If you use your sane-and-rational lenses and the situation doesn’t make sense, that’s because the situation is not governed by sanity and rationality. Yet, even though there’s a mismatch between the system’s behavior and sane-and-rational, we still try to understand the system through the cloudy lenses of sanity and rationality.
Computer programs are sane and rational; Algorithms are sane and rational; Machines are sane and rational. Fixed inputs yield predicted outputs; If this, then that; Repeat the experiment and the results are repeated. In the cold domain of machines, computer programs and algorithms you may not like the output, but you’re not surprised by it.
But businesses are not run by computer programs, algorithms and machines. Businesses are run by people. And that’s why things aren’t always sane and rational in business.
Where computer programs blindly follow logic that’s coded into them, people follow their emotions. Where algorithms don’t decide what to do based on their emotional state, people do. And where machines aren’t afraid to try something new, people are.
When something doesn’t make sense to you, it’s because your assumptions about the underlying principles are wrong. If you see things that violate logic, it’s because logic isn’t the guiding principle. And if logic isn’t the guiding principle, the only other things that could be driving the irrationality are feelings and emotions. But if you think the solution is to make the irrational system behave rationally, be prepared to be perplexed and frustrated.
The underpinnings of management and leadership are thoughts, feelings and emotions. And, thoughts are governed by feelings and emotions. In that way, the currency of management and leadership is feelings and emotions.
If your first inclination is to figure out a situation using logic, don’t. Logic is for computers, and even that’s changing with deep learning. Business is about people. When in doubt, assess the feelings and emotions of the people involved. And once you understand their thoughts and feelings, you’ll know what to do.
Business isn’t about algorithms. Business is about people. And people respond based on their emotional state. If you want to be a good manager, focus on people’s feelings and emotions. And if you want to be a good leader, do the same.
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You’ve done everything to set Strategic Foresight efforts up for success. Executive authority? Check. Challenging inputs? Check. Process integration? Check. Now you just need to flip the switch and you’re off to the races.
Not so fast.
While the wrong set-up is guaranteed to cause failure, the right set-up doesn’t guarantee success. Research shows that strategic foresight initiatives with the right set-up fail because of “organizational pathologies” that sabotage even well-designed efforts.
If you aren’t leading the right people to do the right things in the right way, you’re not going to get the impact you need.
Here’s what to watch out for (and what to do when it happens).
Your Teams Misunderstand Foresight’s Purpose
People naturally assume that strategic foresight predicts the future. When it doesn’t, they abandon it faster than last year’s digital transformation initiative.
Shell learned this the hard way. In 1965, they built the Unified Planning Machinery, a computerized forecasting tool designed to predict cash flow based on trends. It was abandoned because executives feared “it would suppress discussion rather than encourage debate on differing perspectives.”
When they shifted from prediction to preparation, specifically to “modify the mental model of decision-makers faced with an uncertain future,” strategic foresight became an invaluable decision-making tool.
Help your team approach strategic foresight as preparation, not prediction, by measuring success by the improvement in discussion and decision-making, not scenario accuracy. When teams build mental flexibility rather than make predictions, wrong scenarios stop being failed scenarios.
People are Paralyzed by Fear of Being Wrong
Even when your teams understand foresight’s purpose, managers are often unwilling “to use foresight to plan beyond a few quarters, fearing that any decisions today could be wrong tomorrow.”
This is profoundly human. As Webb wrote, “When faced with uncertainty, we become inflexible. We revert to historical patterns, we stick to a predetermined plan, or we simply refuse to adopt a new mental model.” We nod along in scenario sessions, then make decisions exactly like we always have.
Shell’s scenario planning efforts succeeded because it made being wrong acceptable. Even though executives initially scoffed at the idea of oil prices quadrupling, they prepared for the scenario and took near-term “no regrets” decisions to restructure their portfolio.
To help people get past their fear, reward them for making foresight-informed decisions. For example, establish incentives and promotion criteria where exploring “wrong” scenarios leads to career advancement.
Your Culture Confuses Activity with Achievement
Between insight and action, the Tyranny of Now reigns. In even the most committed organizations, the very real and immediate needs of the business call us away from our planning efforts and consume our time and energy, meaning strategic foresight is embraced only when it doesn’t interfere with their “real” jobs.
Disney’s approach made strategic foresight a required element of people’s “real jobs” by integrating foresight activities and insights directly into performance management and strategic planning. When foresight teams identified that traditional media consumption was fracturing in 2012, Disney began preparing for that future by actively exploring and investing in new potential solutions.
Resist the Tyranny of Now’s pull by making strategic foresight activities just as tyrannical – require decisions based on foresight insights to occur in 90 days or less. These decisions should trigger resource allocation reviews, even if the resources are relatively small (e.g., one or a few people, tens or hundreds of thousands of dollars). If strategic foresight doesn’t force hard choices about investments and priorities, it’s activity without achievement.
How You Lead and What People Do Determine Strategic Foresight’s Success
Executive authority, challenging inputs, and process integration are necessary but not sufficient. Success requires conquering the deeper organizational and human behaviors that determine whether strategic foresight is a corporate ritual or a competitive advantage.
