industry and business wisdom that is built up over generations stays in the firm rather than getting washed down the river every time the executive door revolves. The bottom line: family firms remain a more-than-viable model very much alive and kicking all across the world.

These are background issues to Randel Carlock (INSEAD) and John Ward’s (Kellogg) new book “When Family Businesses are Best,” (Palgrave, 2010) which is broadly about navigating a family firm in the changing, globalizing world.

What got my attention particularly is the authors’ contention that family firms are better at developing, retaining, and working to a long-term management perspective. That is, the family is an inherently long-term institution, and well-run family enterprises are run in such a way as to endure for the future for the family – and this is an advantage in navigating and surviving a changing world.

The term the authors’ use is for this kind of management is “stewardship.”

The root problem of most professionally managed businesses is they are run without stewardship  – without concern for long-term well-being of the firm or its stakeholders. If we needed reminding, the banking crisis was the product of management that couldn’t be further from stewardship – taking absurd risks with other people’s money for short-term personal wins.

Banks have become the poster child for the follies of short-termism, but the reality is short-termism remains endemic across professional management, both in business and politics. Long after “après moi le déluge” CEOs have taken their packages and are on the golf course, others – employees, taxpayers, the environment, etc. – are paying the price.

What’s measured

At least, post-crunch, it is now incontrovertible that short-termism is an extremely poor strategy for managing a complex and uncertain future. “What gets measured gets managed,” and when what is measured is only the next quarter’s profit figures, bigger failure looms.

The family-run businesses offers a model of long-term management. It is a conservative non- “bet-the farm” model to be sure, but perhaps the path a real steward of value genuinely operating in the best interest of valued stakeholders would follow.

So how might one, without the real flesh-and-blood bond of family ties, get senior executives to think through the effect of their behavior on employees or stakeholders 10- or 20 years in the future, as the head of a family would? Surely only by creating incentive structures that mimic family stewardship – incentives that mean that leaders can’t walk away smiling until the organization (or the value it represents) has been safely passed on to the next generation.

A photo exhibition, Facing the Impossible, opened at the end of last year in New York. (425 Broadway, 5th floor, NY 10013; to 28 February 2011.)

Just another photography exhibition in NYC? Well, not quite. It’s an industry foresight story too – the survival and revival of Polaroid analog instant photography in a digital world.

Polaroid, for those too young to have heard of it, is a camera system that produces a picture in a few minutes out the back of the camera, no darkroom required.

Polaroid US brought out its first camera in 1948. The company filed for bankruptcy in 2008, closing down its last production plant in Enschede, Netherlands, making 180 employees redundant. But a group of entrepreneurs and ex-employees calling themselves The Impossible Project acquired the plant and have set about making (and improving) Polaroid film. The company reports that 500,000 packs of film, retailing from $15 to over $100 per pack for Polaroid cameras was sold this year. Revenue for 2010 was more than $10m and the number of ex-employees on staff has grown from 10 to 30.

Now a $10m turnover and 30 employees is hardly a business number of consequence for the world. The point is, conventional wisdom says it should not exist at all. Even Kodak stopped making Kodachrome this year, after 70 years. How can anyone be growing sales of analog film in 2010?

The Message in Red Ink

One might say Polaroid US head office could be forgiven for assuming digital media completely trumped its product and exiting the market. But should shareholders be forgiving? Yes the company filed for Chapter 11 bankruptcy amid various complex management issues, but at its heart, red ink is always the product of inability to see and adapt to the future in time (or poor execution, or both.)

What The Impossible Project saw, that Polaroid itself could not see, was that niche, expert, aficionado secondary markets often remain extant and lucrative well after the mass market has moved on. Of course digital photography is the mass product-and-service market of the future. But in the rush to the future, lucrative pockets of specialization remain and this is one of them.

This principle can be seen in the media industry as a whole. Records and record players have not gone away in a CD and iPod world, they have moved to aficionado markets. Printed books and magazines are going this way too. They won’t disappear but they will be a format for niche uses. This is true across other industries and across history too: transportation, for example, has seen eras when horses and bicycles were primary modes of working transport. Their primary function changed, but this opened up lucrative secondary, leisure, and niche industries.

