The signature characteristic of our time is the pace of change. After 13.5 billion years of evolution, change went hypercritical in our lifetime. The world is changing faster than companies can become resilient.
—GARY HAMEL1
Halla Tómasdóttir was growing dissatisfied. Not with her job, exactly—she had a good one. She worked for PepsiCo, climbing the corporate ladder at one of the premier companies in the world. Before Pepsi, she had worked for Mars, a huge private company known for its strong values-driven culture. Both had influenced her leadership style, but as the turn of the millennium approached, neither had been able to satisfy some vague feeling that she wanted more out of her career choices.
Halla had always been independent minded. That’s part of what brought her to America in the first place, traveling from Iceland to attend Auburn University. A hardworking young woman, she adjusted well to life in the United States and school in the Deep South. In those days, she recalls, she could “outwork the men in the day and still outdrink them at night.” After receiving her MBA, Halla had stayed in the States for the opportunities, which were unlike anything in her home country. Pepsi, after all, had more team members on its corporate roster than Iceland had citizens! She was grateful for the experience, but eventually, like many budding conscious leaders, she began to sense that there was something more meaningful for her to do with her life and career. And selling more cola around the world didn’t seem to be the pathway to discovering it. As she pulled on that thread of meaning, her commitment to corporate America began to unravel. It was time to head home.
In Iceland, Halla found the first hints of a higher purpose—not in Iceland’s relatively small corporate sector, but in academia. She led a breakthrough initiative at Reykjavik University teaching women’s empowerment and entrepreneurial skills. This was a chance to have a real impact, and she relished it. It also gave her a voice in the small country. Soon, Iceland’s chamber of commerce asked her to become its CEO, a high-profile job that put her at the heart of the national business community, which at the time was undergoing a massive transformation.
For most of its modern history, Iceland was known for its fishing industry and for aluminum smelting—a power-intensive industry that took advantage of the country’s cheap geothermal energy. But in the years leading up to the financial crisis, Iceland underwent the biggest boom-and-bust per capita in the world’s entire economic history, driven by a massive bubble in the financial sector. When Halla took over leadership of the chamber of commerce in 2006, the assets of the financial sector totaled more than four times the size of Iceland’s GDP. By the time the bust came in 2008, it had ballooned to more than ten times. (For comparison, Switzerland—a country built on banking—had a financial sector with assets totaling only about twice the size of its GDP.) “It was a deal-junkie culture,” Halla recalls. “Every company was growing simply through borrowing cheap money and buying other companies.” That kind of short-term financialization of the economy felt unsustainable. There was too much debt, too much risk, too much ego. The entire small country seemed a bit drunk with money. Signs of a bubble were hard to miss. International celebrities were being paid exorbitant sums to speak at events. Small Icelandic companies were buying up bigger European counterparts. Iceland’s tiny business community—which consisted mostly of men—seemed to have lost its grounding. No one seemed focused on building long-term, sustainable economic value. In her position, Halla had a platform and a voice. She spoke out.
People talk about speaking truth to power, but for Halla it was more like speaking truth to the wind. No one seemed to care or listen. “It was like being at a fantastic party at midnight and trying to get everyone to stop so that we wouldn’t be hungover in the morning. No one wants that person at their party!”
As she struggled to be heard amid the get-rich-quick frenzy of the time, she found a receptive ear in a colleague, a female banking executive who shared her concerns. An evening rant over a glass of wine evolved into something more—a plan for an alternative approach. If Iceland was experiencing a rash of unsustainable, growth-obsessed short-termism driven by a largely male-dominated business world, they decided to create a counterpoint: a women-centered, value-oriented, long-term-focused, purpose-rich investment firm, guided by both profit and principle. For Halla, it seemed as if everything in her life—her corporate experience, her time teaching young women, her knowledge of business in Iceland, her care for the country’s future—had led to this moment. She was able to highlight a different face of capitalism, one that put purpose first and focused on long-term value creation.
