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• Author: Heffes, Ellen M.
• Position: Changes in business - Interview

A Conversation With Futurist Ian Morrison

Want dramatic business growth? While you can't predict the future, Ian Morrision says you can systematically plan for it by recognizing when to leap from the "first curve" to the "second curve." New technologies (faster, better, cheaper), new consumers (anything, anytime, anyplace) and new geographic markets (Asia, Latin America, Eastern Europe) are driving this second curve, which is radically different from the first curve, made up of "business as usual." When is it optimal to make the leap?

Financial Executive's Managing Editor, Ellen M. Heffes, caught up with Ian Morrision, futurist, author and past president of The Institute for the Future, after his keynote address at the Financial Executives Summit in Scottsdale, Ariz. Morrision wrote The Second Curve: Managing the Velocity of Change.

Q What do you mean by "the second curve?" Please describe it.

Morrison: Most businesses and industries are going along with what I call the "first curve," the base business that they know how to run on a daily basis. It's where they make their current profit and revenue, [meaning] most of the revenue, but certainly most of the profit.

The concept is that people have the sneaking suspicion in their gut that it's going to be replaced by a new business or a new way of doing business -- a second curve -- that's radically different from the first. And [when it happens] they're never quite clear whether that second curve is real or not. It can be quite ephemeral at first, leaving one unsure whether it's a "real deal."

This presents problems. If you jump too soon, you'll walk away from your traditional relationships, you could be in head-to-head competition with yourself or your best customers, or you could be in channel conflict with partners. A whole bunch of bad stuff can happen if you move too soon.

Another problem: if you don't move and start building [on] the second curve, you might not be in the phone book later on in the 21st century. So it's really a strategic dilemma of trying to work both curves, when the tendency is to overestimate the short term and underestimate the long term.

Over the last several years, we got too carried away with the second curve of the Internet and we were disrespectful of the first curve, the base business of the old economy. Similarly I think we're doing it in reverse now - sort of completely discounting the Internet, discounting e-commerce.

General Electric Co., arguably the greatest company in the world - with its GE Capital unit probably the "jewel" within that...