How to Create Possibilities

Quick Summary

An idea needs conditions, people and resources to become real. First, we broaden the search. Then we apply critical scrutiny. We choose a test that can change the decision. A tested possibility is not necessarily a capability available for use.

Managing business in an age of uncertainty requires the ability to create possibilities. We will now turn this obligation into managerial work that can be carried out.

How do we create possibilities when we do not know what will happen?

I would start before choosing a solution.

By examining the question we are asking.

When we ask how to improve what already exists, we direct ourselves toward improvement.

When we ask what else we could make possible, we open a different space.

The future belongs not only to those who know how to solve problems, but to those who know how to create possibilities we have not thought of before.

In my view, this is where first principles connect with creating possibilities.

First principles help clarify what is really true and what really limits us.

Creating possibilities asks what can be built on that foundation.

What we want to make possible

A company can start with a simple question: what new product should we develop?

But that question already directs us toward a product.

The important possibility may lie instead in a service, a partnership or a new capability.

I therefore suggest starting with the desired outcome.

What do we want to make possible, for whom, and why would it have value?

At Plasan, as I described in the previous chapter, the aspiration was to grow through new capabilities.

Passive armor was a starting point.

It opened a broader question: how could protection and mobility be made possible together?

That question led to a connection between armor and vehicle engineering.

It expanded what the company could offer.

We do not have to start with a problem that has already been defined.

We can start with curiosity, an aspiration or a capability that has not yet found a use.

Sometimes, the search for a new use reveals a need we had not seen before.

The initial direction gives the search meaning.

It does not need to determine in advance where the search will end.

Even the objective itself can change when we learn something new.

Distinguish constraints from assumptions

Every company operates within a set of constraints.

Some are real. Others are assumptions that have become entrenched over time.

First principles require us to examine the difference.

What follows from material properties or safety requirements?

What follows from a production method, a commercial agreement or a managerial habit?

And what do we keep doing simply because we did it in the past?

Let us return to Plasan.

Armor adds weight to a vehicle.

Its effects on mobility and stability must be addressed.

But it does not follow that the solution must remain solely within the armor field.

Weight distribution and vehicle structure can also be examined.

A complementary capability can be built that changes the whole system.

Weight is an engineering constraint.

The decision about which fields the company will operate in is a strategic decision.

Confusing the two can close off a possibility before we have examined it.

The important question is: what are we assuming cannot be changed?

And what is that assumption based on?

Connecting capabilities creates scope for action

A new possibility does not require a new invention in every component.

Sometimes, it emerges from a connection we have not made before.

Existing knowledge can gain new value with a different customer.

A technological capability can find a new use through a partner.

A different contractual arrangement can make a previously impossible transaction possible.

At Plasan, the armor capability and the complementary vehicle engineering capability reinforced each other.

The connection expanded the company’s scope for action.

It is therefore worth asking:

Which complementary capability would turn what we already know how to do into the basis for a new possibility?

Not every capability needs to be built inside the company.

We can develop, acquire, collaborate or gain access through an agreement.

The choice depends on what is important to know, operate and preserve over time.

However, a relationship with a partner does not guarantee an available capability.

We need to know what the partner is committed to provide, and on what terms.

A possibility that depends on an agreement not yet secured is still a possibility in the making.

Give the possibility a real foundation

Here, we need to move from imagination to action.

An idea expands our thinking.

A possibility for action also needs a foundation that can be put to use.

There is no need to build a complete system immediately.

We need to identify what must be true for the possibility to be useful.

Then test the most important assumption.

Suppose a component manufacturer wants to offer customers equipment availability alongside the sale of components.

It imagines a maintenance service based on its knowledge of the product.

Before establishing a service operation, it must clarify what is missing.

Can it detect a fault in time?

Is there a customer who values the service and is willing to pay for it?

Can a partner perform the maintenance on suitable terms?

An experiment with one customer may test some of these questions.

It does not yet prove that the service can be extended to the whole market.

But it enables a decision about what to test next.

The test is not how small the experiment is.

The test is whether it examines something that could change the decision.

Before starting, we need to state what we want to learn.

What would justify continuing, what would require a change and what would make us stop?

Even an experiment that does not justify continuing can contribute.

Provided we learn something from it that changes our subsequent choices.

A Possibility Card for Managerial Work

For each possibility selected for testing, I suggest a brief card. We will update it when we learn something that changes the decision. The card brings the book’s questions together around a single case.