Halla and her colleague didn’t change Iceland’s boom-and-bust trajectory. When the crash came, it hit hard, and the hangover was disastrous. People lost everything. The social contract was strained to the breaking point. In 2008, the prime minister came on TV and asked God to bless the now bankrupt country. But Halla’s clients—many of them the nation’s wealthy women—already felt blessed. Their firm was a rare bright spot amid the carnage. Their funds had advised clients to seek safer waters well before the downturn. While everyone else had been obsessed with how to profit today, they had been thinking about how to build for tomorrow.
Now, finally, people were ready to listen to Halla. Her prescience and her values gave her new influence in Iceland’s business community, and beyond. She has used it to deliver the message of purposeful business and sustainable long-term value creation, even going as far as to run for president of the island nation, falling short but garnering more than a third of the votes. Her path had not always been straight or well marked, but her once thin thread of purpose had developed into a life thick with meaning.
Not all leaders have the opportunity to play a role in such a stark morality tale, but if we are going to build a business, an economy, and even a nation that creates sustainable prosperity over the long term, then many of the same principles apply. It’s imperative that we look to a longer horizon, understand the dynamics of change, and invest with a multi-year—even multi-decade—timeline. To do that, we must resist the always present temptation to maximize short-term gains at the expense of longer-term investment. Of course, the short term is always an important part of the picture—that’s never going to go away. But as in Iceland, when we start harvesting tomorrow’s potential value and spending it today—in the form of significant debt, environmental unsustainability, or financial sleight of hand—we are constraining and diminishing the prospects of the future. As conscious leaders, our goal should always be the opposite: to enlarge and expand the opportunity set of tomorrow in both economic and social terms. We can accomplish this only by keeping one eye on the long term. And if we don’t want to be blindsided by unexpected events that are seemingly beyond our control, we had also better understand something about the dynamics of change in today’s economy and, more specifically, the technological forces that are accelerating those dynamics.
One of the downsides of a fast-moving, quickly changing world is that it invites a short-termism that can be both pernicious and hard to escape. The need for immediate gratification in business, in markets, and in finance can be strong, driven by a 24/7 business news cycle. Investors want results yesterday and expect ever-shorter periods between vision and implementation. In such an environment, it’s easy to lose sight of what’s most important. The conscious leader must find ways to move at right angles to such injunctions—to escape the allure of momentary matters and raise their vision to consider a deeper, longer, larger timeline. They have to tear themselves away from the spell of this week’s urgent crisis or can’t-miss opportunity and consider timespans of many years, even decades. They must break out of the tyranny of the quarterly income statement and embrace more expansive metrics for success. They have to carve out time and space in their own minds and in the minds of their teams for another mode of thinking, one more suited to creating value over years, decades, and beyond. And be warned: thinking long term might sound lofty and philosophical, but in today’s business context, where the financial markets drive so many of the decisions of leadership, it can be a dangerous, even subversive choice. It could endanger your job, your company, and more. But it’s a risk all conscious leaders must take if they are truly dedicated to building a more conscious capitalism.
At Whole Foods, I chafed against the short-term focus of so many in the public markets who were primarily focused on a quick pop in the stock price, not the long-term appreciation of the shares. In particular, I resented the scourge of activist investors, also called shareholder activists—investor groups that take a significant ownership stake in a company and then use it to pressure the board to increase short-term profitability and stock price. As I recounted in chapter 4, it was the actions of one such activist, JANA Partners, that led to our merger with Amazon—a solution I came up with to serve and protect the long-term interests of our company and our stakeholders from JANA’s short-term profit-seeking.
Another leader who has repeatedly done battle with shareholder activists is Ron Shaich, founder of the phenomenally successful restaurant chain Panera and a true exemplar of conscious capitalism. Few have been more articulate about the importance of long-term thinking than Ron. When he first resigned from his position as CEO in 2009, it wasn’t because he didn’t love the work. Rather, it was the demands of the position, which involves a great deal of day-to-day ceremonial activities and public relations. As he puts it, “I was tired of spending 20 percent of my time telling people what I just did, and 20 percent of my time telling them what I’m about to do.” All of that energy was detracting from what he felt was most important: focusing on the long-term development of the company. In fact, the competitive advantage of long-term thinking was one of the most important lessons Shaich had learned from his many years running Panera, and Au Bon Pain before that. As he stepped away from day-to-day leadership and into an executive chairman role, he finally had time to more carefully consider longer time horizons.
