9 Foresight Analysis Methodologies Successful Companies Use to Stay Ahead
Foresight analysis is a key approach to understanding what ifs and what could be ahead in your organisation’s future. This blog post reveals nine approaches for you to use to become a shaper of the future in your field.
FUTURE PROOF-BLOG BY FUTURES PLATFORM
There are a few answers successful foresight activities must answer. Three of the most important are: What are the alternative futures the organization faces? How likely are the different futures to unfold? And, given the options, what actions can the organization take to achieve its goals? Foresight analysis, when correctly done, has many proven benefits for businesses and organisations across all industries.
FORESIGHT ANALYSIS: MULTIPLE WAYS TO DO IT
The practice of strategic foresight has long been associated with the military and politics. More recently, however, it diffused into public organizations and businesses. Foresight analysis helps to form a shared understanding of the future and make better-informed decisions.
But why have companies and public organizations begun to worry more about how the long term, and even the short term, could impact them so much?
The driver is clear. Never has the pace of change been so fast on so many fronts: technology, business models, ecological environment, culture, and societies. And if history is a good teacher, it’s not going to slow down.
Indeed, “predicting” the future has become so important that a number of different methods have been developed over the years. While 100% accuracy cannot be guaranteed, better preparedness is almost certain.
Here we go briefly over 9 foresight methodologies successful companies have used to stay on top of the game and ahead of the competition.
FORESIGHT METHODOLOGIES
Foresight methodologies can be qualitative or quantitative in nature, and can focus on the near future or long term. Below, we illustrate the 9 different methodologies we will cover and where they fall on the scale.
However, one thing should be noted. Most foresight methodologies actually combine qualitative and quantitative data, so the reality is not as clear-cut. But, for illustrative purposes, this will do.
Foresight Methodologies cover different timespans and vary in terms of qualitative/quantitative nature.
As you can see, some of these may already be familiar to you. Many organizations and institutions include several of these in their year-to-year business. Some may review industry and society trends, go through war game simulations (as governments often do), and draw out technology roadmaps. They are not usually labelled under “foresight” or done in a “foresight department.” But they are there, and necessary.
Let’s move on to the 9 foresight methodologies.
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Forecasts and Predictions
Forecasting is about making more or less linear projections or estimations of future events whose outcomes are uncertain. A “prediction” refers to precise estimations. For example, estimating the precise number of times floods will occur in a certain area over a certain period of time.
War Game Simulations
War game simulations are strategic games that mostly deal with military operations of various kinds. In a business context, these war games simulate different competitive settings and competitor actions and responses.
Roadmaps
Roadmaps are most often seen in technical contexts. They literally map out projected milestones in the development of new technologies or products.
Backcasting
Backcasting starts with defining a plausible and desirable future. After that, the team works backwards to identify actions and programs that will connect that future with the present.
Weak signals and wild cards
When it comes to foresight, wild cards are low-probability, high-impact events. They are also generally referred to as “black swans,” though they can refer to positive events. Weak signals are lower-impact events. Their observation attempts to link small developments and phenomena to the potential occurrence of emerging issues or changes in current trends.
Trends and Emerging Issues Analysis
Trends analysis is the practice of collecting information and attempting to spot patterns in it. It also deals with the impact of these patterns over time. Emerging issues, on the other hand, are “events” that do not seem to fit into any existing patterns, but which may develop new ones.
Horizon Scanning
Horizon scanning is the systematic gathering of information to detect early signs of potentially important developments. It’s also used to identify new and emerging trends. This activity is often based on desk research, assisting in the development of the big picture of future changes. A solid horizon scanning process can help develop strategies to align with future changes. It can also be a way of identifying new trends which are later used in scenarios.
Scenarios
Scenario planning helps organizations anticipate change, prepare responses, and create robust strategies. The process typically starts with the combining of known facts about the operating environment with uncertain factors about the future context. Then, one selects a number of these ‘uncertainties’ or ‘drivers of change’ in the future and converts plausible paths of developments into two or more alternative stories or ‘scenarios’. As the future unfolds, some paths generally begin to emerge as more plausible and others as less plausible. Often, the future involves a combination of paths.
The Delphi Method
The Delphi Method is a structured and interactive forecasting activity that relies on a panel of experts. The experts answer questionnaires and argue different positions. This is usually done over a few rounds. During this process, the range of answers narrows down. This is based on the reassessment of given arguments and consensus-building. In the final round, the group of experts converges toward a final, “correct” answer about the future.
MAKING YOUR ORGANIZATION FUTURE PROOF
Successful companies understand the importance of foresight analysis. Even if they don’t call it that, oftentimes, they do one or more of the above methods yearly in order to stay ahead of the competition.
But a truly successful foresight program needs more than incorporating these methods in strategy work. These foresight methods are part of a larger whole – a company-wide program that enables any organization to become future-proof.
SUMMARY
Here is a summary of the foresight analysis methods covered in this blog post:
Forecasts and Predictions
War Game Simulations
Roadmaps
Backcasting
Weak signals and wild cards
Trends and Emerging Issues Analysis
Horizon Scanning
Scenarios
The Delphi Method
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To stay ahead, organisations must widen their lens, exploring not just their own industry but what’s happening on the edges.