By John Lass
How do we prepare for the future? How do we position ourselves to survive and thrive over the next decade? I hear these questions frequently from credit union boards and management teams. These are the critical questions leaders must ask, but the answers are not simple.
In framing a response, let’s first look back ten years, then fast-forward ten years into the future, and finally consider what we need to do to prepare. In considering the tumultuous change of the past decade, let’s focus on just two items – the iPhone and the financial crisis.
The iPhone turns 10 this year. Introduced in June 2007, the iPhone has been a game-changer for virtually every aspect of life, with financial services being no exception. Today, more than two-thirds of the world’s population are mobile users and more than half of the world’s web traffic is conducted on a mobile device. The iPhone is a “meta-platform” that has enabled the proliferation of transformational platform technologies such as ride-sharing (e.g. Uber, Lyft, Grab, Didi), GPS mapping (e.g. Google, Waze) and many more.
The tenth birthday of the iPhone will be widely celebrated this year, but remember that 11 years ago no one saw the iPhone coming. Even Clayton Christensen, the renowned godfather of disruptive innovation and author of The Innovator’s Dilemma, greatly underestimated the impact of the iPhone, because he saw it as a mobile phone, rather than as a mobile computer.
Next, consider the Great Recession that began with the meltdown of sub-prime mortgages in 2007. While a few perceptive hedge fund managers made billions by shorting sub-prime, very few observers foresaw the breadth and depth of the crisis. This phenomenon was brilliantly chronicled by Nassim Taleb in The Black Swan: The Impact of the Highly Improbable. Taleb said that a “black swan” event had three primary characteristics: it is unpredictable, it carries a massive impact, and, after the event, we concoct an explanation that makes the event seem less random.
I can safely predict that at least one black swan event will occur in the next decade, but I cannot predict what it will be. Similarly, it is safe to anticipate major technology breakthroughs, but difficult to anticipate their specific impacts.
Three Suggestions
How can we prepare in the face of this massive uncertainty? I offer three suggestions:
First, always think strategically. Consider long-term impacts, look around corners, connect the dots, ask the important questions, maintain a strong balance between governance and management.
Second, remain nimble. Ensure that your board or management team maintains a strong diversity of thought, listen to your “truth tellers,” avoid group think, stay young. I am convinced that Baby Boomers cannot fully comprehend how Millennials view technology or finance.
Third, be proactive. Having a clear vision and mission is essential for long-term viability. If you cannot succinctly state why you will be relevant in ten years, it is time for a strategy re-set. As Peter Drucker said: “The best way to predict the future is to create it.”
John P. Lass is president of Lass Advisory Services, LLC. For info: www.lassadvisoryservices.com, or john@lassadvisoryservices.com.