Category: Strategy

After nearly ten years of foresight practice, I still get a slight sinking feeling in my stomach when someone asks ‘what is foresight?’ This is not because I have lost the fire, or I don’t believe foresight is useful, rather it is an indication that a) the term still has little currency and b) I have to come up with a persuasive sounding explanation. I gave up long ago trying for a ‘one size fits all’ elevator pitch, my most successful interactions have been where I match the message to the receiver.  I have also learned to match my explanation to the situation, I am often asked the question on the side of sports grounds watching kids hitting/kicking/throwing an air filled bladder around early on a weekend morning, so a full blown pitch at civilizational foresight does not seem warranted. The main issue with explaining foresight is that it is a broad church of worldviews, methods and tools. It can be applied to most problems, in most situations and whilst this generalisability is a core strength, it is also a weakness in a world that rewards specialisation.

So, what do I reply?

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There are some interesting ideas in this latest list of fashion meets environmentalism or, depending on your point of view, the commodification of nature continues… 10 Eco-Fashion Garments Inspired by Nature and Biomimicry | Ecouterre.

Stefanie has found scraps of wood which she has made into couture pieces of clothing, Suzanne is using couple of bathtubs, some yeast, a pinch of bacteria, and several cups of sweetened green tea to make her fabric which is then dyed by beetroot. Donna is using a nanotechnology-based, structurally colored fiber that mimics the microscopic structure of the Morpho butterfly’s wings that does not require dyeing (see image).

When you have a look through the fashion on the website above it is an interesting  project to question the assumptions and thinking behind many of these ideas by moving them into to a world of restricted resources to generate questions such as these:

Which could continue to survive under cradle to cradle manufacturing requirements?

Which looked to ‘waste’ to find a source of material?

Which are high-tech and therefore require the full functioning of a technological society to support it?

Which can be used to support people when they are deprived?

Which will require low wages and third world manufacturing to be commercially viable?

All of these questions can be legitimately asked in relation to innovative strategies and new products in any industry, but more often than not are ignored. When these questions are answered, there will be products and services supported that are acceptable to the moral stance of the organisation/entrepreneur. People may still not like the outcome, but at least the bigger questions have been dealt with. It is the unconscious choices we are trying to make conscious.

In addition, the sustainability of innovation is a key issue when looking at the future. What are the assumptions about the techno-economic base that the large-scale commercialisation of any of these ideas rely upon? If we are into making things for the long-term, these issues will be at the forefront of our minds, if we want to make a quick buck, then we can afford to ignore them because, at the moment, externalities are not priced into our market.

When I am working with clients to determine a course of action, I like to ask the ‘three questions’:

Who benefits?

Who does not?

And the kicker – just because we can, does that mean we should?

The moral dimension of innovation is often swept under the carpet when shiny new technologies beckon.

In a future where we may have less rather than more, who decides what resources are used for?

When I meet someone who calls themselves a ‘strategist’ I often remark “then we are in the same business, I help them work out where they want to go and you help them work out how to get there”. Sadly, my attempt at bonhomie often fails and I often get a blank look and then a short time later I’m not talking to anyone at all.

As a futurist I am not impressed by strategy that fails to make an explicit link with the intended future that the strategy is meant to bring about. Strategy that fails to make such a link I call ‘cookbook strategy’.  Do this first, then this next and finally this and bingo, there is your future.

Now cookbooks are very useful and when you discover a favourite recipe then you just know that when you apply the correct ingredients in the correct sequence that the yummy future your desire will eventuate. And even if you haven’t cooked the dish concerned for a long time you know that you can always go back to those favourite cookbooks again, repeat all the steps and the desired future emerges again.  If only real life worked liked a cookbook.

In real life if you follow a strategy cookbook – whether it be diamond shaped or involve 5 forces – add all the recipe ingredients to get your favourite banana cake and while you were not looking the future adds some minced steak and a kilo of hot chillies and it also changes the oven to run 100 degrees hotter or colder than the dial says. And when you get to the future you get the shock of your life; “I didn’t order this!”

