Predicting the future has always been a fascinating practice, but rather improbable in its outcome. To accommodate the need to anticipate change, first futures studies (futures studies) and later a discipline like futures thinking were born, which utilises foresight techniques to help organisations identify and evaluate alternative possible futures in the appropriate context.

In this in-depth study, we will therefore leave aside the much more inflated world of forecasting analysis, based on a certain data history, to deal more specifically with strategic foresight, a discipline that can concretely help us answer some fundamental questions.

• What alternative futures must organizations prepare for?
• Among numerous potential scenarios, which strategies should be pursued to achieve objectives?
• How can one foster conditions conducive to realizing preferred futures?

Strategic foresight equips decision-makers in public and private sectors across all industries with insights critical for making pivotal decisions today that shape their future trajectory in countless possible directions.

Understanding Strategic Foresight

Strategic foresight is a methodology leveraging techniques for exploring potential futures to inform present-day strategic business development. As a core aspect of futures thinking, foresight practice involves structured exercises to craft a deliberate and interpretable vision of future scenarios.

Fundamentally, strategic foresight encourages a forward-thinking mindset, broadening our strategic option awareness and fostering a proactive approach towards future uncertainties.

Therefore, strategic thinking focuses on exploring future possibilities without necessarily dictating the steps to realize a desired future, a task falling under strategic planning. It’s vital to distinguish between strategic thinking, informed by foresight, and strategic planning, although both are integral to business success and should be part of a continuous strategy development process.

In essence, strategic foresight begins with exploring options, laying the groundwork for organizations to devise resilient strategies capable of navigating future uncertainties. Strategic planning then aims to align these strategies towards achieving preferred future outcomes. This discussion primarily explores the initial phase of long-term scenario exploration and future possibilities, which constitutes the essence of strategic foresight.

The VUCA World: Navigating Uncharted Futures

The necessity for strategic thinking arises from recognizing that the future, especially in the long term, defies pre-determined scenarios. Backcasting through recent decades shows that the future does not follow a linear progression from past events but is often reshaped by disruptive forces, rewriting the rules in the STEEP framework: Social, Technological, Economic, Environmental, and Political domains.

Futures thinking and strategic foresight lean into the VUCA world — Volatility, Uncertainty, Complexity, and Ambiguity — a concept coined by the U.S. Army War College during the Cold War. Despite the changing context, these definitions remain deeply pertinent:

• Volatility suggests rapid changes can occur, extending beyond financial markets to signify swift, unpredictable shifts in various domains.
• Uncertainty marks a future that’s not predestined, where foresight becomes essential for grasping potential changes and envisioning alternate futures.
• Complexity grows as we look further ahead, with an increasing number of interlinked variables complicating the landscape of alternative scenarios. Foresight techniques facilitate navigating this complexity without resorting to oversimplified conclusions.
• Ambiguity recognizes the lack of clear information about future events, challenging traditional predictive methods but offering rich ground for strategic foresight through the exploration of alternatives.

The Function of Strategic Foresight

Strategic foresight equips organizations to navigate an era of rapid change effectively. It has proven indispensable as technological advancements and new service models, like the revolutionary shift brought by cloud computing, transform IT and daily applications.

By anticipating change, foresight enables organizations to develop “future-proof” business models. It rewards those who, with perseverance and bravery, navigate strategic decisions, unlocking vast opportunities amidst challenges and uncertainties.

It cultivates a critical mindset that evaluates problems from diverse perspectives, transcending current paradigms and assumptions to envision a complex future that extends beyond mere technological considerations.

Moreover, strategic foresight imposes order during digital transformation, managing the deluge of data from myriad sources to avert chaos and foster informed decision-making.

Despite its nascent stage and existing biases, futures thinking stands out from speculative “future activities” and “futurism” with its solid foundation in future studies, offering structured tools and methods for scenario exploration devoid of historical data reliance.

The challenge for foresight practitioners is to effectively convey the advantages of strategic thinking to both public and private sectors. Nevertheless, the adoption of foresight methods is on the rise, empowering organizations to proactively explore future scenarios, thus avoiding the perils of delay that could doom business strategies.

