There has never been a business arena quite like the “New Economy” that has resulted in so many lessons, so fast, in what NOT to do. Corporate foresight, business intelligence and early warning systems are promising tool-based solutions, but many…
There has never been a business arena quite like the “New Economy” that has resulted in so many lessons, so fast, in what NOT to do. Corporate foresight, business intelligence and early warning systems are promising tool-based solutions, but many executives still fail to place these on their list of priorities. Achieving effective corporate foresight is a matter of personal perception and is therefore difficult to address from an executive viewpoint.
Why does the art of foresight remain a mystery? The following are some of the most common pitfalls.
Discounting future problems: We tend to apply a psychological discount rate to our perception of future problems. Therefore, distant potential problems are perceived as posing no immediate threat. Hastily implemented countermeasures may plug the leaks in a crisis, but crucial reaction time has been wasted and the opportunity to invent a solution has been lost.
No time for planning: Today, companies must move quickly to secure a competitive edge. There is little incentive to spend time or effort on long-term strategic planning when easily identifiable surgical strikes can quickly result in a visible win. Studies show that executives spend less than four percent of their time on future-oriented planning tasks.
Overconfidence and excessive optimism: Entrepreneurs are often obsessed with their personal business ideas or inventions, blindfolding themselves to reality. Confidence in ones ingenuity and infallibility should not be a restraint in developing a “what if?” Plan B strategy.
Self-fulfilling prophecy: The human psyche urges us to keep our own ideas and opinions free from conflict. Intuitively, we seek evidence to support our beliefs and decisions.
Overwhelming complexity: Many organizations see the future unfolding on the edge of chaos, leading to a single inevitable outcome that victimizes them. This notion often stalls foresight activities.
Lack of imagination: Today’s demanding workplaces have fostered specialization and narrow-focused tasks. Employees and executives alike are trained to avoid ambiguity, speculation and hypotheses, and instead strive for clarity, structure and precision. Therefore, we expect the future to assume familiar shapes. However, the future is an abstraction; a projection of times to come that requires imagination if it is to be successfully anticipated.
Extrapolation: Many companies still believe that the future will be similar to the past, only bigger. However, today’s business environment is constantly changing and yesterday’s successful remedies guarantee nothing for tomorrow. Many managers struggle to shed old mindsets that are clouded by nostalgia.
Why is this important?
In order to gain the competitive edge and be free of confining assumptions, executives and managers must acquire new skills:
Be more curious: Surround yourself with inquisitive people and encourage them. Look for secondary consequences in emerging trends, challenge common assumptions, search for anomalies and opposites. Don’t settle for obvious explanations, and follow Yogi Berra’s advice: “You can see a lot of things by lookin’.”
Learn to think out of your self-constructed box: Thinking in the future tense requires a different and wider perspective. Read articles you would normally ignore. Put yourself in the role of other people in order to understand their perspective.
Create alternatives: The future will unfold in many diverse ways. Welcome this uncertainty as an invitation to unlimited possibilities. Lee Iacocca demanded at least a “chocolate and vanilla” alternative when making an important decision. If more than five million dollars was at stake, he would also insist on having a “strawberry” option.
Be optimistic about the future: The future is not yet with us, so there is ample opportunity to influence it in your favor. If you look carefully, you will be surprised at how much influence you can wield. People often overestimate what they can accomplish in the short term, but underestimate what can be accomplished over the long haul.
Abraham Lincoln said that the good thing about the future is that it comes one day at a time. This presents time enough to shape ones specific future and reduce its complexity.
Alan R. Procter provides strategic consulting services to organizations looking for new competitive capabilities. He can be reached through www.alanprocter.com
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