STRATEGIC DEFICIT
ARTICLE
A strategy is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty (selected from Wikipedia on strategy).
What could a strategic deficit mean?
Inspired by the concept of technological deficit, the strategic deficit represents the state of the insufficiency or inadequacy of a strategy when it is fueled by information that does not take into account the entirety of an organization’s environment as it exists under the 3 horizons. Rightly or wrongly, many strategies are articulated without taking into account the risks and opportunities of the long term and their possible perverse effects on the current situation of the organization.
We believe that when a strategy is articulated without the wisdom of a flow of information covering the 3 horizons, it can then encourage decisions and actions creating economic harm such as for example going ahead with an investment amortized in the long term but the benefits of which will have a shorter scope. It may also cover getting engaged in a business activity with no sustainable future or not engaging in an activity with a sustainable future.
At AUGMNT, we perceive the 3 horizons as areas of strategic information to be fully exploited in order to ensure an organization (or a territory) the necessary competitiveness, continuity and sustainability. Consequently, not considering the information of a horizon or doing so only partially creates what we call a strategic (information) deficit.
A notion borrowed from the concept of technological deficit
This notion of strategic deficit is borrowed from the notion of technological deficit. The technological deficit describes, among other things, a situation in which a technology does not do what it is supposed to do because it is obsolete and is no longer capable of operating current systems or is not profitable and therefore creates an investment deficit. One factor contributing to the technology gap is the lack of knowledge among decision-makers to ask informed questions and align technology with strategy.
Similarly, a strategy may not do what it is expected to do or has warranted a long-term investment that will quickly become obsolete or will not operate effectively or profitably under current or emerging conditions. Again, it is up the decision-makers (senior management. board of directors or the sole or majority owner for smaller organisations) to fill this knowledge or information gap about the furure and it is through the practice of foresight and the use of the 3 horizons model that this gap can be corrected so that “full-horizons” information is accessible and analysed.
Foresight or prospecting futures is not a projection
It is important to understand that projection is an approach that uses data and project it into or toward the future while foresight or prospecting futures (there are many kind of futures) is about speculating on possible futures and retrojecting (project backward) their effects back into the present.
Prospecting the risks and opportunities of the future
Foresight, or this action of prospecting the horizon of the future, allows organizations to detect potential risks and opportunities, thus allowing it to better prepare for the future by taking advantage of the preventive aspect of foresight. This preparation or preaction (Godet) which allows to prepare for changes is complemented by proaction or taking a course of action which causes changes in real or anticipated competitive advances or advantages.
The Benefits of Long-Term Planning or Planning for the Future
In a study by the McKinsey Global Institute (2017), it was found that companies that plan for the long term:
- Have stronger fundamentals;
- Deliver superior financial performance;
- Continue to invest in difficult times;
- Contribute more to economic output and growth.
Their findings show that companies that are classifed as “long-term” outperform their short-term counterparts on a range of key economic and financial measures.
A Rohrbeck and Kum Study
In a longitudinal 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.
Conclusion
When an organization creates an engaging future and an equally engaging narrative about that future, it positions itself as a thought leader in its market, sector and industry, thus becoming more attractive to its customers, current and future employees, suppliers, bankers and investors. Ultimately, it creates a renewed business purpose that allows it to not only continue into its future, but to thrive.
To your future !
Our workshops
Through a structured approach, we help organizations and individuals learn about how the origins of what they imagine and can empower them to diversify their actions.
Introduction to the futures
A revealing exploration of individual futures and how they can be different. Extremely valuable for everybody, and particularly for decision-makers and governance bodies.
To Your Success !
Introduction to foresight
An introduction into what is foresight/prospective and its main methods, the inner game of foresight and how it helps examine an issue in the context of the larger system that shapes it.
Custom workshop
We are more than willing to design a workshop that includes any topic in need of a more profound exploration or any topic the introduction of which would be of interest to an organization.