The desired outcome and to whom it matters. The connection to purpose and the foundational principle. The path to realization and the main condition that still needs testing. The capability already available and the capability that must be built. The people and partners needed for realization.

The next test, the person responsible and the date for a decision. The resources we will allocate and the limit we will not exceed. The evidence that would justify continuing, changing or shelving. What we will stop doing to release resources for it. Later, we will add the cost of capital and the cost of maintaining the capability.

If we shelve the possibility, we will retain the reason and the knowledge created. We will record what change might justify another test. We will return to the same card in the chapters on investment and shelving. This allows us to follow changes in thinking and the action that followed from them.

Let imagination work and criticism test

Creating possibilities requires two kinds of work.

First, we broaden the search.

Then we examine the possibilities it has produced.

Criticism that comes too early can block an idea before it has taken shape.

But a lack of criticism can turn an exciting idea into an investment without a foundation.

I therefore suggest separating the two kinds of work in time.

First, generate possibilities, including those far removed from the current business.

Then examine what is needed to make them real.

This is where the critical review team comes in.

What must succeed for the possibility to work?

Which assumption rests on weak evidence?

What could make the outcome worthless, even if the technology succeeds?

The criticism must also examine the decision not to act.

What will we fail to learn if we do not try?

What capability might disappear if we postpone the investment?

There is no need to invest in every idea.

There is a need to give promising possibilities a fair chance to be tested.

Optimization, discovery and creating possibilities

In the age of AI, I suggest distinguishing three kinds of work.

Optimization seeks the best solution within a defined space. The objective and the available possibilities have already been defined. The task is now to improve the choice or the execution.

Discovery reveals knowledge, relationships and principles that were not previously known. It may change what we understand about the world.

Creating possibilities formulates new questions and changes underlying assumptions. It builds spaces for action that were not previously available to us.

These kinds of work can feed one another.

This distinction serves managerial work. The kinds of work can overlap. AI, too, can take part in creating new directions. We will assess its contribution through outcomes and evidence, in relation to the task and the capability available at the time of testing.

A discovery can open a possibility.

A possibility can raise a new research question.

Optimization can make execution more economically attractive.

But a discovery does not automatically become a strategic opportunity.

We must ask what can be done with it.

What need could it serve, and which capabilities are needed to realize it?

I propose the following claim:

The scarce resource will be the ability to identify which discovery deserves attention and what can be done with it.

This is also the role I want to give AI in the work of thinking.

To help us examine assumptions, suggest connections and broaden the questions we ask.

Then help with critical review and the design of experiments.

A convincing proposal still needs to be tested against reality.

The company must learn from customers, experiments and its ability to execute in practice.

Perhaps the most important competitive advantage in the future will lie not in owning answers, but in the ability to redefine the space of possibilities.

Make the search part of managerial work

Creating possibilities cannot end with a successful workshop.

Time, responsibility and resources must be allocated to it.

Every possibility chosen for testing needs an accountable owner.

We need to define what will be tested and when the decision will be revisited.

And leave room for a change of direction as learning develops.

In every management discussion, we should distinguish an idea from a tested possibility.

And a tested possibility from a capability already available for action.

This distinction prevents a sense of readiness that does not actually exist.

A company does not have to know in advance what its next business will be.

It does need to work on the possibilities that could lead to it.

It must also preserve the resources that will allow it to act when conditions are right.

A possibility without people, time or financing capacity may remain on paper.

In the chapter on economic measurement, we will examine how to reflect this work in decisions and incentives.

Here, the responsibility must be established: management must also build the company’s future scope for action.

The managerial task is to build an ongoing ability to create possibilities. To an idea we have tested, we add a capability, a partner and resources. This expands what the company can do, even when the future develops in ways we did not know how to describe.

A question for work and reflection

You can start at the very next management meeting.

Choose one assumption that currently limits the company.

Examine what it rests on.

And formulate one possibility that would open up if we could change it.

Then choose an experiment that will provide a basis for a further decision.

This is how systematic work on the company’s future begins.

With a question that broadens our view and an action that makes learning possible.

Which assumption, if we stopped taking it for granted, would open a new possibility for our company?

One Step into Practice

Complete a card for one possibility management is considering. Appoint someone to lead the test and set a date for a decision. Return to the card with evidence and update the decision.