Looking into the crystal ball, at Ford

Dec 5, 2012

By Aaron Desatnik

A volcano erupts in Iceland, halting air travel over Europe for two weeks. The H1N1 pandemic sweeps across Asia. Hurricane Sandy brings business in the New York Metro area to a grinding halt.

These events are unpredictable, but they can be planned for. Given the increasing likelihood of these events in part due to climate change, increasing population, and diminishing natural resources, planning can be the difference between firms that survive and firms that don’t. This is the work that Sheryl Connelly, futurist at Ford, discussed today at a discussion this afternoon at the University of Michigan Ross School of Business. What exactly does a futurist do? At Ford, Sheryl’s “in charge of helping the company stay two to 20 years ahead of the trends outside the industry that will be shaping it for years to come.” Connelly, who’s among the few futurists to keep her job after the recent economic recession, is tasked with making sure Ford doesn’t make the same mistakes that it did in the past: the failure to develop automotive innovations in response to external factors such as increased fuel prices. What does a futurist do?

  1. Prepare for the wild cards: Think out of the box about all future possibilities that could have a drastic impact on the business. While these events can’t necessarily be prevented, planning for them enables the business to put systems into place to respond quickly and effectively. For instance, after the Fukushima disaster last year one Japanese village was “showcased by NHK, Japan’s national broadcaster, as a role model for quick response because of its community ties and the leadership of one of its two chiefs” (NYTimes). Firms can prepare in similar ways.
  2. Dream up alternative scenarios: Use scenario planning to develop “Stories to help us recognise and adapt to changing aspects of our present environment. These stories form a method for articulating the different pathways that might exist for you tomorrow, and finding your appropriate movements down each of those possible paths.” The power of scenarios “is that you can let go of your biases and beliefs and focus on possibilities” (Forbes).
  3. Understands global trends: Evaluate trends using the STEEP model — social, technological, economic, environmental and political trends. For Connelly, the most significant trends are: more people, falling fertility, aging population, falling dependency ratio, emergence of China and India, and widespread urbanization. She explains: “‘If the human lifespan already has closed in on the eighties, why couldn’t it go to 100-plus? It’s a simple notion but has so many tails of implication. What about quality of life? What kinds of economic structures would be required to support” that kind of life span?”

Ford Executive Chair Bill Ford is a staunch supporter of the value of preparing for an uncertain future. In a recent TED talk, he shared:

“By birth and by choice, I’ve been involved with the auto industry my entire life, and for the past 30 years, I’ve worked at Ford Motor Company. For most of that time, I worried about, how am I going to sell more cars and trucks? But today I worry about, what if all we do is sell more cars and trucks? What happens when the number of vehicles on the road doubles, triples, or even quadruples?”

This simple, but powerful, question is the type that Connelly and other futurists like her ask every day to help firms survive and thrive. Among Connelly’s recent successes were her recommendations to invest more heavily in crossover vehicles and to pioneer Ford’s Sync infotainment system.

Being a futurist has its set of challenges, of course. One is that, even more than risk management professionals, futurists are unable to measure the financial impact of their work, which is a major reason why many futurists at Ford and elsewhere were laid off during the recent recession. Due in part to the challenge of measuring impact, futurists often have a hard time influencing specialists within a firm to take action based on futurist research. Connelly has built her influence at Ford by shifting to a collaborative engagement style rather than telling engineers, “this is a key trend and here is how we should address it.”

With all its challenges, Connelly has successfully brought a new lens with which people at Ford understand and prepare for the future of the business. In a business as large and bureaucratic as Ford, that in itself is a success. The ultimate question for Connelly’s work at Ford is, “can the firm adapt to a world increasingly moving to non-automotive forms of mobility?”