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Such system-changing, disruptive events are far more common than most people imagine. We are getting at least one per year on a global level these days. And yet most businesspeople behave as if they live in a continuous environment, as if their business plans and projections are going to be relatively linear. In a world in which there are regularly occurring upheavals, which will fundamentally change many basic assumptions about the way the world works, the most effective strategy is conscious resilience: balancing short-term reactions with long-term vision, and putting in place the necessary preparations so that you can rapidly shift direction if need be. IBM in the 1990s provided a good example of exactly this kind of navigation. For decades the company had a basic business model: leasing mainframes and providing ongoing support. They developed the IBM PC, the best-selling personal computer of the early 1980s, but never saw that as central to their business. It was peripheral to the mainframe structure that they had developed for their customers.

Then everything changed. Apple introduced more user-friendly computers that ate into their market share. They lost the battle with Microsoft for control over the personal-computer operating system. Their customers lost interest in the IBM mainframe and client-server structure as computers became cheap and powerful enough to operate in a more networked, interdependent fashion. And they began to watch the rest of the computer business move out from proprietary systems onto the World Wide Web and the Internet. All they had left was a large amount of cash, and a solid reputation-admittedly two enormous assets, but only if they deployed them.

They moved rapidly in the early 1990s to change their business model. IBM suddenly became the world leader in providing outsourced computer services, a field that EDS and Perot Systems had dominated in the 1980s. To accomplish this IBM had to bypass their world-renowned computer sales force, and essentially invent a consulting business from the ground up. The consulting business then drove their services business, which went from zero to $30 billion in revenues in less than a decade. This allowed them to shift their manufacturing orientation-to focus on the hardware needed for the services they provided. Few companies would have been able to make that move so quickly.

One reason that IBM could move so quickly is that they were attuned to all aspects of the computer business. Though the personal computer had been a sideline for the company, their experience with it gave them a gut feel about the changing marketplace and business environment that no other computer mainframe company had. Xerox, for instance, which was also a market leader in the 1970s, was blindsided and almost bankrupted by its failure to act in the 1990s. They knew about the changes that were occurring in the marketplace; in fact, in 1995, GBN had conducted a scenario exercise with their senior management, in which one of the scenarios was called "The Death of Xerox." When we presented it to them, they said, "We would never do any of those things you have us doing." Then, over the next few years, they systematically made every move we had warned them against making in that scenario. Today Xerox is a much smaller printer and copier company.

There is a twofold process embedded in the information in this book. First, it seeks to understand the kinds of inevitable surprises that lie ahead of us, particularly in the next twenty-five years. That is the period of time in which most of the enterprises starting up today will come to fruition, and in which most of the established corporations (and governments) will have to reinvent themselves. Second, it suggests the kinds of steps that would allow a company or organization to thrive, given the inevitable surprises awaiting us.

Sometimes you may be able to influence the outcome of a surprise. If it's a good thing, you can make more of it happen, and if it's a bad thing, you may be able to prevent it. Sometimes you may be able to take advantage of it, because you have developed relationships, products, financial resources, and information that put you in the right position when the time comes. Sometimes, if you see a big surprise coming and are convinced it will happen, you can act with confidence in the face of apparent risk that others judge to be high-but that you know is lower than it seems, because you've thought about and understand the surprises. And you can also make sure you have the resources to weather the storms that you see coming-particularly the financial strength that allows you to get through crises without shuttering parts of your business.

One common question is: Can you actually see these things coming? I'll let you judge for yourself, by exploring the "face validity" of the predictions in this book. This is not a scattershot exercise; all of the points in this book are carefully thought through, drawn from intensive research and scenario projects that I and others at Global Business Network have conducted, as well as on cutting-edge sources of information around the world. All of them are inevitable-that is, I have phrased and developed them to distinguish those that are certain to take place from those that are merely likely.

Some of these issues will probably be familiar to you, but others will be new. Some of the issues that you think are most obvious, and not even worth repeating, will turn out to be the most critical ones for other readers. For instance, there is a story about the human population slowdown in this book, which is so familiar to demographers that it has become second nature to them. They think it is obvious; that everyone already knows about it. But when I get up to talk about it, I find I can't simply mention it in passing. People practically jump up to ask, "But what about the exploding population?" I always have to take the time to explain, "It isn't exploding anymore." They may have heard this casually somewhere, but they've never absorbed the meaning of it. And some of the specifics will probably be thoroughly unfamiliar. I'd guess that, for most readers, this includes the physical underpinnings of potential teleportation described in Chapter 7.

Underneath the specifics, between the lines on every page in this book, you will find a basic message about the future in general: The challenges facing civilization right now are immense-arguably more difficult than they have been during the lifetime of any living person. At the same time, because of advances in knowledge and technology, the human race has never been so capable. And since most of our challenges are caused, at least partly, by our own activity, this expanded capability is a double-edged sword.

Copyright © 2003 Peter Schwartz, published by Gotham Books, a member of Penguin Group (USA) Inc., all rights reserved, reprinted with permission from the publisher.

Tags: Management & Leadership

About the Author

Peter Schwartz is cofounder and chair of Global Business Network, part of the Monitor Group. He is the author of The Art of the Long View, and coauthor of The Long Boom and When Good Companies Do Bad Things. He has been a leading advisor to governments and major corporations. A highly sought-after speaker for business symposiums, he writes the monthly "Scenario" column for Red Herring magazine.