Right now, we are experiencing technological advancements at an unprecedented rate. From self-driving vehicles to generative AI like ChatGPT, our landscape as both business leaders and consumers is changing exponentially. In fact, I believe that change is too mild a term for the advancements in innovation we are seeing. Technological transformation is far more accurate.

In today’s rapidly evolving world, merely being agile in our approach to innovation is not enough to sustain an organization in any industry. As technology advances exponentially, our strategies for internal and external innovation must also evolve. Staying ahead of the competition requires anticipating future developments.

However, my process must also evolve with the times to help organizations and business leaders turn disruptions into innovative opportunities. For many years, I have used a three-step process to help clients become Anticipatory Organizations, and this approach remains highly relevant in the current climate of digital transformation and exponential change.

1. Always Begin with Certainty

This may sound counterintuitive, as the future often appears to be an ever-changing, unpredictable force, but many aspects of the future are certain. It is not impossible whatsoever to see what is certain about both your future and the future of the world outside your industry. You merely have to be willing to stop being reactionary.

It is that simple, and here is why:

All change moves in patterns, including changes in business. Cyclical change is exactly how it sounds – it occurs in cycles, creating a predictable circle that you can use to anticipate what comes next. For instance, it is inevitable that inflation and interest rates will rise, and recent trends confirm this increase. However, it is equally certain that they will eventually decline after reaching their peak.

On the other hand, Linear change is a pattern that does not repeat. This is an instance that will occur once, often transforming whole industries, and thereafter, time keeps moving forward. An example of this would be Baby Boomers aging out of the job market and Gen Z entering the job market. There will always be older generations retiring and younger generations coming into the workforce, but this specific iteration of it will never happen again.

Netflix began as a temporary movie rental service, but there were already multiple companies that held a large portion of the market – Blockbuster, specifically. So what did Netflix do? They looked at the Hard Trends of the industry, such as consumers pursuing convenience. Consumer convenience will always be a necessity in any industry.

However, how consumers pursue convenience was the Soft Trend. At the time of Netflix’s origins, instead of waiting for a movie to come out on television, consumers went to stores like Blockbuster to acquire rentals. Netflix decided to influence this Soft Trend by mailing DVDs directly to consumers, enhancing customer convenience and cementing themselves as innovators in the industry.

2. Continue to Anticipate

Once you have a firm grasp on Hard Trends and Soft Trends, you can begin to anticipate the future instead of just reacting to it. Today especially, reacting to technological advancements means that you are already behind. And especially with how fast information travels, once the cat is out of the bag so to speak, it moves fast!

Business leaders need to be what I call pre-active – taking action now to positively impact their future from the inside out. Change typically comes from the outside in, where outside circumstances disrupt processes and keep you continuously striving to put out fires. By anticipating these disruptions, business leaders can instead focus on turning those disruptions into opportunities for innovation. They create transformations from the inside out.

Again, let’s look at Netflix. Do you think they thought, “Hey, mailing DVDs to customers is working. They’ll never need anything else”? Of course not! They looked at the current technology of the time – the internet, increasing bandwidth, and the surge of video streaming capabilities – and saw it as a Hard Trend. Netflix concluded that the internet would only increase in bandwidth and processing power, using that observation to launch their own streaming service.

In turn, they became the first streaming platform for movies and TV shows. What Netflix did was become the disruptor in their own industry before someone else had. To this day, they are still one of the largest streaming platforms, and now the potential future disruptions they look to pertain to what type of content they provide customers. Perhaps they will move into the video game industry next? What about music? Could they break into the online education industry?

You cannot just be a crisis manager when it comes to innovation. You have to also be an opportunity manager. Netflix looked to a Hard Trend future certainty and pre-solved a disruption that would have disrupted their whole operation. In turn, they leveraged it to their own advantage. That is the real competitive advantage!

3. Focus on Transformation

It is not enough to simply change how you do things. This is far too slow to keep up with rapidly evolving technology. Much like continuing to anticipate what is to come, you need to continue creating transformations. Whether it is the products you sell, how you service customers, or how you complete internal processes, transformation is the cornerstone of great innovation!

That is not to say that you should completely scrap your current business model. Transformation comes from adjusting current processes to build something never before seen. A caterpillar does not stop being a caterpillar when it enters its cocoon. It uses its current form to morph into something beautiful and new.

Netflix did not completely scrap its business model of providing consumers with convenient access to movies and TV shows. They adjusted how they provided their service, creating a streaming platform where one never before existed. They created transformation, and will continue to do so with future innovations regarding streamed media.

It is up to you as the leader of your organization to:

  1. Anticipate the disruption that technology and the market pose to your industry and use that information to become the disrupter instead of the disrupted.
  2. Anticipate the needs of your customers, but take it to the next level by providing them with products and services they did not know they needed.

To do this, leaders need to let go of their reactionary mindsets and become agents of transformation. Focus on what you are certain of about the future, anticipate disruptions before they occur, and do not create change – transform your industry.