Go «back to the future» with me today!
Hand on heart, how many visions of the future have you watched and how often have you seen or done a follow-up later? If never, you're in good company. We love to explain the world of tomorrow, but hardly anyone verifies it later in any way. «What do I care about my silly talk from yesterday!» the first German Chancellor Konrad Adenauer is quoted to have said in this regard. After all, no one can stop you from becoming wiser and knowing everything better today.
Nevertheless, that's exactly what I'm doing today, not (only) because I want to be exceptional (as usual), but to better illustrate the value of a systematic Strategic Foresight. I got the immediate impetus for this last week when I met my former leadership team from IKEA's Global Business Services in Poland and a colleague, who is still on the leadership team and leading the transformation today, said the following: «Peter, I went through our 'Life@IKEA Group Shared Services 2030' scenarios the other day, they are still very relevant and an inspiration today.» If I now reveal that we made these scenarios in 2017 for the strategy of fiscal years 2018 to 2020+, you may now be surprised, or at least prick up your ears ...
Life@Group Shared Services 2030 - People, Places, Processes
That was the title of our Strategic Foresight project. As a newly formed leadership team, our mission was taking the next step in IKEA's Shared Services and developing the two rather independent Shared Service Centers (SSC) in Poland and China into a true global organization, and also taking over the North American HR Service Center. A perfect starting point to take strategic action in line with external megatrends, while bringing the leadership team on the same level of knowledge and jointly take accountability for the strategic direction. We conducted the endeavour in collaboration with the Copenhagen Institute for Futures Studies (CIFS) and developed four scenarios based on the two most important uncertainties, which we have presented in the following two-by-two grid:
Let's look back for a moment: in 2017, everyone was talking about automation and its impact on labour markets; in the US, Donald Trump started his presidency with the slogan «America First»; and in China, the introduction of the Cybersecurity Law, i.e., a uniform set of rules for cybersecurity and data protection in China, challenged global companies. In foresight projects, the choice of uncertainties is critical to the relevance of the scenarios. Also, in my experience, it helps the subsequent strategy if one is company-internal and the other one external, because this keeps the focus on both the organization and the relevant external megatrends. For our project, it was clear that automation/digitization was not an uncertainty, but a megatrend relevant to all scenarios that was only just beginning to develop. For us, the match-deciding questions were whether
- Group Shared Services is growing and becoming a key part of IKEA's internal transformation.
- Globalization is being rolled back and regional and local laws are becoming increasingly dominant.
At the highest level of abstraction, we assumed the following three developments:
- Automation will reshape the Shared Services Industry, and digitization and robotics are key success factors.
- Nationalism and protectionism are likely to increase, which will slow the pace of automation somewhat and increase complexity.
- Organizational flexibility is becoming the key factor in both taking advantage of digital opportunities and responding to growing national demands.
As it turns out in retrospect, the choice of uncertainties was practically perfect, and the three external developments have sensibilized decision-makers to the truly relevant issues. That is why today, five-six years later, the scenarios are of course more advanced, but more «relevant» than ever: Geopolitically, the development goes far beyond «increased complexity», introducing all technologies in all markets is no longer possible. Anyone who did not have digitalization and robotics on their radar in recent years is completely left behind with the current topics of artificial intelligence and the metaverse, and from the key factor of «organizational flexibility» an actual revolution has emerged under the title of «future of work» or «new work».
From scenarios to strategy
Based on the assessment of all the participants involved, «Ready for You!» was obviously the desired scenario, but «Havana Club» was considered the most likely. By the way, the title symbolizes that even in a fully regulated environment like Cuba, a product like «Havana Club» can be created that is appreciated by consumers worldwide. A total of 9 strategic guidelines were incorporated into the strategy development, from which a mission statement emerged, 10 strategic goals for 2020+ were defined and for communication purposes combined into 3 (+2) overarching goals.
In order to give a teaser on the one hand and not to disclose the strategy on the other, I give three examples of strategic considerations here, one each from the sub-areas «People», «Places» and «Processes». As a reminder up front - these assessments are from 2017:
- People – shortage of skilled co-workers: Due to the megatrends, everyone (external experts as well as internal decision-makers) was convinced that the industry is facing a huge shortage of skilled workers (keyword «war of talents»). Our measures in this area were accordingly strong and very solid. We have been able to leverage IKEA's global reputation and good position in the labour markets in all our locations. This is an excellent example to demonstrate the value of strategic foresight. Through our anticipation, we have shaped this area, rather than responding late and in reaction mode like most of our competitors.
- Places – the future of work: We already drew the following three conclusions at that time
- digital solutions will enable the opportunity to collaborate in the office and remotely
- activity-based workspaces in the office are necessary and important (active, quiet, ...)
- there needs to be a redefinition of how we collaborate as individuals
From today's perspective, this doesn't sound revolutionary (anymore), but the fact that this way of thinking has been a strategic approach since 2018 has led, for example, to a situation where our employees in Shanghai were working from home some days already long before COVID broke out. All the technical and organizational requirements were in place, and we «only» had to increase the home office part to 100% and find a new way of communication between employees, group leaders and management when COVID broke out. What a difference from most other organizations that had to set up everything almost in panic mode from one day to the next!
- Processes – digitalization and end-to-end process efficiency: These were identified as the two main success factors and awareness was created that internally the interaction between process owners, IT, service centers and other internal stakeholders, as well as openness to external alliances, would be absolutely decisive strategy elements. Among others for this reason Group Shared Services was then completely reorganized.
Long story short ...
This example exemplifies the value proposition for Strategic Foresight:
- The strategic elements that make a strategy fit for the future are crystallized.
- The team shapes the future instead of constantly and disunitedly adapts to change.
I personally rate the second part even higher than the first. Last week, I again witnessed an example that even 5-6 years after their development, the future images (scenarios) and insights from «Life@Group Shared Services 2030 - People, Places, Processes» live on with the participants and, in an updated form, continue to influence the strategy development even under new leadership and in a completely changed organizational structure. This reinforces my thesis:
A strategy based on a well-done Strategic Foresight is priceless!
Have I inspired you? Feel free to network and exchange ideas with me on LinkedIn or book a complimentary discovery call.
PS Let the future be your guide - the best in life is yet to come.