Future preparedness through Foresight

FORESIGHT
There is probably not one single approach that makes the challenges of leading in uncertainty go away.

Developing strategies through foresight could be complimentary to other traditional strategy planning tools. Important is to not underestimate uncertainty!

The level of uncertainty is company-specific and depends on factors such as: level of preparedness, access to proprietary info, but also strategic positioning: is the company mindset towards adapting to the future or more towards actively shaping the future? Gretzky, a major hockey player, said: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” Thus, it also depends on where companies want to “play”.

The concept of Foresight emerged after World War II as an approach for military planning. Aware of the fact that the enemy can attack from various places and in different ways, they were building scenarios and related strategic responses.

Starting with the 60s, Scenario Planning also entered the business world as it helped leaders working with complex concepts and uncertainties to create coherent and plausible stories about the future they could work with when planning their strategies.

Shell, the Oil and gas company is considered a pioneer in foresight work. In addition to their traditional planning, Shell is developing for almost 50 years scenarios in which their key assumptions or uncertainties are becoming reality. This approach was crucial for the strategic position Shell has taken during the uncertain times of the 1973 Oil Crisis. That also contributed to the fact that in 2 years, from the eight biggest oil & gas company Shell became number two. Currently, there are many companies that have developed such practice with both internal and external experts.

Maybe you have seen or read reports or publications about the future of a certain domain or industry; few examples of publicly available reports: 4 plausible futures: 2050 Scenarios by Arup, 2020 Strategic Foresight Report by European Commission, Scenarios 2030: Workforce of the future by PwC, The Business World in 2025 by IMD, Retail Scenarios 2025 by Gartner or Paying in 2025: Scenarios for the future of payment. In general, these are reports resulted further to a participatory foresight process, using specific foresight tools for scanning and strategy building.

Foresight helps organizations investigate, not predict, the future.

WAZE ANALOGY

Instead of “Outsmarting traffic, together” we could Outsmart competition, together.

In some aspects, we can think of foresight as a “Waze” for business – instead of “Outsmarting traffic, together” we could Outsmart competition, together.

Using foresight discipline and its tools, we help companies understand the different alternatives (scenarios) that they should consider in their journey planning and choose the one that takes them to the preferred destination.

We also warn them of the different pitfalls (innovations, consumer behaviour change, emerging technologies, trends) that they might encounter on their journey, the same way Waze does with danger ahead alerts. Not all players in an industry reach the same destination; by using foresight as a “Waze” for business, companies could reach some goals sooner than their competitors.

Do we think there is only one future? If not, why do we only plan for one?

Foresight catalyses thinking in alternative futures.

FORESIGHT
Rules for talking about the FUTURE

Talk possibilities!

There are multiple futures.

Look back to see forward

There is no data about the future, only about the past.

Scan for signals of change, identify patterns, forget about predictions

The future is not predictable.

Do not just observe the future, but actively shape it!

Our today actions can influence the tomorrow.
ABOUT

Foresight work implies 3 time dimensions.

PAST

Look back to look forward

Winston Churchill believed that “the longer you can look back, the farther you can look forward.” In our desire to move full steam ahead, we sometimes forget to look back and understand the past. If we do not understand our past, we may become ignorant to many of the probabilities and possibilities presented to us. Exploring the facts and data of what has happened, looking at how things happened and the different experiences of that can be a source of rich learning and hindsight - which can consequently dramatically inform future plans. Taking time to look retrospectively can help us in recognize patterns and identify specific behaviours.

How did you behave in past crisis? Or in the face of past extreme events? What did you learn from that? It also helps a lot to reflect on how fast our behaviour and adoption pace has changed. When the iPad launched in 2010, people could not seem to figure out what it was for. Tech writers wondered why anyone would want a touchscreen-only computer with no ports. The name was mockingly compared to feminine hygiene products. Now there are millions of tablets sold, not only from Apple, but from many other providers. 10 years back for early adopters, now mainstream. Not to mention that there are times, like the Covid19 pandemic, which become catalyzers for even faster changes.

PRESENT

Horizon Scanning

More than 45 years ago, Igor Ansoff introduced into the world of business management the concept of "weak signals", which refer to signals of change or events which are happening outside of an organization (in the external horizon) and which are not (yet) widespread. Detecting and monitoring such weak signals can help companies to identify potential areas of opportunity and competitiveness. And today, this practice of scanning trends or horizon scanning is crucial for the strategic planning process of companies.

It is important to make a distinction when it comes to business information when talking about a trend and how to care for the use of this word in a popular way. In the common language, a trend is most of the times associated with the latest preferences in music or fashion. In the business world, a trend is a factor of change observed in the present, which refers to future developments.

We look at trends from several perspectives or levels.

MEGATRENDS

Society level
Examples: BlackRock Megatrends, PwC Megatrends, HP Megatrends

MACROTRENDS

Field / industry / consumer level
Examples: Ten trends shaping fintech - McKinsey, 2020 Healthcare Trends - Board of Innovation

MICROTRENDS

New manifestations / Innovations
Examples: Smart helmet, Edible packaging, Billboard that detects pollution level and decreases the price of electric cars

FUTURE

Scenario Planning

When faced with uncertainty, one way to move forward is to develop possible future scenarios and plan different approaches for each of them. Scenarios are stories, narratives about what the future may be like. They are not stories that WILL happen or that we WANT them to happen, they contain hypotheses of what COULD happen.

By systematically developing consistent and plausible alternative plans, we can reduce the rationality bias and be prepared for the different ways the future might unfold.

Scenario planning is a tool crucial to any strategic Foresight process. Here is a great HBR article explaining Scenario Planning applications by using Shell as an example. And here is a MIT article explaining the difference between Scenario Planning and other planning methods, such as contingency planning.

Organisations that value #FuturePreparedness are 33% more profitable than the average!

Corporate Foresight Benchmark, Aarhus BSS

Foresight Resources:

  1. Harvard Business Review, Future proofing your strategy podcast
  2. MIT, Scenario planning, a tool for strategic thinking
  3. McKinsey, Getting ahead of the next stage of the coronavirus crisis (through scenarios)
  4. Harvard Business Review, Living in the futures
  5. Shell Scenario Planning
  6. Pepsi: The Use of Strategic Foresight Methods for Ideation and Portfolio Management
  7. OECD, Strategic foresight
  8. How futurists cope with uncertainty, Amy Webb
  9. Scenario Planning and Foresight under uncertainty, Diana Stafie
  10.  From uncertainty to opportunity, Rene Rohrbeck
  11.  Prizes go to those that prepare for the future, and not predict it Podcast with Andreea Rosca and Diana Stafie (in Romanian)
  12.  The Futures Of A World With The Covid-19, Sohail Inayatullah and Peter Black
  13.  Foresight allows companies to prepare for the future, Diana Stafie
  14.  2020 Strategic Foresight Report, European Commision
  15.  The Art of the Long View: Planning for the  in an Uncertain World, Peter Schwartz. Currency Doubleday, 1991
  16.  Dialogues about the future, Ionita Olteanu, 1982 (in Romanian)
  17.  Strategic Reframing: The Oxford Scenario Planning Approach, Rafael Ramirez and Angela Wilkinson
  18.  Thinking about the future: Guidelines for strategic foresight, Andy Hines & Peter Bishop, 2007
  19.  Scenario Planning – Revised and Updated: The Link Between Future and Strategy, Mats Lindgren and H. Bandhold