To make it simple, the role of strategic foresight should be as the informant, the source of knowledge, the basis for strategic planning and decision-making. After all, without incorporating any foresight to your decision-making, you will be making decisions that are only based on current conditions and as we all…
To make it simple, the role of strategic foresight should be as the informant, the source of knowledge, the basis for strategic planning and decision-making. After all, without incorporating any foresight to your decision-making, you will be making decisions that are only based on current conditions and as we all know, the only constant in this world is change.This leads to that
The aim of strategic foresight is to find insight in long-term trends that are observable and actionable today.
Frankly, the fact is that foresight is never a clear calculation or estimation of what will definitely be or a certain prediction of the future. In contrast, it is an approach of working with alternative, possible futures to identify what type of trends have a major impact on our societies and what type of opportunities lie ahead because of those trends. The aim is to find some insights on how the future might play out and then find actions that we can take execute today to affect how future plays out or make ourselves better prepared for it.
There is tendency for people to talk about the future with unclear or underdefined terms, which is of course understandable when something that doesn’t exist is discussed. Sometimes, we probably are at fault in this too. Here is an attempt to clarify some of basics about strategic foresight, the surrounding terms and their relation to each other, at least how we tend to understand them.
Megatrends
are large scale societal changes that create pressure for companies and public sector organisations as well as other groups and individuals to develop.
Megatrends shape global transformation and drive the change that creates…
Trends
mean a pattern of gradual change in a condition, output, or process, or an average or general tendency of a series of data points to move in a certain direction over time.
Trends impact our societies. Research of trends also reveals key…
Tensions
in other words uncertainties that have alternative development directions with no clear trend currently, forces acting in opposition to each other. For practical examples of tensions, check out our scenario report on Hyperconnected societies, which describes five of them. For example, the tension between human wellbeing and limited natural resources is crucial when we look at societal development in the long run as it has been the defining correlation of our time, the correlation between the unsustainable use of natural resources and human wellbeing. Which of course has a dire need for solutions that uncouple those two.
Thus, tensions describe alternative development directions. These are explored through…
Futures states and scenarios
which are created to describe possible, probable and desirable (or undesirable) visions and roadmaps about the future.
Future states and scenarios are used in strategy to identify…
Strategic choices
mean flexible and rigid investments of resources made in order to remain competitive in and have an effect to the changing business environment. For example, Rolls Royce used scenarios as a base for their strategic decision making. This in practical terms meant that “any investment proposal had to take into account how it would be affected by the scenarios and what, if anything, should be done to mitigate or exploit the scenarios; investments that didn’t meet this qualification were rejected”. Identifying desirable strategic choices can also reveal a need to form a new vision or goal for the company to replace the old ones.
Strategic choices should always be in line and support the Vision, the long-term goal of the company, the desirable state in the future. Vision should take into account not only the goals of the company, but incorporate the views of its various stakeholders, the externalities it produces, and what is sustainable within the operational environment it creates value in.
Strategic choices can be made in a way that fits the societal change and impacts it by setting direction of…
Tensions
which brings us back through the feedback loop of how companies can impact society. It is by solving and setting the direction of tensions, settling an uncertainty to follow a certain path. When tensions’ direction becomes clear, they become trends, which in the long-term shape megatrends and the whole development of our societies.
To conclude
Thus, by strategic foresight it is possible not only to guarantee competitiveness and position in the changing competitive environment, but also identify what are the feasible strategic choices and how these choices can shape the society around the company.
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This is the third part of the blog series about strategic foresight. Read part 1 on what kind of results strategic foresight creates and part 2 on why scenarios are the most important tool in strategic foresight.
Do you want to discuss more about your organisation’s future and strategic foresight? Contact Risto Lätti and connect in Twitter @ristolatti.