- Richard Lum
The 3 Easiest Ways to Link Foresight to Strategy
Bottom Line: most organizations already have the basic practices they need to begin linking foresight to strategy.
A common question we hear is, “how do you use foresight?” While the answer will seem self-evident to some, for a lot of decision makers the link between what seem like wide-ranging and open-ended futures conversations and more hard-nosed business decisions is not necessarily clear. Fortunately, there are several answers to the question and none of them are very far from discussions and practices most organizations already have in one form or another. In other words, it is easy to apply foresight to existing strategy conversations. Let’s look at three simple ways to link the two.
#1: Wind Tunnel Your Strategy
The first and most straight forward way to link foresight with strategy is to stress test your existing plans. Whether your foresight effort consists of downloading and passing around a recent “future of” report from a consulting firm or conducting a six-month scenario forecasting project, any and all of the trends, emerging issues, and scenarios you discuss can be used to wind tunnel your existing initiatives. For example, let’s say you are a financial services firm and have a set of emerging issues in front of you that include the possibilities of “future regulation leveling the playing field” and “novel sources of competition.” One of the simplest things you can do is to ask, “how well would our current capabilities and investments fare if either or both of those issues came to pass?”
Stress testing current plans against future possibilities in this way is not only simple and straight forward, it is also essential for developing the preparedness and resilience that so many organizations are striving for today. Of course, as with any similar activity like contingency planning, it is important to start with logical and challenging trends and scenarios.
#2: Reframe Your Strategy
One of the other common and simple ways to incorporate foresight into strategy discussions is to modify or expand your plans with new insights developed through foresight work. Trend analysis, horizon scans, and scenario forecasting all produce insights into future threats and opportunities. These insights can be used to consider market and product spaces you hadn’t even realized were possible or to build in additional safety margins for current operations.
Let’s say your organization is responsible for managing land resources and maintaining local cultural traditions. While visitor trends and demand for access have been increasing, current operations are limited by available cultural expertise and associated costs. Your recent horizon scan, however, has popped up an emerging issue around the use of augmented reality and virtual reality to create a persistent sense of place with visitors. This might represent a whole new set of tools and possibilities for expanding access, extending education, and generating respect for local culture.
#3: Develop Early Warning for Your Organization
A third way to link foresight and strategy is by creating an in-house practice to monitor for indications that the threats and opportunities identified in your organization’s foresight work are coming to pass. Foresight work of all types is used to identify the signs, be they trend lines or headlines, of disruptions building to a critical mass. Linking particularly compelling future possibilities to key elements of your current plans creates an important sensing and feedback loop for your organization. This is something most organizations already do in some form, e.g. tracking interest rates. Foresight work just expands this practice and extends the horizon a bit.
For example, your organization might be well-practiced with competing against your traditional industry players. Your people know how to quickly adjust products, pricing, and marketing to counter moves by bigger players. Recent scenario work, however, illustrated how challenged you would be to respond quickly to competitors coming from a completely new (and rapidly developing) space. Given the lead times your organization would need, you could begin continuously monitoring the environment for early signals that some of these outsider companies are considering entering your market.
Foresight is simply insight into how and why the future may be different from today. Applying those insights to your organization’s strategy can be a simple and straightforward affair, and the most common ways of doing so mirror practices most organizations already have in one form or another. Getting started today is easy. What foresight work do you already have on hand that you can use? How would your current capabilities perform if the possibilities and scenarios you are looking at come to pass? What hedging or shaping actions should your organization consider given some of those possibilities? Finally, what are the early indicators your team should start monitoring for, to give the organization early warning of emerging possibilities?