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What is Strategic Foresight?
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. The idea of strategic foresight arose from the idea that while the future is not predictable, it is also not predetermined, and can be influenced in a positive way by actions we take in the present. This mode of thinking is often used in the context of business, and encourages those making business decisions to structure their plans based on future opportunities rather than past events.
Those who employ strategic foresight in business may be able to forecast and detect adverse market conditions, as well as any need there may be to analyze new markets or new potential products. For most business organizations, the future is something like a large blind spot. They operate based on assumptions and principles accepted in the past, and only modify their view based on new information from the present, like economic data or legislation. While this is a seemingly natural and understandable way of looking at the business world, and is very common, it essentially keeps the mind focused on the past.
One of the assumptions of a worldview that includes strategic foresight is that the future need not be abstract or mysterious. There are real challenges and dangers that will have to be faced. Not only that, but there may also be great opportunities on the horizon, waiting to be taken advantage of. Both challenges and opportunities, and the patterns in which they occur, are highly important and relevant to everything that a business does, even in the near term. If the future events that are visible are overlooked, then it is unlikely they will lead to ideal outcomes when the future becomes the present.
Though the mindset of strategic foresight can be a powerful tool, no one can accurately predict all future events. Even though this is the case, those businesses and leaders who employ strategic foresight will find themselves more prepared for events as they arise. They will likely be better equipped to handle opportunity and adversity compared to their competition, and this will reduce uncertainly and enhance confidence and success again and again. Strategic foresight will lead a person to have a proactive stance, rather than a reactive one, where he can anticipate events, rather than being caught unprepared.
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Discussion Comments
If nothing else, we can definitely credit the concept of strategic foresight for opening up a whole new career field for economists. I have been seeing so many job vacancies for strategic foresight experts or other names they may be called by.
I'm not quite sure what the experience and education requirements for this position is. I'm sure that it requires a lot of experience and economic knowledge. I personally wouldn't allow someone's opinions about the future impact decision making in my business unless I was hundred percent sure that they know what they're talking about.
Maybe for small businesses, this is not a very big deal. But for large businesses and corporations, I'm sure that they would want to keep a couple of these experts on hand and check with them before making any new policies.
@Oceana-- I agree with you that we can't be prepared for everything, especially in business. But I also think that this is exactly what strategic foresight is about. It's about understanding the potential risks and gains and acting accordingly.
The example you gave could happen to any company and they might incur a loss that even leads them to bankruptcy. But they can also take precautions by improving their security systems and investing in many different areas in the economy.
I know that companies who give importance to strategic foresight try to invest their profits in other markets and industries, so that if they do have an unexpected loss, they won't go down entirely.
I think that strategic foresight is an important factor for making profit as well, especially when buying and selling shares.
I read an article about this recently. I don't remember the financial term, but it was talking about investors buying shares based on their assumptions about future prices. In this example, investors only bought shares which they expected to become more expensive in the near future. When the price goes up as expected, they sell the shares and re-invest. The difference between what they bought for and what they sold for is their profit.
They are actually using strategic foresight to do this and it's probably a great example/proof that strategic foresight works.
Strategic foresight could have very well saved the newspaper I work for when we suffered from a natural disaster. A tornado destroyed the building, the press, and all the computers. Fortunately, we had a plan in place.
The newspaper in a nearby town had told us long ago that in the event of a disaster that prevented us from printing our publication, they would let us use their press while we waited on money from the insurance company to buy new equipment. Though we usually printed in the afternoon, because we were sharing everything, we had to come in at night and work after the other paper’s employees were through for the day.
We had made backups of all of our fonts and files, and we stored them in a safe deposit box at the bank. Because we had these, we were able to go about our jobs relatively smoothly. Other than temporarily becoming a night publication and changing locations, we pretty much stuck to our old routine.
It’s always good to have a plan of action for circumstances that are likely to arise. However, sometimes we have to accept that we cannot have control over every situation, and some things simply cannot be predicted.
Let’s say a corrupt CEO steals money from the company and gambles it all away. They would have no plan in place for how to recover from that. Money that they thought was in their account was not just stolen but lost. Suing him would be pointless, because he would have none of it left to pay back.
Unless part of the company’s strategic foresight included having an account full of money that the CEO knew nothing about as part of a backup plan, then they would be destroyed. I hesitate to think that a company would think to set up a separate account and hide it from their CEO.
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