Strategic Foresight: Are You Making Your Future?
In the past several months since COVID-19 was declared a pandemic, our newsletters have been emphasizing the need to revisit your company’s strategy to ensure you can come out of the crisis ahead of the competition. However, the unprecedented level of uncertainty leaders are now facing gives them reason for pause. As a solution, consider Harvard Business Review’s current article by Peter Scoblic offering tools to help formulate strategy in uncertain times.
With the pandemic and its accompanying economic dislocation, many businesses have had no choice but to focus on surviving immediate threats. The paradox is that many of the choices being made to deal with the immediate pressures may have long-term ramifications . As businesses try to navigate through this crisis, they need a way to link current moves to future outcomes. Scoblic’s answer is the practice of “strategic foresight.”
The practice of strategic foresight does not try to predict the future, but rather imagines multiple futures by building the organizations capacity to sense, shape, and adapt to what happens in the years ahead. Strategic foresight recognizes that uncertainty stems from our inability to compare the present to anything we’ve previously experienced. When situations lack parallels to the past, we have trouble visualizing how they will work out in the future. What leaders need are tools to make up for the limits of our experience.
We are all familiar with scenario planning, which was made famous by Royal Dutch Shell in the 1970’s, when they created scenarios on what might take place by oil producers in the Middle East. Shell was able to navigate through the 1973 OPEC oil embargo ahead of its competitors, which also established strategic foresight as a valuable strategic capability for organizations.
The following are some popular strategic foresight tools:
Horizon Scanning – The searching of “weak signals” of change in the present with the intention of monitoring their development and assessing their long-term potential impact.
Scenario Planning – Uses stories about alternative futures to challenge assumptions and reframe perceptions of the present.
Trend analysis – Considers the potential influence of patterns of change that are already visible. The popular STEEP framework helps disaggregate patterns of change in five categories: social, technological, economic, environmental, and political.
War Games – Teams engage in simulated conflict against an opponent. Like scenario planning, the objective is not to predict what will happen; rather, project what could happen, providing insight into your decision making.
For these tools to be successful, they must be used dynamically. Working with uncertainty means assumptions and company needs can change quickly. Consequently, preparing for the future requires a cadence of re-assessment. It is important that leaders institutionalize their strategic foresight process to insure consistent and continual exploration of the future.
The objective of using strategic foresight is to enable your organization to identify opportunities and strengthen its ability to seize them. By building greater awareness of future needs you will inform and improve your employee’s ability to operate into the future. As Scoblic states “Organizations don’t just prepare for the future. They make It!”
At Albu Consulting, we are entirely focused on helping middle market private companies develop and execute transformational strategies. Are you having the kind of strategic discussions that will refresh your strategy to adapt to the post-covid world? We welcome any comments and questions you have and please feel free to forward this article to your friends and associates as you see fit.
Quote: “It is precisely in these contexts – not in stable times – that the real opportunities lie to gain competitive advantage through strategy” Pierre Wack Economist Royal Dutch Shell