Imagine my delight when I went to a recent presentation by the writer of a leading strategy text book, Bob de Wit (Strategy Synthesis), and in his opening he described strategy as a “dialectic approach between two irresolvable paradoxes”.  Now that sounds like a strategy approach that is nothing like using a cookbook.

Bob de Wit sees strategy as managing rival tensions with there being a multitude of positions that offer distinct resolutions but never a perfect answer. One such tension is the strategic balance between shareholder value (profitability) and stakeholder value (responsibility). Whatever strategic response is chosen (maximise profit) has consequence upon the other dimension of the paradox (minimise responsibility). This is not a simple binary opposition but there are an unlimited range of synthetic options available – hence the dialectic. His book outlines ten such paradoxes that organisations face.

This did seem like an interesting approach to strategy and one that seemed to integrate with our ideas about ‘using the idea of the future’. I began to wonder how we could use the future to assist organisation’s manage their paradoxes?

The first obvious way is to use the future as the design space within which to prototype future synthetic resolutions of the paradox. Create a synthetic future model that maximises both dimensions of the paradox (responsibility and profit) and thus you have your desired future and hence your strategic direction.

I then saw parallels in our approach called Actionable Foresight. The phase we call Present Need is where the paradox(es) are identified and Pathways Thinking and Option Generation are where the multitude of synthetic positions are explored. And finally Goal Commitment is where we settle on the best resolution of the strategic tension. Not a solution but the best tradeoff we can build commitment to. And as we move towards the commitment future then we scan the state of the paradox, where is the pressure building and where is it lessening, always seeking for new and innovative combinations that provide a synthetic resolution of the tension.

Actionable Foresight operates from the premise that in order to usefully use foresight we need to:

  1. Understand as best we can what is the fundamental issue we face;
  2. Find new pathways of thinking about the situation, the circumstances and ourselves in order to expand the future option space;
  3. Generate working models of those future options – including what happens to the fundamental issue, what happens to the circumstances, what else emerges and, very importantly, what is the pathway to that option; and finally
  4. We need to choose an option and then commit to its future pathway.

This approach is consistent with our understanding of how people utilise ‘hope’ in order to transcend difficult circumstances and to find purpose. It is also a process that creates the favourable conditions for also ‘finding’ hope and purpose. So our approach bootstraps itself onto our innate capacities and also develops those capacities. Yet this approach is quite different to what most people would understand as the most useful way to use the future – making a forecast and then acting on the basis of what the forecast says. Does this mean that we don’t think forecasting is useful?

To answer this it is best that we ensure what it is we mean when we use the term forecast.  A forecast does attempt to make use of the future (like foresight does). A forecast:

  1. Starts with a question or problem about the future – “will it rain tomorrow?” “how many people are going to need a hospital bed in ten years time?” “how much food are we going to need to produce on the planet to feed the estimated population a hundred years from now?”
  2. Next you collect data that you think is relevant to the question you are asking;
  3. Then you build a model of how the future will work itself out based on the data you are using. This model can be as simple as how you think the world works (“Give people more education and they will become more responsible citizens”) or as complex as a detailed computer simulation (The World3 simulation used in the Limits to Growth, the Climate Change models used by the IPCC or the Meteorological models used to forecast tomorrows weather);
  4. Next you test your model on the only hard data you have of how the world really works – the past. You run your computer simulations time and time again, changing variables and weightings to reduce your forecast error or you use your memories of what happened in the past in order to test your ideas about how the future works;
  5. Now you reach the big decision point – “Is my model valid based on all my testing against the past?”  If you answer “yes” then your answer to your initial question is what your model tells you the future will be based on the most current data you have. You have faith in your model – faith in your judgement of the past, faith in the past as a reliable predictor of the future – and so you act accordingly. If you say “No” then you doubt your model – you doubt your judgement or you doubt the past as a reliable predictor of the future – and so you need to do something else. Build a new model or try something different.

So, do we think forecasting is useful?

