Why The Futures
In January 2020, on the last day of the Strategic Foresight training at the University of Houston, news broke about a new virus spreading across continents. In a classroom filled with strategic thinkers from NATO, US federal and state government agencies, major corporations, independent futurists, and management consultants like myself, everyone was checking the phone, dumbfounded and hesitant to comment. We said our goodbyes and “see you in the future” with a sense of foreboding.
We desperately wanted to know what would happen next, while knowing we couldn’t know at the moment. It was the beginning of a global pandemic, and many lives and businesses were changed since then.
Wouldn’t we all want to know, so we could be better prepared for and adapted to a global pandemic, a regulation shift, a supply chain disruption, or an economic downturn? Wouldn’t it be great if we could emerge ahead of the competition, arriving first to market with the perfect application of a new technology, riding a major trend wave, dominating the field? Is there an equivalent of a crystal ball for all of us to use, or in nerdy terms, a framework, methodology, and formula?
In my role as an Expert Consultant at McKinsey & Company for over five years, I was surprised by how many clients limited their strategy to a 6-12-month horizon. How would you know you are taking the right steps in the short-term without knowing where you are headed?
Don’t get me wrong, I understand why and how it’s not their fault. One easy-to-spot factor is that the median tenure among S&P 500 company CEOs has decreased by 20%, from six years in 2013 to 4.8 years in 2022. (https://www.equilar.com/blogs/558-ceo-tenure-rates.html)
Many leaders I spoke to, especially when things got tougher, expressed greater concern for immediate challenges over long-term ones, given the pressure from their boards and stockholders. When asked, “Would you be concerned about missing out on long-term goals and opportunities?” they often responded, “Yes, that would be the very next priority.” And it will likely never get bumped up on the list.
“Sustained resilients” that lead on both growth and productivity build the largest performance gap
On the other hand, there are those who chose differently. Leaders who created urgency around longer-term vision setting, opportunity discovery, and proactive strategies are taking one step closer to the proverbial crystal ball. Data in McKinsey’s research showed how “…by taking defensive measures such as conserving cash while also going on the offense, “ambidextrous leaders” create value despite volatility, setting up their organizations to thrive in a world that has likely changed in fundamental ways.”
Another research, by René Rohrbeck and Menes Etingue Kum, shows that future-prepared organizations outperform their peers both in profitability increase and growth advantage.
https://www.sciencedirect.com/science/article/pii/S0040162517302287 1. Corporate foresight and its impact on firm performance: A longitudinal analysis, 2018, René Rohrbeck, Menes Etingue Kum
At the beginning of launching Design x Foresight at McKinsey, we logically speculated that certain sectors might be more susceptible or ready for long-term thinking, such as infrastructure-dependent sectors like oil and gas, agriculture, and public sectors. However, after numerous conversations and engagements with leaders across various industries—from startups to Fortune 500 companies—it became clear that we were wrong. It’s not a sector divide or an infrastructure-dependency game.
There are simply two kinds of organizations ready for Futures thinking: those who are leaders in their industry and those who have a leader’s mindset, poised to become leaders.
Industry leaders are motivated to maintain their leading positions, have the maneuvering power and confidence, and understand what it means to lead. They invest in long-term vision, explore multiple future outcomes, and strive to stay ahead.
Organizations with a leader’s mindset, even if they are not yet leading, are poised to do the same. They understand that acting like a leader is how you become one. These organizations delve into emerging trends and multiple future scenarios to seek opportunities in white spaces before their competition.
Now the question to you is this:
Are you ready to think, strategize, and act like a leader into the future?
Additional reads on uncertainties, innovation, and the leadership mindset:
World Uncertainty Index shows the rise of uncertainty over the years with peaks at times such as the COVID19 Pandemic https://worlduncertaintyindex.com/
HBR on bringing foresight back to strategy: “Strategy and foresight were once the same discipline. And they should be again. The immediacy of day-to-day operations can lead to a strategic process that is more about ticking boxes and filling templates, which often end up languishing, unopened, in an inbox.”https://hbr.org/2024/01/bringing-true-strategic-foresight-back-to-business
HBR on how Strategic Foresight can enable true leadership especially during uncertain times: “The practice of strategic foresight offers a solution. Its aim is not to predict the future but to help organizations envision multiple futures in ways that enable them to sense and adapt to change. Its most recognizable tool is scenario planning.” https://hbr.org/2020/07/learning-from-the-future