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The surprising power of reframing as an innovation tool
GUEST POST from John Bessant
Neuroplasticity. Not some weird creation of a mad 3D sculptor intent on creating a strange new species with which to threaten the world in another zombie apocalypse story but instead a wonderful feature of our brains. Research increasingly confirms our ability, in the face of unexpected shock or challenge, to rewire ourselves, make new neural connections. Defined as‘the ability of neural networks in the brain to change through growth and reorganization’ it’s visible in the ways in which people can recover speech or movement after traumatic brain injury and it’s now understood to be critical in the process of early cognitive development in babies. It’s even offered as one explanation for the impossible and unpredictable lifestyls of teenagers; their penchant for lying in bed all day and mooching aorund may be down to their working hard at the synaptic level to reconstruct their brains!
It’s also a good description of a key capability which entrepreneurs have. Being able to reframe, seeing the world in a new way opens up significant new possibilities. Provided, of course, that you are then able to follow through, solving problems and enabling the new connections necessary to bring about that state.
Think about Malcolm Maclean, sitting on the dock of the bay one afternoon and imagining an alternative approach to shipping. Instead of the laborious loading and unloading with all its costs, its wasted time, the security challenges and so on – why not use containers? The vision involved a stretch of the imagination; the actual realisation of it considerably more but in the end you have a game changer. Reframing and then realising the possibilities.
It’s an old story; the challenge of transportation and logistics was one which engaged James Brindley 200 years earlier as the Industrial Revolution began to reshape the British economy and the landscape in which it took place. You can’t get a manufacturing-led transformation off the ground unless you can move tings around – raw materials in and finsihed products out of your factories. Which, given the worn-out and primitive state of many of the roads and tracks criss-crossing the country at the time was a big problem. Brindley was one of the pioneers of the idea of creating waterways – canals – as an alternative, providing fast and straight connections between factories, cities and ports.
Image: Watercolour of Barton aqueduct by G.F. Yates 1793, public domain
Just like Malcolm Maclean, this was an inspirational idea which required a deal of systems thinking. Not just one which could imagine an alternative world built on waterways but also one which would need a lot of practical problem solving to bring it into being. Dealing with multiple questions around how to enable the different elements of the system to come together and deliver ‘emergent properties’ where the whole has an impact much greater than the sum of its parts.
His efforts extended well beyond the map making and route planning through to the detailed construction, involving tunnels, cuttings and viaducts. He also had to think through the big challenge of hydraulics, how to fill the canals with water and keep them full – which meant, amongst other things, solving the problem of lining the canal with a water- saving clay. He also reduced the water demand by cutting narrower canals and then designing narrow-boats to navigate them. And since the country is not level means that in places vessels using the canal have to climb up or down slopes which necessitated development of intricately engineered locks and sluices.
Brindley’s work on connecting up the dots of his system into something which changed the transportation world of its time even extended to thinking in the same direction as Malcolm Mclean came to do much later. Faced with the problem of loading and unloading coal as a key bulk item Brindley devised a system involving specially built wooden containers which could be prefilled and transhipped quickly from specially-designed boats!
Above all Brindley was a systems thinker, seeing connections and working on how to best join up the dots to deliver major change. Which his legacy over 350 miles of canals criss-crossing the country and powering the Industrial Revolution seems to have done.
There’s still plenty of scope for such system rethinking today – giving opportunities even in the face of crisis. Take the example of Gridless, founded in 2022 and already a successful and growing business in the energy sector of Africa.
First the vision. Africa is the coming continent, with a huge population of around a billion largely young people and rapidly accelerating development. This creates an engine for growth through both domestic demand and – with sufficient investment – the possibility of increasing exports, not just of raw materials but of finished goods and services.
It has enormous potential – and it has a track record as a place where radical innovations can emerge and scale. Take the example of M-PESA. Where the idea of mobile money still seems fresh and exciting for citizens of the industrialised world learning to use cashless payments by phone it’s actually rather old hat to many people in East Africa. M-PESA (the word means mobile money in Swahili) is coming up towards celebrating its 20th birthday and has moved a long way from being an experiment to try and improve access to basic financial services for the largely unbanked population of Kenya. Now the M-PESA network carries 60% of GDP and delivers a growing range of services across the economy.
But Africa is also unevenly developed; not least in the case of energy. Whilst much of the population is now connected this is not the case everywhere. Over two thirds of the population – 600 million people – have no access to electricity. Mini-grids (relatively small local power stations and networks) can help solve this energy access problem, not least by tapping into the huge potential which renewable energy – solar, wind, hydro and biomass – has for the region.
There’s no shortage of technology to help construct mini and even micro-grids, and there are plenty of power sources which could potentially be tapped. The problem is economic; in order to finance the construction of such a micro-grid a lot of capital is needed up front. That needs a reasonable return to cover operating costs and recoup the investment costs – but in the short term the market to pay for this isn’t there.
