Although far from new, strategic foresight is an area that is not widely known or well understood. However, as the world becomes an increasingly uncertain place, strategic foresight is arguably more important for companies than ever.
This approach can help organisations anticipate changes in their operating environment, foresee challenges, and position themselves to make the most of opportunities. This makes it a vital area for existing and upcoming business leaders alike.
What is Strategic Foresight?
The Organisation for Economic Co-Operation and Development (OECD) defines strategic foresight as “a structured and systematic way of using ideas about the future to anticipate and better prepare for change”. This methodology may be used by governments, organisations, or companies.
For companies, it involves studying and analysing predicted future business environments in order to prepare for challenges down the road and plan for the best outcomes for the corporation.
It falls under the broader discipline of future studies and can cover all aspects of the business’ operating environment, from the economic, political, and social landscape to technological and legal developments.
Why Does Strategic Foresight Matter?
Strategic foresight is a relatively new area and goes beyond more well-understood practices such as market intelligence and strategic planning. It’s also important to understand that the discipline is well-reaching and comprehensive, covering all sectors and the economy and society in general.
As the world becomes ever more interconnected, understanding how different sectors and drivers for change may impact your organisation is more vital than ever.
While many business leaders may consider it relatively easy to predict upcoming trends within their own field, foresight around what may eventuate in other sectors or the business landscape more generally can be more challenging. This becomes even more nuanced when it comes to looking beyond the next two or three years.
Strategic foresight has a range of benefits for companies, including:
- Helping to predict, and so prepare for, challenges the business may face in the future
- Identifying potential opportunities, to put the company in a better position to take advantage of them
- Assisting with developing optimal processes and policies for probable futures
- Stress-testing existing strategies and processes against probable futures
How Does Strategic Foresight Work?
A key part of the strategic foresight process involves identifying what the future is likely to look like.
- Considering all plausible versions of the future, focusing on the areas aligned to the organisation’s strategic goals
- Distilling these down into the most probable futures by analysing the key factors that will influence change over time
- Determining the challenges and opportunities that these probable futures would present for the company
This encourages leaders to not only consider all possible future challenges and opportunities, but drill down to the ones they are most likely to face.
Though strategic foresight may be part of broader leadership roles, some larger organisations have dedicated teams for this area. This team works to analyse data, identify trends, assess risks, and pinpoint potential future opportunities. They may conduct extensive research, create scenarios to explore probable futures, and present recommendations to internal and external stakeholders.
Whether conducted by a dedicated team of experts, or company leaders, the specifics of strategic foresight can include:
- Gathering information on and analysing trends in or related to the industry
- Defining the key strategic themes that most closely align with the company’s goals, to focus the analysis on the most relevant areas
- Researching top competitors’ strategies, products, and processes to differentiate the company and give it competitive advantage
- Identifying the most important drivers for the changes that will impact the company in the future, such as technological development, new laws and regulations, and economic shifts
- Predict how these drivers for change are likely to develop in the coming months and years by analysing data trends and considering potential future scenarios
A well-known example of strategic foresight are the Mont Fleur scenarios, an exercise conducted in post-apartheid South Africa from 1991-92. As part of the exercise, South African leaders from various ideological backgrounds predicted and analysed different potential futures for the nation. The learnings from the Mont Fleur scenarios informed the country’s policy-makers in the proceeding years.
How to Develop the Skills You Need for Strategic Foresight
Strategic foresight involves a range of skills, including data analysis, risk assessment, and strategic planning, as well as more general interpretation, collaboration, and communication skills.