In adapting to the future, opportunities exist in taking retiring mass-market solutions into new industries, or upmarket into niche areas of the same industry.

Creative Adaptation

The irony in this story is that the Polaroid camera and film was always a niche product. It fought giants Kodak and Fuji for a piece of the mass market in analog photography but never became a mass-market solution. (Its competitive advantage was instant-ness; its disadvantage was price and relative quality.) So it didn’t require any great “shift in DNA” by the company leadership to make the moves that Impossible has. But it did require a leadership willingness towards industry foresight and creative adaptation.

Impossible is doing the basics of providing (and improving) film to Polaroid’s installed base of users. It estimates that 300 million working Polaroid cameras still exist. This is the legacy factor. The future doesn’t move as fast as we think.

But more importantly, Impossible is also actively building a future for itself in its new niche — broader artistic and creative industries. In addition to its project space in New York, it has one in Tokyo (and had an exhibition during the Arles Photography Festival.) It is using these spaces as hub for soliciting alliances across visual creative media, promoting analog instant photography in its relationship with other creative industries, including growing beyond Polaroid’s static image legacy.

Promotional projects during the year included the creation of a special film edition with HUGE magazine (Japan), participation at Photokina 2010 Germany with the first 20×24 camera, and cooperation with the band The Decemberists — all growing the future of the product, reaching out to new users and a whole new generation of users.

The leaks created predictable dismay at the State Department and beyond, along with gritted-teeth promises to bring perpetrators to justice, and there is enough outrage and embarrassment in high places that this kind of action will no doubt go forward.

But, from a foresight perspective, it’s just “noise.” It is not the future. There can be no muzzling in the digital world. Just like we nod and smile when China tries to keep a finger in the Internet dyke, we should nod and smile at these diplomatic machinations to hold back the electronic tide.

A long time coming

This kind of upset has been a long time coming for the diplomatic community. Over the last 20 years, most industries and organizations have been forced to adapt to a world where instant copying and distribution of digital content means that electronic information is soon, if not instantly, freely available in the public domain. That is, an electronic document is effectively a public document no matter what anyone says or does.

Some have learned the hard way. Media companies slow to imbibe this new reality, from Encyclopedia Brittanica to Blockbuster, have gone to the wall. The music industry has fought a long fight against unsanctioned electronic redistribution, a fight it must ultimately lose. Police departments have found out that any time “policing” is going on, someone with a cell-phone is videoing it (digitizing it), and next thing that’s in the public domain too.

So now its US (and global) diplomacy’s turn to learn the digital lesson: if it’s digital, it’s in the public domain — already, or soon.

There are of course good arguments for secrecy. The sensitive baby-steps of international agreements need privacy protection. Leaking information may embarrass partners, scupper deals, put lives at risk, or compromise counter-terrorism. This is all true.

But to wag fingers over this is like EMI saying: “creator incentive is compromised by copyright violation.” True, but there go mp3s, zooming around the Internet.

Far from the public gaze

As already evident, first response of the authorities will be to try to shore up the system. The Secret internet Protocol distribution (SIPDIS) electronic archive will disappear or be ushered behind much higher security, access clearances will be hiked, and tougher followup and penalties for official secrets violations will be enacted —to make it safe for diplomats to go back in the water. That is, back to the 19th Century gentlemanly art of a quiet word here, a confidential nudge there, far from the public gaze.

But electronic information cannot be contained, and to think that it can is to live stupid. We inhabit a world where the electronic machinations of diplomacy and national interest can be sent anonymously to a drop box at any time. If the forces of national interest close down the current actors and Web sites, others will open (broadly supported by the quality news media.) Digital capabilities cannot be withdrawn and the thought of an anonymous electronic drop box cannot be unthought.

The writing is on the wall, and it says: “This Writing is On Everyone’s Wall.”

So we should anticipate that the public going forward will have a much greater visibility into the diplomatic process no matter what diplomats want or think is best.