When the power starts to flow there is relatively little demand to hook it up to; people who’ve survived without electricity don’t suddenly become active consumers. As Eric Hersman, one of the founders of Gridless points out, ‘ … if you’re a smallholder farmer in a rural village in Africa you’ll likely buy an LED light bulb and charge your phone at first. These don’t draw a lot of electricity, but they do change your life considerably. It might be a few years before you invest in that refrigerator, TV, irrigation pump, or electric oven’.
The consequence of this slow demand growth is that the provider ends up throwing away 80% of its energy and having to charge too high a price for the rest. What could be an important way of helping local communities develop runs aground because that high price effectively throttles the emerging demand at birth. Catch-22.
Gridless represents an entrepreneurial way of reframing this problem. Given such a stalemate their business model asks a simple question. What if there were a consumer who would guarantee to buy electricity at the necessary market rate to support the project and then gradually retreat as the prices fell and the connections rose? A stepping stone approach, essentially a temporary scaffolding to enable an infrastructure to emerge and grow. Using a horticultural metaphor it’s like putting in place a trellis to support an early sapling until the plant is able to survive and thrive on its own.
That’s the vision part of the Gridless approach – to help Africa with micro-grid development. Their website describes it simply: ‘By combining small-scale bitcoin data centres and renewables-based mini-grids they aim to develop the foundation of a new model to expand profitable electrification to communities in emerging markets without the need for charity, aid, gifts, or government subsidy…’
Bitcoin mining – the energy intensive operation of multiple computers beavering away at solving complex mathematical puzzles to earn rewards in the form of bitcoins – does not have the best of reputations in terms of sustainability. By its nature it involves consuming huge amounts of energy whose generation often contributes to pollution and global warming. But Gridless have reworked the story so that it makes a positive contribution to both sustainability of operations and community development.
It does so in a simple a practical way. It hooks up a bitcoin mine with a source of sustainable energy provided by local renewables like hydro or solar. And it deals with the ‘stranded energy’ problem by joining in the system as a ‘buyer of last resort’. Their bitcoin mining operations provide plenty of demand for energy and those operations are profitable enough to buy it at prices which are too high for local communities to pay in the short term. But as the market develops so the local demand increases – and this means the provider can reduce prices, recouping their costs over a larger market. They can also invest to extend the grid and bring yet more demand into the system.
Eventually things reach a point where there isn’t enough power left for the bitcoin mining, so Gridless pack up their operations, move on to another site where there is ‘stranded energy;’ and start the whole cycle once again. It’s a business model for development with some important social values underpinning it. The main purpose is to help connect people through micro-grids and to gradually exit as the role of the buyer of first resort becomes unnecessary. It’s a business fuelled by bitcoin profits but these are effectively being reinvested in social development – a powerful alternative vision. By providing a consistent and reliable demand for electricity, Bitcoin mining helps to utilize excess renewable energy that might otherwise go to waste, thereby unlocking the potential of stranded renewable energy projects and contributing to a more sustainable energy future.
An impressive vision – but as Messrs Maclean and Brindley will tell you, the challenge is not in creating the vision, it’s in realising it. Visions like these need a lot of different dots to be joined up, a lot of problem solving to make it all work. The Gridless solution starts with the idea of being ‘geographically agnostic’ – meaning it is mobile and can be moved anywhere, finding and helping develop micro-grids wherever there is ‘stranded energy’ opportunity.
They do this by putting the bitcoin mine in a box – literally, using a shipping container in a way which would make Malcolm Maclean proud. They move it close to sources of renewable power – like a micro-hydro system in Zambia, harvesting the abundant energy from the fast flowing Zambesi river.
They’ve worked hard on adapting their technology – computers, power supplies, software – to operate in what can still be challenging conditions. Rural Africa is a long way from the clinical clean environments of Silicon Valley and they’ve had to learn to deal with the suite of problems this throws up in order to make their system reliable. For example air quality- the dust which the wind blows up as it sweeps across the wide plains means you have to be very careful to fit suitable filters to avoid all the expensive electronics grinding to a halt. Ditto the heat; average temperatures in Kenya hover around 30 degrees Celsius so there’s a big problem in keeping things cool. And then there are the bugs.
In 2022 when they set up their first facility the lights attracted plenty of curious insects and, especially in the rainy season, they flew towards them en masse, only to crash into the ventilation fans and eventually jam them!
Problems weren’t just physical; the economics of buying containers ready made from China or the USA to use as mobile bitcoin mines posed a big challenge. Quite apart from the logistics and transportation costs of getting them to Africa there were bureaucratic costs involved in getting the various permissions needed to import such equipment. And then there were the capital costs – at over $100,000 per container it was too expensive. So the team went back to the drawing board and designed their own container which cost 75% less. It’s also had the side benefit of bypassing many of the import regulations (since it is now a domestically manufactured product)
Their problem-solving also extends to another big issue with their business model – that of micro-grid management. How to balance supply and demand and make sure that the needs of the community are served first? Gridless wanted to make sure that they weren’t using electricity which somebody else needed. They did this by writing their own software – Gridless OS – which allows for real-time response to demand, making sure people get what they need when they need it whilst also stabilising the grid.
