Strategic foresight: Navigating uncertainty

Unpleasant surprises always come to those who fail to understand what is contributing to uncertaintym say Mike McAllum and Paul McDonald. They explain why strategic foresight, rather than simply forecasting, is critical to leading edge organisations

Uncertainty may take many forms: the durability of current success paradigms; how the world may change geopolitically; restoring the environment to a level that is truly sustainable; and what the consequences might be of an almost unstoppable flow of wild cards.

By way of illustration, nowhere has this been more evident than in the travel industry. Are terrorism and SARS – which have seen radical drops in patronage – mere blips on the radar screen, or are they the portent of a deeper and more fundamental change in society? And how would we know?

Imagine the following scenario, in part an extrapolation of the current situation and in part a foresight of the discontinuities. It describes a future where the nexus between "business" and "travel" is broken.

In this world how might industry participants navigate? Will the travel industry be able to rely on what has always been or will it need to reinvent itself?

Indeed what is the "industry" in this future world?

For those who recognise uncertainty as part of the human condition, scenarios like this help establish which successes are nearing their use-by date, where future opportunities might lie, and, most importantly, the basis of future value.

On the other hand, for those who are uncomfortable living with uncertainty, the scenario seems at best ridiculous and at worst some form of black humour. Those who think or write such things are somehow complicit in perpetuating uncertainty. The argument goes: "Of course the cycle will turn up. It's all a question of timing – and the important thing to do is to manage carefully and look for smoothing mechanisms in the interim." It is interesting to observe how many groups in Australian society have an investment in such thinking.

Many of us have mastered the skills we call "management", which, by definition, are about creating certainty. We have so much invested in such skills – it is hard to let go. Uncertainty, however, requires a realignment of skills and thinking, a change in decision-making processes, and acceptance of levels of discomfort which sit uneasily with our management prowess. In an uncertain world, leadership of the realignment is as important as management is today.

The ability to think differently is a key success factor for this increasingly uncertain world. Thinking differently enables us to understand what to let go of and what is important for building the logic of success.

In the road warrior scenario (left), we can see that business travel is really a misnomer for business communication.

Therefore in order to understand the future of business travel what we really need to think about is the future of business communication. The strategic focus is immediately different as the value proposition changes, new competitors emerge, leverage points vary and customer and market segments are altered.

Thinking differently requires us to go beyond a trend analysis mentality, to the idea of foresight. Forecasting, by definition, is often constrained by the logic of yesterday. Foresight, on the other hand, is a creative device which allows us to anticipate the future by imagining that future place. This future is not a place of right or wrong but of what might be.

This kind of thinking is not a blue skies exercise as it has the immediate benefit of helping us to see more clearly what is driving, and more importantly, what is undermining today's success model. Unpleasant surprises always come to those who fail to understand what is contributing to uncertainty.

In an uncertain world, strategy – defining the best ideas to put into action – also needs rethinking. It must be informed by a rigorous view of the future and a clear understanding of what underpins today's business. The integration of this future view with strategy we term strategic foresight. As uncertainty is a multidimensional concept, so must our thinking be multidimensional – and in a way that ensures we define the basis of future direction, future value, how future resources are best used, and future organisation. As the diagram above suggests, strategy itself has evolved as an idea, as uncertainty and the pace of change have increased. The supreme challenge for strategic thinking in an uncertain world occurs at the point of the so-called singularity.

A substantial number of respected scientists have predicted that the singularity will occur some time in the period 2030-2050. Numerous portents are already evident (eg. cloning, robotics). Broderick says that at the point of forecasting or singularity "...all the standard rules and cultural projections go into the wastepaper basket." How, for example, would we prepare our children for a society where life extension well beyond what we currently consider reasonable is being seriously postulated?

Strategic foresight, by assisting us to think about how to play in a boundary-less and uncertain world, will hopefully provide frameworks for grappling with the ultimate uncertainty of the singularity.

In a world of certainty, strategy often focused on a "just execute" mentality. For example, increase market awareness of your product offering through visible participation at trade conferences and conventions.

In a world of uncertainty such thinking, while still important, must be linked with a robust future adaptability strategy – space is never empty; if we don't claim it someone, or something else, will.

Decision-making, too, must change in this world of uncertainty. For nearly two centuries we have regarded organisations as machines and the people who worked in them in mechanistic terms. Our language is littered with machine rhetoric such as "re-engineering" and "best practice". As Margaret Wheatley said: "Over the years, our ideas of leadership have supported this metaphoric myth. We sought prediction and control, and also charged leaders with providing everything that was absent from the machine: vision, inspiration, intelligence, and courage. They alone had to provide the energy and direction to move their rusting vehicles of organisation into the future."

