What is Strategic Foresight?
Here's what it is and why it matters.
July 16, 2018, Bruno Jacobsen, Irmeli Hirvensalo
Strategic Foresight, also known as Futures Studies, is a discipline organizations use to gather and process information about their future operating environment. This information can include, for example, trends and developments in their politcal, economic, social, technological, and legal environments.
What is Strategic Foresight?
While the discipline of Market Intelligence has been around for a while, Strategic Foresight is relatively new in businesses and public organizations. (We'll do a blog article explaining the difference soon.) For that reason, many are not familiar with its terminology, and as an organizational activity it is not as commonly practiced as, say, competitor monitoring and market analysis. But in an VUCA world, the lack of a reliable foresight program can have disastrous consequences for all types of organizations.
Many people in organizations believe they can foresee developments in their industry or sector. At least over the next couple of years.
Yet, the most critical threats or greatest opportunities often emerge in other industries or sectors. New trends, developments, or phenomena can emerge in adjacent fields or in society at large. And while at first they may seem disconnected, they are often the drivers of change that will eventually affect one's own future, too. And often in dramatic ways.
Hence, it's important to have a broad understanding of the changes in industry and society.
But a broad understanding of these changes is not sufficient. While you can still have a good understanding of changes occurring within the next 2 to 3 years, looking at longer term changes becomes more difficult. As you expand the time horizon, possibilities multiply and a variety of possible futures emerges.
So what can organizations do after identifying a range of possible futures?
One important activity is to identify the plausible futures (see how here). After that, an organization should identify the probable futures, those most likely to come about. To do that, it is important to identify the key drivers of change and monitor them systematically.
Then, some organizations may have a strong vision of their preferred future and will take action to influence developments in order to increase the chances of that future becoming true. Often, however, management teams admit that any one of different scenarios is possible and will do their best to ensure their organization is ready for many different futures.
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Why is this important?
Without Strategic Foresight, an organization may have a good understanding of the short-term trends in their industry. Or even general long-term trends in society. But, in an interconnected world where change is occurring ever more rapidly, and where the boundaries between industries are blurring, more is needed.
What happens on one side of the world has an impact on the other side of the world. A small startup today may disrupt the largest company in the world tomorrow. Political instability can change the balance of power and have widespread consequences across the globe. Not to mention no one knows where AI, automation, and other rapidly developing areas will take us.
Fortunately, with these topics dominating conference agendas and coffee table discussions, systematic foresight activity has gained momentum.
More and more organizations want to understand in greater detail how the world is changing and how they can make the most of these changes. The purpose of Strategic Foresight is to help them in that difficult task. And, of course, to ensure that organizations make informed decisions based on carefully analyzed views of alternative future scenarios.
This article is based on our latest eBook. Get your FREE copy today and get ready for the future. If you're looking for a tool to facilitate the process, take a look at our Foresight Platform and check out the free trial.