Strategic Foresight: Linking Foresight & Strategy Maree Conway

Purpose An overview of what foresight is about and how it relates to strategy development in organisations. futures inspired strategy

Terminology Foresight: an often unconscious individual capacity to think about the future. Strategic Foresight: an organisational foresight capacity. Futures: the broad academic field now developing globally; interdisciplinary and inclusive in its approach. Futurists: those who work in futures, either as academics, consultants (outside organisations) and as practitioners within organisations. Scenario planning: a futures methodology. Before I start to debunk those thoughts, let me get some terminology in place. futures inspired strategy

Terminology Foresight is the capacity to think systematically about the future to inform today's decision making. It is a capacity that we need to develop as individuals, as organisations, and as a society.   'Futures' refers both to the research, methods and tools that are available for us to use to develop a foresight capacity, and to the field in which futurists work. futures inspired strategy

Terminology When we consciously use foresight in organisational processes to inform strategy, we are practising ‘strategic foresight’. futures inspired strategy

Developing Strategy Challenges Knowledge Questions How to anticipate and interpret change in the external environment. How to leverage that change into ‘winning’ strategies. Knowledge Questions Do we have some sense of the different ways in which our environment and our market might evolve over the next five years? Do we know which factors, or drivers of change, are most likely to dominate how our industry will evolve? Do we know what our strategic and organisational responses would be if a future were to unfold that was distinctly different from the one anticipated by our current plan? When we are developing strategy, we need to be able to address these challenges and answer these questions. Does your organisation have ways to do this now? If you do, great, I need to talk with you, if you don’t, how can you introduce find ways to do this into your processes? Most organisations have not yet recognised the need to develop strategic foresight as a core organisational capacity. Adapted from Fahey, 2003 futures inspired strategy

The External Environment of Universities Social Environment Driving Forces Education Environment Factors / Trends Issues / Forces Social Technological Economic Ecological Political … Students Suppliers Educational Organisation Customers Graphical detail of van der Heijden’s “transactional” and “contextual” environment, showing Games, Players, Competitors, Referrees and Context Setters, and STEEP… Driving Force factors. Here it is translated into something that people in an educational institution would understand. Clients Competitors Members of Wider Society Driving Forces Adapted from K. van der Heijden futures inspired strategy

The Strategic Landscape ‘The Star’— Our enduring and guiding social role The purpose of the organisation • A “future-focused role image” • Not completed or “used up” The ‘self’ journeys across the chessboard to the mountain, which lies in the medium term future The strategic objective: • A compelling, relevant future • BHAG—“Big Hairy Audacious Goal” • A concrete, specific goal • A challenge, but achievable ‘The Mountain’— What we hope to achieve The strategic environment: • Strategic implementation and tactics • Threats and opportunities • Actions of other strategic actors • Driving forces • Mapped and understood using scenarios ‘The Chessboard’— Issues and challenges we are likely to face ‘The Self’— Our values and attributes as a strategic player Strategic identity: • Current reality • Self-knowledge • Strengths and weaknesses • Values • Preferences and experience futures inspired strategy “Star, mountain, chessboard, self” image © 1999 Hardin Tibbs

Strategic Foresight & Strategy Strategy is about the future, not the present. All our knowledge is about the past, but all our decisions are about the future. But … future strategy is developed in the present. How do we integrate knowledge about the past, present and future to make wise strategy today? futures inspired strategy

Developing University Strategy Council/ Executive Foresight Individuals Council/Executive Planning Workshops Strategic Thinking Options Strategic Directions Statement Council/Executive Strategy Review and Decision Making Decisions Plans Performance Reporting Faculties University Planning Workshops Strategic Planning Strategies Results and Feedback Implementation futures inspired strategy

Strategic Decision Making Strategy Framework Strategic Thinking Strategic Decision Making Strategic Planning Strategy development occurs in three separate but interdependent stages: strategic thinking, strategic decision making and strategic planning. Strategic thinking is where information is analysed and interpreted to make sense of it for an organisation. It is about generating options. Strategic decision making is where the decisions are made about which strategy to pursue. Realistically, decision making occurs within the brain of a CEO or Vice-Chancellor. Strategic planning is about implementation and doing, about action. Action Review futures inspired strategy

Strategic Decision Making Strategy Framework Foresight Strategic Thinking Strategic Decision Making Strategic Planning Foresight informs the strategic thinking stage of strategy development. Action Review futures inspired strategy

Generic Foresight Model Inputs things happening Analysis “what seems to be happening?” Foresight Interpretation “what’s really happening?” “what might happen?” Prospection “what might we need to do?” Outputs Re-iterate a slide they should have seen in the Seminar. Copyright © 2000 Joseph Voros “what will we do?” “how will we do it?” Strategy futures inspired strategy

Strategic Environmental Scanning A Foresight Framework Strategic Environmental Scanning Information Gathering Analysis What seems to be happening? Categorising Interpretation What’s really happening? Contextualising Sense Making Foresight is a four level activity which incorporates much of what already happens today in strategy development, as well as a new step called prospection. Prospection What could happen? Innovation futures inspired strategy

Strategic Environmental Scanning A Foresight Framework Strategic Environmental Scanning Information Gathering Competitor intelligence, competitive intelligence, business intelligence, social intelligence. Focus on past, present and future. Methods: Delphi analysis, 4Q/11L Scanning Framework Most scanning work undertaken today focuses on the past and the present. futures inspired strategy