Panera had long been the poster child of the “fast casual” restaurant revolution, achieving remarkable growth that allowed it to perform as well as or better than close retail cousins Chipotle and Starbucks. But Shaich knew that the secret to that track record had been his willingness to embrace transformative changes and investments that may have required some challenges in the short term but kept the company creating value over the long run. Once again, he felt Panera needed that focus.
As the short-term demands of the CEO role faded, he was able to focus on the larger trends in the restaurant industry, including the accelerating impact of technology. We all sometimes need adequate time and space for such concerns to come to the forefront of our mind. Long-term thinking is not simply a tap that can be turned off and on. You need to make room for it. It’s like engaging a different part of the strategic brain. Shaich’s thoughts germinated, little by little, until finally, after a trip overseas, he poured out a twenty-page memo about what needed to happen for Panera to be competitive over the next decade: embracing technology, a greater health focus, a transformed loyalty program, clean food, delivery. He sent it out and, after getting buy-in from the executive team, worked on developing a prototype of this new vision.
Soon Shaich was back as CEO (the existing CEO had to step down for personal reasons) with a focus on implementation. But transformations take time, and the “What have you done for me lately?” attitude of Wall Street again reared its head. The stock price temporarily stagnated, and activist investors circled. They even called for him to be removed as CEO. Eventually, Panera’s investments paid off, the reinvigorated company found its footing, and, yes, the stock price eventually reflected that success. But Shaich had had enough. He and the board agreed to sell Panera to a private company, where it could continue to incubate a long-term focus.
Shareholder activism is one of the greatest threats to the burgeoning Conscious Capitalism movement. It’s like a parasite that has dug its way into the very structure of financial capitalism, and if we don’t root it out, it could very well kill its host. Recognizing this, many people have proposed legal and structural changes to the market designed to disincentivize such thinking—from changes to the tax structure to reconsidering the quarterly schedule of reports to rethinking public and private markets altogether. Some businesses have adopted the relatively new but very successful Benefit Corporation (B Corp) certification standard, an alternative corporate organizational form, now legal in thirty-five states and several other countries. B Corps legally require their boards of directors to take into account the interests of multiple stakeholders, including social and environmental impact, and in so doing, they encourage a long-term focus. As Jay Coen Gilbert, founder of B Lab, the nonprofit behind B Corps, puts it, these new organizations have the potential to create a more “durable prosperity” for more people, because they are “inoculated against the virus of short-termism.”2 We believe B Corps are an excellent starting point, but many more such innovations will be required if we are to truly remake financial capitalism. Another new and interesting player is the Long-Term Stock Exchange, founded by Eric Ries, which is creating ways for companies to access public markets without the short-term pressures and incentives that normally accompany such a move. But whatever new incentives and evolved structures we come up with, they will not lessen the need for individual leaders and teams to adopt long-term thinking as a foundation of their own approach to business. Sometimes that comes easy, sometimes it’s extraordinarily difficult, but how successful we are at doing it depends to a large degree on how we see the business community and our role as a member of it.
In our current business environment, it’s easy to lose sight of what’s necessary to build a resilient company that is focused on long-term success—one that is not just reacting to competitive market demands, but building an innovative, adaptive culture that can thrive over the long haul. That distinction between “winning” in the short term and building for the long term is the difference between what some have called “finite games” and “infinite games.” Those terms originally come from religious scholar James Carse, author of Finite and Infinite Games. For Carse, an infinite game is an open-ended game in which the purpose is not simply to “win” but to continue the game. It’s a long-term endeavor that keeps changing and developing as it moves forward. A finite game, on the other hand, is one more like the win-lose scenario we discussed in chapter 4, with defined boundaries, specific rules, a finish line, and a clear winner and loser.
