The short answer is with a lot of research, hard work and imagination! Even then, we can at best come up with a set of alternative futures. Most importantly, although the possible futures are infinite, we can influence which ones will become reality. This is determined by our actions, or chosen inactions, in the present and we live with the consequences of these decisions.
But what can companies gain from a futures approach?
A study has shown that a futures approach enables companies to extract significant value from the process. The value is realised through;
(1) an enhanced capacity to perceive change,
(2) an enhanced capacity to interpret and respond to change,
(3) influencing other actors,
(4) and through an enhanced capacity for organizational learning.”
But even so, does all this work on futures make a worthwhile difference to company performance?
It’s a resounding yes according to a study by René Rohrbeck and Menes Etingue Kum! They performed a long-term study of the profitability of 70 companies and the market capitalization growth of 42 companies. Their study showed that vigilant (prepared) companies “..had a 33% higher profitability and a 200% higher market capitalization growth when compared with the sample average.” A great result by any standard.
To see if it’s worthwhile for your company to use a futures based approach then simply take its profit and capitalisation, multiply by the figures above and see what you get. For any medium to large company that’s going to be a LOT of value that can be created!
So how do you predict futures?
Although it’s difficult to predict futures, even having knowledge of a possible or probable future is better than being blind to the possibilities and opportunities! Taking actions to bring into being a preferable future is even better! Predicting futures can be risky, but there are a variety of techniques available to minimise the risks and maximise being prepared for the opportunities.
A brief overview of a small sample of these techniques is below.
1. Scenario planning.
Scenario planning is about creating and describing multiple versions of the future so companies can map potential responses to these futures. Scenarios shouldn’t be confused with forecasts. Forecasts usually aim for accuracy in a defined future, whereas scenarios involve considering multiple futures.
There are a few different scenario process models and a good one is from Andy Hines. His stepwise process involves framing, scanning, forecasting, visioning, planning and acting. It’s a great book if you’re interested in deep diving into scenario planning.
2. 3 Horizon model
The three horizon model is about exploring the future as the result of the interaction of three time/activity horizons. This technique helps to balance the focus from now through to the future and helps ensure a balance between the competing resources required to fulfil the demands of each horizon.
The horizons are;
Horizon 1 – The way we do things now.
Horizon 2 – Emerging ways of doing things differently.
Horizon 3 – How we will do things in the future.
Scenario planning is a proven and useful technique used by organisations from governments to businesses to think about the future allocation of resources.
3. The Voroscope
This is my personal favourite, as it possesses the ability to encompass so many divergent thoughts in such a simple diagram. It achieves that most difficult of tasks, making the complex simple! Also known as the “futures cone”, but for my money Joseph Voros has developed the best version I’ve seen.
The Voroscope can best be described visually as in the diagram below.
I like the Voroscope for three reasons;
1. It so elegantly shows us that the various futures only increase in number the further we progress into the future.
2. It embraces so many types of futures.
3. It makes us consider every future from probable to preposterous.
Obviously only one future becomes our reality (and it may not even be one that we considered!) so whatever technique we use, constant reality checking against the proposed future(s) is an absolute must. And look out for those Black Swans……….. but that’s for another time.
There are many other techniques available, but I just wanted to write an article, not a book! Finding the right technique for you and your organisation can be difficult, but very worthwhile. It aids strategic thinking and is also highly lucrative, as shown in the articles by Rohrbeck and his colleagues. In my opinion futures work is the most fascinating area of business strategy today, especially in food. Not only because of the array of new technologies being applied to food, but its importance in feeding an ever growing population from now to 2050!
To finish up there’s a somewhat clichéd saying attributed to Alan Kay of Xerox PARC that “The best way to predict the future is to invent it”. Despite being clichéd it’s very true, and it’s incumbent on us all to take responsibility for influencing our own and our company’s future. As Voros says;
“just because we cannot imagine a future does not mean it cannot happen…”
In Part 2 I’ll expand on these 3 techniques and how they can help you develop alternative futures.
Want to investigate predicting the Future of Food for your company? If so then contact me here.