Many leading-edge organisations are now moving to a paradigm where people and organisations are viewed as "living systems" rather than machines. In a living systems world, intelligence is distributed as widely as possible and decisions decentralised, for it is only at the interfaces that the realities can be accurately assessed and real-time responses provided. Of course there are boundaries, but this is very different from command and control, and governance systems need to change. Living systems thinking requires a new literacy; a new framework for thinking and using knowledge and wisdom. This presents a significant education and training challenge because many of our best people utilise machine thinking – the very antithesis of uncertainty – and therefore are poorly equipped to thrive in living systems environments.

Uncertainty raises new questions and requires conversations different from those that are part of the traditional management process. These questions and conversations open us up to information that we had previously filtered out because our world views or mental models had remained focused on management-related information. For example, how many in the business travel industry are tracking strategically-threatening technologies such as voice recognition and ubiquitous video, not to mention "out there ideas" such as hologram meetings?

But uncertainty is often paradoxical. Somehow we need to keep going today while creating tomorrow. The challenge for organisations is to integrate this thinking into their activity base to define what they need to let go of as they move into the future, what they need to keep to drive short term value and what initiatives are truly the basis of future success. Keeping these things in balance is not easy and requires thinking time ill afforded in a demanding management environment.

Machine thinking, and the efficiency that flows from it, consumes almost all of our time. A new determination and a new literacy are essential if we are to break the mould and create benefits, however transitory the uncertainty.

This emerging world requires us to behave differently if we accept the mantle of leadership. This is a world which doesn't rely on cycles, which celebrates different thinking and searches for the questions that push us into new possibility. It is a place which understands that paradox just is. It is a world where it is not only okay to be human but it is vital. And, it is a world that requires us to overhaul many of our business approaches so that people flourish in uncertain times.

And we can do it, for as 11-year-old Mollie said recently in her "Letter from the Future" at a community planning exercise: "but then was then and now was now and the past, well it can't be changed, but the future can".

* Mike McAllum and Paul McDonald are directors of Global Foresight Network, a consulting firm specialising

in new ways of thinking and leading-edge strategy.

Contact them at (07) 3408 6214 and (02) 9929 4116. www.globalforesight.net

The end of the road warrior – city states in 2015

The CBD was once described as an "Industrial Age people factory". Like all by-lines it was only partly true. One thing for sure, smart city states have been able to rethink their social integrity and build new vibrancy as one by one the key props of the Industrial Age disappeared. Perhaps the most symbolic sign of this change has been the demise of the "road warrior". Sure, people still travelled for business-related purposes, but it is now only 20 percent of what it was in 2000.

As cheap replacement technologies became available as substitutes for physical attendance at meetings, the travel requirement evaporated. Periodic threats to personal safety, SARS, and the failure of the airlines to address health concerns in a way that was affordable, undermined regular travel as a fun idea.

In most circles frequent travel is considered shallow and indulgent in a world conscious of sustainable energy. It also means time away from real time business activity.

For the few who do travel, infrastructure is not what it was. Business privileges have virtually disappeared, hotels are less accommodating of business requirements, and most inner city infrastructure has been reoriented around local creativity and attractiveness factors. Many who based their success on the idea of business travel just took it for granted and assumed that sooner or later the cycle [really a spiral] would turn up.

Occasional travel is still important, mainly for symbolic reasons and learning, but nowadays it is mostly integrated into personal lifestyle/workstyle events portfolios.

"Singularity is the postulated point in our future when human evolutionary development – powered by such developments as nanotechnology, neuroscience, and artificial intelligence – accelerates enormously so that nothing beyond that time can be reliably conceived. Typical developments include the merging of man and machine (cybernetic organisms – or cyborgs) and accelerated technology beyond our ability to control."

James John Bell, The Futurist, 2003

Teleconferencing to Telepresence

HP Labs recently invited a bunch of journalists to check out its latest experiment, a robotic meeting surrogate that turns teleconferencing into telepresence. The idea is that if you have to attend a remote meeting, you virtually "inhabit" the surrogate bot and send it in your place (one assumes that the bot would already be at or near the meeting location). After all, if the military can separate its pilots from its airplanes with a remote-control link, why can't the business traveller separate his body from the conference room?

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