Raphael ThysAs the world becomes more volatile, uncertain, complex, and ambiguous (VUCA), futures thinking is increasingly becoming a non-negotiable skillset for leaders. Gain a deeper understanding of how futures thinking can be effectively applied to navigate today's challenges, particularly for mid-sized organisations and not-for-profits. This guide serves as a comprehensive resource for those seeking to adapt and thrive in the face of rapid change.
What is futures thinking?
Futures thinking is an interdisciplinary approach to planning and decision-making that equips organisations to anticipate, prepare for, and shape the future. Rather than a single method or discipline, it’s a blend of various tools and perspectives, designed to provide a fuller understanding of the complex factors that influence the road ahead.
Components of futures thinking
- Strategic foresight: Strategic foresight is a process of exploring possible futures and developing insights and strategies to navigate uncertainty and complexity. It involves identifying emerging trends and drivers of change, generating multiple scenarios of the future, and assessing the potential impacts of different scenarios on an organisation or society.
- Design thinking: Design thinking is a problem-solving approach that is human-centered, iterative, and collaborative. It involves empathising with the needs and perspectives of users, defining the problem, ideating potential solutions, prototyping and testing those solutions, and then implementing the most effective solution.
- Sensemaking: Sensemaking is the process of creating meaning from complex and ambiguous information. It involves collecting and analysing data from various sources, identifying patterns and connections, and interpreting and framing the information to create a coherent narrative.
- Inclusive facilitation: Inclusive facilitation is a process of guiding groups or teams to achieve their objectives while actively promoting diversity, equity, and inclusion. It involves creating a safe and respectful environment where everyone's voices are heard, and all participants are encouraged to contribute their unique perspectives and experiences.
- Cognitive science: Cognitive science can help to identify cognitive biases and limitations that may affect the way people think about the future. It can inform the design of tools and methods that facilitate more accurate and creative thinking about the future, and help to overcome common barriers to effective foresight, such as cognitive overload or confirmation bias.
- Optimistic action: Optimistic action is an approach to future studies and foresight that emphasises the importance of taking proactive and positive steps towards shaping a desirable future. It recognises that the future is not predetermined, and that individuals and organisations can take action to influence the direction of future developments.
By integrating these diverse methodologies, futures thinking allows organisations to navigate uncertainties and complexities more effectively. It aids in making informed decisions, fostering innovation, and ensuring long-term sustainability. It's a multifaceted approach for organisations that want a robust, informed and proactive strategy for the future.
The origins of strategic foresight
The origin of strategic foresight can be traced back to the aftermath of World War II, when the world faced unprecedented challenges and uncertainties. The emergence of nuclear weapons, the Cold War, and the space race created new threats and opportunities for humanity. To cope with these complex and dynamic situations, some military and political leaders, scientists, and thinkers began to develop new ways of thinking about the future and planning for it. One of the pioneers of this field was Herman Kahn, a physicist and strategist who worked at the RAND Corporation, a think tank set up by the US Air Force. Kahn used a tool called scenario planning, which involved creating and analysing multiple plausible stories about how the future might unfold. He applied this tool to various topics, such as nuclear war, global politics, and social change. He also coined the term "megatrends" to describe the major forces that shape the future.
Another influential figure in the history of strategic foresight was Pierre Wack, a French economist and planner who worked at Royal Dutch Shell, a multinational oil company. Wack was responsible for developing and implementing a foresight process that helped Shell anticipate and adapt to the oil shocks of the 1970s and 1980s. He used a technique called intuitive logics, which involved identifying the key drivers and uncertainties of the future, and constructing consistent and coherent scenarios that captured the range of possible outcomes. He also emphasized the importance of challenging the mental models and assumptions of decision makers and engaging them in a dialogue about the implications and actions of the scenarios.
Since then, strategic foresight has grown and diversified as a practice and a field of study. It has been adopted and adapted by various sectors and domains, such as business, government, education, health, environment, and civil society. It has also incorporated and integrated various methods and tools, such as trend analysis, visioning, backcasting, gaming, simulation, and participatory methods. It has also developed various frameworks and models, such as the three horizons, the futures cone, and the futures wheel. It has also produced various outputs and products, such as reports, maps, stories, images, and videos.
