Foresight – the practices and capabilities of anticipating and planning for the future – is living its golden age. A quick search on Google reveals just how curious we are about what’s next. There are 339 million results for the phrase “the future of” to learn more about the future of work, energy, customer experience, agriculture, banking, travel, aerospace, health care, architecture, capitalism – you name it.
On LinkedIn, there are 13,727 futurists whose books, podcasts, blogs, and vlogs paint alternative views of the future alongside the white papers and research reports published by consultancies, governments, think tanks, and universities.
I bet there aren’t many organizations where foresight and “the future of” haven’t surfaced in management and board meetings during the past year. The exponential pace of technology development, the volatility, uncertainty, complexity, and ambiguity of the operating environment, as well as the magnitude of challenges that humanity (and ultimately businesses) faces have led us to realize that to survive and succeed in the long-term, interpretation of the potential consequences of the changes needs to inform the future courses of actions in organizations. Recent research also supports this conclusion by showing that future-prepared firms outperform the average by a 200 percent higher growth and a 33 percent higher profitability.
The awakening to the importance of foresight brings about a bunch of questions. As a strategy consultant who has done ambitious strategy work with companies from various industries, I’ve identified the ten most-often-asked questions about practicing foresight. I'll elaborate on each question in a series of blog posts.
Below are some highlights of the series to follow that will offer guidance and practical tips, as well as examples on how to start practicing foresight and ultimately master it.
I hope you will help co-create this series in an ongoing dialogue. Please feel free to leave your comments at the bottom of the post.
Where to start
Where should we start if we want to understand more about the future?
As mentioned above, there are many alternative views of the future. And as the unfolding future is always a result of multiple changes happening simultaneously, it is crucial to adapt a wide enough lens to understand the future. For example, we can understand the future of food production by looking at the changes in demographics and values behind consumers’ food choices, urbanization, climate change, regulatory changes, and technological advancements throughout the value chain.
A broad lens helps in identifying relevant and meaningful trends, phenomena, and uncertainties as well as gaining strategic insight from them.
Answering the questions of where to play and how to win
How can foresight inform our strategy work? And how can it inform our people, organizational, and business model development?
Put simply, strategy is about answering the questions of where to play and how to win. According to Dr. Joseph Voros, expert of Strategic Foresight at Swinburne Business School, foresight informs strategy creation by enhancing “the context within which strategy is developed, planned, and executed.”
Foresight can be used to identify emerging new markets and transitions in established markets ahead of the competition and to work out their conclusions regarding strategic choices, market opportunities, competitive advantage, and, ultimately, all things related to execution (e.g., competence, capability, organization, and business model development).
Identifying and using trends
How do we identify trends, phenomena, and uncertainties that are relevant and meaningful in understanding the future and what do we do with them? And how do we gain strategic insight from them?
There are two guiding principles for identifying trends, phenomena, and uncertainties: 1) adapt a wide enough lens, and 2) go beyond the strong signals.
The first principle encourages us to look beyond the changes in a company’s immediate playing field, industry, and role in the value chain. The second principle challenges us to pay attention to the fringes, weak signals, and wild cards – in addition to the trends and megatrends.
Often, foresight focuses too narrowly on strong signals – to the knowns, such as trends and megatrends – and their implications which seldom offer privileged insight for strategy, people, organization, and business model development.
Trends, phenomena, and uncertainties are “nice-to-know” unless they are interpreted and worked through to their conclusions. For example, with the trend of urbanization, working to the findings of it means gaining an understanding of how consumer behavior would change due to this trend. It means knowing which of our customer segments would be affected by this trend, and how/which of our product/service lines would be affected, among others.
Trends, phenomena, and uncertainties are “nice-to-know” unless they are interpreted and worked through to their conclusions.
Building alternative views of the future
How do we create alternative views (e.g., scenarios) of the future?
To speak of the future in the singular is misconceiving. As we look ahead, there are always multiple futures which we can imagine and foresee, for example, with the help of the scenario method. Building alternative views of the future helps in imagining what could be possible and even preferred.
Creating these alternative views start with bringing together trends, phenomena, and uncertainties to understand their interdependence and joint implications that can ultimately be fleshed out as stories of what could be co-created with customers and partners.
To speak of the future in the singular is misconceiving.
Finding future market needs and their solutions
How do we identify future market needs and potential solutions for them?
Whereas trends, phenomena, and uncertainties can bring about insights into new market opportunities, building alternative views of the future helps show which opportunities would be common to nearly all alternative futures. As companies typically spread their resources too thin across multiple opportunities, to ground the selection of opportunities to those common to multiple alternative futures for resource allocation brings clarity to strategic decision-making.
Identifying future market needs and potential solutions for them, as well as the business opportunities that follow, is especially well-suited to be done in collaboration and dialogue with customers and partners. In a B2B setting, this means creating a common strategic agenda for the innovation to satisfy future market needs.
"Business, more than any other occupation, is a continual dealing with the future; it is a continual calculation, an instinctive exercise in foresight." Henry R. Luce
Using foresight to challenge potentially biased choices
What biases should we be aware of when practicing foresight? And how do we use foresight to challenge choices and decisions?
Ultimately, foresight is about thinking: attention, interpretation, prioritization, and decision-making. As with all thinking processes, we as humans bring all sorts of different cognitive biases – flaws and prejudices in our mental models – to foresight. Some of the biases that easily creep to foresight include:
- Over-optimism in expectations of the benefits or outcomes
- Tendency to prefer avoiding losses to acquiring equivalent gains
- Reliance on an initial piece of information to make future decisions
We cannot entirely avoid these biases. But, we can become aware of them to use foresight to challenge choices and decisions already made in addition to making choices and decisions about the future.
Practicing foresight continuously
How do we successfully make foresight a continuous activity?
Nothing is as constant as change: to be prepared for the change, you should practice foresight continuously. One way to think of foresight is as a service that can offer insights to strengthen the capabilities of the company: strategy creation, innovation management, sales, operations, people development, and so forth. Foresight can have dedicated roles, processes, tools, and methods. It’s crucial to discuss and debate the future in cross-organizational forums where actions are planned and decided.