At Oslo Business Forum, Howard Yu unveiled the key strategies for creating a future-proof organization, helping leaders ensure their organizations not only survive but thrive in an era of unprecedented change.
Staying Future-Ready
In this era of unprecedented change, many organizations have discovered that the numbers on their spreadsheets are no longer relevant and old strategies are insufficient to address future challenges. But the answer isn't to rush to catch up; it’s to slow down and anchor yourself.
As a business professor, Howard often hears from business leaders seeking examples of companies like theirs that have transformed successfully. They're looking for a copy-paste solution, but Howard says, "It's not going to be that way."
He recalled an anecdote from Amazon's Jeff Bezos, who commented that people always ask what's going to change in the next ten years but never ask what's not going to change. Like Bezos, Howard is convinced that question is more important.
But didn't we just say old strategies are no longer working? While the past may seem irrelevant, Howard believes history plays an important role in future-proofing an organization. "To prepare to go forward, we have to understand where we are coming from," he said. "Persistence and focus are key."
Balancing Performance and Transformation
Howard has observed that no matter the industry, successful companies all share one trait: they perform and transform at the same time. "Average companies do either-or," Howard said. "But the stop-start cycle doesn't help. Companies who have cracked the code do both at the same time every single day."
"You need persistence."
Performing and transforming require clear prioritization. That sounds simple enough, but it's easier said than done. Many leaders discover the most important may not be what feels the most urgent—and that leads to having to make tough choices.
In nearly every industry, there have been early pioneers with deep history who commanded an advantage. Then, latecomers entered and became formidable competitors. When it comes to studying the nature of this type of competition, Howard has dedicated himself to looking for anomalies. Where do the pioneering companies stay strong when the latecomers present a threat? The answer lies in alignment, reinvention, and innovation.
Howard Yu is the mind behind the award-winning bestseller LEAP and Director of IMD's Advanced Management Program. Howard works to bridge the gap between academia and the global business landscape. His work has been recognized with prestigious awards from EFMD and Thinkers50 and has influenced some of the world's leading companies.
Adopting a Shared Viewpoint
In today's complex business environment, having a shared viewpoint across leadership is essential but notoriously difficult to achieve. Howard referenced a study of 124 Fortune 500 companies, revealing that only two had executives who were fully aligned on their top strategic priorities. This disconnect stems from siloed thinking, where each department or leader focuses narrowly on their own domain.
To drive real growth and make tough tradeoffs, leaders must be aligned with what's most important for the organization. This goes beyond incremental planning and requires leaders to ask critical questions: What rate of growth do we expect from our business? Where do we want to be in the next five years? A shared viewpoint ensures teams are equipped to scale new capabilities and tackle the challenges of a rapidly changing marketplace.
Scale Up Your Capabilities
Using Tesla as an example, Howard explained how vertical integration has allowed successful EV automakers to overcome global semiconductor shortages. Tesla did so by rewriting software for redundant chipsets, enabling them to continue delivering vehicles even during the supply chain shortages that plagued the industry post-pandemic.
This scenario highlighted the need for companies to understand and own the technologies driving their core products. It's all about identifying critical capabilities to scale up so you remain a step ahead of disruption.
Embracing Cognitive Conflict with Love
High-performing organizations understand the value of healthy debate. Howard emphasized that embracing cognitive conflict—rooted in trust and love—allows teams to push boundaries, unlock innovation, and arrive at better solutions. It's a delicate balance: too much harmony leads to complacency, while too much conflict can erode trust.
Companies that thrive know how to navigate this tension. They create environments where it's safe to challenge ideas and question assumptions. Leaders must foster a culture where differing viewpoints are welcomed, and tough conversations lead to progress. Howard said, "You get the truth out when important things are at stake," and embracing this cognitive diversity is the key to staying agile and innovative in a competitive landscape.
Three Key Principles to Become Future-Ready
Howard shared three key principles for organizations to become future-ready and equipped to perform and transform:
1. Adopt a shared viewpoint on scaling up opportunities: Ensure alignment across leadership on scaling up new capabilities and making tough tradeoffs.
2. Stay curious and embrace cognitive diversity within the team: Encourage debate and differing perspectives to foster problem-solving and innovation.
3. Debate with your colleagues with love: High trust equals high performance—embrace cognitive conflict with respect and empathy to unlock the best ideas.
Howard concluded with the idea that future-readiness isn't about massive leaps. It's about consistently compounding small wins into big advantages over time.
"You just need to stay one inch ahead."
He asked leaders at Oslo Business Forum to remember this: "You don't need to be Tesla overnight. You just need to stay one inch ahead. If you keep compounding that inch, before you know it, you are miles ahead."
Key Points
- Howard Yu is a bestselling author and Director of IMD's Advanced Management Program who helps leaders create future-proof organizations positioned to survive and thrive in an era of change.
- Successful companies excel at both performing in the present and transforming for the future. Average companies tend to do either one or the other.
- To future-proof an organization, leaders must understand both the history and the current trajectory of their industry. It's critical to scale up new capabilities without losing sight of foundational strengths.
- Organizations often suffer from siloed thinking, which prevents teams from aligning on key priorities. Leaders must create a shared viewpoint and learn how to make tough tradeoffs.
- Companies must understand and own the technologies driving their core products. Vertical integration can empower you to stay a step ahead of disruption.
- High-performing organizations encourage healthy debate. Embracing cognitive diversity and conflict—rooted in trust and love—can help teams innovate and problem-solve.
- Future readiness isn't about massive leaps. It's about staying consistently ahead by just one inch, compounding small wins into big advantages over time.
Questions to Consider
- Are you balancing both performance and transformation in your organization, or are you focused on one over the other?
- Are you consistently staying one inch ahead in your industry, or are you at risk of falling behind?
- How can you foster a shared viewpoint across teams to ensure alignment on strategic priorities?
- What critical capabilities in your business need to be scaled up to stay competitive in the future?
- Is your organization embracing conflict with trust to encourage innovation? Can you recall an instance when a decision was made with strong debate and love?
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