After three years of such problem-solving the team have a robust model which they have demonstrated can work in a variety of contexts, using whatever renewable power supply is available – solar, hydro or biomass. Theirs is primarily a social mission and so they’ve codified their experience and can offer a blueprint for the same kind of model to be used by others to help African development.
And it works. Not only by connecting people to electric power but by extending the range of possibilities which that then opens up. Once you have power you can have light – which offers more than just illumination, it allows children to study at night and boosts education. Local services become possible because power enables small-scale facilities to operate and deliver healthcare. Business can connect better to markets and small-scale farms and factories can improve their operations and profitability, generating employment.
In an interview with Bitcoin Magazine one of the Gridless founders, Janet Maingi, elaborated on this novel approach which now operates in several countries including Kenya, Malawi and Zambia, ‘…for example, there’s a tea factory in Muranga, Kenya, which is in the highlands. We partnered with the energy generator in the area and they were able to give the factory power. Now, their facilities are able to support the tea factory, which has two benefits: tea farmers can bring their tea to the factory, which means it doesn’t spoil on the farms because they can’t get it to point B in time and more employment has also been created just by that tea factory becoming an electrified space….’
The potential is huge. As Eric Hersman, points out‘….just 10% – 40GW of the 400GW of hydroelectric energy in Africa – has been developed (and that’s just hydro!). There is a near unlimited supply of energy to be developed in the one place on earth that needs it most… Africa. But how to get the plants built? Despite being home to 17% of the world’s population, Africa currently accounts for just 4% of global power supply investment’.
As he points out mini-grid business models have traditionally focused on having an ‘anchor client’, a single large electricity consumer such as a telecom tower, which consumes the majority of electricity supplied by the mini-grid. The anchor client is the first step in what’s called an ABC strategy (Anchor—Business—Consumers) for mini-grid financial sustainability. The model builds on finding an anchor client with a predictable load profile and then helping develop around that a group of local businesses that can provide stable demand and promote economic growth in the communities. The last step is residential customers, bringing them in gradually by improving access and generating income from them.
Over the last 3 years Gridless has shown that mini-grids can be made profitable using their model of becoming a ‘geographically agnostic anchor tenant’. They’ve done this on 6 sites in 3 African countries, using the stranded (wasted) energy from hydro, biomass, geothermal, some of that augmented by solar. Their numbers prove that it can be done; they are confident that a 5-7 year return on investment is possible on almost any hydro mini grid.
There’s a lot to be done – figures from the World Bank estimate that Africa needs 140,000 mini-grids to help electrify the continent. But as of 2025 only 5000 have been built – around 5% of what’s required. Which opens up a huge opportunity – if we can reframe the problem.
The key thing about neuroplasticity is that it isn’t an instant process of constructing new neural pathways. Instead the connections have to be made and reinforced; only gradually does the new network become fully operational. Patients who manage to recover movement or speech after a catastrophic neural event like a stroke do so by a mixture of hard work and determination. Gradually creating those new pathways.
Fixing problems like Africa’s energy challenge won’t happen overnight. It’s not going to be simple, and it will need a lot of system-level problem-solving, joining the dots. But just like James Brindley imagining a network of canals or Malcolm Maclean picturing container routes spanning the world, it starts with an entrepreneurial vision.
You stand on the brink of an exciting new adventure. Turmoil and uncertainty have convinced you that future success requires more than the short-term strategic and business planning tools you’ve used. You’ve cut through the hype surrounding Strategic Foresight and studied success. You are ready to lead your company into its bold future.
So, where do you start?
Most executives get caught up in all the things that need to happen and are distracted by all the tools, jargon, and pretty pictures that get thrown at them. But you are smarter than that. You know that there are three things you must do at the beginning to ensure ultimate success.
Give Foresight Executive Authority and Access
Foresight without responsibility is intellectual daydreaming.
While the practice of research and scenario design can be delegated to planning offices, the responsibility for debating, deciding, and using Strategic Foresight must rest with P&L owners.
Amy Webb’s research at NYU shows that when a C-Suite executive with the authority to force strategic reviews oversaw foresight activities, the results were more likely to be acted on and integrated into strategic and operational plans. Shell serves as a specific example of this, as its foresight team reported directly to the executive committee, so that when scenarios explored dramatic oil price volatility, Shell executives personally reviewed strategic portfolios and authorized immediate capability building.
Start by asking:
Who can force strategic reviews outside of the traditional planning process?
What triggers a review of Strategic Foresight scenarios?
How do we hold people accountable for acting on insights?
Demand Inputs That Challenge Your Assumptions
If your Strategic Foresight conversations don’t make you uncomfortable, you’re doing them wrong.
Webb’s research also shows that successful foresight systematically explores fundamental changes that could render the existing business obsolete.
Shell’s scenarios went beyond assumptions about oil price stability to explore supply disruptions, geopolitical shifts, and demand transformation. Disney’s foresight set aside traditional assumptions about media consumption and explored how technology could completely reshape content creation, distribution, and consumption.
