The Box – the shipping container, unpredictability, and strategic planning

In his book The Box (Princeton University Press 2006), the author, Marc Levison writes: “Economists,

myself included, are in the business of predicting events; we like to think that we can analyze what has happened and gain insight into what will occur in the days to come. Business school students take a similar approach, learning to apply quantitative analysis to historical data in order to draw conclusions about the future. In the business world, this way of looking at the world through a spreadsheet is treated as modern management thinking. It’s the bread and butter of some of the world’s most famous, and expensive, consulting firms. The story of containerization attests to the limits of this sort of rational analysis, for the developments recounted in The Box turned out not at all as expected…Absolutely no one anticipated that containerization would open the way to vast changes in where and how goods are manufactured, that it would provide a major impetus to transport deregulation, or that it would help integrate East Asia into a world economy that previously had centered on the North Atlantic”. In fact, the container, a simple aluminium box, has enabled globalization as we know it. And it is not the only example of a disruptive innovation.

There is always, obviously, the losing side for every disruptive innovation. In this example they were port workers (“longshoremen”) who were no longer needed, and local manufacturers that could not compete with cheaper imports. In another case these were the film camera and the camera film itself (and photographic papers and development materials) in the case the digital cameras and soon(ish) the truck-stops across the USA when driverless truck convoys start roaming the cross-continent highways. Unless another unexpected disruptive innovation kicks driverless trucks off the road before they even begin to run.

The crux of the matter is that, as the saying goes, it’s difficult to make predictions, especially about the future. This doesn’t mean you need to close your eyes and ignore what’s happening around – a much more dangerous proposition - but it does mean that 5, 10, 15 year plans are risky and you need to be agile and flexible enough to deal with an ever-changing environment. In order to thrive, organizations cannot set their sights on a distant target and pursue it without constantly looking around, see what changes, and react.

Going back to the shipping metaphor, a container-ship captain that will navigate his 14,000 TEU ship by looking at the compass will find himself (and his ship, crew and cargo) very far from where he intended to go, if not beached somewhere. Just as you would expect our captain to use a GPS to know where his ship is at any given moment, read the weather-alerts, and change direction when winds, currents and passing vessels veer his ship off-course, an organization “captain” must navigate their company, knowing where they are, who is around, what’s effecting their performance and react swiftly and properly. This is Organizational Navigation.

#planning

#strategic_planning

#volatility

#VUCA

#organizational_navigation

#navigation

#agility

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