When developing a strategy, such as a growth strategy or perhaps a market entry strategy, there are countless factors that can be taken into account. Strategic foresight is a discipline used by organizations to form a picture of their future operating environment. It encourages us to consider how factors seemingly unrelated to an issue can come to affect it.
When putting together the pieces of a jigsaw puzzle, you usually have a picture of the desired end result in front of you. In addition, it is safe to assume that you have all the pieces. However, developing a strategy can be likened to solving a jigsaw puzzle where the bits of information on the relevant markets, the current corporate strategy, etc., are your puzzle pieces, but where you lack the guideline of a finished picture. Moreover, both the possible pictures and the puzzle pieces may change as you work.
In fact, when it comes to strategy development, no-one has all the pieces required, and – what’s even more challenging – the picture is constantly changing. Therefore, you will never be able to sit down satisfied with having completed the puzzle, and content to lean back and admire the picture that has taken form in front of you. Instead, it is an ongoing process of looking critically at the new picture that is emerging, and not being reluctant to use new puzzle pieces displaying parts of a ladder, for example – when you initially never thought your picture would include a ladder at all.
The acronym “VUCA” was introduced in the 1990s to describe our modern world. It stands for Volatile, Uncertain, Complex and Ambiguous. VUCA tells us that we need to be alert and agile, and to acknowledge right from the start that this is the reality we face in developing our business strategy. Once we have agreed on this matter, the next step is to think about what is required to develop and sustain a strategy in this environment – a process in which I think strategic foresight can be very valuable. Strategic foresight is defined as the ability to create and sustain a variety of high-quality views on the future, and to apply these insights in ways that are useful for an organization.
It is impossible to foresee the future fully and accurately. What can be done, however, is to consider many alternatives for the future, and be ready and willing not only to adapt to them, but to embrace them. Disruptions can come from more sources than one might think. Industries are becoming increasingly connected and a start-up in a different industry may disrupt your business. Being ready for this and willing to react to these new puzzle pieces that suddenly become part of your picture will go a long way towards helping you manoeuvre your way through – now, or in five or ten years.
Blog author Nadia Söderling works as a strategy consultant.