Start by asking these questions:
Is the team going beyond trend analysis and exploring technology, regulations, social changes, and economic developments that could restructure entire markets?
Who are we talking to in other industries? What unusual, unexpected, and maybe crazy sources are we using to inform our scenarios?
Does at least one scenario feel possible and terrifying?
Integrate Foresight into Existing Planning Processes
Strategic Foresight that doesn’t connect to resource allocation decisions is expensive research.
Your planning processes must connect Strategic Foresight’s long-term scenarios to Strategic Planning’s 3–5-year plans and to your annual budget and resource decisions. No separate foresight exercises. No parallel planning tracks. The cascade from 20-year scenarios to this year’s investments must be explicit and ruthless.
When Shell’s scenarios explored dramatic oil price volatility over decades, Shell didn’t file them away and wait for them to come true. They immediately reviewed their strategic portfolio and developed a 3–5-year plan to build capabilities for multiple oil futures. This was then translated into immediate capital allocation changes.
Disney’s foresight about changing media consumption in the next 20 years informed strategic planning for Disney+ and, ultimately, its operational launch.
Start by asking these questions:
How is Strategic Foresight linked to our strategic and business planning processes?
How do scenarios flow from 20-year insights through 5-year strategy to this year’s budget decisions?
How is the integration of Strategic Foresight into annual business planning measured and rewarded?
Three Steps. One Outcome.
Strategic foresight efforts succeed when they have the executive authority, provocative inputs, and integrated processes to drive resource allocation decisions. Taking these three steps at the very start sets you, your team, and your organization up for success. But they’re still not a guarantee.
Ready to avoid the predictable pitfalls? Next week, we’ll consider why strategic foresight fails and how to prevent your efforts from joining them.
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Are you spooked by the uncertainty and volatility that defines not just our businesses but our everyday lives? Have you hunkered down, stayed the course, and hoped that this too shall pass? Are you starting to worry that this approach can’t go on forever but unsure of what to do next? CONGRATULATIONS, consultants have heard your cries and are rolling out a shiny new framework promising to solve everything: Strategic Foresight.
Strategic foresight is the latest silver bullet for navigating our chaotic, unpredictable world.
Remember in 2016 when Agility was going to save us all? Good times.
As much as I love rolling my eyes at the latest magic framework, I have to be honest – Strategic Foresight can live up to the hype. If you do it right.
What Strategic Foresight Actually Is (Spoiler: Not a Silver Bullet)
A LOT is being published about Strategic Foresight (I received 7 newsletters on the topic last week) and everyone has their own spin. So let’s cut through the hype and get back to basics
What it is: Strategic foresight is the systematic exploration of multiple possible futures to anticipate opportunities and risks, enabling informed decisions today to capture advantages tomorrow.
There’s a lot there so let’s break it down:
Systematic exploration: This isn’t guessing, predicting, or opining. This is a rigorous and structured approach
Multiple possible futures: Examines multiple scenarios because we can’t possibly forecast or predict the one future that will occur
Enabling informed decisions today: This isn’t an academic exercise you revisit once a year. It informs and guides decisions and actions this year.
Capture advantages tomorrow: Positions you to respond to change with confidence and beat your competition to the punch
How it fits: Strategic Foresight doesn’t replace what you’re doing. It informs and drives it.
Approach
Timeline
Focus
Strategic Foresight
5-20+ years
Explore possible futures
Strategic Planning
3-5 years
Create competitive advantage
Business Planning
Annual cycles
Execute specific actions
The sequence matters: Foresight → Strategic Planning → Business Planning.
This sequence also explains why Strategic Foresight is so hot right now. Systemic change used to take years, even decades, to unfold. As a result, you could look out 3-5 years, anticipate what would be next, and you would probably be right.
Now, systemic change can happen overnight and be undone by noon the next day. Whatever you think will happen will probably be wrong and in ways you can’t anticipate, let alone plan for and execute against.
Strategic Foresight’s rigorous, multi-input approach gives us the illusion of control in a world that seems to be spinning out of it.
How to Avoid the Illusion and Get the Results.
Personally, I love the illusion of control BUT as a business practice, I don’t recommend it.
Strategic Foresight’s benefits will stay an illustion if you don’t:
Develop in-house strategic foresight capabilities.Amy Webb’s research at NYU shows that companies using rigorous foresight methodologies consistently outperform those stuck in reactive mode. Shell’s legendary scenario planning helped them navigate oil crises while competitors flailed. Disney’s Natural Foresight® Framework keeps them ahead of entertainment trends that blindside others.
Integrate foresight into your annual strategic planning cycle: Strategic foresight is a front-end effort that makes your 3-5 year strategy more robust. If you treat it like a separate exercise where you hire futurists, and run some workshops, and check the Strategic Foresight box, you won’t see any benefits or results.
What’s Next?
Strategic foresight isn’t a silver bullet, but it can be a path through uncertainty to advantage and growth.
The difference between success and failure comes down to execution. Do you treat it as prediction or preparation? Do you integrate it with existing planning or silo it in innovation labs?