Employing a forecasting approach to the future gets you to a clear decision point. It closes down the potential future option space to a single point – “this will probably happen, so you should do this”. For issues that employ solutions that have very long development times – (the new Hong Kong International airport took 17 years to be fully built) a forecast is very useful otherwise how does it every get started. For issues that do not have a huge consequence effect if they are wrong (it will be fine tomorrow so I won’t take an umbrella) then a forecast is good enough. The most useful point about forecasts is that they are deeply compatible with conventional thinking. You don’t need to explain to most people how to use a forecast. Give a person a forecast then if they have faith in it (and you) then they may well act accordingly.

So forecasts are useful. Sometimes, but we believe they are also fraught. Everything up to step 5 in a forecast is a mechanical, logical process that is as good as the person doing it and the process being used. But the 5th step is the critical one. “Do you have faith in your model – faith in your judgement of the past, faith in the past as a reliable predictor of the future?” If you have faith, then forecasts will be useful. If you have doubt, however, then we would suggest that Actionable Foresight might be useful. We do not say that Actionable Foresight will necessarily cause you to rediscover faith in your judgement or faith in the past as a reliable predictor of the future. But you might discover hope or purpose and we think they are very useful.

“If you are willing to talk with me, I am willing to work with you”. The speaker is the head of a family owned company with a rich history of manufacturing who is facing a future in which he works in collaboration with his former competitors to re-shape the future of their industry.  Picture this: twenty representatives from small and medium companies from the same industry intently debating the future direction of that industry and how they might work together to shape it. They aren’t talking price, they are talking about survival in the face of large multi-national companies flooding their market with cheap, mass-produced furniture. There are disagreements, and former competitors are finding it difficult to imagine working together, but there is a will to try to create a different future for the industry than the one that is unfolding at the present. They are engrossed in learning a new way of developing a business model and planning framework using the future.

These scenes occurred during a recent trip to Valencia, Spain. I was working with family owned furniture companies involved in a Valencian Government funded research program run by AIDIMA, the government-funded furniture research centre in Valencia, aiming to assist companies to develop more competitive businesses through the use of foresight. This program has been running since the late 1990s. At its heart is the development of a robust and resilient furniture industry for Valencia. Spain, like many other high cost manufacturing countries, has seen an increase in imports from China, they have also seen the market share of the domestic companies overtaken by increasing market presence from large European companies such as IKEA. The Valencian region is resisting this trend and supports their local industry but they acknowledge the local companies have to become more competitive.

The process of providing the furniture companies with an accessible stream of competitive intelligence on what was happening in similar countries, and within Spain, began in the late 1990s. This developed into a trends spotting service known as the Trends Observatory. This service utilises environmental scanning to identify emerging future trends and reporting these to the local industry.

In 2005, the next stage of the process was devised as a foresight exercise. A number of scenarios were developed that chart the possible future for the Valencian industry over the decade to 2015. The next stage of the project is to develop new business models for each company that will give them resilience in the face of a changing business environment.

During 2007, the head of the project came to Australia looking for foresight expertise in the development of scenarios. Whilst here, he spoke to our domestic industry about the idea of assisting the long term sustainability of place-based manufacturing and, by all reports, they were perplexed as to why a domestic manufacturing capacity was important.

‘It is cheaper to manufacture in China’.  This demonstration that an industry appeared not to value the retention of domestic manufacturing expertise reminded me of something I had read about Britain after the Romans started to roll back their Empire. A king’s tomb that was dated to 300 years after Roman occupation included pottery from a part of France that had been renowned for its quality and craftsmanship. The pottery found was dated to around the end of the Roman occupation in Britain, but at that time it would have only been seen as suitable for the family of a worker. In 300 years, what was once seen as everyday had become so precious that it was buried in a King’s tomb.  The specialisation that occurred during the Roman Empire resulted in the British ceramics sector losing its ability to manufacture quality pottery, which left it no resilience in the face of shocks from external forces.

The Valencian Furniture industry is not looking to turn back the clock, they understand the future is coming to them, but they are also aware that their ability to maintain their resilience in the face of external shocks is rooted in the strength of their place-based manufacturing industry.

More details on the scenario process and the business model workshops in following posts.


CEFFOR Project