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Imagining the future
Managers have traditionally relied on periodic and episodic information to make decisions. Most decisions have been based on "gut feel" about what worked in the past. But, in the ever quickening cycles of change that we are experiencing now, foresight not hindsight is a more valuable managerial attribute.
Foresight comes through discovering and understanding changing competitive landscapes through the use of real-time structured and unstructured data. By analyzing far more information, using computers, we can actually see the underlying trend patterns in complex data that signal far-reaching change far quicker than before.
We can imagine the future by thinking about change in three dimensions:
Trends are changes occuring over time in (p)olitical, (e)conomic, (s)ocial and (t)echnological spectrums. These spectrums are often stated as an acronym such as STEP, STEEP or PESTLE where the additional E is for the Environment and the L for legal.
Trends occur gradually but at varying degrees of speed and impact and can be exploited to take advantage of the opportunity or to avoid the damage a trend may threaten. But, beware! "A trend is only a trend until it bends."
Spotting the turning or inflection point before it happens is where the greatest opportunity to exploit the change often occurs. Crowds blindly pursuing a trend can often lead to the creation of a bubble (the 2008 financial crisis for example) with the result that, like lemmings, most go over the cliff together while the more foresightful live to tell the tale.
Considering potential events
Trends are relatively easy to spot but predicting the impact and likelihood of a future event is not. Unforeseen or uncertain events are hard to anticipate but we can learn from history and envision the type of surprise (a wild card in the extreme) that might come along.
Considering possible events helps to strengthen an organization at times of high potential change. For instance, Matsushita told his managers after the Second World War that he was artificially going to peg the yen against the dollar several multiples higher than it then was. He told his managers this new exchange rate would now be used to calculate his company's performance. His managers thought this was crazy and impossible to contemplate. When asked why he would do such a thing he pronounced "because one day it will be at this level!" Several years later his prediction came true and Panasonic was able to flood the U.S market with cheap electronics and hence build an empire. Matsushita had prepared his company for the unthinkable and was ready when the tipping point came.
Considering potential events like tipping and inflection points and surprises helps us to see how we might cope in a crisis or exploit the opportunity. It helps organizations become more resilient to change under more circumstances than just maintaining the status quo and hence increases the chances for survival, innovation, performance improvement, and long-term success.
Choosing among the options
Like Matsushita, choices have to be made from the considered trends, events, and action plans put in place to maximise the outcomes.
Determination at the outset to take action as a result of conducting Practical Foresight will bring great rewards but, without it, all that results are increased costs, wasted resources and time, and considerable disappointment from all concerned.
Further references
The New Age Of Innovation, Driving Co-created Value Through Global Networks; Prahalad & Krishnan 2008, McGraw Hill
Next: Learning Organization Back: Opportunity and Risk Management To: Shaping Tomorrow
Copyright: Some rights reserved. This work is licensed under a Creative Commons License.
Foresight comes through discovering and understanding changing competitive landscapes through the use of real-time structured and unstructured data. By analyzing far more information, using computers, we can actually see the underlying trend patterns in complex data that signal far-reaching change far quicker than before.
We can imagine the future by thinking about change in three dimensions:
- Examining and projecting current trends
- Considering potential events or tipping points
- Choosing among the options
Trends are changes occuring over time in (p)olitical, (e)conomic, (s)ocial and (t)echnological spectrums. These spectrums are often stated as an acronym such as STEP, STEEP or PESTLE where the additional E is for the Environment and the L for legal.
Trends occur gradually but at varying degrees of speed and impact and can be exploited to take advantage of the opportunity or to avoid the damage a trend may threaten. But, beware! "A trend is only a trend until it bends."
Spotting the turning or inflection point before it happens is where the greatest opportunity to exploit the change often occurs. Crowds blindly pursuing a trend can often lead to the creation of a bubble (the 2008 financial crisis for example) with the result that, like lemmings, most go over the cliff together while the more foresightful live to tell the tale.
Considering potential events
Trends are relatively easy to spot but predicting the impact and likelihood of a future event is not. Unforeseen or uncertain events are hard to anticipate but we can learn from history and envision the type of surprise (a wild card in the extreme) that might come along.
Considering possible events helps to strengthen an organization at times of high potential change. For instance, Matsushita told his managers after the Second World War that he was artificially going to peg the yen against the dollar several multiples higher than it then was. He told his managers this new exchange rate would now be used to calculate his company's performance. His managers thought this was crazy and impossible to contemplate. When asked why he would do such a thing he pronounced "because one day it will be at this level!" Several years later his prediction came true and Panasonic was able to flood the U.S market with cheap electronics and hence build an empire. Matsushita had prepared his company for the unthinkable and was ready when the tipping point came.
Considering potential events like tipping and inflection points and surprises helps us to see how we might cope in a crisis or exploit the opportunity. It helps organizations become more resilient to change under more circumstances than just maintaining the status quo and hence increases the chances for survival, innovation, performance improvement, and long-term success.
Choosing among the options
Like Matsushita, choices have to be made from the considered trends, events, and action plans put in place to maximise the outcomes.
Determination at the outset to take action as a result of conducting Practical Foresight will bring great rewards but, without it, all that results are increased costs, wasted resources and time, and considerable disappointment from all concerned.
Further references
The New Age Of Innovation, Driving Co-created Value Through Global Networks; Prahalad & Krishnan 2008, McGraw Hill
Next: Learning Organization Back: Opportunity and Risk Management To: Shaping Tomorrow
Copyright: Some rights reserved. This work is licensed under a Creative Commons License.
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