Drawing on this distinction, Simon Sinek’s book The Infinite Game points out that business is a great example of an infinite game. It’s open-ended, there aren’t always clear winners and losers, and the game itself is endlessly being reinvented over the long term. But here is the key point: leaders have to decide how they are going to play. Many business leaders play finite games—they become good at coming out on top in short-term, win-lose competitions. The best leaders and organizations, however, play infinite games, endlessly inventing and creating new arenas of cooperation and competition. As Sinek puts it, “Infinite games have infinite terms . . . To succeed in the infinite game of business, we have to stop thinking about who wins or who’s the best, and start thinking about how to build organizations that are strong enough and healthy enough to stay in the game for many generations to come. The benefits of which, ironically, often make companies stronger in the near term also.”3 Innovation over the long term is a hallmark of an “infinite” mindset, as are resilient, successful cultures. One can succeed in finite games and still fail in infinite ones, as exemplified by Iceland before the financial crisis.
Conscious leaders need to wake up to the infinite game they are already playing. Indeed, much of the criticism about business and capitalism today focuses on the ways in which some seek to exploit the system and extract wealth from it for their own short-term interests, often at the expense of other stakeholders. But the answer to extractive, short-term, finite-oriented, win-lose capitalism is not to get rid of business or capitalism as an institution. Rather, it is for the whole institution to evolve, and the way it evolves is through our recognizing more deeply that it is by nature a long-term, even infinite, endeavor. And for that, we need conscious leaders who are willing to become masters of long-term thinking.
Of course, it’s also important to recognize that short-term thinking can’t be altogether discarded. We all must do it. No one escapes that reality. Business must prosper in the here and now, even as it creates value over decades. We must harvest some crops to live on today, even as we plant for the future. The trick is in finding the right balance. If we merely harvest the energy, innovation, and business investments that have already been created, the business’s days will be numbered, however successful it is in the short term.
There’s a people element to this challenge as well, which is why succession planning is a critical part of a conscious leader’s job. A moment of leadership transition is often a perilous one even for the best companies, because it requires recognizing that the skills required to nurture and tend a business for the long term are different from those required to manage the abundant harvest. Too often, a new CEO comes in after a founder and innovator has created an extraordinary business. They address many important issues: cutting costs, increasing efficiency, and “making the trains run on time.” The business may perform better in the short term. In fact, if the business has a long enough runway, that approach can reap rewards for some time. But ultimately, unless those leaders are also able to think long term—or empower others who can—and plant seeds of investment for the future, they’ll never be adequate stewards of the business over a longer time frame.
We’re inviting conscious leaders to embrace a way of thinking about time, change, and possibility that will affect multiple areas of life and work—from innovation to technology to people development to operations. Thinking long term is about understanding the trajectory of success. When we see dramatic achievements, we easily miss the essential antecedents, the hard work and struggle, the constant investments and small improvements that went into the early stages of that seemingly sudden success. We want the payoff now; we want to get to the good part immediately. We want the “hockey stick” curve without the long trek up the slight incline. We want to start harvesting without ever planting and tending the garden. But success over the long term, today more than ever, means understanding the relationship between early investments and later rewards. And in our era, like none before, thinking long term requires that we do this in the midst of tremendous uncertainty, unpredictability, and accelerating change.
Once upon a time there lived a great king who loved to play chess. In order to entice would-be gamers of the era to play, he offered any person who could best him at his favorite game the chance to “name your own reward.” One day, a traveling sage took him up on his offer and managed to achieve victory. As his prize, he requested what seemed a modest compensation: that grains of rice be placed on the chessboard, starting with the first square and doubling on each subsequent one. However many grains of rice ended up on the final square, that would be his payment. The king, thinking he was getting off easy, enthusiastically agreed and instructed his attendant to fetch him a bag of rice. He placed one grain on the first square, two on the second, four on the third, eight on the fourth, and so on. At first, the numbers were small, but soon they ballooned almost beyond measure. You see, what the king failed to realize—and the same is true of many leaders today—was that the tiny initial sums masked a much more important fact: the growth rate. That’s the number that matters. As any good mathematician can tell you, by the time you get to the back half of the chessboard, there isn’t enough rice in the entire world to match the numbers attained. Such is the unexpected nature of exponential growth. Today, exponential growth rates are impacting the entire economy and culture.
