Maximizing Optionality.
The Future Does Not Fit in the Containers of the Past. Edition 198.
In career and in life, a key is to maximize optionality.
It is important to ensure that except for a life partner, one is not so dependent on a single platform, company, supplier or approach that we loses agency over our future choices.
Optionality also matters across a range of areas in order to remain competitive.
Strategy and Optionality
If strategy is “future competitive advantage” and the future is hard to see, we need to ensure we have the flexibility to adapt to circumstances and new data.
A case can be made that many leaders and firms including many in the “legacy” media business found themselves either too reliant on a single platform (e.g. Google or Meta or Apple) or too addicted to the margins from the existing business model they did not invest in a plan B to re-think their business model until it was too late.
Very often they limited their competitive set to their existing category and thus limited their options in seeing future threats or future opportunities.
If one does not have choice one cannot make strategic moves.
Timing and Optionality.
While being too early in implementing a strategy is sometimes the same as being wrong, being late is almost always wrong because business models first erode slowly but then suddenly and within months an existing model is no longer profitable or new competition has been allowed to establish strong footholds.
Minimize time on task forces.
Maximize time on tasks.
Tasks that allow for development of minimum viable products, proof of concepts and ways to get teams and organizations moving in the direction of tomorrow. Ways to stress and test the system and allow time for the analog reality of culture and slowness of people to adapt.
Err in the direction of speed to maximize options.
These days it is not speed that kills but the lack of speed that kills.
Career and Optionality.
A case can be made that talent who have options are more likely to be loyal.
While this sounds counter intuitive it is not.
The best leaders and best companies build and grow talent so that a) they are constantly becoming more valuable in the marketplace, b) better known in the marketplace and c) have many firms trying to recruit them.
This increases both the success of the firm and the loyalty of the employee for three reasons
a) If one is not growing one’s talent to be the best in the industry how will a company be best in the industry? And if talent is growing to be at the top of their game they are less likely to leave.
b) If one’s talent is well known in the marketplace, they attract both Clients and the next generation of talent who realize that the firm is allowing them to grow their brand and their worth as they grow the firm’s reputation and growth.
c) Being well regarded and constantly building skills allows talent to handle the setbacks that come with one’s career without having to quit since they know they are held in esteem and therefore have options. If one’s market value continues to increase in the firm, one is working at why go anywhere else?
Companies do not transform and grow. People do.
Thus, firms that help people grow and transform themselves and let them celebrate and promote these achievements end up with the greatest optionality in recruiting and retaining people to adapt to transformative times.
The best wants to work with best. Winners with winners. Company growth and personal career and brand growth are intertwined.
Modern Talent Mindset and Optionality.
In the US, 66 percent of Gen-Z who have a full-time job have a side gig or side hustle with which they make money. This is due to some combination of needing extra income to make ends meet and building expertise to ensure they have future options and to ensure optionality of income and therefore choice.
76 percent want to work for themselves if they can because after the shocks of the Great Recession, Covid, Tech job meltdown, threat of AI they no longer want to outsource their future to a firm.
So as companies try to figure out how to leverage AI to become more productive either through cost cutting or enhanced products and services, leadership and Boardrooms need to remember that talent is simultaneously thinking about how AI increases their options!
Here are some questions that Management and Talent need to consider regarding their future options in an AI world
a) Who captures the productivity gains? If AI creates productivity gains why will talent not decide to use the AI tools (they are very inexpensive and today more used by talent than companies) so that it benefits them in either working less or asking for more compensation for their increased productivity? What makes companies believe that AI productivity will go to shareholders and the bottom line and not to the talent that uses these tools to become more productive? ( Threatening people with job loss turbo-charges their plotting on optionality! )
b) What is the benefit of seniority? Since AI makes knowledge free (and some folks at Google believes it will make intelligence free) it lessens the advantage of many types of seniority for a couple of reasons. First the rules of the game change and so knowing the old rules are no longer an advantage. Second legacy knowledge is now easily available, and it will not take lawyers or consultants as long to make partner.
c) What is the benefit of scale? Scale matters and has always mattered but increasingly modern tech and AI is providing many benefits of scale to small companies and the individual. We are likely to see many billion-dollar companies with a total of less than a hundred employees
The modern mindset is to re-consider all options including what are the new options to eliminate scale advantages or create new scale advantages.
How best to train and deal with tenure when companies are likely to pay less for knowledge but more for intuition, insight, imagination and ideas.
How to re-think employment and benefits in a modern AI workplace.
Adaptation will be critical and maximizing optionality will be the key to adaptation.
May 26, 2024
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