Increasingly accessible within companies, foresight initiatives invite broad participation through proven exercises, greatly aiding decision-making at all organizational levels. The long-term focus of futures thinking and foresight, looking beyond a decade, seeks to free us from the confines of the current deterministic situation, enabling the formulation of strategies geared towards change, moving beyond the confines of traditional forecasting.

The Advantages of a Future-Proof Business

Emerging technologies such as artificial intelligence, robotics, and virtual reality have spurred organizations to look beyond the immediate future, exploring unprecedented scenarios within digital transformation.

Recognizing this, discerning entities are increasingly integrating foresight exercises into their processes, moving from initial curiosity to strategic thinking that informs present decisions with an eye on alternative future scenarios.

Benefits for organizations engaging in systematic foresight include:

• Enhanced readiness and awareness of trends and phenomena affecting future success and potential challenges, fostering a predisposition towards necessary adaptive and corrective actions for business sustainability;
• A proactive approach in monitoring future horizons to pinpoint opportunities and threats, guiding business lines to respond effectively;
• A holistic view of future developments through prediction radars, offering a methodical approach to otherwise random and unrelatable themes. Foresight maps out future evolutions in structured scenarios, enabling strategic control;
• Increased confidence in making “future-proof” decisions, with the uncertainty mitigated by the scientific application of foresight techniques. This facilitates strategic thinking and planning, allowing firms to make investment decisions that extend beyond short-term financial returns towards ensuring long-term survival and growth;
• The ability to develop more effective marketing strategies that meet the demands of an ever-changing market, requiring a constant reevaluation of scenarios and an orientation towards innovation.

Forecast vs Strategic Foresight

To effectively leverage foresight, it’s essential to differentiate it from forecasting, particularly the kind rooted in business analytics techniques. The field of Big Data & Analytics, enriched by the evolution of artificial intelligence and machine learning, now plays a critical role in forming precise future predictions to guide short-term business decisions.

Forecasting is built on principles fundamentally opposed to those of foresight.
It maximizes the value of a company’s historical data through analytical prowess. Forecasting aims to predict the future with a degree of certainty, relying on present knowledge. This method enjoys widespread use across various business sectors for its ability to provide reliable short-term predictions, applicable in predictive maintenance, automatic ordering in retail, supply chain management, and forecasting market demand.

In contrast to foresight, forecasting does not venture into future exploration. Instead, it treats the future as a deterministic outcome of past data analyses. The forecasted future remains firmly within the bounds of known scenarios, limited to interpreting events that have already unfolded.

This methodology has a high success rate in the immediate term but often loses predictive accuracy over the medium to long term when unforeseeable events and circumstances arise that current data cannot predict.

Strategic foresight, on the other hand, adopts the principles of futures thinking to the business context. It identifies alternative scenarios to place critical predictions for the business’s future, fostering innovation and preparing for change.

Forecasting and foresight thus fulfill complementary functions, provided they are used with conscious autonomy. Employing them together, without causing overlaps, ensures present actions are not based on unlikely scenarios or overly restrict the exploration of future possibilities that are not currently foreseeable.

Utilizing Future Scenarios in Strategic Foresight

Strategic foresight develops future scenarios through a continuous, critical reevaluation of the dynamics that initiate them. Initially vague scenario definitions are advantageous, offering flexibility to explore a wide range of nuanced future possibilities.

Excessively strict scenario definitions might curtail the exploratory vision, diminishing foresight’s value.

This approach underscores the preference for extending future projections beyond a decade from the evaluation point. Although forecasting techniques provide detailed analytical insights, they should not overshadow foresight efforts.

Scenarios rooted solely in analysis, focusing on certain trends and predictions, restrict the spectrum of potential futures, leading to considerable analytical efforts with limited interpretive effectiveness.

Furthermore, a prevalent cultural barrier often leads decision-makers to prefer familiarity over exploration, ignoring the critical exploration of medium to long-term alternatives. In foresight implementation, the goal is to employ practical, proven tools dedicated to fostering shared viewpoints on future possibilities, thereby aligning strategic facets with each organization’s journey toward the future.

The Futures Cone in Strategic Foresight

Strategic foresight plays a crucial role in identifying alternative futures, distinguishing between various types of futures grounded in future thinking. The use of “possible futures” as a general term simplifies dissemination but does not capture the nuanced classifications recognized in scientific literature.