Many of the core virtues we champion in this book are ancient. Love, integrity, and purpose, for example, are “evergreen,” and their relevance is hardly unique to our era—though we continue to develop in our understanding of how they are expressed in contemporary organizational settings. However, conscious leaders can’t just double down on timeless values; they must also embrace new truths. Some of the most important leadership mindsets are specific to our time, and none more so than the ability to “think exponentially.” It’s a critical subset of long-term thinking. Yes, there has historically been some understanding of compound growth rates (as the story would suggest). Einstein is alleged to have declared compound interest the eighth wonder of the world, and whether he actually said it or not, its wisdom is certainly worthy of him. Still, the importance of thinking exponentially goes deeper than finance—as we have recently seen with the “exponential” growth of the COVID-19 pandemic. Indeed, the mathematical reality behind this obscure term has quickly been brought home by the fast-moving spread of the virus. But it’s also important for leaders who aspire to be more conscious as they steward their organizations and people into the future. We’re not just suggesting you improve your math, or even your forecasting skills (although those are important). But to better anticipate those potential impacts, we had better stretch our minds to fit this unfamiliar way of thinking and examine some of the ways it’s shaping the world around us.
Only in recent decades have we really begun to grasp how the rise of information technology has changed the game of business—and life—fundamentally. In 1965, Gordon Moore, then CEO of Intel, published a paper observing that the number of components on an integrated circuit was doubling every year, an observation that is famously known as Moore’s law. Over time, he revised this observation into a prediction that the doubling would continue every two years. And it has more or less done exactly that, right up into the present day. Whole manufacturing blueprints and projections have been based on it for decades.
Like the rice on the chessboard, this doubling results in truly remarkable numbers over time. In the early 1970s, there might have been thousands of transistors on a microprocessor. Today we are headed up into the many billions—all in less than a human lifetime. That means that the relatively inexpensive phone in your hand is significantly more powerful than the entire computing setup that took us to the moon in 1968. We’ve gone from a mainframe that takes up a whole office floor to a personal computer that takes up the top of a desk to a mobile device that fits in a pocket, and onward. This is exponential change in action.
Technology hasn’t just changed the game for those in Silicon Valley—it’s changed it for all of us, no matter what field we’re in. In the decades to come, no company or individual will be left untouched by the tides of exponential growth, and the wise leaders will be the ones who strive to understand these forces and help their people and their organizations navigate them more skillfully.
We evolved to think “linear and local,” explains technology pioneer Peter Diamandis, but today we must think “global and exponential.”4 Our minds adapted to be highly concerned about local events, and it’s difficult to transcend that particular conditioning and sustain an interest and awareness of larger trends and global concerns. Unfortunately, our localized perspective is inadequate for understanding the increasingly interconnected, rapidly changing, globalized world that we are operating in every day. And our linear intuition will jump to conclusions that misunderstand the nature of change.
In 1990, the Human Genome Project was launched, an international scientific effort to fully sequence the human genome. It kicked off with high expectations and plans of completion within only fifteen years, which immediately drew criticism. It was too ambitious, some claimed, suggesting it would take decades if not generations. Those doubts seemed to be confirmed when only 1 percent of the genome had been finished at the halfway mark. But to exponential thinkers like theorist Ray Kurzweil, they were right on schedule. After all, the real power of exponential growth is in the back half of the chessboard, when the numbers start to rise dramatically. If you’re doubling tiny numbers, initially it doesn’t seem like much, until suddenly the growth spurt is massive. One percent, in this case, was actually more than halfway. The project finished ahead of schedule.
