Richard Watson: It’s been said many times that history is no guide to the future. I disagree. It is also unsaid that companies do not need to understand where they have been to see where they’re going. Hence most commercial organizations have very little sense of their own history and what happened last year is so yesterday.

This is a tragic mistake because memory and experience can prevent us from making the same mistake twice. It is also a shame because whilst many things change, the fundamentals often do not. People act and react with the same primeval instincts that they’ve always had. On a practical level, older employees were a source of knowledge before the term knowledge management was invented. Equally, looking at the history of products and markets often uncovers insights buried beneath the service. Add to this the fact that many trends are cyclical, and you might start to see how to use history to invent the future. If, for example, you looked at the history of newspapers, you would discover that they were first sold in coffee houses in the 1700s. So maybe that’s where Starbucks got the idea? Or how about aerosol paint? That idea was first thought of about 40,000 years ago.

If companies are outsourcing strategy, innovation, R&D, manufacturing, logistics, and distribution what exactly are they left with? Sure, outsourcing saves money in the short term and specialists tend to be better than generalists. But as Tom Peters says, you can’t shrink your way to greatness. Maybe 2005 will see a move back to in-house innovation and the realization that whilst ideas, provocations, and catalysts can come from the outside, research, development and implementation can’t.

More here.