Strategic Foresight

(This document is the result of my independent work. All sources of information used in the document have been duly acknowledged.)

"Take hold of your future or the future will take hold of you. "

--Patrick Dixon

Now, we have seen that the forecasting is not a flawless tool to peep into the future, so the very next question which arises in our mind is then how do we go about having a glimpse of the future? Also this is certainly inevitable to have a feel of the future when we are dealing with uncertainties every moment. So here comes to our rescue "Strategic Foresight". Foresight as the name suggests is forecasting itself but with an 'insight'. And as we know forecasting requires methodologies, the insight comes with the deep knowledge of the subject matter involved and hence providing the planning with a stronger basis. Hence, Strategic foresight provides the tools for early identification of emerging trends for analysis and interpretation and for developing a range of futures and identifying the preferred responses.

Strategic foresight is medium to long term trends and futures research in strategic management. It provides the important processes, methods and tools for trend-scanning, systematic analysis, interpretation and creation of the strategic perspectives. Carrying on the very basics of Strategic foresight we see that it arises from three premises:

• The future is not predictable
• The future is not predetermined
• Future outcomes can be influenced by our choices in the present.

We find that the strategic foresight gives the organizations a platform to create as well maintain a high quality view to look forward so as to explore the possible opportunities and threats before actually encountering them and hence be able to take more informed decisions in the present to be able to shape the future in our way. This would be helpful in navigating through this complex global environment which is changing so rapidly so that no trends may emerge to be captured by just forecasting method.

"The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow"

--Rupert Murdoch,

(Chairman and CEO News Corporation)

So now its not just about reacting or reacting fast but reacting faster as the relativity theory is getting more and more hold in the current era (i.e. the act of reacting faster is relative to the competitors). So the companies that use strategic foresight are basically trying to enhance their innovation reactivity, management of debacles and obviously the strategic decision making.s

Last but not the least a word of Caution - Strategic foresight can not forecast the future. It is, however, an effective tool to support strategic decision-making in the systematic generation and use of future-oriented, scenario-based knowledge in strategy and innovation. Future is a highway with varying lanes that may lead to unhappy endings also which are definitely difficult to accept. So to better equip ourselves with the lanes leading to unhappy endings (if it seems impossible to change the lane) strategic foresight is the tool.

References:

A project of the Chair for Innovation and Technology Management, Technische Universitat Berlin (n.d.), Strategic Foresight, Retrieved August 24, 2008, from http://www.strategic-foresight.eu/

Green, Daryl (2008), Strategic Foresight- Understanding the Negative Future- Nu Leadership Series, Retrieved August 25, 2008, from http://ezinearticles.com/?Strategic-Foresight---Understanding-the-Negative-Future---Nu-Leadership-Series&id=1340647

Department of Agriculture, Fisheries and Forestry, Australian government (n.d.), Strategic Foresight, Retrieved August 24, 2008, from http://www.daff.gov.au/animal-plant-health/animal/strategy

Paradox Of 'FORECASTING'

(This document is the result of my independent work. All sources of information used in the document have been duly acknowledged.)

(Image source : http://www.paranormaltendency.com/wp-content/uploads/2008/02/crystalball_468x317.jpg)

Forecasting has always remained a buzz word in business management - be it Material Management, Financial Management or Planning anything new for the organization. So the first thing that we do is to predict or forecast what lies in the future. This is a common feature not just in the business scenarios but its a common element of our day to day lives too. Before taking any decision in our lives be it big or small we tend to anticipate the future circumstances.

But have we ever thought that how this forecasting itself can affect the future? Take an example of an organization which is trying to forecast its sales using the past data and taking into account the environmental changes that are likely to take place. And say they have discovered that their sales are likely to go down this way. So they will in most cases take preemptive action so as to avoid such a situation. Now due to such a response to the environment let us assume that the sales have increased. This ultimately means that the forecast has been proved wrong.

Future in most cases can only be predicted by using the past data that is by extrapolating the past although we know that the future is not a reflection or continuation of the past and it is bound to change. Through forecast we would expect to reduce future uncertainty, yet as we consider the future more carefully we realize that unexpected events are possible, thus increasing the uncertainty.

So what we gather from this example is that the if we can forecast a state of a system then we cannot plan for that system and vice versa. So we find that if we can intervene in a system then the system is indeterministic and if the system can be determined then we cannot intervene in the system.

But we should also understand that forecasts will be inaccurate most of the times but still they are an indispensable part of the planning process and we cannot strategize our future plan of action without estimating the uncertainties that lies in the future for us.

References:
MAKRIDAKIS, S. G. (1990). Forecasting, planning, and strategy for the 21st century. NY: The Free Press. (Ch. 3. Predicting the future: Myths and reality, pp. 49-68)