Professor Norman Henchey’s foundational work in 1978 categorized futures studies into possible, plausible, and probable futures, each representing different degrees of likelihood and feasibility:

• Possible futures encompass all imaginable alternatives, focusing on unrestricted exploration. This category allows for the broadest exploration of future scenarios, unconstrained by feasibility or current technological limits.
• Plausible futures narrow down from the possible by meeting feasibility criteria, considering whether scenarios could realistically occur within the laws of physics and existing or foreseeable technology.
• Probable futures suggest a likely continuation of current trends, requiring changes that preserve their feasibility. They represent futures that, regardless of their time frame, are deemed feasible with current conditions and knowledge, even though future trends may shift unpredictably.

This classification evolved further with the introduction of the futures cone model by Trevor Hancock and Clement Bezold in 1994. This model provides a visual framework for categorizing the growing diversity of futures, introducing the concept of preferable futures.

• Preferable futures stand apart from Henchey’s classifications, rooted not in empirical knowledge but in the desire for certain futures to materialize, focusing on what stakeholders hope to achieve irrespective of its likelihood.

In practical foresight application, preferable futures help in setting strategic goals, shaping the direction for future planning and innovation. They emphasize the importance of aspirational targets in guiding organizations toward desired outcomes, thus complementing the analytical perspectives provided by possible, plausible, and probable futures.

This nuanced approach to futures enables organizations to prepare more comprehensively for the uncertainties ahead, leveraging the full spectrum of future thinking to inform strategic decisions.

Strategic Foresight Mechanics

Strategic foresight integrates diverse elements, ranging from current trends and signals of change to wild cards—low probability but high-impact events.

By processing these components, organizations develop strategies for future-driven innovation. The goal transcends crafting a long-term vision; it involves strategic planning from the outset to align near-future decisions with the organization’s direction.

Balancing short-term needs with a long-term outlook is essential, ensuring neither compromises the other’s effectiveness.

Strategic foresight steers organizations away from fixating on a singular future towards continuously assessing alternative scenarios. This flexibility allows for strategic and actionable adjustments as any forecasted scenarios unfold, securing a future-proof business.

The emphasis is on preferable futures, promoting the exploration of multiple alternatives. This strategy empowers organizations to adapt to forthcoming changes without becoming ensnared by a singular, potentially vulnerable hypothesis.

Strategic Foresight Techniques: Popular Methodologies

The temporal horizon for observing the future effectively accommodates various methodologies. Over time, a wealth of frameworks, exercises, and guidelines have been developed to assist a broad spectrum of individuals in engaging with and deepening their understanding of futures thinking. These tools, tailored for both experts and novices, require contextual adaptation according to specific goals, timeframes, and budgets, as well as the target audience for these initiatives.

For clarity, the list below encompasses techniques within the strategic foresight domain, though they also find application in broader market intelligence tasks, at times being unconsciously associated with or detached from the principles and mindset of futures thinking.

Forecasting

Distinct from foresight, forecasting is nonetheless integral to strategic foresight when aiming to develop focused knowledge on particular phenomena. Its purpose is to provide reliable estimates for inclusion in wider explorations of future scenarios.

War Game Simulation

This approach utilizes strategy games inspired by military operational planning, especially in simulations. Civically applied, war games replicate competitive scenarios to scrutinize and gauge options against potential competitive maneuvers, acknowledging that rivals will actively respond.

Backcasting

Backcasting helps map future scenarios to past dynamics and events. This process selects a theme and retraces steps leading to the present, using past evolutionary paths to simulate potential future routes. Unlike forecasting, backcasting emphasizes understanding the drivers of change over time, not merely projecting future outcomes from past events.

Weak Signals and Wild Cards

Investigating possible futures necessitates the search for signals and indicators to gauge alternative possibilities of change, including unprecedented historical situations that might occur. Weak signal detection focuses on identifying nascent trends and emerging challenges by likelihood. Wild cards, recognized for their low probability but potentially high-impact outcomes, are exemplified by the COVID-19 pandemic, which caught the world off-guard despite historical precedents and speculative fiction forewarnings.

Roadmapping

Primarily employed in technical domains, roadmapping outlines project or technology development timelines and milestones. It provides a clear, intuitive trajectory, regardless of the subject matter.