What seems to be happening? A Foresight Framework Current approaches at this level are largely quantitative in nature. Analysis What seems to be happening? Categorising Trend analysis, emerging issues analysis, quantitative benchmarks, cross-impact analysis. futures inspired strategy

A Foresight Framework Interpreting the analysis for the university’s context. Making sense of the data. Interpretation What’s really happening? And what does it mean for the university? Contextualising Sense Making Most strategy work stops at this step. Decisions are made once interpretation has occurred. futures inspired strategy

A Foresight Framework Focus on the future. Deriving a broader range of strategy options from the analysis: what options are available to us in the long-term? What might be the impact of those options in the long-term? What will influence those options? What are potential obstacles? Scenarios, visioning etc. Prospection What could happen? Innovation futures inspired strategy

A Foresight Framework Integrates a step to allow decision makers TIME at the BEGINNING of the strategy process to consider POTENTIAL future events and POSSIBLE implications for strategy rather than REACTING to future events which might have already undermined that strategy by the time those events become apparent. futures inspired strategy

Building a Strategic Foresight Capacity All individuals have the capacity for foresight – we use that capacity every day. The aim is to move that individual capacity to a shared, organisational capacity. futures inspired strategy

Building a Strategic Foresight Capacity Individual foresight is: unconscious implicit solitary Strategic Foresight is: conscious explicit collective futures inspired strategy

Building a Strategic Foresight Capacity Understand how successful organisations apply foresight to inform their organisational strategy. eg Shell, GBN, CUB, SKb, DEST, Toyota futures inspired strategy

Building a Strategic Foresight Capacity Generates a challenge: strategic foresight takes time to develop: mangers and leaders do not have much time, managers and leaders are rewarded for certainty, not uncertainty. Need to demonstrate value of taking time out in the short term to consider long term issues particularly when urgent imperatives in the ‘here and now’ need to be dealt with. futures inspired strategy

Institutional Time 1905 2005 2105 Present Future Past Universities have a past, present and future. All three times are interdependent. One time cannot be considered in isolation from the other two. futures inspired strategy

Institutional Time 1908 2004 2108 Present Future Past Strategy Decisions So…in terms of strategy. Strategy is about making decisions about future directions. If we accept that the past, present and future are interdependent, then strategy decisions need to take into account all three. But…strategy decisions now are based primarily on interpreting information about the past and present. Strategy decisions now are based primarily on interpreting information about the past and present. futures inspired strategy

Institutional Time 1908 2004 2108 Present Future Past Strategy Decisions What if we add in the future? Strategy decisions today can be strengthened by interpreting information about the future. futures inspired strategy

Institutional Time 1908 2004 2108 Present Future Past Strategy Decisions Strategic Hindsight Strategic Foresight So, we now have strategic hindsight, and strategic foresight. Strategic perspectives and interpretation need to be applied with the benefit of both hindsight and foresight. futures inspired strategy

Why strategic foresight? “The future does not just happen to us; we ourselves create it by what we do and what we fail to do. It is we who are making tomorrow what tomorrow will be. For that reason, futurists think not so much in terms of predicting the future, as in terms of trying to decide more wisely what we want the future to be.” Edward Cornish President, World Future Society futures inspired strategy

Why Strategic Foresight? All our knowledge is about the past, but all our decisions are about the future. What we don’t know we don’t know What we know we don’t know What we think we know This slide is another way of depicting the knowledge dilemma. We might think we know a lot, but we don’t really. But, admitting that in an organisation is not always a wise choice. What we know Most of what we need to know to make good decisions today is outside our comprehension: we don’t even know it’s there. futures inspired strategy

How do you ‘do’ Strategic Foresight? Step 1 Make a commitment to develop and use explicit futures processes. Give permission for staff to take time out from the here and now to think about the future. Encourage the use of a wide range of methods to support strategic thinking. futures inspired strategy

How do you ‘do’ Strategic Foresight? Step 2 Build a scanning framework – what do we need to know more about? What do we need to keep an eye on over time? Value multiple sources of information – quantitative, qualitative, from staff, from experts, hard data, possibilities… Value information that relates directly to strategy implementation today and information that is a bit more ‘left field’ and seemingly unrelated. Scan the mainstream and the periphery. futures inspired strategy

How do you ‘do’ Strategic Foresight? Step 3 Systematically and regularly review and interpret scanning reports using a range of approaches – What does this mean? Is there anything we need to pay attention to now? futures inspired strategy

How do you ‘do’ Strategic Foresight? Step 4 Have regular strategy events or processes to collectively consider information that has been gathered over time. Step 5 Make strategy decisions, and review them regularly. The world can change overnight. futures inspired strategy

Foresight and Strategy Strategic Foresight is about thinking, not doing. Thinking helps the doing. But … only if time is committed to allow people to think as well as do. futures inspired strategy

Foresight and Strategy Schedule regular ‘thinking’ time. Systematically develop and use strategic scanning to inform thinking. Use a range of futures methods to structure output. Make Strategy futures inspired strategy

Foresight and Strategy There may be no apparent link between foresight work and day-to-day work. Assumption that tangible results are the only valid results. Intangible results in terms of changes in thinking are not readily measured. The benefit of foresight is only apparent in hindsight! futures inspired strategy