It’s good to remember that the idea of something progressing or developing over time, in an evolutionary process, is still a historically novel concept. There was a time in history, not so long ago, when we were hardly aware that the world was developing or evolving at all! Of course, we can now look back and see evolution in action, but the speed of change was so much slower that it was hard to appreciate in the course of a lifetime. A cyclical perspective dominated the experience of most people. From generation to generation, there was little change in the how of living. There might have been minor, and occasionally major, changes in ruling powers or climate or religious views or geopolitics or health. Such things were always in flux, but fundamental elements of life and work weren’t significantly changing. The increasing speed of technological progress has upended that world—opening up a previously unknown universe of change, progress, improvement, newness, and even abundance. As former editor of Wired Kevin Kelly puts it, “Newness is such an elemental part of our lives today that we forget how rare it was in ancient days . . . The idea that the future brought improvement was never very popular until recently.”6
Today, the reality of time-based, developmental processes of rapid change intercedes in our awareness in dramatic ways. But we’re still cognitively—and sometimes culturally—wired to an older world. “The truth-is-stranger-than-fiction factor keeps getting jacked up on us on a fairly regular basis, maybe even exponential basis,” says science fiction author William Gibson. “I think that’s something peculiar to our time. I don’t think our grandparents had to live with that.”7 In other words, today we all live on the back half of the chessboard.
Thinking long term requires not only stretching our minds further into the future, but also learning to think “developmentally.” That means learning how to cognize change over an arc of time. We don’t just see discrete products or services staying the same as time moves ahead, but we see a process—from a version 2.0 to a 3.0 to a 5.0. What did transportation industry executives think in 2009 as they looked at the picture of the founders of Google with the silly-looking Toyota Prius self-driving experimental car with its huge, expensive Lidar sensor on top? Did they dismiss it as impractical technology? In that particular moment, it was just that. But was it just an early square on a new chessboard? Where was it headed? What process was it undergoing? What was its evolutionary pathway? How many of them had the developmentally informed foresight to see that only a decade later the technology would be where it is today? Thinking exponentially and developmentally encourages us to explore the trajectory of a given technology over a decade or two, and the perspective we adopt is very different. No longer under the spell of the local and linear, we grasp the process in time, not simply the object in space. We can trace the antecedents of that product or service (which, in the case of self-driving cars, go back decades) and better predict its pathway into the future. We see the versions that came before and the ones that might come after, understand what’s driving the changes, and consider the speed and trajectory.
For business leaders today, there are important insights—about products and services, about growth trends, and even about whole industries—that reveal themselves only when we start to see processes in time instead of objects in space. Incidentally, the cost of self-driving car technology has dropped precipitously over the past decade and is still dropping fast today, even as the technology has improved dramatically—another common feature of exponential growth curves.
In a world of accelerating change, long-term thinkers must be resolutely attuned to the question What business am I in? This is true for the simple reason that business categories are changing much faster than they did in previous decades. Define the answer to the question too narrowly and you may miss opportunities or fail to see important disruptive developments. A decade ago, if you had asked this question of Netflix, you might have expected to get the answer “We’re in the mail-order DVD rental business.” After all, they practically invented that sector. Luckily for Netflix, however, founder Reed Hastings had a different answer. He knew that Netflix was in the entertainment business. That’s why he was able to pivot his company to online streaming and eventually to content creation as technology rendered its previous business model obsolete. The future of the company depended on that broad and flexible understanding of the company’s mission.
The shifting landscape of business for companies like Netflix has been exacerbated by a particular tendency in technological evolution called convergence. At times, a group of new technologies will converge together to create a robust platform—think of the PC, the iPhone, the internet, or even the internal combustion engine. A platform, in this sense, is a virtual or physical “habitat” for a host of other technologies to thrive in. It supercharges innovation and disruption, quickly rendering earlier platforms obsolete. Within the entertainment industry, the delivery platform for video content has undergone several massive shifts in the past few decades—from theaters to VHS to DVD to internet-based streaming. Only a company with the vision to decouple its value-creating activity from the shifting methods of delivery could continue to thrive through such changes.