Ready to separate the hype from the hard results? Our next post shows you what two industry leaders learned about turning foresight into competitive advantage and how you can use those lessons to your benefit
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(and What Data Centers Can Teach Us About Getting Them Right)
GUEST POST from Robyn Bolton
On May 6, Nvidia CEO Jensen Huang and ServiceNow CEO Bill McDermott joined CNBC’s “Power Lunch” to discuss the companies’ partnership. But something that Huang said about large-scale cloud service providers (i.e., hyperscalers) at the end of the interview stopped me in my tracks:
It’s not a data center that stores information. It’s a factory that produces intelligence. And these intelligence tokens could be reformulated into music, images, words, avatars, recommendations of music, movies, or, you know, supply chain optimization techniques.
What struck me wasn’t the claim about what data centers and AI could create — we’ve seen evidence of that already. It was the re-framing of data centers from storage solutions to “intelligence factories.”
When leaders fail to lead, or even recognize that the business they’re in is different, even the best efforts at business transformation are doomed.
Because re-framing is how Disruption begins.
Data Centers Are No Longer in the Data Business
Repositioning your company to serve a new job requires rethinking, redesigning, and rebuilding everything.
Consider the old adage that railroads failed because they thought they were in the railroad business. By defining themselves by their offering (railroad transportation) rather than the Jobs to be Done they solve (move people and cargo from A to B), railroads struggled to adapt as automobiles became common and infrastructure investments shifted from railroads to highways.
Data centers have similarly defined themselves by their offering (data storage). However, Huang’s reframing signals a critical shift in thinking about the Jobs that data centers solve: “provide intelligence when I need it” and “create X using this intelligence.”
Intelligence Factories Require a New Business Model
This shift—from providing infrastructure for storing data to producing intelligence, strategic analysis, and creative output—will impact business models dramatically.
Current pricing models based on power consumption or physical space will fail to capture the full value created. Capabilities mustexpand beyond building infrastructure to include machine learning and AI partnerships.
But Intelligence Factories are Just the Beginning
While Intelligence Factories will require data centers to rethink their business models and may even introduce a new basis of competition (a requirement for Disruption), they’re only a stepping-stone to something far more disruptive: Dream Factories.
While the term “Dream Factory” was coined to describe movie studios during Golden Era, the phrase is starting to be used to describe the next iteration of data centers and AI. Today’s AI is limited to existing data and machine learning capabilities, but we’re approaching the day when it can create wholly new music, images, words, avatars, recommendations, and optimization techniques.
This Is Happening to Your Business, Too
This progression will transform industries far beyond technology. Here’s what the evolution from data storage to Intelligence Factory to Dream Factory could look like for you:
Healthcare: From storing medical records to diagnosing conditions to creating novel treatments
Financial Services: From tracking transactions to predicting market movements to designing new financial instruments
Manufacturing: From inventory management to process optimization to inventing new materials
Retail: From cataloging products to personalizing recommendations to generating products that don’t yet exist
How to prepare for your Dream Factory Era
Ask yourself and your team these three questions:
Is my company defining itself by what it produces today or by the evolving needs it serves?
What is our industry’s version of the shift from data storage to dream factory?
What happens to our competitive advantage if someone else creates our industry’s dream factory before we do?
If you’re serious about transformation, take a cue from the data centers: redefine what business you’re in—before someone else does.
After all, the key to success isn’t trying to stay a data center. It’s recognizing you’ve become an intelligence factory, and your long-term success depends on becoming a dream factory.
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“What will you do on vacation?” a colleague asked.
“Nothing,” I replied.
The uncomfortable silence that followed spoke volumes. In boardrooms and during quarterly reviews, we celebrate constant motion and back-to-back calendars. Yet, study after study shows that the most successful leaders embrace a counterintuitive edge: strategic idleness.
While your competitors exhaust themselves in perpetual busyness, research shows that deliberate mental downtime activates the brain networks responsible for strategic foresight, innovative solutions, and clear decision-making.
The Status Trap of Busy-ness
At one company I worked with, there was only one acceptable answer to “How are you doing?” “Busy.” The answer wasn’t a way to avoid an awkward hallway conversation. It was social currency. If you’re busy, you’re valuable. If you’re fine, you’re expendable.
A 2017 study published in the Journal of Consumer Research confirmed what Columbia, Georgetown, and Harvard researchers discovered: being busy is now a status symbol, signaling “competence, ambition, and scarcity in the market.”
But here’s the uncomfortable truth: your packed schedule is undermining the very outcomes you’re accountable for delivering.
Your Brain’s Innovation Engine
Neuroscience has confirmed what innovators have long practiced: Strategic Idleness. While you consciously “do nothing,” your default mode network (DMN) engages, making unexpected connections across stored information and experiences.
Recent research published in the journal Brain demonstrates that the DMN is activated during creative thinking, with a specific pattern of neural activity occurring during the search for novel ideas. This network is essential for both spontaneous thought and divergent thinking, core elements of innovation.