Strategic foresight is not a static or fixed discipline, but a dynamic and evolving one. It is constantly influenced by the changing context and needs of the present, and the emerging signals and insights of the future. It is also shaped by the diverse perspectives and experiences of the practitioners and participants who engage in it. It is a discipline that aims to not only understand and anticipate the future, but also to create and transform it. It is a discipline that seeks to empower and inspire people to imagine and realize their preferred futures.
The rise of futures thinking
As the world grows more volatile, uncertain, complex, and ambiguous (VUCA), it is clear that traditional forms of strategic foresight were not enough. This led to the emergence of futures thinking - a more holistic approach that combined elements of strategic foresight with other collaborative disciplines. This approach recognises that navigating a VUCA world requires not just the ability to forecast but also the capability to adapt and innovate.
Futures thinking: the new norm
Today, futures thinking is not limited to Fortune 500 companies or policy think tanks. It has become a mainstream practice that is especially relevant for mid-sized organisations and not-for-profits. These entities face the same VUCA challenges but often lack the extensive resources of larger corporations. Futures thinking offers a more agile, cost-effective methodology to anticipate and prepare for various potential futures.
The role of technology
Technological advancements, particularly in data analytics and artificial intelligence, have facilitated the quicker adoption of futures thinking. Generative AI, for instance, allows organisations to simulate multiple scenarios in a fraction of the time traditionally required, enabling more agile decision-making.
Strategic foresight has evolved from its roots in global politics to become an essential business tool. The rise of VUCA challenges has led to the expansion of this discipline into futures thinking, a more versatile and accessible approach that leverages technology for quicker and more efficient planning.
Why futures thinking in a VUCA world?
In today's fast-paced environment, the term "VUCA" has become more relevant than ever. Originally coined by the U.S. Army, VUCA stands for Volatile, Uncertain, Complex, and Ambiguous. These four words aptly describe the challenges organisations face daily.
- Volatility: Markets and technologies are in constant flux. This rapid change can disrupt traditional business models, requiring leaders to adapt swiftly to remain competitive.
- Uncertainty: The increasing number of variables affecting business outcomes makes it difficult to predict future scenarios. This uncertainty often leads to delayed decision-making or, worse, paralysis.
- Complexity: Businesses operate in a web of interconnected systems, stakeholders, and regulations. This complexity can often make even seemingly straightforward problems difficult to navigate.
- Ambiguity: The lack of clarity in the business landscape can mislead leaders into making incorrect judgments, often resulting in suboptimal solutions.
So, how does futures thinking help navigate this VUCA environment? By integrating strategic foresight with elements like design thinking and cognitive science, futures thinking equips leaders with the tools to:
- Scan broadly: Capture a wide array of signals and trends that might affect the organisation.
- Think critically: Evaluate the potential impact of these signals on the business landscape.
- Plan flexibly: Create multiple future scenarios to prepare for various outcomes.
- Act decisively: Make informed decisions and take immediate, effective actions.
By embedding futures thinking into your leadership approach, you not only mitigate risks but also seize opportunities that might otherwise be overlooked. For organisations, especially mid-sized and not-for-profits, adopting futures thinking can be a game-changer in building resilience and driving innovation in a VUCA world.
Unpacking the toolbox
Strategic foresight isn't just about making predictions; it's about equipping your organisation with the right tools to navigate uncertainty and shape the future. The traditional tools are still relevant, but let's discuss how to make them more accessible, lighter in terms of resources, and quicker to deploy—especially useful for mid-sized organisations and not-for-profits.
These 3 tools are the essential tools to applying futures thinking to your strategic planning:
Trend analysis
Understanding trends is fundamental to any futures thinking process. Usually, businesses invest substantial amounts of time and money into exhaustive market research. But you can start smaller:
- Do-It-Yourself: Basic trend analysis can begin with tracking industry news, research reports, and even social media conversations relevant to your sector. There are free and inexpensive software tools available to automate this.
- Engage a Consultant: For a more in-depth understanding, a consultant can provide expert analysis, customised to your organisation's specific situation.
