Right now, most companies are working on their budgets for 2021. Given the soul-crushing amount of uncertainty ahead, budget planning for FY21 will be a challenging, arduous process. Making allocations for signal tracking, scenario planning and longer-term visioning might seem frivolous, or outright irresponsible, given the circumstances.
There’s a problem with that logic. Covid-19 aftershocks are still erupting. If you don’t think about the next-order outcomes of all this ongoing change, you will put your organization’s short-term survivability and long-term growth at risk.
Post-pandemic disruption will endure because a host of lower-magnitude tremors are incrementally shifting every other facet of our lives. Banks are bracing for double-digit unemployment through the first half of 2021 as the coronavirus leads to rolling closures of the U.S. economy. In America, the virus closed stores where people would buy lottery tickets, and since lottery revenues fund state and local school programs, public schools suddenly have less money per student than they’d planned.
Here’s a thought experiment: Adult children are moving back in with their parents, either to save on rent or to gain access to day care, and the next-order impacts are profound: compressing subscriptions (cable, internet, streaming, news and gaming) from many down to just a few shared accounts, decreasing the number of units rented in a building, reducing the need for insurance policies, shifting the foot traffic to grocery stores, and potentially reducing the number of devices (TVs, computers) bought. Adjacent businesses will begin to suffer too, as more adults living under one roof will require fewer dishes and flatware, lightbulbs, houseplants, carpet and the other creature comforts of home.
Organizations that buckled under disruptions caused by Covid-19 didn’t have an early warning system implemented within their organizations, and that lack of preparedness made them vulnerable to outside forces. Businesses without a culture of strategic foresight found their supply chains disrupted, their events dismantled, their customer base evaporated. What about all those organizations that aren’t drawing a line between Covid’s upcoming aftershocks and their businesses, partners and industries?
The “new normal” we desperately seek has already arrived: it’s continued disruption. But catastrophe can be a catalyst for positive change.
Companies more oriented to disruption are finding new markets, anticipating consumer behavior, and inventing our futures. Strategic foresight isn’t just about risk — it’s also about finding new opportunities. Covid-19 also unlocked emerging business models, created uses for existing technology and revealed new markets. Just look at the sudden transformation we’ve seen in telehealth, virtual work, entertainment, financial services, synthetic biology — I could go on.
From this moment forward, your organization’s lack of foresight does not excuse it. Keeping a watchful eye on the future is a core responsibility of leaders. Building a culture of foresight and planning will make teams more resilient even under the most difficult circumstances, and importantly will position companies to innovate, grow, innovate and evolve. Which means you should make an investment of some kind in your futures during this budget planning cycle.
Here’s how to build strategic foresight into your budget for 2021, whether you’re a 2-person startup or a multinational corporation with 100,000 employees.
If you have a limited budget (or none at all)…
- Get familiar with strategic foresight: Start by reading articles and books. The Harvard Business Review and the MIT Sloan Management Review have published dozens of papers and articles about foresight. (See these HBR articles; these and these MIT SMR articles.) The following books will provide a deeper understanding specific areas of foresight: The Signals Are Talking (to learn how to spot disruption early, find signals and emerging trends, and make better strategic decisions); Lead From The Future (strategic foresight in management); Seeing Around Corners (using inflections to drive innovation); Strategic Reframing: The Oxford Scenario Planning Approach (explains the Oxford model for scenarios); The Art of the Long View (a broad overview of scenarios and how they were used at Shell); and The Futurists (a compilation of essays and methods from futurists in the 1940s-1960s).
- Read this playbook: Stanford’s Foresight and Innovation division produced the Playbook for Strategic Foresight & Innovation. It includes case studies, different approaches to strategic foresight, and a good overview of the different methods, frameworks and tools futurists use.
- Download this foresight training module: Policy Horizons Canada, which is part of the Canadian government, published a short training manual on its foresight method. Access it here.
- Find ways to operationalize what you’ve read: After reading, discuss your insights and ideas with others in your organization. Find ways to operationalize foresight within your various workstreams. Don’t just say you’re going to incorporate the principles of foresight — hold yourselves accountable to making the necessary changes.
If you have a moderate budget…
- Hold quarterly emerging trends sessions: Bring together a cross-functional team once every quarter to discuss emerging trends within and external to your industry. Strive for a holistic picture to help you understand different areas of macro disruption. Review research in advance, and bring in an outside group to facilitate the meeting. This should yield better insights, possible partnerships, new M&A/ business opportunities and greater synergies across your departments.
- Align on how you will prioritize signals and trends: Once your organization is regularly monitoring signals and trends, how will you prioritize them? A simple workshop will position your team for convergence.
- Create an early warning system: In my experience advising executive teams for the past two decades, I’ve observed that most companies lack early warning systems and an effective method for making decisions. Is your organization positioned to see the next disruptive event and take measures to leverage opportunity or mitigate risk? How are you mapping the cadence of decision-making and action within your organization to the cadence of uncertainty, signals and trends? One of our core offerings at the Future Today Institute is a bespoke early warning system that identifies which signals to monitor, which to escalate to senior executives and when to take action. Creating an early warning system can simply mean developing a new shared workstream and a framework everyone will use — or you can build an AI-powered platform that mines insights from various data sources.
- Take a class: Learn the fundamentals of strategic foresight, like how to identify and track signals, how to know the difference between what’s “trendy” and what’s a longitudinal trend, how to build simple models to make decisions, how to develop scenarios, how to derive insights and strategies from scenarios and the like. The Institute For The Future and Kedge offer many training options and workshops for teams of all sizes. Coursera has several classes and certificate programs dedicated to foresight. The Future Today Institute offers master classes in foresight — FTI’s frameworks and tools are also publicly available to download and use.
If you have a bigger budget…
- Commit to longer-term visioning and strategic planning: What does the evolution of your organization look like? How does that evolution intersect with changes in your industry and society? If you don’t answer these questions for your organization, an unexpected competitor will emerge and dictate the terms of your industry’s future going forward. Engage in a comprehensive foresight process to develop a longer-term vision for your organization and to develop the strategic, operational, and organizational transformation required to achieve that vision.
- Develop specific foresight skills and capabilities: The OECD offers many programs and public resources for governments and government agencies. Oxford University has a training program specifically for scenarios.
- Create a nanodegree program for your organization: Now that organizations are working remotely, they are already primed for online learning. Develop and offer a nanodegree or certificate program in strategic foresight.
- Invest in executive coaching: Leaders must learn how to use strategic foresight to shape the futures of their organizations. Futurists can support executives in exploring plausible, alternative futures to better understand the forces shaping a system, and how that system might evolve over time. Foresight can be a powerful aid in decision-making, evaluating, and vision-building.
If money doesn’t matter…
- Poach an elite strategic foresight team. Amazon, Google, Apple, UNESCO, Shell, Ericsson, Ford, Walt Disney, Meow Wolf, Samsung, Intel, GM, P&G, the governments of Canada, UAE, Finland and hundreds of other organizations worldwide view strategic foresight as a core capability. Pick your favorite foresight division and acquire the entire team. Their first assignment: work with a crisis communications firm to forecast the aftermath of the acquisition. Then, prepare for the opportunities on the horizon.