In many respects, this changing of the platforms is not just a tendency of technological evolution, but of evolution itself. “Everything that rises must converge,” wrote the Jesuit mystic and evolutionary philosopher Pierre Teilhard de Chardin8 back in the early twentieth century. He is often credited with being one of the first theorists whose writings anticipate the internet. He wasn’t talking about technology but rather about biology, yet in some respects, biological evolution and technological evolution exhibit similar characteristics. Cell division, for example, exhibits exponential growth. Biological evolution also tends to produce new “platforms” upon which evolution can continue to operate and accelerate. DNA was once an incredible new platform for the acceleration of biological diversity, the Cambrian explosion being the fossilized record of that historical quickening. The human mind could also be considered an extraordinary platform of evolution, and it has fostered the emergence and accelerating evolution of culture.
Coming back to technology, let’s consider the internet itself, a magnificent example of convergence (as well as an accelerant to human cultural evolution in all kinds of ways) and a platform for thousands of new businesses. Some thrived, like Amazon, and some failed (like our aborted WholePeople.com business, described in the introduction). In fact, the early days of an emerging platform often provide unique “gold rush” opportunities. Microsoft built its business on the word-processing and spreadsheet capabilities that were implicit in the newly created personal computing platform (the operating system of which it also owned). Whole suites of new businesses are often implicit in emerging platforms. For example, consider a more recent platform, the smartphone operating system, of which iOS and Android are the two most prominent players. Ridesharing apps like Uber and Lyft are among the many businesses that are implicit in the smartphone—a device that tracks exactly where you are, with mechanisms to handle mapping and transactions. So are thousands of other applications, some yet to be realized. Just as it does in biological evolution, the platform speeds up and makes possible all types of emergent breakthroughs and disruptive innovations.
Leaders today, in all fields, must be attentive to convergence, the power of platforms and their evolutionary potentials and, by extension, the business potentials that are implicit in them. In such a world, it is necessary to be agile, stay light on your feet, play the long game (or infinite game), and beware of thinking too narrowly about your industry. If you are in the business of selling cars, the future is highly uncertain. If you are in the transportation business, you have great opportunities ahead of you.
It’s natural to have some concern, even fear, about the potential impact of technological disruption on your business. But ultimately, a healthier response is to be inspired by the future that technological change is making possible. Conscious leaders don’t fundamentally fear the future; they’re too interested in being a part of it, building it, and shaping it. They are more focused on creating that future than in strategically defending their own businesses against change. The future is part of that infinite game, and conscious leaders and long-term thinkers express a natural “faith in the future” by planting seeds that will bear fruit in that extended time frame.
“It’s difficult to make predictions, especially about the future,” says an old Danish proverb. This is even truer in an accelerating world. In 1980, AT&T asked the top consulting company, McKinsey and Co., to advise them on the future of the mobile phone business. How many mobile phones would there be by the year 2000? After a careful study of that issue, McKinsey concluded there would be no more than 300,000—a market opportunity hardly worth pursuing for the huge phone company. But when the year 2000 arrived, companies were selling 300,000 mobile phones every three days.
But don’t blame McKinsey. At that point, everyone was just beginning to grapple with the nature of these exponential growth curves that enable and create entirely new categories of economic possibilities. In 1980, few realized that communication technology was undergoing an incredible exponential price/performance growth rate driven by information technology. But today’s leaders have fewer excuses.
That being said, the goal of this chapter is not to turn leaders into unerring forecasters—if such a thing were even possible. Exponential change and unexpected innovations will always take us by surprise, at least to some degree. Disruption in markets is a phenomenon that’s never easy to deal with, and it’s ten times harder if it’s being driven by accelerating technology. We may always be caught off guard by innovations that change our lives, and growth curves with hockey-stick-like properties. But if you want to be Netflix rather than Blockbuster, Apple rather than Nokia, or Uber rather than your local taxi service, it’s critical to be able to look at the chessboard, see a few handfuls of rice in the middle, and appreciate the mountain that is coming, even if you can’t see it clearly.
Still, becoming better-informed prognosticators, while important, has limited utility. Even the most innovative, technologically sophisticated companies make plenty of mistakes when it comes to predicting the future of technology. It’s perhaps a truism today that “no plan survives first contact with the enemy,” or, to put it in Mike Tyson’s more blunt style, “everybody has a plan until they get punched in the face.” That is always true when markets undergo transition, especially ones under the influence of exponential changes. Therefore, the capacity to pivot on the fly, to change direction, and to change one’s conclusions is one of the most important yet most difficult qualities of both organizations and individuals. The most important benefit of learning to think exponentially is that it can help you to not double down on a poor decision, and to acknowledge your own fallibility. As Mark Twain is said to have observed, “What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.”9 The same could be said for forecasting.