The issue for senior government leaders is to choose their response path. Do they, as expected, act furiously to preserve the past; or do they embrace the future of their sector and perhaps even exploit the possibilities in it? Not everything should be made public, that’s what “top secret” is for. But for the rest, bringing the public into a high-quality, two-way sense of what is being done in its name could bear fruit of real political grounding for diplomatic initiatives, therein greater legitimacy.

Source: tradefinance-jobs.com

I’d give the video a miss. It’s Gen-Y dude-immersion to the like, max, and what co-producer Venessa Miemis has to say is much more effectively communicated on her site, which is:

“All the decisions about where I spend my time, attention, and money say something about me. For example: I buy organic food from local farms and products and services from local businesses —(I believe in building resilient communities by supporting local economy.) I have a garden, I fish, I hunt, I brew beer— (I find empowerment, gratification, and joy from understanding where food comes from and how to get it myself.) I recycle—(I understand that we live on a planet with finite resources and I want to reduce my impact.) I don’t shop at Wal-Mart. – (I prefer not to buy products that were produced in a country where people’s labor had to be exploited so I could “save” a dollar.)”

The well-identified trend to ethical consumption is at work here, but Miemis is actually expressing a far bigger consumer trend that in industry foresight workshops I call “identity-building consumption” (which may or may not be ethical.) Ref: “All the decisions about where I spend my time, attention, and money say something about me.”

Miemis continues: “Now, what does my bank say about me? Nothing.”

How might a bank go about articulating customer identity?

“Transparency… All I know about the way my bank works is that I deposit my money there, and then they take that money and go make money off of it. Where is that money going? Where is it being invested? Can I have control over how you use my money? Can I set a standard of where I allow you to invest my money, so I can be proud to say my money is being invested in green technology, or local initiatives, or anything that I care about?

“Intelligent Investing Opportunities… Show me opportunities where I can micro-invest in things I care about. Recommend ways I can save money on the things I already buy regularly. Show me how I can leverage my network and invest with a whole swarm of people. (Think Groupon for investing.) And then make each of these investments a part of my digital identity. I WANT people to know. I’ll wear it like a badge. Give me a service that empowers me to invest intelligently and in a way that represents the ethics I believe in, and I’ll tell everybody about it. This information will become part of ‘Social Credit Score,’ which will be more important than our current credit scores one day.

“Social Network Analysis for Co-Production Opportunities… There are a lot of people out there who want to cooperate and collaborate in order to manifest something together and make their lives and the world a better place. How do we find each other? Could a BANK help hook us up and then provide us with the information and resources we need to take an idea to action? Could we display projects we want to work on that are socially responsible and environmentally sustainable, and the bank links us to the investors that can help actualize it?”

Miemes rails against how at Sibos her “Innotribe’s” manifesto was met with no more than a polite “there-there” pat-on-the-head from gray-haired bankers. That’s to be expected. But if there is a solid principle in industry foresight, it is that the next generation wins in the long run (and the long run is becoming shorter.)

Retail banking, like just about every other retail industry, is being sucked with new generations into Web 2.0, the “Social Web.”

And the Social Web is, fundamentally, a self- (and group) identity-building and identity-expression machine.

So the banking sector has to prepare for a near-term future where it plays an active role in the identity construction and identity articulation of its customers. Here they are shown some important ways to do it. That is, they have been gifted a blueprint of the future of their industry.

Leadership is most commonly associated with motivating staff and streamlining organizational effectiveness. While this is core, leadership implies far more. It implies foresight and vision. Leaders are not just those who are responsible for an organization’s “best manifestation today.” Whether they like it or not, they also carry the burden of responsibility for their organization’s best manifestation tomorrow.

And tomorrow, as we know, will be different in important and sometimes surprising ways.

So any leader of note is soon asked to go beyond “effective managing,” to look out at the uncertain road ahead and steer to the desired destination on behalf of followers and stakeholders. Leaders take their institutions to the future.

Therefore, as enterprises are forced to transform in response to rapid social, technological and market change, so anticipating and competitively interpreting new opportunities and setting appropriate direction under conditions of complexity and uncertainty has become a key competitive skill — perhaps the key skill — leaders bring to their position.

