The past is more important than the future
It's been said many times that history is no guide to the future. I disagree. It is also unsaid that companies do not need to understand where they have been to see where they're going. Hence most commercial organizations have very little sense of their own history and what happened last year is so yesterday. This is a tragic mistake because memory and experience can prevent us from making the same mistake twice. It is also a shame because whilst many things change, the fundamentals often do not. People act and react with the same primeval instincts that they've always had. On a practical level, older employees were a source of knowledge before the term knowledge management was invented. Equally, looking at the history of products and markets often uncovers insights buried beneath the service. Add to this the fact that many trends are cyclical, and you might start to see how to use history to invent the future. If, for example, you looked at the history of newspapers, you would discover that they were first sold in coffee houses in the 1700s. So maybe that's where Starbucks got the idea? Or how about aerosol paint? That idea was first thought of about 40,000 years ago.
The end of outsourcing?
If companies are outsourcing strategy, innovation, R&D, manufacturing, logistics, and distribution what exactly are they left with? Sure, outsourcing saves money in the short term and specialists tend to be better than generalists. But as Tom Peters says, you can't shrink your way to greatness. Maybe 2005 will see a move back to in-house innovation and the realization that whilst ideas, provocations, and catalysts can come from the outside, research, development and implementation can't.
Conversations as catalysts for change
Theodore Zeldin will readily admit that most of his ideas will fail. But let's face it, so will most of ours. Surely it's better to go out in a blaze of glory as a beautiful failure than as an invisible and mediocre success. Zeldin's ideas are mostly focused on work and ways of making work more satisfying. He is also a champion of conversation and says that if more people talked to each other properly they would discover new interests. Shared interests and conversation spark ideas — and ideas can change the world.
To thy own self be true
Some people believe that you can make anyone creative. The aim of all organizations in 2005 and beyond should therefore be to pursue radical creativity and innovation. Regardless of whether all people can be creative, there is a significant amount of evidence to suggest that not all companies can. Most radical innovations (some say as many as 70%) come from guys in garages, not industry incumbents. Inventors are creative precisely because they don't sit inside inertia-ridden corporate structures. However, inventors are usually hopeless at implementation whilst this (along with incremental improvement) is exactly what big companies are good at. So maybe the best innovation process for big companies is simply to spot good ideas from elsewhere and either adapt or licence the idea or buy the company. In other words, know what you're good at and don't try to be something that you're not.
The need for speed
There are at least a dozen megatrends out there at the moment, but if I had to pick one for 2005 it would be speed. Technology is speeding up and so are we. 15% of meals in the United States are now eaten in cars and apparently 50% of soup is eaten out of the home. Hence the rush by food companies to create portable products and the continued growth of 24-7 availability. But like most big trends, there's a counter trend. In Europe the Campaign for Slow Cities want to slow things down while in Australia 25% of people say they have downshifted in the last year to readdress their work-life balance.
Happiness on the agenda
According to sci-fi writer and futurist Bruce Sterling, everything we own in the future will be cuddly. I don't know about this but maybe we'll want everything to make us happy. Happiness is an emerging trend that's set to take of in 2005. There's an Institute of Happiness in Australia and writers like Alain de Botton (Status Anxiety) and Clive Hamilton (Growth Fetish) are challenging the idea that growth and material possessions automatically make us richer. A study by the Henley Centre in the UK found that in 1989, 58% of people were happy compared to 45% in 2003 — despite a 60% increase in average incomes. Meanwhile, a study by Cornell and the University of Colorado found that spending money on experiences is more fulfilling than spending it on possessions. So if you've got a product, you'd better get busy turning it into an experience. This idea also has serious consequences for companies who have always assumed that the way to keep employees happy is to promise them more money.
If you're interested in the future of work, get your hands on a few books by management thinker and social philosopher Charles Handy. His track record is impressive with stints at Shell and the London Business School. His forecasts are spot on, too, with predictions like the decline of the traditional organization and the growth of portfolio careers.
Older younger and younger for longer
In the future, children will grow up faster while adults will stay younger for longer. There will be fewer young people around, but they will be more sophisticated and experienced. This is a dream come true for some advertisers, but there will be negative social impacts too.Girls maturing physically earlier and children having kids will affect policy in areas like education and employment. Conversely, there will be more older people around, which will be good news for industries like medicine, travel, home improvement, and leisure. However, it could be bad news for innovators because older people tend to be conservative and reject anything new. Or maybe not. 17% of Sony Playstation users in the US are aged over 50.
Open source innovation
Someone once said that to get a good idea you need to have a lot of ideas. Suggestion boxes are a bit old hat these days, but the principle of asking everyone for ideas is very sound. However, most companies still seem to run innovation as a (small) department and consider the aims, processes, and outcomes as some kind of state secret. A model for the future could be the open source software movement. Instead of doing everything yourself, why not open up the search for ideas and ongoing research and development to customers and suppliers? A good example of how to do this is the Global Ideas Bank, where anyone can submit or vote for an idea.
Problems looking for solutions
Here's an innovation tool that's often hidden in plain sight. If you've looking for new ideas, don't. Look for problems instead. Go and talk to whoever runs the customer complaints department and ask for a list of the top 10 moans and groans. Alternatively ask some customers . Or maybe grab a product designer, a psychologist, and a social anthropologist — and watch people using your product or service. What doesn't work and what could be improved from a customer experience point of view?
Richard Watson is the CEO of the Global Innovation Network. He contributes to Innovation Station, Fast Company's innovation resource center.
A version of this article appeared in the November 2004 issue of Fast Company magazine.