- A common goal (purpose, mission, positioning) with which everyone in the leadership team identifies and for which it is worthwhile to work.
- Diversity in the team, firstly in terms of core competences and skills, secondly personality and character traits and thirdly with regards to external characteristics such as gender, age, nationality, etc. And all of this embedded in the company's context to build the basis for a truly sustainable approach.
- Psychological safety, meaning a cultural environment in which everyone can be themselves, contribute, openly express their opinions, know themselves and the team, where «the masks have fallen» and people take each other as they are.
The first part of my leadership trilogy is about "The common sustainable goal."
The Strategic Foresight Paradox
The Copenhagen Institute for Future Studies surveyed the top management of Denmark's 1,000 largest companies about the future and how they are preparing for it. The results are astonishing:
- 50% believe that their core business will change fundamentally in the next 3-5 years
- 26% have defined strategic foresight as a business priority
- 11% are systematically working to understand their longer-term future (5+ years)
In a world that is changing faster than ever before in human history and in which many believe that things are not only difficult and complex, but already chaotic or downright incomprehensible, only a minority of top managers systematically deals with the future. Isn't that crazy?
Why is this so? This paradox can have three reasons:
- Future blindness - people are preoccupied with the present and think it will be okay
- Future illusion - people deal with the future and believe to know it
- Disinterest out of ignorance - people know Strategic Foresight only from hearsay
We live in a disruptive world
Since globalization and digitization have taken root, the world is not only changing faster than ever before, but the phenomenon of disruption is spreading further and further. It is turning entire industries upside down, calling business models into question or even making them obsolete. Pandemics, wars, geopolitical developments and uncertain energy supplies on one hand, Artificial Intelligence, the automation and its impact to the way we work on the other, there is little doubt left: Disruption is not a temporary phenomenon. On the contrary: it will continue to intensify, and we are at the beginning rather than the end of this development.
The future is no longer what it used to be. Those who ignore it or believe they can predict it for a period of more than 5 years are playing with fire. Isn't it absolutely clear that whoever aligns his strategy, including planning, budgeting and investments, to a single scenario will very soon be in adjustment and correction rather than in creating mode? Actually, this has always been the case, but in today's disruptive world the effects are much more drastic. Competitive advantages are almost temporary, the life cycles of companies are getting shorter and shorter, and even the most successful companies are not immune to disruption. There are the big and famous examples such as Kodak, once an icon and world market leader, which slept through the digital revolution in photography and had to file for bankruptcy in the noughties. Or, as a more recent example, Toys "R" Us, the global toy chain that suffered the same fate in 2018 with its 64,000 employees because it missed the entry into online retail. But it doesn't just stop with the big guys, it affects small and medium-sized businesses just as much. The other day, I had lunch with the owner of a Swiss fiduciary company and listened with interest to how one specific company is shaking up the fiduciary industry in Switzerland with its cloud-based software that makes administration and accounting easier, faster, more convenient and largely paperless.
Established companies must systematically deal with the future and consider different scenarios. Only in this way can they free themselves from the constant mode of adaptation, create their future actively and based on sound knowledge of the future.
Achieving a common, sustainable goal with strategic foresight
For those who don't know or trust Strategic Foresight, here's Good News: It works! Strategic Foresight is the key to future-readiness, the tool that makes the difference between a conventional and a future-ready strategy. And it's not rocket science. It's actually much simpler than you might think at first glance. I know what I'm talking about, I've been learning and applying it since I became associated with the Copenhagen Institute for Futures Studies in 2005.
Strategic foresight essentially involves these four steps:
- Evaluate global megatrends for their impact
- Identify critical uncertainties and select the two most important ones
- Develop four future scenarios
- Derive insights for strategy development
The magic of this process is that it works on two levels: First, the participants derive their strategies from different future scenarios and can thus develop a strategy that is fit for the future. And second, the whole team works on different future scenarios. Together, they see that there is no such thing as the one true future, and they draw conclusions for their own organization. Afterwards, they follow the development with different eyes and exchange the same images of the future. It's less about arguing about who is right and knows better, and more about creating.
The advantages at a glance
These are the key advantages that then make a significant difference in strategy development and implementation:
- The horizon is broadened. Everyone breaks away from the planning illusion of knowing the one future, opens up and adjusts to different scenarios.
- Everyone gets into creation mode. As everyone grapples with several possible futures, everyone sees more than just one way. Instead of putting the focus on surviving, the emphasis is on creating.
- There is a common view. Participants in a Strategic Foresight project are given the same vantage point and work together from there to determine how to approach the future. This reduces discussions within the team about the direction during the strategy development and implementation process.
- The future is seen as an opportunity. When developing several future scenarios, there is always one that is more desirable than the others. Then it is obvious to influence the future accordingly, where this is possible.
Of course, after that it is crucial to incorporate the conclusions drawn into the strategy, launch it successfully and then follow through. What comes across as a bit sloppy here is a real problem. Many foresight projects are done for the gallery, do not generate concrete measures, and the organizations wonder afterwards why the exercise did not yield anything.
This also involves openness and readiness for change. For anyone who does not embrace opportunities that arise and generally sees change as a danger even the most intelligent future scenarios are of no use.
But with Strategic Foresight, the most important first step has been taken: The basis for a sustainable strategy has been laid. And it is often precisely this process that gives an organization the decisive impetus to gather itself together, reorient itself and set out for new shores.
You can see three examples of what strategic foresight, strategy development and implementation looks like in concrete terms in companies in my business cases.
If you would like to learn more about Strategic Foresight and about other future and strategy topics, feel free to network with me on LinkedIn and subscribe to my newsletter, which will provide you with exciting content every 14 days.
PS Let the future lead your way - the best in life is yet to come.