Sometimes, buzzwords just seem to stick in the business lexicon.
“Future-proofing” — the concept of safeguarding a business against future stresses and challenges while making it more receptive to future opportunities — is a prime example of that buzzword-turned-ethos in action.
As a result, executives, gurus and pundits alike have touted the importance of future-proofed business models, especially as new technologies such as artificial intelligence enter the mainstream. From future-proofed products and services to enterprise-wide systems and small business technology, the business community is rushing to take advantage of ways to sustain growth and investments for years to come.
But despite the newness of the term, the idea of protecting your business interests against the unknowns of the future is very old. Indeed, some of the most successful brands with the longest legacies initially grew their market share thanks to a future-proofed philosophy. However, even newer, smaller startups can quickly rise to prominence with a smart approach to future-proofing.
Whether you’re trying to protect and grow an existing business or give your new organization its first big push, here are lessons any employer can learn to start tomorrow with confidence.
3 Examples of Future-Proofing
A future-proofed business decision is simply one that accounts for the technological realities of the current day while also forecasting future demands, opportunities and threats down the road. In that vein, these three product, service and technology models have found immense success thanks to the future-proofed foresight of their creators.
Packaging. Colgate broke convention in the late 1800s when it introduced toothpaste in a collapsible tube. Previously, toothpaste had been packaged in jars. The future-proofed idea accounted for growing interests in personal hygiene as well as convenience — and clearly, the idea has stuck around for the long haul.
Video streaming. Netflix introduced its own future-proofed idea by way of in-home video streaming — a now-ubiquitous service that was an anomaly during the era of big-box movie rental stores. The brand’s idea was a tale of disruptive innovations that paid off, all thanks to the technological ease of streaming and the demand generated by multimedia content.
Cloud hosting. Years ago, data storage depended on owned hardware, but the way Dropbox revolutionized cloud storage makes a compelling case for why future-proofing is just as much about predicting what people need as it is about crafting solutions for needs they didn’t even know they had.
Opportunities and Limits of Future-Proofing
Of course, not every small business is going to emerge with the next big disruption that transforms their industry — but it is feasible for most businesses to at least consider future-proofing in their operations.
Within the context of small business technology, capital purchase and inventory management is one area that may offer an immediate benefit to businesses taking a future-proofed approach. Hospitals, for example, tend to future-proof by renting or outsourcing biomedical equipment, such as ultrasounds and infusion pumps, rather than buying them outright. This ensures that the equipment will always be current and serviced without the sunk cost that might otherwise limit necessary upgrades.
Of course, future-proofing has its limits, too — especially in light of ongoing external cybersecurity threats and other concerns that are hard to predict. Of course, upkeep and maintenance for equipment is always a good call, but some assets, such as staff computers and outdated software, will just need to be regularly replaced.
How to Future-Proof Your Business
Applying a future-proofed philosophy to your business model doesn’t require that you make sweeping changes all at once, but it’s a good idea to account for long-term planning as much as possible. For example:
Track the trends. Keep tabs on industry trends to identify patterns that could signal the next big thing. If the next major breakthrough isn’t something you currently offer, consider how you can gain early entry into that market in other ways.
Know the talent market. Many industries are currently battling labor shortages as older workers retire. The businesses that previously predicted those shortages will be in a better position to manage them now.
Check beyond your border. Look to international markets and keep an eye on their current challenges and opportunities. Often, trends migrate overseas — something taking place in Europe today may be relevant in the U.S. tomorrow.
Take security seriously. Assess future threats such as cybersecurity. Invest time, training and talent in identifying existing and future security threats, and work with consultants to protect your business against them.
Avoid unnecessary costs. Evaluate your capital purchase strategy, and consider opportunities to outsource or rent to keep equipment current without the sunk cost of owned inventory.
Regardless of which future-proofing measures you take, ensure that they meet the greater needs of the business — but also know that those needs may not always be evident. The biggest industry disruptors wagered on big ideas that paid dividends later on. A small gamble may tee you up for success in ways you might never have imagined.
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