In a world of extraordinary uncertainty, manufacturers must learn how to recognize and respond to trends and developments in order to create anticipatory organizations instead of reactionary ones.
That’s the message of Daniel Burrus, a leading technology forecaster and business strategist. He will deliver the morning keynote address at the WMEP Manufacturing Matters! conference in Milwaukee April 23, 2008.
“We are faced with amazing uncertainty,” he said. “Are we entering a recession? If so, will it be a big recession? Or will there be no recession? Who will be the next president? Is the housing crisis over? We just don’t know.”
Such uncertainty, and a failure to anticipate evolving market trends and conditions, too often results in organizations that can only react to the shifting landscape. “Change comes at us from the outside in,” said Burrus. “We’re in crisis management, putting out fires.”
Any strategy based on the chaos of the everchanging business climate “has high risk and fleeting reward,” he said. “But a strategy based on certainty has low risk and high reward. And it’s amazing how much certainty there is.”
What’s Ahead
There are aspects of the global marketplace that, when correctly identified, can be used to create sound growth strategies. For example, “a perfect storm of technology-driven disruption is just about to hit,” said Burrus. “It’s going to cause massive disruption, but also massive opportunity for those who see it coming.”
One example of this is the speed of microprocessors used in computers and other devices. The geometric increases in processing power over the last several decades are at the point where they are about to go off the scale, a situation with dramatic implications.
“It means we can add intelligence to just about anything in the form of chips,” he said. “We can make a tire intelligent, so that it indicates when it’s going flat. Concrete can be made intelligent so you know when it’s cracking. This is unprecedented. Manufacturers need to reexamine their true core competencies in light of this massive disruption and opportunity.”
Spotting and capitalizing on such trends gives manufacturers more control over their place in the market. “When we’re in a reactionary mode, we’re order takers, or only focusing on how Lean we can be,” he said. “Companies should be Lean, but what manufacturer isn’t trying to get Lean? Lean is the cost of entry – you’re keeping up. I like to see companies go beyond Lean.”
What You Can Do to Grow
Communication “There’s a difference between informing and communicating,” Burrus said. “Informing is one-way, static, and may not cause action. Communication is two-way, dynamic, and causes action. The key is unlocking the power of communication.”
Collaboration Manufacturers within an industry should consider collaboration as a way to “break down fiefdoms and accomplish something that serves us all,” he said. By collaborating with competitors, better opportunities are created for everyone, while a healthy sense of competition is maintained.
Problem-solving “Some people say a problem is an opportunity in disguise,” Burrus said. “I say a problem is a problem.” A company with strategies based on certainty can head off problems by solving them before they appear. An even better approach is to look at their customers’ problems and develop solutions for them.
Differentiation “The more we compete with our competitors, the more we look like them and the less differentiated we are,” he said. By benchmarking a high-performing competitor and trying to reach that level, manufacturers are following a flawed plan because they can never catch up. A better plan is to benchmark the future based on certainty, then distance yourself from competitors by finding better customers and tailoring products for them.
Innovation Many companies “tend to have innovated on a couple of products, turned them into a cash cow and then spend their time milking the cash cow,” he said. “What they need are new cash cows.” Firms that have identified a core competency and leveraged it innovatively are in a better position, regardless of the state of the economy.
Jor-Mac Puts Principles into Practice
One such manufacturer, Jor-Mac Co., a metal fabrication contractor based in Grafton, has won back business from China by focusing on high quality, quick engineering changes and precision deliveries. The key to this success was determining what Jor-Mac could offer that low-cost Chinese competitors couldn’t, then finding customers who valued those competencies.
“Quick engineering changes are more difficult (for the Chinese),” Burrus said. “Time, language and distance are all barriers. So the question is, who are the type of customers that regularly make and need a lot of changes? They’re the target. They’re the ideal customers.”
That kind of strategic foresight has helped Jor-Mac grow and become an anticipatory organization. By recognizing and leading with certainty, manufacturers can move beyond a reactionary mindset and grow and prosper in the global marketplace.
Daniel Burrus is the author of the best-selling book Technotrends, and a leading futurist and business strategist. He is founder and CEO of Burrus Research, based in Hartland, Wis., a research and consulting firm that monitors technology-driven trends to help clients better understand how technological, social and business forces are converging to create enormous, untapped opportunities. He is also an entrepreneur who has founded and managed five businesses, two of which were national leaders in their first year.