When we think about the future, we usually ask what it holds. But a more useful question is “What do we want the future to be?”
Our curiosity, imagination, diverse ways of thinking, and ability to learn and respond when faced with unpredictability are essential to propel innovation and keep companies competitive—especially in a future where AI is commonplace.
Unfortunately, most companies aren’t set up to promote these inherently human qualities. They are still structured according to ideas about hierarchy and role-based tasks developed over 100 years ago. Soon these old habits will get in the way of originality and growth.
We need to start encouraging flexibility and imagination, and we must embrace unpredictability. All the things, in short, that are anathema to most businesses today.
To prepare for the future, business leaders must shoot for what McKinsey Insights has described as the “third horizon” of enterprise thinking and run their companies for the long term. AI will help companies refocus by providing the tools that will help them concentrate their energies on the future and make research and ideation easier and quicker.
Companies engage in three horizons of enterprise thinking: short-term planning, forecasting and co-innovation with customers, and long-term thinking.
We’re really good at reaching the first horizon, which involves delivering on what we can imagine right now. That’s how we’ve been running our businesses—very successfully—for the past 100 years.
But relying on this kind of thinking is dangerous because it’s only reactive to the current market.
The second horizon, also called adjacent innovation, isn’t far from the first. It results from asking customers what they’re missing and what they need, then developing products and services to fill those gaps.
We’re pretty good at this, too, but we focus on expanding what we already know and do. Reaching the second horizon doesn’t involve much imagination and creativity.
If your business is focusing primarily on what it lacks at the moment or in the near term, rather than what it needs for long-term profitability—that is, the third horizon—you aren’t creating your own future. As the fourth industrial revolution progresses, what customers needed now or in the past won’t tell us much about their needs in the future.
To reach the third horizon, we have to change how we think about what we offer. We have to embrace the far-out ideas, the groundbreaking, world-changing risks. Doing so demands that we use our imagination to project ourselves into the future and conceive a different world from the one we’re used to.
To succeed, we need to “back-cast” instead of forecast. We envision a future of self-driving cars, augmented humans, and a self-organizing business ecosystem, and maybe we can describe those really well. But we’ll only get there by working backwards from the end goal.
We need to ask ourselves, “What would the second-to-last step be? And the one before that? And the one before that?” And so on until we reach where we are now.
Back-casting involves comparing where you want to be with where you are and figuring out the steps to close the gap that maybe no one has discovered yet.
Answering these questions requires us to bring experimentation into the enterprise—to make a practice of playing with ideas. But most companies don’t know how to do this yet.
The journey to the third horizon will be powered by imagination, and AI will help us. It will remove the burden of rote chores so we have more time to create and it will enable us to find answers and tackle problems immediately, connect ideas and data, and make a new reality.
Humans are extremely curious. We’re also extremely social. Our ingenuity is our greatest ability; working together, we can create ideas out of nothing and mix them to create even more new things.
But these abilities are so often ignored at work. Preparing for the third horizon means changing how we think in the enterprise and bringing that creative humanity to the fore.
The rigid structures and hierarchies of corporations will need to adapt by moving away from fixed roles and schedules. Future teams will need to be more dynamic and adaptable to whichever challenge they are working on, which will change all the time.
Diversity will become even more important than it is today, as well. We’ll need diversity of thought and points of view, as well as a diversity of people who will question the status quo and who can use their imagination to connect ideas in unusual ways.
Companies will need to create safe environments where imaginations can be let loose. Employees must be encouraged to experiment, make mistakes, and develop ideas for the pure joy of it, not with any particular business outcome in mind.
Enabling continual education so that people learn many different skills and are able to quickly switch from one idea or project to another is essential to existing in the third horizon.
Once AI-based systems take the weight of routine off employees’ shoulders, we will be able to be more social, more human, and more inventive. We’ll be able to use our brains for what they’re actually good at: creating novelty, asking “What if?” and inventing crazy things.
That’s how we create progress.
When we unite ourselves with technology, we’ll be able to use the time and freedom that it gives us to pursue new adventures in curiosity, to go out and ask new questions. We’ll be able to do that and more because machine intelligence will guide us into new pursuits.
Think of it as “humachine learning” or the “humachine existence.” We want to encourage this most powerful symbiosis between human ingenuity and machine intelligence.
We’ll finally be able to drop the spreadsheets and forms and spend time having substantive discussions, asking questions we don’t know the answers to, and making art we don’t understand but that intrigues us and leads us to bigger ideas. Our human ingenuity and productivity will be of a higher quality.
What’s the benefit from a business perspective? The most-creative enterprises will be the most innovative, meaning they’ll attract great talent and be far ahead of their competitors. They’ll be the ones inventing the future.
AI-based systems will allow humans to be more human, freeing us to do the human things that we do best. Don’t fear the machines—prepare your employees for a super-human future instead. D!