Trend Analysis and Emerging Issues

Trend analysis gathers data to create predictive models and evaluate their long-term impacts through simulations. Geared towards exploring possible futures, it permits a more interpretative approach. Emerging issues involve situations outside established models, anticipating scenarios that are similar but not identical to known ones.

Horizon Scanning

A prominent foresight technique, horizon scanning systematically gathers data to support or refute established models based on trend evolution. It spots new trends, particularly in areas divergent from existing strategic thinking models, facilitating alignment with and the development of alternative future scenarios.

Scenario Planning

Scenarios are narratives that detail possible future visions, either partially or fully. They are not future predictions but simulations designed to enhance understanding. The actual occurrence of these futures is secondary; the aim is to enable organizations to thoughtfully consider actions and strategies for effective decision-making now and in the future. Scenario planning helps decision-makers evaluate potential impacts, including STEEP analysis and other vital strategy-defining elements, addressing both opportunities and challenges.

Delphi Method in Strategic Foresight

Among the foresight techniques, the Delphi method spans the widest temporal horizon, involving a panel of experts who respond to open-ended surveys to elaborate on their views. Its distinctive feature is the iterative narrowing of hypotheses, aiming to reach a consensus deemed most accurate.

Strategic Foresight Implementation in Businesses

Renowned English futurist Richard Slaughter, a professor at Swinburne University of Technology and precursor to Joseph Voros in the mid-2000s Strategic Foresight Program, outlined three foresight implementation approaches, underscoring the discipline’s extensive application scope. Slaughter delineated pragmatic foresight, progressive foresight, and civilisational foresight. Below are their distinctions.

Pragmatic Foresight

Focused on securing a competitive edge within industry and enterprise contexts, pragmatic foresight investigates future markets and entrepreneurial challenges through innovation. This approach views alternative futures as competitive arenas, emphasizing market rule mastery to maximize advantage. Predominantly adopted in business, it aligns closely with core objectives vital to organizational prosperity.

Progressive Foresight

Contrasting with pragmatic foresight’s market competition focus, progressive foresight concentrates on future-proofing processes. It entails a deep reevaluation of current processes to adapt them for forthcoming scenarios. If future scenarios necessitate new product development, it may require reconfiguring production lines to meet demands with radically different features. This foresight strategy is invaluable for integrating new technological, sustainable development, and socio-cultural inclusion concepts into industry practices.

Civilisational Foresight

Aiming to reshape industry around sustainability and social inclusion, civilisational foresight evaluates broader societal impacts, not limited to change agents. It aligns with industry 5.0 and society 5.0 paradigms, advocating for a human-centric, positive future and the pursuit of preferable futures. With its expansive reach, civilisational foresight seeks to assess global change impacts, fostering resilient strategies that offer enduring benefits to the global community and avert negative dystopian futures. Despite its critical sustainability focus, civilisational foresight remains the least common implementation approach.

Strategic Foresight Essentials by the Institute For The Future (IFTF)

For over fifty years, the Institute For The Future (IFTF) has significantly contributed to futures studies, promoting the exploration of alternative futures to create value across various sectors. Reflecting on COVID-19’s dynamics, the IFTF emphasizes viewing uncertainty as a future constant, leading to the development of post-pandemic scenarios. These scenarios aim to foster a culture that not only prepares for future challenges but also capitalizes on the opportunities within potential risks.

The IFTF has also introduced the IFTF Foresight Essentials, a comprehensive set of lessons designed to provide the necessary tools and techniques for strategic foresight practice. This program empowers organizations to approach the future proactively, with goals to:

• Identify and analyze signals of change,
• Explore new possibilities beyond current limitations,
• Discover disruptive innovation patterns through hindsight,
• Design visionary and achievable future projects,
• Foster an inherent foresight capability within organizations.

Renowned as the world’s leading educational program on futures studies, the IFTF Foresight Essentials benefits from ongoing refinement based on decades of field experience.

Available under a Creative Commons 4.0 license, it serves as an invaluable resource for those new to strategic foresight, equipping them with the mindset and skills to help organizations anticipate change, identify emerging trends and issues, and devise concrete strategies. Targeted at businesses, government agencies, and social-purpose organizations, the IFTF Foresight Essentials is a key tool for strategic foresight implementation.