So if you’ve always wondered why you get your best ideas in the shower, it’s because your DMN is powered all the way up.
Three Ways to Power-Up Your Engine
Here are three executive-grade approaches to strategic idleness without more showers or productivity sacrifices:
Pause for 10 Minutes Before Making a Decision Before making high-stakes decisions, implement a mandatory 10-minute idleness period. No email, no conversation—just sitting. Research on cognitive recovery suggests that this brief reset activates your DMN, allowing for a more comprehensive consideration of variables and strategic implications.
Take a Walking Meeting with Yourself Block 20 minutes in your calendar each week for a solo walking meeting (and then take the walk!). No other attendees, no agenda, just walking. Researchers at Stanford University found that walking increases creative output by an average of 60% compared to sitting. The combination of physical movement and mental space creates ideal conditions for your brain to generate solutions to problems you didn’t know you had.
Schedule 3-5 minutes of Strategic Silence before key discussions Research on group dynamics shows that silent reflection before discussion can reduce groupthink and increase the quality of ideas by helping team members process information more deeply. Before you dive into a critical topic at your next leadership meeting, schedule 3-5 minutes of silence. Explain that this silence is for individual reflection and planning for the upcoming discussion, not for checking email or taking bathroom breaks. Acknowledge that it will feel awkward, but that it’s critical for the upcoming discussion and decision.
Remember, You’re Not Doing Nothing If You’re being Strategically Idle
The most valuable asset in your organization isn’t technology, capital, or even the products you sell. It’s the quality of thinking that goes into critical decisions. Strategic idleness isn’t inaction; it’s the deliberate cultivation of conditions that foster innovation, clear judgment, and strategic foresight.
While your competitors remain trapped in perpetual busyness, by using executive advantage of strategic idleness, your next breakthrough will present itself.
This is an updated version of the June 9, 2019, post, “Do More Nothing.”
Image credit: Unsplash, Laura Weiss
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Sometimes they’re said when a company is starting to invest in building their innovation capabilities, sometimes during one-on-one stakeholder interviews when people feel freer to share their honest opinions, and sometimes well after investments are made.
Every single time, they are the beginning of the end for innovation.
But one word that can change that.
“We don’t have time – yet.”
“Our people don’t have the skills – yet.”
“We don’t have the budget – yet.”
“That’s not what we do – yet.”
Yet.
Yet creates space for change. It acknowledges that you’re in the middle of a journey, not the end. It encourages conversation.
“We don’t have time – yet.”
“OK, I know the team is busy and that what they’re working on is important. Let’s look at what people are working on and see if there are things we can delay or stop to create room for this.”
“Our people don’t have the skills – yet.”
“Understand, we’re all building new skills when it comes to innovation. Good news, skills can be learned. Let’s discuss what we need to teach people and the best way to do that.”
“We don’t have the budget – yet.”
“I get it. Things are tight. We know this is a priority so let’s look at the budget and see if there’s a way to free up some cash. If there’s not, then we’ll go back to leadership and ask for guidance.”
“That’s not what we do – yet.”
“I know. Remember, we’re not doing this on a whim, we’re doing this because (fill in reason), and we have a right to do it because of (fill in past success, current strength, or competitive advantage.”
You need to introduce the Yet.
It is very rare for people to add “yet” to their statements. But you can.
When someone utters an innovation-killing statement, respond with “Yet.” Maybe smile mischievously and then repeat their statement with “yet” added to the end.
After all, you’re not disagreeing with them. You’re simply qualifying what they’re saying. Their statement is true now, but that doesn’t mean it will be true forever. By restating their assertion and adding “yet,” you’re inviting them to be part of the change, to take an active role in creating the new future state.
There’s a tremendous amount of research about the massive impact of this little word. It helps underperforming students overachieve and is closely associated with Dr. Carol Dweck’s research into fixed and learning mindsets.
The bottom line is that “yet” works.
Put Yet to work for you, your organization, and your efforts to innovate and grow.
Image credit: Unsplash
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“A Few Good Men” is one of my favorite movies. As much as I love Jack Nicholson’s classic line, “You can’t handle the truth!” lately, I’ve been thinking more about a line delivered by Lt. Daniel Kaffee, played by Tom Cruise – “And the hits just keep on comin’.”
But, just like Lt. Kaffee had to make peace with Lt. Cdr JoAnne Galloway joining his Cuba trip, we must make peace with uncertainty and find the guts to move forward.
This is much easier said than done, but these three steps make it possible. Even profitable.
Where We Begin
Imagine you’re the CEO of Midwest Precision Components (MPW), a $75 million manufacturer of specialized valves and fittings. Forty percent of your components come from suppliers now subject to new tariffs, which, if they stay in effect, threaten an increase of 15% in material costs. This increase would devastate your margins and could require you to reduce staff.
Your competitors are scrambling to replace foreign suppliers with domestic ones. But you know that such rapid changes are also risky since higher domestic prices eat into your margins (though hopefully less than 15%), and insufficient time to quality test new parts could lead to product issues and lost customers. And all this activity assumes that the tariffs stay in place and aren’t suddenly paused or withdrawn.
