Saturday, April 9, 2016
Being Future ready (contd..): Making active and effective bets rather than passive ones
The previous post on ‘Being Future Ready’ discussed the approach to creating future bets and portfolio. In this post, we pick up from where we left off, i.e. making active bets rather than passive ones.
A technology bet is passive if its being researched and developed in a silo with no link to business and market. A bet on new business model or market segment is passive if its only being explored in powerpoint presentations and reports. Such passive bets are common to organisations with siloed and conventional way of working.
In contrast, an active bet has product/commercial applications and benefits in medium and short term (refer figure below). An active technology bet would see a launch of prototype/demo in short-term and the first product application over mid-term. An active bet on a new market or business model would have a pilot phase in short-term, followed by a commercial offering over mid-term.
For bets in unrelated areas (an unconnected market/industry or technologies), finding a partner is an apt approach. To evaluate and find a right partner in short-term and then work closely with the partner towards field/market test over mid-term. The partnership approach allows to access new capabilities, share risks and gain experience/expertise.
For a company with not so deep pockets, the partnership approach can be extended to core and adjacent areas. This would reduce investment requirements and allow to have a diverse portfolio of bets.
Active bets are easier said than done. It requires an organisation which is tuned to cross-functional, design thinking and agile way of working; collaboration with customers and external parties; and a positive disposition towards risk and failure. Even with best of intentions, it's the organisational readiness which becomes the constraint and an active bet may relegate into passive one.