348: How product managers can help to future-proof organizations – with Jonathan Brill

Prepare for the unexpected as a product manager

Today we are talking about change. Innovation itself means making change happen. Changes also come from external sources, with the COVID pandemic being an example of a huge cause of change.

Our guest, Jonathan Brill, is here to tell us how to survive through and profit from radical change. He was the futurist at HP, making strategy recommendations, and continues to help organizations prepare for the impacts the future brings. He also has written about the framework he uses in his book Rogue Waves.

Summary of some concepts discussed for product managers

5:17] What are business schools not teaching about strategy?

Business schools teach people to use a formulaic recipe to solve problems, but a recipe only works if the environment stays the same. A lot of business schools teach tools like Six Sigma or Extreme Programming; the founders of those frameworks understood a problem and created a recipe to solve it, but when a disruptive event like COVID, a financial crisis, or a new technology happens, the recipe doesn’t work anymore. I call those disruptive events rogue waves; unmanageable, huge waves that pop up out of nowhere because multiple, individually manageable waves combine in the same time and place. When that happens, your recipe isn’t going to help you unless you know how to cook.

To innovate in times of radical change, you need to understand three things: awareness to identify rogues waves coming; behavior change to prepare people to respond to the unexpected; and culture change to design processes and incentives to exploit change.

[9:02] Tell us more about Awareness.

Awareness means thinking about the social, economic, and technological changes that will overlap to create rogue waves, impacting your organization. Think about what could impact your financial, operational, or strategic performance or your external environment (the four foes). Product managers tend to focus on financial and operational impacts, but strategic and environmental issues are far more likely to occur.

[13:50] As an organization, how do we become aware of the trends that are shaping the future?

We need a culture shift. We make assumptions about what the future will look like based on the past, but it’s unlikely the low-volatility environment we have now will continue. We can’t assume our cookbooks will still work. To prepare for a changing future, consider having a future unit in your organization, like we have at HP. In the future unit, we look at the social, economic, and technological changes and what they mean across our functions. We report our findings annually to the C-suite and look at risks associated with the four foes (financial, operational, external, and strategic). As a result, we were prepared to respond to the rogue wave of the pandemic and HP’s revenue and earnings were stable over 2020.

[17:50] How does recognizing trends create a catalyst for new opportunities?

Recognizing trends not only helps us prepare for rogue waves; it also helps us find and exploit new opportunities. As an example, at HP we use microfluidics, moving very small dots of liquid on a page to make inkjet prints, a technology relevant for disease diagnosis. We had identified this application as an opportunity, and we knew a pandemic would be an accelerant. Just before COVID hit, we had funded a business unit that develops technologies for pandemics and medical issues.

To find opportunities, you can look internally at threats associated with the four foes, and externally at threats your customers are facing. The more you can alleviate your customers’ pain, the higher the value you’re creating for them.

We can apply some rules from Game Theory to innovation. First, make a dynamic threat into a static threat. This is what insurance does. I had two grass fires at the bottom of my hill,