Scenario planning
Planning for various future scenarios is a key aspect of futures thinking. The standard approach often involves months of work and intricate modelling.
- Do-It-Yourself: Simplify this by focusing on the most probable and impactful variables. Use templates to guide the planning and involve team members to add diverse perspectives.
- Engage a Consultant: A consultant can fast-track this process, adding expertise in constructing more nuanced scenarios and helping guide you through the complexities.
"Wind Tunneling" or Scenario Matrix
Wind tunneling involves testing your strategies against various future scenarios. This exercise can reveal vulnerabilities and opportunities, but it doesn’t have to be an exhaustive process.
- Do-It-Yourself: Create a basic matrix of the most likely and impactful scenarios. Run your strategies through this "wind tunnel" to see where they stand.
- Engage a Consultant: If you're looking for a more comprehensive evaluation, consultants offer advanced methodologies and software to simulate various conditions your organisation might face.
In summary, these tools are not just for big corporations with big budgets. With today's technological aids and a bit of expert guidance, you can implement them in a lighter, more cost-effective way, tailored to your organisation’s needs.
Taking advantage of these simplified approaches allows your organisation to benefit from futures thinking without breaking the bank or consuming extensive resources. The future waits for no one; equip yourself with the right tools to meet it head-on.
Futures thinking in mid-sized organisations
When we talk about futures thinking, it's easy to picture large conglomerates with endless resources at their disposal. But let's shift focus to where this approach is equally vital, yet often overlooked: mid-sized organisations and not-for-profits. The constraints of fewer resources don't mean you can't plan for the future—it just means you need a different approach.
Tailoring approaches for mid-sized orgs
The toolbox we discussed earlier can be scaled down without losing its essence. Here's how:
- Flexible timeframes: Unlike larger entities that might look 20 or 30 years ahead, mid-sized organisations can start by focusing on a 5 to 10-year horizon and then build upon them at a later time.
- Iterative process: Futures thinking isn't a one-off event. Make it an ongoing practice integrated into your regular strategic planning cycles.
- Cross-functional teams: Involve people from different departments to get multiple perspectives. You don't need a specialised team; just a diverse one.
Special focus on not-for-profits
For not-for-profits, futures thinking is an important way to ensure longevity of the organisation. Given the social missions and often uncertain funding, understanding future scenarios is crucial.
- Resource allocation: By understanding future trends and scenarios, not-for-profits can allocate their often-limited resources more effectively.
- Fundraising: With a clearer view of the future, you can make a stronger case for your cause, helping you secure grants or donations.
- Mission alignment: Futures thinking ensures that your activities are aligned with long-term goals, making your organisation more resilient and impactful.
Leadership skills for the future
Executives and senior leaders can no longer afford to rely only on traditional managerial skills. Futures thinking is rapidly becoming a must-have leadership skill set, especially in a VUCA world. With the right approach, you can integrate these capabilities into your organisation ensuring not just survival but also sustainable success.
The FUTURE framework is a multi-faceted approach for adopting the behaviours that create the best conditions for embedding futures thinking into organisational culture. This approach brings together many contemporary best practices in management:
- Flexibility - adapting to change, embracing new ideas and revising strategies
- Understanding - empathy and insights for informed, compassionate decisions
- Timeliness - acting at the right moment, balancing urgency with consideration
- Upbuilding - strengthening skills and structures for future challenges and opportunities
- Resilience - quickly recovering from setbacks, adapting positively to adversity
- Evolution - proactively growing and adapting practices for relevance and effectiveness
Each element of the FUTURE framework is interdependent, creating a combination effect that amplifies an organisation's ability to anticipate and shape its destiny. For more details, read more about the FUTURE framework.
How to get started
So, you're sold on the value of futures thinking and you're keen to incorporate it into your organisation. But where to begin? The journey may seem daunting, but you can start small and scale up. Here's a roadmap to ease you into this forward-looking approach.
Assess your current position
First things first: Know where you stand today. Conduct an internal audit that reviews your organisation's strategic goals, identifies gaps in skills and knowledge, and evaluates your risk management capabilities.
