Leading with Strategic Foresight and Certainty


By

Mrs Mamatha J
M.Sc., (Micro-Bio) M.B.A., (HR) Ph.D
Lecturer
Department of MBA
S.J.B. Institute of Technology
Bangalore-60
 


Abstract:

Our world is rapidly changing and the future is not going to be like the past and the way we operate and do business today will not be useful. To propel the organization into the future requires systematic strategic thinking to make decisions with certainty. Strategies based on certainty that is strategic foresight will dramatically reduce risk and produce superior results. For most business organizations, the future is something like a large blind spot. Based on the assumptions and principles accepted in the past and information from the present, they modify their views.

In this article, Strategic Foresight is viewed as a prime technique for future studies in order to understand the future of business that enables to minimize surprises and broaden the span of managers' thinking about different possibilities. The three levels at which foresight can be practiced and the methods to perform and a framework for strategic foresight are been discussed.

Key words: Foresight, Certainty, Blind spot, Framework.

Introduction:

"Take hold of your future or the future will take hold of you" Patrick Dixon

Strategic foresight is the practice of creating a functional view of the future, or future events and possibilities, in such a way as to take full advantage of opportunities, as well as to prepare for any possible adversity. Since the future is un-predictable and cannot be determined the only way to deal with is thinking in a positive way based on our present status. This mode of thinking is often used in the context of business, and encourages making business decisions to structure the plans based on future opportunities rather than past events. Hence, planning for the better future of the business and to survive in this uncertain and competitive world strategic foresight plays a major role.

Strategic foresight is deep strategy, because it takes a longer view: 2-to-5 years, 10 years, 20 years or longer, depending on the need. Regardless of time horizon, the future frame is a means to get better perspective on the present.

Business forecasts can be Operational or Strategic. Operational forecasts includes routine business processes such as production planning, inventory management, sales force evaluation, etc.. using historical data we can apply time-series forecasting methods to identify levels, and seasonal variations in the data can be used to predict future performance. These techniques are very easy to apply and can produce very accurate results. However, time-series forecasts are based on the assumption that the business environment and practices will not change substantially from their current state. Whereas, Strategic Forecasts are used to exercise and compare competing business plans. These forecasts are fundamentally different from Operational Forecasts in that we intend to change our business practices, so extrapolating past performance will no longer be a good predictor of future performance. Strategic forecasts rely on new techniques like modeling and simulation rather than statistical data analysis.

Table 1.0: Comparison between Operational Forecasts and Strategic Forecasts

 

Operational Forecasts

Strategic Forecasts

Type

Time-series forecasting

Modeling and simulation

Basis

Historical data

Management insight

Methods

Exponential smoothing
Statistical regression
Fourier analysis

Monte Carlo simulation
Decision analysis
Stochastic optimization

Application

Production planning
Inventory management
Sales force evaluation

Marketing strategy
Resource allocation
Business optimization


Concept of Strategic Foresight

Australian educator Richard Slaughter defines foresight as "the ability to create and maintain a high-quality, coherent and functional forward view and to use the insights arising in organizationally useful ways." For example, to sense adverse conditions, form strategy, and to explore new markets, products and services. It represents a blend between futures methods with those of strategic management.

Thus, Strategic Foresight is often an unconscious individual capacity to think systematically about the future to inform today's decision making.  As individuals, as organisations, and as a society we need to develop this capacity.

Strategic foresight is used as part of the corporate foresight in large companies. Strategic foresight can also be practiced at three different levels:

1. Pragmatic foresight  - "Carrying out tomorrows' business better". Framing realistic and sensible goals for the better tomorrow.

2. Progressive foresight  - "Going beyond conventional thinking and practices and reformulating processes, products, and services using quite different assumptions". Modifying the existing practices, thinking and assumptions would definitely help in the advancement of the business.

3. Civilization foresight - "Seeks to understand the aspects of the next civilization - the one that lies beyond the current impasse, the prevailing hegemony of techno/industrial/capitalist interests."

Need for strategic foresight

To help individuals, organizations and social institutions in anticipating the trends happening around them and to make them feel confident to operate in future instead of a passive or fatalistic acceptance of what might happen. Strategic Foresight combines the ideology and evaluation of Futures Studies with the application of Strategic Leadership. This is essential in order to actively pursue preferable futures and aspirations ,as well as execute the change that occurs within organizations or society as intended action is taken to pursue those futures.
 

--> Article continued on next page, click here  -->

Source: E-mail February 3, 2011

          

Articles No. 1-99 / Articles No. 100-199 / Articles No. 200-299 / Articles No. 300-399 / Articles No. 400-499 / Articles No. 500-599
Articles No. 600-699 / Articles No. 700-799 / Articles No. 800-899 / Articles No. 900-1000 / Articles No. 1001-1100
Articles No. 1101-1200 / Articles No. 1201-1300 / Articles No. 1301 Onward / Faculty Column Main Page