Three Steps Forward
Entering the boardroom, you notice that the CFO looks more nervous than usual, and your head of Supply Chain is fighting a losing battle with a giant stack of catalogs. Taking a deep breath, you resolve to be creative, not reactive (same letters, different outcomes), and get to work.
Step 1: Start with the goal and work backward. The goal isn’t changing suppliers to reduce tariff impact. It’s maintaining profit margins without reducing headcount or product quality. With your CFO, you whiteboard a Reverse Income Statement, a tool that starts with required (not desired) profits to calculate necessary revenues and allowable costs. After running several scenarios, you land on believable assumptions that result in no more than a 4% increase in costs.
Step 2: Identify and prioritize assumptions. With the financial assumptions identified, you ask the leadership team to list everything that must be true to deliver the financial assumptions, their confidence that each of their assumptions is true, and the impact on the business and its bottom line if the assumption is wrong.
Knowing that your head of Sales is an unrelenting optimist and your Supply Chain head is mired in a world of doom and gloom, you set a standard scale: High confidence means betting your annual salary, medium is a team dinner at a Michelin-starred restaurant, and low is a cup of coffee. High impact puts the company out of business, medium requires major shifts, and low means extra work but nothing crazy.
Step 3:Attack the deal killers. Going around the room, each person lists their “Deal Killers,” the Low Confidence – High Impact assumptions that pose the highest risk to the business. After some discussion to determine the primary assumptions at the beginning of causal chains, you select two for immediate action: (1) Alternative domestic suppliers can be found for the two highest-cost components, and (2) Current manufacturing processes can be quickly adapted to accommodate parts from new suppliers.
A Plan. A Timeline. A Sense of Calm.
With this new narrowed focus, your team sets a shared goal of resolving these two assumptions within 30 days. Together, they set clear weekly deliverables and reallocate time and people to help meet deadlines.
A sense of calm settles on the team. Not because they have everything figured out, but because they know exactly what the most important things to be done are, that those things are doable, and they are working together to do them.
How could you use these three steps to help you move forward through uncertainty?
Image credit: Pixabay
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It’s easy to get complacent about your strategy skills. After all, our yearly “strategic planning” processes result in quarterly “strategic priorities” that require daily “strategic decisions.” So, it’s reasonable to assume that we know what we’re doing when it comes to strategy development.
I’ll admit I did. After all, I’ve written strategic plans for major brands, developed strategies for billion-dollar businesses, and teach strategy in a Masters program.
I thought I knew what I was doing.
Then ChatGPT proved me wrong.
How it Began
My student’s Midterm assignment for this semester is to develop, recommend, and support a strategy for the companies they’ve studied for the past seven weeks. Each week, we apply a different framework – Strategy Kernel, SWOT, Business Model Canvas, Porter’s 5 Forces, PESTLE, Value Chain – to a case study. Then, for homework, they apply the framework to the company they are analyzing.
Now, it’s time to roll up all that analysis and turn it into strategic insights and a recommended strategy.
Naturally, they asked me for examples.
I don’t have a whole lot of examples, and I have precisely none that I can share with them.
I quickly fed The LEGO Group’s Annual Report, Sustainability Report, and Modern Slavery and Transparency Statements into ChatGPT and went to work.
Two hours later, I had everything needed to make a solid case that LEGO needs to change its strategy due to risks with consumers, partners, and retailers. Not only that, the strategy was concise and memorable, with only 34 carefully chosen words waiting to be brought to life through the execution of seven initiatives.
Two hours after that, all of my genius strategic analysis had been poured into a beautifully designed and perfectly LEGO-branded presentation that, in a mere six slides, laid out the entire case for change (which was, of course, supported by a 10-page appendix).
The Moment
As I gazed lovingly at my work, I felt pretty proud of myself. I even toyed with the idea of dropping a copy off at LEGO’s Back Bay headquarters in case they needed some help.
I chuckled at my little daydream, knowing no one would look at it because no one asked for it, and no implementers were involved in creating it.
That’s when it hit me.
All the reasons my daydream would never become a reality also applied to every strategy effort I’ve ever been part of.
No one looks at your strategy because it’s just a box to check to get next year’s budget.
No one asks for it because they’re already working hard to maintain the status quo. They don’t have the time or energy to imagine a better future when they’re just trying to get through today.
No one responsible for implementing it was involved in creating it because strategy is created at high levels of the organization or outsourced to consultants.
What the strategy is doesn’t matter.*
What matters is how the strategy was created.
Conversation is the only way to create a successful, actionable, and impactful strategy.
Conversation with the people responsible for implementing it, they people on the ground and the front lines, the people dealing with the ripple effects of all those “strategic” decisions.
How It’s Going
Today, I’m challenging myself—and you—to make strategy a dialogue, not a monologue. To value participation over presentation. Because strategy without conversation isn’t strategy at all—it’s just a beautiful document waiting to be forgotten.
Who are you inviting into your next strategy conversation that isn’t usually there but should be? Share in the comments below.
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