Every organization exists inside a field of forces: demographic shifts, changing behaviors, migration, wars, elections, subsidies, tariffs, cultural movements, ecological disruption, and the list goes on. Some of these forces are slow-moving but critical, some are almost invisible. Others arrive as sudden shocks. Yet businesses often lack an awareness of these factors that is communicated accross the organization. This inhibites their ability to react to changes with quick and strategic actions.
The question is therefore not whether volatility can be eliminated. It cannot. The question is whether an organization is capable of sensing change early enough and how quickly it can act on it. That is the purpose of SENSE, the second step in the Dreams X Machina framework.
The world is becoming harder to predict
The consequences are already visible in the rapid increase in insolvencies across major markets, including the United States and European Union, as well as in startup environments.
A five-year plan assumes that the relevant conditions can be understood well enough today to determine what the organization should do years from now. But when the surrounding system is changing rapidly, the more important strategic capability is not prediction. It is simply sensing change.
A company needs to know what is changing, how quickly it is changing, which changes matter, which are noise, and how different changes may reinforce or undermine one another.
Volatility is not necessarily bad news
Volatility is usually described as a threat and it certainly can be one. But volatility has another property that is often overlooked. It creates openings. When an environment is stable, established positions tend to remain established. Existing competitors have time to optimize their advantages. Customers become accustomed to existing products. Infrastructure, regulation and capital flows reinforce the status quo. When the environment changes, those relationships can loosen.
A new technology can make an old capability suddenly valuable. A change in consumer behavior can create a new category. A geopolitical disruption can create demand where none previously existed. A demographic change can make an underserved group an interesting commercial proposition.
Whether volatility becomes existential danger or strategic opportunity depends partly on the organization's ability to identify new alignments and act on them.
An example: The social weather
The first category SENSE examines is social change.
Who is growing and who is aging?
Where are people moving and how households are changing?
How are people spending their time?
How are they consuming?
What are they willing to pay for?
What are they no longer willing to tolerate?
How are they working?
How are they forming communities?
How are migration patterns changing the composition of cities and markets?
Which cultural expectations are changing faster than businesses can respond?
Markets are made of human behavior and at least some of these questions are bound to be relevant for a business regardless of the field. A company can have excellent internal operations and still fail if its understanding of its customers is based on outdated behavior.