There are, these days, more high-quality non-predictive approaches to strategic foresight and future-management than most managers are aware of. So this is what I get to go over with an impressive array of real-world Scottish managers in workshop mode in Edinburgh over the weekend.

But will leadership itself change?

In leading the future, there is also a meta-question: will leadership itself change? Does this skill have “a future?” Will leading mean the same thing in the next generation as it has meant in the past? Or are there new skills leaders will need to acquire for the new era of business and society?

In a recent Forrester hub blog piece “Thoughts on Leadership in the Social Era,” authors Josh Bernoff and Ted Schadler bring insight from their book Empowered, and Charlene Li’s book Open Leadership in asserting what it means to lead “in a social world.” They offer this 5-point checklist:

1. Share strategy continuously, especially changes in strategy
2. Embrace half-baked ideas
3. Use councils to coordinate
4. Celebrate failure
5. Celebrate success (Full text here.)

Would he require a skills upgrade? Image via Wikipedia

To be honest, this looks a lot like the flattening and opening-up “leadership revolution” of the dot-com boom and the post-recession 90s, which leads me to think, is leadership (including the foresight injunction) perhaps a constant rather than a changing skillset? Would any leader in history, from Jefferson to Jesus, not be able to lead in today’s environment? Would George Washington, Abraham Lincoln, Sir Earnest Shackleton, Mahatma Ghandi, Golda Meir, Nelson Mandela, et al would be able to lead in the 2nd decade of the 21st Century, or would they they require some kind of “skills upgrade” to be fit for the world of social media, empowered consumers, and so on?

I’m very tempted to say they would do fine. Hyper-information and social networking is just another set of challenges drawing on an age-hold leadership skill set, which includes knowing how to effectively communicate and persuade and inspire, no matter what the media conditions.

But I’m indebted to my friend and foresight-sounding-board-extraordinaire, Andrew Curry, for offering this perspective:

“I think there must be *some* changes in the demands on leadership as a result of:

- rapid feminization of the workforce
- secular shift in attitudes to authority/ trust
- emergence of ideas about complexity.”

While I was there I couldn’t help noticing the business print and radio waves being dominated by the potential entrance of Wal-Mart, with all the jitters of local businesses considering the knock-ons and side-effects of the “über cost competitor” turning up at the end of the street.

If it goes ahead, Wal-Mart will enter via acquisition of local retailer Massmart which is, as the name suggests, a copy-cat company anyway, so it would seem all there is to talk about is price. As things stand, Wal-Mart is in its fifth week of due diligence on Massmart, currently visiting all 288 stores under acquisition, according to a recent WSJ report.

Now Wal-Mart is not busting a gut for the SA market, population 45 million, of course. The whole project is about using the South African operation as gateway into Africa as a whole. It is bet on the 5-to-10-year-and-beyond future of sub-Saharan Africa.

Massmart Chief Executive Grant Pattison is quoted as saying “you have to take the long view on Africa,” and this is exactly what Wal-Mart is doing. Enacting a long forward play for the newly strengthening African retail market.

Other than inventing the scale-based supply-chain-squeeze model of retail, which must go down as one of the great business innovations of all time, Wal-Mart is hardly known as a foresight-based player. As forward looking as the Massmart acquisition is, Wal-Mart has in fact been well beaten to the African punch by the Chinese who have been investing across the continent over the past decade (although the Chinese investment has been predominantly in infrastructure and resources, while Wal-Mart’s would be in anticipation of lower-middle class consumer enrichment on the back of that.)

The glass half full
The Chinese invasion is by far the biggest thing to happen in African economies since European colonialism, not only due to widespread infrastructural investment, and not only because it comes without “Washington Consensus” strings attached, but, even more fundamentally, because it is driving a zeitgest shift in business confidence. Deep problems remain, but suddenly the glass that was half empty appears half full, particularly to occidentals.

