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Chapter 5: The Day After Tomorrow
1 Introduction
"The Day After Tomorrow" by Peter Hinssen discusses how businesses can navigate and
succeed in an era of rapid innovation and disruption. Hinssen encourages organizations to focus on
long-term transformation rather than short-term solutions, preparing for the 'day after tomorrow' to
ensure sustainability and competitiveness in a fast-evolving world.
1.1 Four Questions
1. Large Company Blindness: Large companies often struggle with innovation and adopting new
technologies due to their size, which can lead to organizational inertia. The complexity of their
hierarchies and the focus on maintaining the status quo can create blind spots for disruptive
technologies. It's a challenge to balance ongoing operations with the risk-taking required for
embracing radical innovation. This requires a shift in mindset from the top down, where leadership
must foster an environment that encourages experimentation and accepts the possibility of failure
as a step towards progress.
2. Challenges in Mergers and Acquisitions (M&A): M&As often fail to meet expectations due to
cultural clashes, integration issues, and the dissipation of the acquired company's innovative spirit.
Large corporations might rush into acquisitions to harness fresh ideas and technology without a
strategic integration plan, resulting in a loss of the very agility and innovation that made the startup
attractive. Success in M&A requires a clear vision for integration, respect for the acquired
company’s culture, and strategies that allow the acquired entity to maintain some of its
entrepreneurial drive.
3. Large vs. Agile: The agility of smaller, more nimble companies often contrasts starkly with the
cumbersome nature of large corporations. While large companies have the advantage of resources
and scale, they often lack the flexibility to respond quickly to market changes. The bureaucratic
layers that come with size can impede rapid decision-making. To overcome this, large corporations
need to adopt a culture that encourages innovation, decentralizes decision-making, and embraces
agile principles that allow for faster pivoting and iteration.
4. Succeeding in the Day After Tomorrow (DAT): As companies prepare for the DAT, they must not
only anticipate future trends but also be prepared to rapidly adjust their strategies to align with
these shifts. This calls for an organizational culture that prioritizes long-term vision over short-term
gains, fosters continuous learning, and encourages collaboration across all levels. Embracing digital
transformation, investing in research and development, and creating cross-functional teams can
help companies become more responsive and ensure that they are not only reacting to changes
but leading the way.
1.1.1 Context
Large organizations often struggle with recognizing and integrating radical innovation. They
may acquire startups to inject innovation but frequently falter in merging the new culture or capitalizing
on the acquired innovation. Even with an understanding of necessary changes, these companies can
appear incompetent in execution. In a VUCA world—characterized by volatility, uncertainty, complexity,
and ambiguity—managing 'Day After Tomorrow' thinking is a significant challenge that requires agility,
foresight, and adaptability to navigate effectively.
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1.1.2 Eisenbahnscheinbewegung
The concept of "Eisenbahnscheinbewegung" describes the illusion of motion that occurs when
you're stationary but perceive yourself to be moving because an adjacent train starts to move. In a
business context, it represents the dilemma companies face when they believe they are progressing
simply because the industry or their competitors are advancing rapidly. This can be particularly
misleading in the fast-paced environment dictated by 'Day After Tomorrow' (DAT) thinking, where
change is accelerating rapidly. Companies may need to significantly speed up their innovation processes
to keep pace and not be fooled into complacency. This misperception of progress can be one of the
most significant threats to an organization's success and relevance in the future.
Data are gold
Data has become a critical asset for businesses, as it holds the key to insights, decision-making,
and strategic advantage. This aligns with the common adage "data is the new oil," emphasizing its role
as a fundamental resource in driving innovation and growth in various industries.
The Global Game
The global economic landscape is marked by the dominance of the US and China, particularly
in the technological arena. As these nations compete in the technological race, predictions suggest that
China may surpass the US in terms of GDP by 2023. This reflects broader trends in innovation and
economic growth, with the distribution of high-value startups, known as unicorns, indicating the
vibrancy and potential of their respective ecosystems. The emergence of such companies is a key
indicator of a country's innovative capacity and potential for future economic leadership.
Major technology companies such as Meta, Apple, Microsoft, Amazon and Alphabet (behind
Google) have become key players in the global economy, with their revenues rivaling the GDPs of some
countries and their market value representing a significant portion of major stock indices. These
companies' economic power reflects their central role in the current technological and financial
landscape.
1.2 Survival
In the current fast-paced business climate, survival hinges on embracing radical innovation.
Companies often struggle with this, as evidenced by their difficulties in recognizing groundbreaking
innovations, integrating startups they acquire, and appearing incompetent even when they know the
direction they should take. This is compounded by the challenges of applying 'Day After Tomorrow'
thinking in a VUCA (volatile, uncertain, complex, ambiguous) world. Despite these challenges, it's
notable that younger, smaller companies, such as startups and scale-ups, are often more nimble,
although they represent a small fraction of the overall job market and corporate landscape.
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1.2.1 VUCA
In a VUCA world characterized by
volatility, uncertainty, complexity,
and ambiguity, managing 'Day After
Tomorrow' thinking involves agility
and adaptability. The strategy is to
counter these challenges with a new
VUCA: clear vision, understanding,
clarity, and agility—elements crucial
for innovative and responsive
strategy design. Klaus Schwab of the
World Economic Forum
encapsulates this approach with the
analogy that in the modern era, it's
not the size of the company that
determines success, but its speed
and adaptability—the "fast fish"
outmaneuvering the "slow fish."
1.2.2 6D’s
The 6 D’s embody a progressive trajectory of technological advancement and societal change:
1. Digitization marks the initial transformation of analog information into digital formats,
sparking the potential for rapid and widespread dissemination.
2. Deception characterizes the early phase of exponential technologies where progress doesn’t
seem dramatic, often misleading observers about their future impact.
3. Disruption occurs as these technologies mature and begin to significantly alter or render
obsolete the established market dynamics and business models.
4. Dematerialization signifies the fading of physical entities as digital services replace tangible
products, leading to less resource-intensive solutions.
5. Demonetization emerges as costs plummet due to digital efficiencies, often resulting in
products or services becoming free or nearly free.
6. Democratization concludes the cycle, as access broadens, allowing a global user base to
benefit from technologies once limited to affluent or specialized groups.
