In these strange and uncertain times, it seems like we need a fortune teller to tell us what to do. I am not a believer in relying upon Zoltar, the fortune teller, for business advice but I do like the idea of imagining the future in order to provide insights for present choices.
A Client’s Dilemma
The other day I asked a client, “What is your plan?”
He shot a desperate and angry look at me and barked, “How the hell do I know?! What do I look like? A fortune teller! I am just barely keeping my head above water and taking it day by day!”
Whoa. I stepped back a little bit and thought to myself, “Although he sounds hopeless, the fire and anger in his voice are good signs that he still has some fight in him”. Then I replied, “It makes sense that you feel like you are drowning given the changes brought on by the pandemic. How will you be able to survive if you are just treading water and trying to keep your head above water?”
He calmed down a little, realizing that I was not an enemy. “I just don’t know. My business probably won’t survive if the pandemic lasts a few more months.”
Then I countered, “If treading water is just going to delay the inevitable, what else can you do?”
His energy shifted and his face became determined. “I can swim!”
I told him to think about what that meant and we would continue the process of outlining a path ahead in our next session. His energy and perspective had turned in a more productive direction so now we will need to determine the direction that he is going to swim.
Causality and Analogy
We need to pursue strategies that will take advantage of shifting opportunities in order to thrive in the long run, but first we need to survive in the short run. Changes are necessary, but given the current levels of uncertainty, traditional decision-making techniques won’t work.
I teach MBA students that the key factors necessary for successful decision-making systems are the concepts of Causality and Analogy. Causality is the cause and effect correlations and relationships found in a situation. Analogy involves applying the casual relationships to new scenarios. Traditionally we look at history to determine causality and then apply our knowledge through analogy to a present decision.
At this strange and unique moment of time, it seems fruitless to look to the past and attempt analogy because the situation that we are facing is so different and uncertain.
If we can’t look to the past for answers, can we learn from the future?
Rather than searching the past for guidance in our present decisions, we can use the future as a compass to guide our path ahead. A recent article published in the July-August 2020 Harvard Business Review discusses this type of planning. In the article entitled, “Learning from the Future: How to make robust strategy in times of deep uncertainty,” J. Peter Scoblic explores the strategic planning technique he calls Strategic Foresight.
The technique of Strategic Foresight does not attempt to predict the future but it involves imagining multiple futures in the somewhat distant future. The technique imagines a world 20 years from now. This requires us to stretch our imagination but we must also apply the guardrails of reality by looking at potential trends for future outcomes and not just fantasy.
The linking of the past to the present leads us to think of time in linear terms. In this process as we look to the future, we must think of time as a loop between present decisions and multiple imagined futures rather than a single linear prediction.
To determine multiple imagined futures, we must look at the forces that will shape conditions for the future and the interaction between those forces. We must define our assumptions about trends, driving forces and also factor uncertainties into our future scenarios. A variety of imagined futures should be explored and then based upon those scenarios we will adapt our present model to attempt to optimize success with our objectives. The process works backward from the future scenarios to the current decisions and actions that need to be taken.
Viewing time as a loop, we must consider this exercise as a process of constant exploration that should be periodically revisited. Scoblic provides the Cost Guard’s “Project Long View” and “Evergreen” as examples of successful implementation of Strategic Foresight.
While we form our current strategies, we must consider attributes and trends that have been revealed by the pandemic. We must look to embrace technology, consider connected strategies, and realize the strength of our local communities as we create our plans.
Technology-The Fourth Industrial Revolution
We are in the midst of the Fourth Industrial Revolution and the pandemic has accelerated the importance to embrace technological advances. Technology will continue to advance in the future. We must remember that systems and automation will always surpass human talent in the long run. The West Virginia Folk Tale, The Legend of John Henry, provides a story that will be repeated as we progress into the future. John Henry worked for the railroads drilling holes in order to blast tunnels through the Appalachian Mountains. He was the best to ever do the job. He was so talented that he beat a steam engine driven machine in a contest. The only problem was that he died soon after from exhaustion. Embrace technology and keep an eye on emerging technologies or your company will be left behind.
Value Chain Connected Strategy
The pandemic emphasizes how connected the world is. This applies to the value chain related to your business. Information is becoming more transparent as Block Chain technology enables information to be shared in real time up and down the value chain from the original raw materials to the end consumer. As you develop strategies, consider pulling both suppliers and customers into your processes to enhance transparency and operational flow.
Supply Chain Local Solutions
Looking to the future, you may want to re-think supply chain sourcing. The pandemic has revealed the risk of relying upon only a handful of suppliers. Shortages can occur if you do not have alternative sources available when problems arise in the supply chain. In the future, trade wars or embargos could cut off global suppliers. Consider the advantages that local sources provide in light of these risks. Local communities are more important than ever and supporting local business has a synergistic effect enhancing your own success.
If you would like to discuss Strategic Foresight or if you would simply like to share your story with me, please reach out to me in LinkedIn or contact me at firstname.lastname@example.org. My initial discovery sessions are always free so you have nothing to lose. Remember, even Zoltar, the fortune-teller cost you at least a quarter!