Brief information, descriptions and definitions related to futures, foresight, the 3 horizons, strategy, continuity, future-ready, risk management, etc.
Leaders keep their eyes on the horizon, not just on the bottom line. — Warren G. Bennis
Why prospective or foresight ?
The future being inherently uncertain and complex and the present being subject to its rapid and discontinuous changes; Futures Thinking and Foresight tools provide organizations with a structured and robust approach to responds to long-term change by monitoring and making sense of possible future change, exploring its dynamics and uncertainties, describe what the future might be like and understand the potential impacts of each future considered. By routinely considering how the future may unfold, and proactively and systematically incorporating our findings in our strategies and decisions, organizations will be more resilient and deliver long-term benefits more effectively.
Why the 3 horizons ?
The 3 horizons (McKinsey and Sharpe) is a framework to help organizations not only see beyond the short term but also to better visualize the differences between each of the horizons as well as the objectives and roles to be held in each . Traditionally, the 3 horizons represent the short term (horizon 1), the medium term (horizon 2) and finally the long term (horizon 3). For McKinsey, horizon 1 represents the core business to defend, horizon 2 represents emerging activities/markets and finally, horizon 3 represents the the future. For Sharpe, horizon 1 is that of the manager, horizon 2 is that of the entrepreneur and finally the horizon 3 that of the visionary.
The benefits of foresight/prospective !
Foresight offers many important benefits to organizations. It allows us to develop a vision of the future and for the future. This increases awareness of impacts by not only looking at the consequences but also the consequences of the consequences. Foresight helps determine what to anticipate in terms of risks and opportunities. It provides the strategy development process with the information needed to determine its long-term relevance and viability and helps the organization understand structural changes, predict innovation and new business opportunities. It develops enlightened leadership of the organization.
An augmented perfomance
According to a study by René Rohrbeck and Menes Etingue Kum, it was found that “future-ready” companies, defined as those with a corporate foresight practice, had 33% higher profitability than the average company and 200% higher growth. According to a study by McKinsey, it was found that: (i) long-term companies exhibit stronger fundamentals, (ii) long-term companies provide superior financial performance, (iii) long-term companies continue to invest in difficult times , (iv) long-term businesses contribute more to economic production and growth.
What is a maturity model ?
A maturity model is (wikipedia) a set of structured levels that describe the extent to which an organization’s behaviors, practices, and processes can reliably and sustainably produce required results. It also implies that a process is complete in its usefulness and continually improving and that it evolves or matures with the growth, sophistication and adaptation of the organization in its ever-changing environment. Some processes suggest steps to reach the level of development or maturity. We view the 3 Horizons and the Generic Strategy Model as maturity models as they help organizations adapt to what is new and what is next.
What is a generic process ?
A generic process is one that can be used interchangeably in many applications and situations. In the case of strategy, we use that proposed by Henry Mintzberg suggesting the 3 progressive stages of (1) thinking or strategy thinking (2) the development of the strategy and finally (3) the planning or development of a plan of action; none being more important than the other and taking precedence over the other. This model can be used with new inputs to generate a strategy that will evolve with the changing environment. Finally, Joseph Voros articulated a generic foresight process framework (2003) based on previous independent work by Mintzberg, Horton and Slaughter.
What is a strategy ?
Strategy is a widely used term that is probably widely misunderstood and therefore also misused. According to Porter, strategy must be distinguished and remain as such from operational effectiveness. The main objective of the strategy is to “do different” while the objective of operational efficiency is to “do better”. The strategy is to compete, not by being better than the competition, but by being different. As Porter suggests, an organization attempts to achieve sustainable competitive advantage by preserving what sets it apart. Strategy means (1) performing activities different from those of rivals, or (2) performing similar activities in different ways. This is the creation of a unique and valuable position, involving a different set of activities. Strategic posture is about determining how different your organization is in meeting the needs of your customers.
Trends are useful because to are vectors and a vector has both a magnitude and a direction. Trends can also cause a bias as in cognitive bias. The brain loves certainty which is why trends are so popular; we use trends to confirm something we want to be confirmed. But trends may be misdirecting us into a future that may not have much of a future. Here are a few reasons why trends may not be trusted as much as we would want to :
- Trends are vectors originating from the past; a reflection of the past because all data is historical by nature;
- Trends do not account for wildcards and unpredictable events;
- Trends do not take into account unintended consequences;
- Trends have a limited range that rarely extends into the future;
- Trends encourages causal analysis;
- Trends have relative importance between them and relative to the future;
- Trends may be more noise than intel(ligence).
The future is strategic and proprietary
The use of foresight leads to the development of a strategy for the future which is proprietary. Actually, it is both the strategy and the future that have this proprietary nature for the organization. The future is in fact an intimate reflection of its structure and its culture and is therefore unique to it. It’s a future that is an integral part of who it is and wants to become. This future may or may not be informed by third party experts but cannot or should not be dictated, imposed, copied/pasted. This future is the result of a creative, sovereign and self-determining act of the organization.
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