I once wrote an article in which I extolled the way Tesco scoped out the US market when planning the launch of their Fresh & Easy stores. I talked about the fact that they had executives hang out with families and learn the way Americans wanted to shop – a way which is quite different from customers in the UK due to the layout of shopping areas and freeways, work and domestic routines and so on. Anyway, as valid the “see the world from the customer’s point of view” message remains, Tesco’s in-depth research wasn’t enough to do the trick on its own. Fresh & Easy struggled and Tesco pulled out in 2013.
This took the shine off my example. So, although I don’t do much futurism, one prediction I feel safe in making is that I will do less of it in the months and years to come.
It’s fun to look back at predictions made by pundits and business leaders. For example:
- In 1977, Ken Olsen, founder of Digital Equipment Corporation said, “There is no reason anyone would want a computer in their home.” (Olsen had at that point built DEC from a garage start-up to be the second biggest computer manufacturer in the world – we can suppose he knew a thing or two about the computer industry).
- Darryl Zanuck, a producer at 20th Century Fox, said in 1946 that television wouldn’t last because “people will soon get tired of staring at a plywood box every night.”
- In a 1995 Newsweek column, astronomer Clifford Stol said “no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.”
- In 2007, Steve Ballmer, then-CEO of Microsoft, said, “There’s no chance that the iPhone is going to get any significant market share. No chance.”
Clearly being successful and clever says little about one’s prediction abilities. Even one of the best, most sensible and innovative writers on strategic management, Henry Mintzberg got caught out:
- “Enron, with its “loose-tight” management policy, is an example of an organization that has figured out how to effect change without the usual pitfalls, says Mintzberg. “The Houston-based energy company manages only two corporate processes very tightly: performance evaluation and risk management.” (“How to Overcome Change Fatigue,” Harvard Management Communication Letter, Vol.4, No. 7, July 2001)
Mintzberg is indisputably top-drawer – so when I read how wrong he’d been about Enron, I didn’t feel quite so bad about my Tesco blooper!
Are there any lessons here? Well, for would-be pundits: “Don’t make sweeping predictions,” obviously! But more seriously, how about the following?
- Don’t be too quick to emulate the ‘best practices’ of an apparently successful business venture.
- Don’t mistake over-confident extrapolations from a ‘model’ or set of beliefs for what is developing in the real world.
- Do think twice before writing off the competitive threat of new ideas or substitute products which would threaten your currently successfully, even dominant, business model.
- Do either base the business on human needs which don’t change much, or make sure you have an agile organization: one which can perceive and respond to threats to the assumptions that got you where you are today.
© 2012-16. Andrew Bass. All Rights Reserved.