Applied Foresight, Adaptive Strategy

Following the previous post on strategic design, I want to focus on the other half of the equation—what I mean by applied foresight.

The Limits of Linear Thinking

In 2019 I worked on a foresight program in the retail sector. The goal of the work was to develop scenarios focused on sustainability in 2030, which were to be a canvas for transformative business model innovation. If successful, this would help the company achieve its sustainability goals while better serving customers and society, contributing new growth, and fostering resilience amid uncertainty.

These were ambitious goals, in part because sustainable business models would likely challenge the status quo if not the nature of consumption and capitalism. The internal innovation team had done a significant amount of horizon scanning and synthesis following the University of Houston Framework Foresight approach, and my firm was hired to create scenarios and lead the innovation work.

To start, we facilitated large cross-functional teams to make sense of the signals and identify critical uncertainties. The team had decided on the 2x2 scenario method—so there were lengthy discussions about which dimensions would best capture the most important issues, and to work through implications for the scenarios.

After a time it was clear that none of the prospective frameworks felt right. Some were too narrow, others too broad—none captured the key issues in a way that would help us generate a representative and compelling narrative space.

This led us to engage larger issues outside the initial domain and research scope. For example, it became clear that sustainability and inequality are interdependent—that a less equitable world would be inherently less sustainable and vice versa, particularly in terms of impacts to customers. To affect change at the level they sought, the organization would need to work along both vectors—a challenge they embraced as being uniquely aligned to their values.

This was a useful pivot, and the resulting scenarios were well-received and still hold up in many ways, even though much has changed. For example, we didn’t anticipate the pandemic, a global trade war, recent geopolitical conflicts, or the ways in which these and other changes would impact the industry and redirect attention from sustainability and social change. We did anticipate being worse off—a less sustainable and less equitable world—and here we are, more or less on schedule.

We went on to generate hundreds of novel business model concepts, which were inspired by and later mapped to the four scenarios to quantify resilience across the various futures. A limited number of ideas were selected for further development, and a few later became exploratory pilots.

Since then, the internal team was directed toward different goals, several individuals moved on to new opportunities, new executive leaders were put in place, and more immediate business challenges emerged. Based on the company’s public disclosures there is reason to believe that seeds planted during that time were influential, though it is difficult to know for sure, or whether similar initiatives would have happened anyway. Meanwhile, the organization retreated on its social agenda, and today appears to be on a business as usual path—far off the transformation journey we had envisioned.

Real impact is hard to come by in foresight.

This chasm between present-day intentions and future actions is one reason there isn’t a great deal of clear and unambiguous evidence that foresight is effective as designed—making preferable futures more likely or negative futures less so, improving decision-making, or increasing organizational resilience.

A more foundational issue is that linear theories of change and strategic roadmaps are misaligned with the complex nature of reality. There are too many signals, interactions, and changes to track. And even if you could track them all, causality would remain ambiguous at scale because the world is not a machine. This is why so many strategies fail upon contact and over time.

Semantic Introspection

Strategic foresight is the most common term for the applied work of “futures studies,” an interdisciplinary field of academic research focused on the history, theory and practice of foresight—critical thinking about the future in order to better anticipate and influence change.

In this context, strategic suggests the application of foresight to inform long-term strategic choices for organizations, and functions as a reference to specific methods, structured processes, and universal assumptions. It also has a formal quality and strives to differentiate the field from adjacent practices—for example “forecasting” (making predictions), “trends research,” “futurism” (technological determinism), or “design futures” (speculative design), and many more.

Even so, strategic foresight remains misunderstood and undervalued. My use of the term has declined over the past few years amid this confusion and some frustration with the efficacy of the methods. Today, I generally prefer “foresight” when referring to the formal discipline. Recently, I have been using the term “applied foresight” to suggest a more pragmatic integration of futures thinking with strategic design and complexity, and a greater emphasis on action.

Starting there—if you accept that the world is an entanglement of complex systems— then both foresight and strategy must be equally adaptive by nature.

Key attributes of complex systems: They are emergent—the whole exhibits behaviors and dispositions that can't be predicted by analyzing individual parts. They are open systems—constantly shaped by and shaping their environments. And they are nonlinear—small changes can have disproportionately large effects.

In complex environments, an adaptive approach to strategy demands a shift toward integrated action, sensing, and learning within the system. This is an ongoing process, because everything is in motion, all the time.

Consequently, the role of foresight shifts from distant research and analysis to participatory sense-making and co-design with stakeholders—applied foresight. This places greater emphasis on facilitation, prototyping, and other hybrid methods that increase coherence between long-term vision and present-day action—specifically, strategic design.

Work in Progress

This thinking is work in progress—really, just a start.

A key influence has been Dave Snowden from The Cynefin Company. I have adopted much of his thinking about complex systems and have added complimentary methods to address gaps in the Cynefin toolkit for my own purposes—specifically, foresight to augment sense-making and theorizing about future outcomes, and design to provide a means of envisioning artifacts and prototyping change.

Strategy is dead. Long live strategy.

More to come.