Align leadership
For any initiative to succeed, it’s critical to have buy-in from top leadership. Get the executives and senior leaders involved from day one. Share articles, research, or even some case studies to help them understand the value of futures thinking.
Choose the right tools
Refer to the toolbox discussed earlier. Organisations tend to find that conducting a thorough Trend Analysis is the most useful initial project, as the output of this project can be used for other foresight projects or more traditional strategic planning.
Pilot a project
Don't leap; take a step. Pilot a small project using the chosen tool. Make it manageable in scope and clearly define the objectives. This way, you'll get a taste of the process and can iron out any wrinkles before rolling it out organisation-wide.
Evaluate and iterate
Once the pilot project is complete, measure its success against your objectives. Was it helpful? What did you learn? Use these insights to make any necessary adjustments.
Scale gradually
If the pilot proves successful, plan how to integrate futures thinking into your broader strategy. Start incorporating other tools from the toolbox as you become more comfortable and as the organisation sees value in it.
Seek expert guidance
If at any point you find the process overwhelming or seek faster, more nuanced results, consider engaging with a consultant. An external perspective can often spotlight elements you might have overlooked.
The journey to futures thinking doesn't have to be an all-or-nothing plunge. You can wade in, test the waters, and gradually go deeper as you become more confident. The important part is to take that first step; the future is shaped by actions taken in the present.
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Recap
Futures thinking is an accessible, practical approach to understanding the complexities of the present in order to better shape tomorrow.
For mid-sized organisations and particularly not-for-profits, the urgency to adopt futures thinking is real. Financial constraints and resource limitations are no longer valid excuses to shy away from this methodology. Today's toolbox offers lightweight and cost-effective solutions that can be self-implemented or accelerated through professional consulting.
In a world where change is the only constant, staying ahead of the curve is essential. Futures thinking equips you with the strategic insight to proactively manage risks, seize opportunities, and ultimately, secure a more sustainable future for your organisation.
Further Reading and Resources
Continue your learning journey in futures thinking with these links and resources.
Books & Links
- "The Art of the Long View" by Peter Schwartz: A seminal work on scenario planning.
- "Thinking in Systems" by Donella H. Meadows: Essential reading for those interested in understanding complex systems.
- Top Foresight Books – The Foresight Guide
Our articles
- Bringing foresight scenarios to life with Generative-AI video
- Understanding the fundamentals of futures thinking
- The art of future thinking - how to develop a futures thinking mindset with the FUTURE framework
- From forecasting to foresight: How to move beyond predictive analytics in strategy development
- Using futures thinking to develop technology strategies for mission-based organisations
- Why strategic foresight is crucial for long-term business success
- The role of scenario planning in strategic decision making
Online courses
- Futures Thinking Specialization [5 courses] (Institute for the Future) | Coursera
- IFTF - Foresight Essentials | Unleash the Power of Futures Thinking
- Copenhagen Institute for Futures Studies - Individuals (cifs.dk)
- Foundations in Natural Foresight® - TFSX
Tools and templates
Scenario analysis canvasDevelop new strategies that adapt to a foresight scenario
Strategy Stress Testing CanvasSee how each strategy stacks up against all scenarios
Strategy Portfolio CanvasPrioritise a more robust set of strategies that adapt to the scenarios.
What's next?
You've taken the first step by equipping yourself with knowledge about the evolution of futures thinking and its critical role in navigating a VUCA world. The next step is turning this knowledge into actionable insights for your organisation.
- Educate your team: Share this resource and other related materials to get everyone on board. The more collective the understanding, the more effective the implementation.
- DIY approach: Utilise the toolbox techniques discussed above. Start with simple versions of trend analysis, scenario planning, and wind tunnelling. Our resource links offer guidance for each.
- Consult an expert: If you're ready to dive deeper into futures thinking, I offer tailored consultancy services that focus on strategic foresight for mid-sized organisations, especially not-for-profits. I can help you adapt these approaches to your specific needs and challenges.
Ready to shape a more resilient and forward-thinking organisation? Your future doesn't have to be uncertain. Equip your organisation with the tools and expertise to navigate what lies ahead confidently. Take the next step today.
Chris Dury
Strategic Foresight Consultant
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