ce on historical analogues for predicting the future. Also, recent studies have shown the subconscious impact of bias when participants are asked about their perceptions of the future. People alternate between “confirmation bias” — seeking evidence to support previously-held beliefs — or “disconfirmation bias” — looking for evidence to challenge or disprove future outcomes.
Finally, the figures and approaches behind corporate foresight fly in the face of traditional business practices. One major barrier to achieving potential comes from the origin story of foresight itself: it rose from the ashes of static and unhelpful models of the 1980s and ‘90s. Foresight became the vehicle to launch scenarios and to start conversations between senior executives the traditional “strategy” practice did so well in driving. Short for the facile phrase, “It’s finally time to digitize your foresight function.” the framework for the Strategic Foresight Framework (SFF), coined by Dr. Jay Ogilvy, advanced in America and Europe by the Global Business Network consultancy, had replaced traditional value-driven strategic approaches with new questions and seed ideas that connected basic societal trends for executives. This singular time frame of strong, healthy growth generated “burgundy briefcases” with a focus on developing strategy bombs, rather than iterating more effectively with a goal of building advantage over the long term. (As a student of this departed era, it might sound as though I’m pining for nostalgic reunions with trends like risk-aversion, or “strategic planning” processes that showed diagrams of romantic journeys that map how leaders can move deliberate decision by deliberate decision to a far-off destination.)
The spaghetti-slinging approach to understanding how a company’s decisions might affect its preferred future is simply not working for leaders. Leaders trying to make strategy decisions for competitive growth can’t get distracted by “shiny objects” about what the future might look like. They need clear, disciplined models to make data-driven, priorities where strategy concerns are most important, and direct investments. Again, it’s time to reunite strategy and foresight to create a lasting and actionable framework for accelerating your business.
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“Strategic foresight, or strategic foresight is the application of systematic intelligence to inform business leaders about the future and its potential impact on their organization.”
Beginning in the ‘80s
and ‘90s, forward-looking companies used
strategy and
foresight as a powerful dual force that guided leaders to peer over the horizon with data-backed, quantitative models,
compelling narratives about plausible futures, and informed choices to stay competitive. The goal was to provide a defensible
long-term point of view, align on key themes, and engage leaders in a common dialogue about multiple scenarios for the future.
At the same time, leaders and managers alike would use that foresight base to create,
calibrate, and execute their near-term strategies. They had a shared perspective on where and how to
grow, how to execute new positions, and how to maintain and defend the core business.
Over time, however, strategy and foresight diverged into separate disciplines. In the 1990s, companies
started adding strategy professionals, sometimes called chief strategy officers (CSOs), to their
management teams. CSOs were often hired from strategy consulting firms and they were charged with
developing winning strategies along with tactics and operations to ensure effective decision making and execution.
As the C-suite delegated more initiatives to the CSO and their teams, strategy managers, strategic planners,
business analysts and others wound up doing less strategy. These days, I see CSOs often serving as a proxy
for their CEOs, while their teams do everything from taking the lead on executing priority initiatives to finding
attractive new markets. Meanwhile, foresight, which used to involve quantitative data, predictive modeling,
behavioral insights, and storytelling to craft intricate scenarios designed to prepare companies for multiple future states,
has devolved into company speeches, workshops, and lightweight scenarios that lack rigor.
In my observation,
foresight output is now too far removed from actual business needs of the company to wield real influence.
As strategy and foresight drifted onto separate paths, companies lost the synergy that originally made each
discipline so potent. Just like other iconic duos you already know — Simon & Garfunkel, Kirk & Spock, Sherlock & Watson —
strategy and foresight are better together, because they amplify what each element could achieve alone. Strategy
without foresight makes companies vulnerable to outside disruption. Foresight without strategy renders scenarios
unactionable. Each on its own has value, but our current business environment demands both.
It’s time to reunite strategy and foresight, recognize they operate on the same continuum, and reset expectations
for what they can achieve together. With modern updates and improvements to these combined disciplines, leaders
can sharpen their vision for the future, empowering managers to make informed strategic choices and propelling
teams towards superior performance. This domain is true strategic foresight: a disciplined and systematic approach
to identify where to play, how to win in the future, and how to ensure organizational resiliency in the face of unforeseen disruption.
Why Corporate Strategy Needs Updating
Corporate strategy is crucial for establishing a sustainable competitive edge, yet it is increasingly failing to drive
the long-term growth it once promised. I see the original purpose of corporate strategy
as creating a long-term plan for developing a business’s competitive advantage and then compounding it. At best,
corporate strategy was an opportunity
to define a company’s near-term competitive and operational strategy and also helm its long-term research and visioning.
I rarely see this in practice today. What’s happened is that executives ask for long-term strategic perspectives, but in reality
they are limiting their teams to narrow timeframes, resulting in a perpetual review of the same objectives with only minor adjustments.
Here’s a sobering truth that most C-suites won’t acknowledge: Considering the speed at which most modern companies are reasonably capable of moving (read: laboriously slow compared to the rate of external change), by the time a two-year plan is executed the future will have moved further out of reach. Strategy’s mission-critical responsibility — to chart a clear organizational direction and follow through with a robust execution plan — is being overridden by the immediate pressures of resource allocation and everyday operational tactics.
Many CSOs I know feel trapped. They wind up with ambiguous, all-encompassing mandates: Act as CEO whisperer, provide support for board-level engagement,
facilitate stakeholder management, and serve as a Jane-of-all trades special projects person. As a result, CSOs find themselves both responsible for
everything and accountable for nothing, since the results reside with the business owners or managers within the company.
I remember sitting down with the CSO of a leading consumer goods company grappling with an outdated margin management approach,
focused solely on cost-cutting and ranging from packaging redesigns to operational shifts like plant relocations. The intent was to reinvest
these savings into innovation to propel the company into a new growth phase. Yet, the strategy team’s preoccupation with margin improvements
overshadowed the drive for innovation, causing the company to miss research-backed opportunities and leaving it exposed to market disruption.
This underscores a wider problem faced by many companies: While managing margins is vital, it must be balanced with the pursuit of innovation and
growth opportunities to prevent strategic myopia and secure a company’s competitive edge in the future. When strategy isn’t performing its intended
job, companies can’t continually improve, leverage disruptive technologies, and adapt to new market conditions.
The immediacy of day-to-day operations can lead to a strategic process that is more about ticking boxes and filling templates, which often end up
languishing, unopened, in an inbox. Today’s tactical actions must set the course for the desired future, but the desired future must be regularly
reevaluated as dynamics change to make sure the intended destination hasn’t shifted.
The Promise and Peril of Corporate Foresight
The promise of corporate foresight is that it will position leaders to make good decisions in times of soul-crushing deep uncertainty.
And that’s the peril: the way foresight is practiced today doesn’t typically yield data-backed recommendations to guide leaders on new market
expansion, M&A strategy, innovation roadmaps, sustainability efforts, or the myriad other initiatives they prioritize.
The foresight function is often positioned inside a research or marketing team, where outputs aren’t tied specifically to strategic outcomes.
Foresight teams within organizations often lack formal training in how to build quantitative models or how to calculate the trajectory and momentum
of trends.
They also lack direct profit and loss (P&L) accountability that business heads typically hold. These days, foresight must do more
than change
Source article: https://hbr.org/2024/01/bringing-true-strategic-foresight-back-to-business