Thinking long term is a way to not make the obvious mistakes, to learn from what we’ve collectively come to understand regarding both the advance of technology and human cognition and its biases. It gives you the opportunity to succeed—or at least to make new mistakes. We speak a lot about humility in this book, and here again it’s worth a mention. Remember that humility does not necessarily have anything to do with an absence of confidence or conviction. One can have tremendous self-confidence and still be humble. One of the world’s top experts on forecasting, Philip Tetlock, explained in his recent book Superforecasting that when it comes to peering into the future, a very particular kind of self-reflection is required for good judgment:
The humility required for good judgment is not self-doubt—the sense that you are untalented, unintelligent, or unworthy. It is intellectual humility. It is a recognition that reality is profoundly complex, that seeing things clearly is a constant struggle, when it can be done at all, and that human judgment must therefore be riddled with mistakes. This is true for fools and geniuses alike. So it’s quite possible to think highly of yourself and be intellectually humble. In fact, this combination can be wonderfully fruitful. Intellectual humility compels the careful reflection necessary for good judgment; confidence in one’s abilities inspires determined action.10
“A leader is a dealer in hope,” Napoleon Bonaparte is said to have declared.11 We’re not suggesting you should emulate the world-dominating ambition of the nineteenth-century French general, but in this respect he was onto something. A significant element in the practice of long-term thinking is the exercise of hope. To plan and build for the long term, we have to believe in it. That also means believing that the future can be impacted, changed, and improved through our creative activities. In a world whose mood leans so heavily toward pessimism, a conscious leader must be able to convey to others a unique combination of faith and foresight. That doesn’t mean being naive, arrogant, or boastful. It simply means that one believes that the trajectory of the future can, in some small way, bend around one’s commitment, work, and intention. However strong our vision, dreams of the future are always risky: they’re often not shared by others, and reality never gives any guarantees. The economist Deirdre McCloskey once described entrepreneurs as those who possess “the virtue of courage combined with prudence and a pinch of hope.”12 Hope is not sufficient for creative leaps forward, but it is indispensable.
Perhaps the most important leadership lesson to be gained from a deep dive into the exponential nature of technological growth trends is a simple one: a healthy optimism. By that, we don’t mean a Pollyannaish techno-positivity, or a pseudo-faith that technological evolution is the simple answer to every complex question. No, we’re talking about a highly rational optimism, a realism infused with idealism, based not on faith but on the trends of history. It’s hard to look at some of these trend lines and not be inspired about the possibilities of the future. There will be disruption, yes, and plenty of unintended consequences, no doubt. There will be steps back even in the midst of larger leaps forward. There will be more than enough hype and disillusionment to go around. Such is the nature of progress and development in just about any form. But despite it all, we are now living during the healthiest, most prosperous and peaceful time in history.13 Even with all of our challenges, the rise of technology has massively improved the human condition. Whatever our complaints about current realities, few would want to return to the world of a couple hundred years ago, much less several thousand. And, more important, the exponential future will provide breakthroughs and opportunities we can scarcely imagine today—for businesses, for organizations, for entrepreneurs, for leaders of all kinds. Technology will provide opportunities to improve the human condition that dwarf our current tools. Genetics, robotics, self-driving cars, quantum computing, AR, VR, 3D printing, an abundance of cheap energy, biotech, nanotech, and many other as-yet-unrecognized breakthroughs. Some are already languishing on the front half of the chessboard. Don’t be fooled: soon they might change everything. Or, more specifically, they might inspire the businesses, products, services, and processes that will provide the opportunity to change everything. They won’t do it alone. Ultimately, those tools will need human guidance from conscious leaders with long-term perspectives to reach their true potential. That will take more than technology; it will take wisdom and insight. Some from the past, but plenty from the present and future as well.