One expression of the new half-full perspective is McKinsey’s breathless report (June 2010) on Africa’s economic emergence, entitled “Lions on the Move,” which starts: “Africa’s collective economy grew very little during the last two decades of the 20th century. But sometime in the late 1990s, the continent began to stir. GDP growth picked up and bounded ahead…”

Asian Tigers. African Lions. Geddit? But when both Wal-Mart and McKinsey are setting their watches to the near-term future African economic growth story, you can bet other companies are set to pounce too.

I’m going back to the S+B interview with Lawrence Burns, former GM head of R&D, cited in my previous post, because there is more to be had in understanding how systems dynamics has shaped and will shape the future of the automobile industry.

This not only helps us think about automobiles, energy, public transport, and so on, but also about foresight in all industries.

Asked about the likelihood of “transformational” change in the auto industry—given the historical pattern of slow, incremental change we have seen for decades—Burns says:

“The main reason upheavals haven’t happened is that the automobile transportation system benefited from a tremendous self-reinforcing dynamic: the codependence between the roadway infrastructure, the energy infrastructure, and the machines that we created.”

In other words, systems dynamics were at work, in this case dominated by a deeply powerful reinforcing loop:

“As cars became available in the early 1900s, you needed to build roads suitable for them, and the costs of the roads were paid with gasoline taxes… As more cars were manufactured, more gasoline was consumed; the more gasoline was consumed, the more roads were built. The more roads were built, the more valuable a car became. And as cars became more valuable, it led to more cars being bought… Next thing, you wake up and in the United States you have 250 million cars, and they travel on 4 million miles of road, 3 trillion miles a year…

“So we thought about a new DNA for the automobile, but you couldn’t create that just for the car itself. It has to operate within a new codependent system.”

Too smart to crash

What drives this new system, is of course the core of the debate. In Burns’ view the key issue is vehicles will become “too smart to crash,” allowing them to be built without current safety defences, that is, 75 percent lighter, which drastically reduces energy requirements.

“The problem with batteries today isn’t really the batteries themselves; the problem is the vehicle that we’re putting them in. To power a typical car today, you need a battery the size of one or two Sumo wrestlers, and it takes eight hours to recharge, so you need charging stations in garages or on the street. For the 750-pound class of vehicles that we envision, the battery could someday become small enough so that you could easily bring it into your house or apartment to recharge, and it would recharge in just three hours.”

Everything rests on the assumption of whether “too smart to crash” is possible, and the secondary assumption whether consumers will ever really trust this. The former is surely sound, the latter questionable.

But, no matter. At least this view of the automobile industry evolution, or indeed revolution, is in clear acknowledgement that one will not see the future of the auto industry by looking through the lens of a single issue such as global warming, or any single propulsion or other technology.

The car is inextricably tied to the deeper systems it is part of. Any transformational future proposed or envisaged—whether that of Burns, or environmental lobbyists, or public transport evangelists, or any other—has to show how the whole current reinforcing system behind the car is overcome, that is bettered for most consumers and stakeholders, by a new system.

First posted at Forbes Leadership: http://blogs.forbes.com/adamgordon

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Truth be told, the foresight field is littered with predictions about the future of the automobile, from the futurists’ flying car that never happened to the-pumps-run-dry doomsday, and everything inbetween.

The Xiao EN-V concept car. Photograph © General Motors / Wieck Media Services Inc

But, judging by the interview, Burns has a higher-quality foresight view of this industry than most, and this because he prioritizes what consumers really value as a guide to what will emerge over any policy principle or ideological interest.

What do consumers really value? “There’s nothing like the freedom they (cars) provide to let us go where we want, when we want, with the people we want to travel with,” says Burns.

“Ever since people could walk, the ability to move when they want and where they want is something people have found very compelling.”

Nothing new, but what he is warding off, in preparing the ground to looking to the industry future, is views of the automotive future that are ideologically colored, particularly those imbued with the virtues of public transport.

Says Burns, “Three major impediments get in the way of public transportation:

• The first is routes. A public transportation system can’t go everywhere, so people have to have a way to get to and from the stations.
• The second is schedules. You can’t leave exactly when you want to, so you have to arrive before the public transit system arrives to pick you up, which has major impacts on how people schedule their lives. And unfortunately, those schedules aren’t always predictable, so you have to buffer.
• The third is that since people have to shift modes from how they get to the station — whether it’s in cars, on scooters, or on bicycles — to the public transport mode, you create a need for parking.”

