The Link Between Foresight and Strategy

Unlike popular futurism, foresight has a serious intent: to understand the range of possible futures and to use that understanding to inform action. It is now an essential prerequisite for developing strategy, and both of these activities need to be closely linked.

At the core, strategy is about choosing the course of action an organization must take to ensure its success and survival. In a world of rapidly accelerating change, today’s strategy quickly becomes obsolete. We must be ever more aware of the future we are planning for, since that future will quickly be upon us.

Because the future can never be predicted, foresight can only provide disciplined tools for understanding the forces that are at play, assessing the range of possible outcomes, and identifying wildcards that could change everything.

Doing foresight well can create a significant competitive advantage. We know things others don’t or we know them before they do.

Foresight allows us to assess the wisdom of our current strategic direction, determine the sensitivity of policy and business decisions to alternative future realities, make informed investments and stimulate innovation. With early warnings of change, we can adjust course to take advantage of emerging opportunities and avoid emerging threats.

Foresight Tools and Processes

The collection of techniques is growing. They include:

• Scanning – Continuous review of newsfeeds, articles, websites, weblogs, and other information sources to identify trends that are likely to have future significance.
• Trend Monitoring – Ongoing monitoring of trends to identify their driving forces, speed of development, and potential impacts. Plotting of numerical trends over time.
• Expert Opinion – Consultation with experts to obtain their opinions about the future, generally done using Delphi exercises, online surveys, facilitated workshops, or brainstorming sessions. The results are consolidated and synthesized.
• Scenario Development – Definition of alternative futures, based on selected driving forces. Different sets of outcomes for the driving forces define a different future. Alternative scenarios make decision makers aware of the potential range of possibilities.
• Backcasting – Development of scenarios where current trends are part of the problem, and the future needs to be radically different from the past. Visioning with stakeholders helps to define the desired future, and the process works backwards to identify how this future might actually be achieved.
• Wildcards – Identification of unexpected and highly improbable events that could have a huge impact. Wildcards are major discontinuities in the way the future may unfold – undermining trends and creating a radically different future. Wildcards are often used to challenge the assumptions that govern scenarios.

Scanning, trend monitoring, and expert opinion are used to create strategic intelligence. Scenario development, backcasting, and wildcards help to define alternative futures.

Developing Strategic Intelligence

Foresight takes a sea of information, filters it, distils it, and makes meaning from it. The result is strategic intelligence. If we do this continuously, there are no gaps in attention. Weak signals indicating a shift in direction are quickly detected.

The context for the strategy determines which information streams we choose to emphasize; for example:

• scientific discoveries
• emerging technology
• environmental trends
• social trends
• political and economic developments
• changing business models
• market dynamics
• competitor activities

Strategic foresight requires that we present this information to decision makers in a form that is immediately relevant and useful in developing and implementing actionable strategy.

Dealing with Uncertainty

While foresight can help to improve our understanding of potential futures, allowing us to think more broadly and deeply about strategy, it does not create certainty or eliminate risk. We cannot take any of the described outcomes for granted. Just as we need to be more engaged in foresight in a time of accelerating change, we also need new ways of doing strategy.

Michael Raynor offers a new approach in his book, The Strategy Paradox: Why Committing to Success Leads to Failure (and What to Do About It). While organizations must commit to a chosen strategy to be successful, they need to do so in the face of great uncertainty. They may commit to the wrong future – and fail spectacularly – if events don’t go the way they expect. The answer is to develop core and contingent strategies, where contingent strategies hedge against alternative futures. By monitoring events as they unfold, we are able to validate whether we are still on course or need to adjust. Actions taken in the contingent strategy provide a degree of protection against sudden and unanticipated change.

Foresight (purposeful exploration of possible futures) and strategy (intentional action with respect to potential opportunities and threats) are deeply complementary.

Creating Future-Facing Strategies and Action Plans

Foresight should lead to action. The insights of foresight need to be translated into implementable strategies and action plans.

Strategy can address such diverse requirements as:

• developing policy
• focusing the innovation agenda
• guiding new investments
• establishing new ventures
• commercializing new products and services
• developing new geographic markets
• improving competitive ability

Intelligence collected through foresight serves as a starting point for strategy development. Strategic options — alternative action-oriented responses — are defined that take advantage of opportunities and respond to threats in the outside world. These options are then used to develop core and contingent strategies.

Strategic assessments use strategic intelligence and alternative futures to evaluate the appropriateness of an existing strategic direction, or a new course of action, based on current information. They should be part of the annual planning cycle, or be performed when internal or external circumstances change significantly. They mirror the strategy development process, potentially creating new strategic options or adjusting existing ones. Core and contingent strategies may also change.

Reassessing strategy is essential for success. Otherwise, organizations risk their future on obsolete information.