What is Strategic Foresight?

In today’s uncertain business world, there’s no doubt about the importance of being continually prepared for challenges that can arise at any time.

This concept is encapsulated by VUCA - an acronym that stands for Volatility, Uncertainty, Complexity, and Ambiguity. 

It's a framework used to describe the unpredictable and turbulent nature of the modern business world. 

The term originated in the 1990s at the U.S. Army War College to describe the post-Cold War world. It was adapted to the business world in the early 2000s and has become increasingly relevant in recent years due to ongoing economic uncertainty and the COVID-19 pandemic.

While the discipline of market intelligence has been around for a while, strategic foresight is relatively new in businesses and public organisations.

Many business leaders are unfamiliar with its terminology, and as an organisational activity, it’s not as commonly practised as, say, competitor monitoring and market analysis.

But in a VUCA world, the lack of a reliable foresight programme can have disastrous consequences for all types of organisations.

The most critical threats or greatest opportunities often emerge in other industries or sectors. New trends, developments or phenomena can develop in adjacent fields or in society at large.

And whilst they may firstly seem disconnected, they can be the drivers of change that will eventually affect the future - often in dramatic ways.

Put quite simply, strategic foresight is a systematic method of analysing possible futures to help businesses prepare for the future and make better decisions. 

It is often also described as a suite of behaviours under the banner of “situational awareness” and Resilient Leaders do this well.

It involves considering a range of plausible futures, and then distilling them down to the most likely scenarios. Companies can then use this information to identify opportunities and challenges and align their strategies accordingly.

The Organisation for Economic Co-Operation and Development (OECD) defines strategic foresight as “a structured and systematic way of using ideas about the future to anticipate and better prepare for change.”

For companies, this involves studying and analysing predicted future business environments to prepare for challenges ahead and plan for the best outcomes for the corporation.

Strategic foresight isn’t about predicting a single future. It’s about the analysis of plausible futures, which can support better policy making. Rather than making predictions based on linear extrapolation of past and current trends, strategic foresight cultivates the capacity to anticipate alternative futures and an ability to imagine multiple and non-linear possible consequences.

Strategic foresight helps policy makers improve the effectiveness of governments by identifying opportunities, challenges, risks and disruptions that may arise over the coming years.

While strategic foresight and forecasting share similarities in that they both involve anticipating and preparing for future events, they have key differences. 

Forecasting tends to focus more on quantitative data and extrapolating trends, seeking to predict the most probable outcome based on past patterns. 

On the other hand, strategic foresight is a more comprehensive approach that considers a wider range of factors, including qualitative data, expert insights, and multiple scenarios.

Rather than focusing on a single future outcome, strategic foresight aims to develop a deeper understanding of the drivers of change and the various possible futures that could emerge.

This allows organisations to be more agile and adaptable in uncertainty by developing strategies that can be adjusted and refined as new information emerges.

Look out for the next articles in this series – “How to Develop Strategic Foresight,” “The Importance of Strategic Foresight,” and “The Benefits of Strategic Foresight.”

If you need further information about these approaches, or any other resilience topic, please contact russell@theresiliencecoach.co.uk.