• What is strategic foresight?
Articles:

What is strategic foresight?

17 September 2019

Michiel Jonker , Director, IT Advisory |

Business strategy is pretty much about setting future objectives, making a normative declaration about the future state of an organisation. Normative claims about the future are simply desired or preferred futures – basically a wish list to be acted upon. Even countries set future objectives – e.g. China indicated that they want to mine the moon for minerals.

Is it possible? The short answer is – it depends.

It depends on what is China’s preferred future (i.e. what do they prefer to do in the future)? The best way to be prepared for the future is to create it. Sometimes it is argued that it doesn’t make sense to be concerned about the signs of change on the horizon, and that it is better to rather create those signs. To basically create a preferred future or an environment suitable to you.

We do it all the time. For example, parents influence their children’s future when they let them attend extra classes in maths. They therefore steer their children’s future into a more positive direction. We can influence and change the future, but we cannot change the past. We can only learn from the past (to some extent).

So, how can a business change/influence its future? By making use of normative scenario planning and back-casting methods. Normative scenario planning entails the envisioning of an ideal situation in the future. By, figuratively speaking, standing in this future (ideal) position one can look back at the “past” (although still the present) and ask the question: “How did we get here – what did we do as step 1, step 2, step 3 etc. to get here in this ideal future?” (See Figure 1 as an example). NASA did it after President Kennedy had announced in the early sixties that the USA would land a man on the moon by end of that decade. Kennedy basically expressed a normative statement/wish/strategic direction/preferred future, while NASA had to use back-casting as a method to establish the required tactical steps to achieve this vision.

 

Figure 1 – Normative Scenario Planning

 

 

 

Unfortunately, business is not that straightforward. Every business also has to deal with change outside its control – e.g. threats in the contextual and competitive environments, in the form of new trends, emerging issues and weak signals stemming from the :

 

 

 

  • Political environment
  • Socio-economic environment
  • Technological environment
  • Legal environment
  • Worsening physical environment
  • Industry-related environment
  • Cross-industry related environment

 

Change in above environments creates uncertainty among business leaders about their chances on survival and growth. However, every business needs to navigate this change – whilst pursuing its envisioned future. Instead of trying to predict the future, it is better to have “… the ability to recognize ‘dots on the horizon’ – the signs of change that inevitably affect every organization and to understand their significance and how the organization should adapt…” (Futurist, Kees van Heijden (2002)). It is therefore important to identify and understand these signals of change and turbulence, and their meaning, on the horizon – in time.

 

 

 

Because we cannot predict the future, it is better to understand above signs of change by developing certain explorative scenarios (see Figure 2) of what could possibly happen. By developing for every possible scenario warning indicators, a business would be in a position to anticipate the crystallization of a certain scenario, based on the fact that the specific scenario’s warning indicators are ‘flashing’. More than that – a business should also be in a position to determine the impact of an explorative scenario on its normative vision. In other words, it is of the utmost importance to combine normative scenario planning with explorative scenarios. External events (explorative scenarios) will have an impact on the achievement of a desired (normative) future of any business (See Figure 3 as an example).

 

Figure 2 – Explorative Scenario Planning

 

 

 

 

Figure 3 – Normative and Explorative Scenarios Combined

 

 

 

Why the need for foresight?

 

Research shows that the same part of the human brain that is used to store memories, is also used to think about (imagine) the future. In other words, the human being is prepositioned to use ‘past futures’ – i.e. yesterday’s futures. Hence the need to deliberately create (new) desired future visions by thinking and placing yourself in the future (i.e. normative scenario creation – “let us put a man on the moon”), whilst, at the same time, a deliberate attempt is made to understand the signs of change (that are outside our control), in the contextual and competitive environments, and their impact on our normative visions.

 

By creating explorative scenarios, a business doesn’t get fixated with one prophesy (one future); it allows the door open to change direction and to respond in an appropriate manner to a changing environment – whilst pursuing the desired future (dream), albeit through alternative paths.

 

Why the need for foresight?

 

Having said that, it is important to consider the past in pursuing a desired future. The past can pull a business back into old ways of doing things, legacy thinking, and yesterday’s paradigms – basically functioning as a weight (of history). It is important that the past is acknowledged and what elements of it are no longer part of the future vision. By neglecting to do that, the past would keep dragging an organisation back into the abyss of antiquity.

 

Strategic foresight is therefore a combination of three things :

 

  • The envisioning of an ideal (preferred) future – i.e. “where do we as a business want to go in the future?”
  • The identification of a few possible explorative scenarios of what might happen in the future – both in the contextual and competitive environments – and to understand their significance and how the organisation should adapt. The impact of these explorative scenarios on the preferred future should therefore be determined, and action plans set up to address each explorative scenario.
  • The acknowledgement of history’s weight (specifically in the area of legacy processes, products, services and thinking) and the deliberate decision to actively remove these leftovers from the past from all levels of business (at strategic and tactical (operational) levels).

 

Globalisation increased the complexity of doing business the last few decades; hence the reason why very few business executives can approach the future today without practising foresight.

 

Foresight practitioners can also assist in this process, as they have the required skills and tools to establish strategic foresight.

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