This balance could change — this is what public transport executives seek to effect. But until there is clear reason to see public-transport pain-points diminishing, there’s no reason to see anything but private-dominated transport in the future (other than very dense urban environments such as Manhattan.)

Pain avoidance

Burns places automotive foresight at the intellectual crossroads between what the majority of consumers really want (or what pain they want to avoid) and what pundits and ideologues think would be a better solution. Guess which always wins?

With that issue solved, the question then turns to what these private vehicles are exactly? Here Burns and co-authors have a vision, but it is more “anybody’s guess.” Their fundamental assumptions is that onboard inter-vehicle accident-avoidance technology is watertight, which means cars don’t need all their defensive armour and can so be far lighter, and therefore use less energy, so battery power and life is no longer the limiting issue it is today. See the concept-car above.

This blog first posted at Forbes Leadership: http://blogs.forbes.com/adamgordon

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But, making one of the classic mistakes of technology-driven futures thinking, Clarke lets his technological imagination blur basic insight into human nature and social service/product adoption. Specifically, he goes on to say that because of communications technology advances, “the city of 2000 may not even exist at all. The traditional role of the city as meeting place for a man will cease to make any sense.”
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Note the gender paradigm blinkers. But anyway – the end of cities? Fat chance. One of the defining issues of the early 21st century is urban growth and the emergence of  10+ million-population mega-cities. And across the world, a higher proportion of the human population live in cities than at any point in history (and that proportion has just crossed 50% making humans for the first time a primarily urban species.) Hello? Arthur?

Urban concentrations 2007. Source: The Guardian

Why the miscue? First Clarke makes the classic error of holding key variables still while running technology forward. The key variable here is population growth. The number of people on the planet has doubled, at least, since 1964.

But that population could all be comfortably telecommuting from rural idylls, so there is another problem. Clarke fails to factor in social and economic pressures which sometimes run counter to technology advancement or, as in this case, merely absorb technology shift with no change. No matter how good communications get, nothing in the information-communications revolution has changed the age-old social truth that proximity matters. It matters to community welfare. It matters to social opportunities. It matters to  career advancement, and so on. It mattered in the past. It will matter in the future. That’s why people are in jam-packed into into Los Angeles and São Paulo and Johannesburg and Seoul, etc., but not Tahiti.
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In its own words: “Global Voices is a community of more than 300 bloggers and translators around the world who work together to bring you reports from blogs and citizen media everywhere, with emphasis on voices that are not ordinarily heard in international mainstream media. Global Voices seeks to aggregate, curate, and amplify the global conversation online – shining light on places and people other media often ignore. We work to develop tools, institutions and relationships that will help all voices, everywhere, to be heard.”

There are of course other places to get local-blog perspectives on current issues and concerns, but this site appears to be the broadest and best, at least at the moment.

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Why is this important for thinking adequately about the future?

The biggest problem we have in foresight work is the double-whammy that (a) people, on aggregate, choose and make the future, and (b) we don’t know what they will choose because we don’t adequately listen to their concerns and motivations, or worse, are we are deaf to their motivations because they are outside of our frame of reference.

(a) Yes, the future is influenced by new capabilities, driven by new technologies, but technologies come out of societal perspectives (what are we going to invest in or research towards?) and then adoption (which technologies “make it”) is all about social and economic choices. So what defines the future is what most people want. (Not everyone wants the same thing: that’s what politics is about.)

(b) Share of voice is political too, and in our world some people and companies have vast sway over media channels, but most have no voice. But just because they have no voice doesn’t mean they are not making choices as to (a) above. All it means is that if you’re not listening, the future will surprise you.

A “surprise future” = a lack of mental preparation. Without exception.

It is easier both practically and ideologically to listen to ourselves and our micro-communities of associates online or off, which confirms what we think and how we think. It’s much tougher to absorb alternative perspectives. Global Voices is not perfect. It is still, naturally, the preserve of the literate and educated. But it is a first step out of the frame.

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