Welcome to the future. It was an abrupt adjustment!
The COVID-19 pandemic definitely caught most of us by surprise. Then again, organizations with robust innovation intelligence functions were ready to adapt, even if they had never envisioned this specific scenario. That’s because the trends now reflected in our radically different reality actually have been on course to change our lives for some time. Take telemedicine, remote work and delivery of everything—all were present before COVID, and most of us would have agreed that over the next 10, 20 or 30 years, their prominence would only grow. The only question is the speed of change.
Innovation intelligence is a process that guides the development of an organization’s innovation strategy, whether it be proactive or passive. It utilizes corporate foresight, which extrapolates current trends in the external environment far into the future and to the extreme, to push the limits of our imagination and enable us to practice reacting to unforeseen events. This is not a forecasting process that relies on historical data; information about the past is only helpful to understand the future if there isn’t much difference between the two. Instead, this analysis pays special attention to surprising, unusual or uncomfortable changes on the horizon.
Real intelligence analysis for any organization would take a month or more, but in this article, we can get a flavor for what is involved by using the airline industry as an example. This industry has been through the wringer over the past two decades, from September 11, 2001, and its long-tail aftermath to the near-total shut down of the travel industry in 2020, all while fuel costs rose and price competition became fierce. For these companies, understanding the potential direction of the industry over the next 20 years is critical.
The first step is discovery: gathering as much information about anything that might affect the industry. That’s a big job, and usually, companies focus only on competitors, regulators and perhaps customers. This discovery process encourages organizations to also explore substitutes, alternative industries and other tangential fields to a very high level of detail (for example, local news articles, hiring announcements, patent filings). A basic way to start the discovery step is by using the PESTEL framework to organize your thinking—conduct research on political, economic, socio-cultural, technological, environmental and legal trends and then brainstorm (preferably with a team) how they could touch upon your industry in the future, or if taken to the extreme.
It helps to prioritize the trends uncovered through research based on the degree of impact and certainty of occurrence. While potentially counterintuitive, organizations should pay significant attention to uncertain trends because these are the types of trends companies often ignore until it is too late.
For our airline industry analysis, some key trends in the industry and beyond are increasing ancillary revenue streams (bag fees, seat upgrades), businesses having to determine and enforce health precautions, the pressure to be carbon neutral and seek alternative fuels, in-flight internet connectivity becoming standard and rising income inequality in the U.S.
Next, moving onto the anticipation phase: how do we use the information about the trends to predict what might gain prominence in the future? There are a variety of tools you can use to do this. Worldbuilding and sci-fi prototyping involve creating complete forward-looking fictional worlds to generate ideas and discussion. Threatcasting envisions futures based on dystopian prompts and ensures companies have practice if the worst comes to pass. One of the most accessible tools in the analysis, and the tool we will focus on, is deductive scenario development. This is the structured development of provocative but plausible future scenarios to prepare for a variety of potential versions of the future. This process not only helps organizations prepare for actual likely future demands but also gets a company accustomed to adaptative and innovative thinking in general, to allow better reactions no matter which future becomes a reality.
For the airlines, let us prioritize the trends of (1) airlines taking on more healthcare responsibility and (2) rising income inequality in the U.S. Considering how the trends may interact calls upon divergent thinking skills; indeed, the combining of two seemingly unrelated things is known as a random association. Looking for opportunities, gaps and potential cross-applications at the intersection of trends pushes the boundaries of engrained thought and adds a creative element to the analysis that can be fun!
Check out my Innovation Intelligence webinar around the 40-minute mark for some great ideas of what would happen if income inequality continued and airlines assumed substantial responsibility for medical operations.
The final stage is planning. After a number of scenarios are developed, planners should look for commonalities among them that would support similar innovations or business models. For example, if drones are a beneficial capability in three out of four of the scenarios developed, it lowers the risk of investing in that direction. Further, once you understand what the future might look like, you can properly decide where to invest your company’s financial and human resources, based upon your chosen strategy. The key is to use the innovation intelligence process continuously to ensure an organization is aware of and in alignment with important changes. Then no matter what comes to fruition, it will have the capability not only to handle any crisis but also to capitalize on new opportunities.
Kerry Slade is an assistant professor in the Department of Strategic Management and the assistant academic director of the Innovation and Entrepreneurship Institute (IEI). Before joining Temple full time, Ms. Slade practiced law for ten years, specializing in commercial, employment and property litigation and arbitration.