A few months ago I was asked to give a speech to AWCI’s Industry
Executives’ Conference & Committee Week. It was decided
that the topic should be “Managing in Uncertain Times.”
This is the first in a series of six articles dealing with this topic.
Let’s start with these three questions: What certainties were
destroyed on Sept. 11? Are things any less certain today than
before this terrible tragedy? Why is the topic “Managing in
Uncertain Times” on our minds?
Certainly, our feelings of being an impregnable nation are shattered,
our sense of security is less, and the economy went
through a tremendous downturn last year. Such a tragedy and
such an economic downturn leave us feeling a great deal of
uncertainty.
For most of us, when we think about uncertainty, we tend to
think in terms of when things seem to have taken a turn for
the worse.
But, were this 1999 or 2000, how certain then was the future?
Continued economic growth, continued increase in equity markets
and continued growth in the construction industry were
the forecasts or expectations for many of us. The future seemed
pretty certain.
But, if we think about those expectations, we know that the
honest answer has to be “yesterday was no more certain than
today.” As a result, when the downturn comes and when we feel
much less certain, we often find it difficult to look into the
future.
In 1994 Professors Gary Hamel & C. K. Prahalad wrote an article
called “Competing for the Future.” In this article they outlined
the results of their detailed study of how companies look
into, plan and compete for the future.
They asked senior executives the following three questions:
- What percentage of your time is spent on external rather
than internal issues—on understanding the implications of a
particular new technology instead of debating corporate overhead
allocations?
- Of this time spent looking outward, how much do you
spend considering how the world may change in five or 10
years, rather than worrying about winning the next big contract
or responding to a competitor’s pricing move? - Of the time devoted to looking outward and forward, how
much do you spend working with colleagues to build a deeply
shared, well-tested perspective on the future as opposed to a personal
and idiosyncratic view?
The answers fall into what they call their “40/30/20 rule.” This
says that executives spend about 40 percent of their time looking
outward. Of that time, about 30 percent is spent looking
three or more years into the future. Of that time, about 20 percent
is spent building a collective view of the future.
The math then is 40% x 30% x 20% = 2.4%.
But let’s round it up to 3 percent. If the average executive works
a 50-hour week (2,500 hours per year), then 3 percent of 2,500
is only one and a half weeks per year dealing with the uncertain
future—a rather frightening statistic.
To succeed in the uncertain future, one must devote substantial
time to looking outward and forward.
About the Author
L. Douglas Mauk is president of the Executive Advisory Institute,
Yakima, Wash.