Preparing for the Unpredictable in Business: A Foresight Expert’s Insights into Navigating an Uncertain Future
In an era of unparalleled uncertainty and rapid changes, the capacity to prepare for the future and develop resilient strategies has become imperative. Amidst volatile market conditions and ongoing disruptions, executives are increasingly prioritising the enhancement of organisational resilience and long-term profitability. “Strategic foresight methods, such as scenario-based strategizing and foresight-driven innovation, have been widely endorsed as essential tools for effectively navigating uncertain environments,” says Dr. Sebastian Knab, Director of Foresight & Strategy at Corporate Venture Builder Creative Dock.
Strategic foresight is more than ordinary planning
Stephanie Strobl (SS): What specific advantages and benefits does strategic foresight offer organisations?
Sebastian Knab (SK): What sets strategic foresight apart is its crucial role in effectively navigating uncertainty, which proves invaluable not only in the long term but also in short-term planning, especially given the frequent occurrence of crises we have witnessed recently. The key is working with different possible futures and acknowledging our inability to predict events with certainty.
SS: But planning for a shorter and longer time is as old as a business, right? How is strategic foresight different, then?
SK: Traditional planning was conducted by ‘trying to anticipate the future.’ Then you would just agree to something plus or minus 10% around the anticipated developments, and that’s what the plan was based on. In contrast, strategic foresight with tools like scenario planning accepts the variability of future outcomes. It's about planning for multiple plausible futures, not investing all resources in one, but striking a balance. It's similar to financial hedging, where bets are spread across scenarios, creating safe bets that work in all outcomes and big bets for controlled risk-taking.
“The essence of what we aim to achieve with strategic foresight is, I believe, preparing for various futures, short and long-term, to ensure that our clients can navigate whatever comes their way,” explains Dr Sebastian Knab.
SS: How do you approach the Foresight process at Rohrbeck Heger by Creative Dock? Could you elaborate on the methodology and tools you use to decode potential futures for strategy development?
SK: Our methodology comprises two broad steps. Firstly, we explore the external environment and create scenarios about the world surrounding an organization. Secondly, we develop robust strategies or innovation portfolios for various scenarios beyond mer scenario creation – prioritising practical implementation. The first step sets us apart from traditional strategy consultancies and innovation agencies. The second step sets us apart from our competition in the Foresight field.
SS: What do you mean by ‘beyond mere scenario creation’? What does ‘prioritising practical implementation’ look like?
SK: We're not just focusing on the classic consideration of trends. In our understanding, scenario creation involves identifying influencing factors that shape the organisation's relevant environment, such as policy, regulation, socio-cultural and economic shifts, or technology. Unlike trends, factors can evolve in different directions. We prioritise these factors based on their uncertainty and impact on the organisation, project their potential developments, and combine them into consistent and plausible pictures of the future.
SS: Such a comprehensive approach requires some methodology.
SK: Sure, it's part of our unique know-how. We usually develop scenarios through workshops, which include interviews and research to identify those factors, followed by discussions with the organisation's team. Although software can be used for scenario creation, which we also leverage in some cases, our experience shows that workshop-based approaches yield similar results but with more engagement. Ultimately, a major part of the value in foresight comes from undergoing the process and capability-building within the team, not only from the resulting scenarios.
We work with some clients beyond one-time projects and help them to build foresight capabilities in-house. In these cases, we’re focused on equipping organisations with the tools for continuous foresight practices, such as establishing a bespoke trend framework for ongoing trend monitoring and assessment.
The World Economic Forum estimates that 75% of organisations are unprepared for the pace of change in and around their industry and suggests foresight as a key strategic capability.
SS: Is there a set of best practices for integrating strategic foresight into strategic planning?
SK: In terms of integration, foresight's role varies across companies. Some now have dedicated foresight units, a rare development a decade ago, while others embed foresight within their strategy, innovation, or R&D units. In any case, I have to say that foresight's understanding and acceptance have changed remarkably over the years. In the past, it was often misunderstood as being relevant only for distant future planning. Now, strategic foresight is widely recognised and valued in strategy, innovation, and R&D spaces. Looking forward, I see foresight becoming so integral to strategy and innovation that it might be seamlessly woven into these functions, making separate units unnecessary.
Why generative AI and sustainability are shaping our future
SS: Drawing from your expertise in foresight, could you provide insights into trends and emerging technologies you foresee having a transformative impact on various industries in the near future?
SK: As the main forces driving the transformation of our business environment today definitely, digital transformation and sustainability stand out. They are shaping change on a grand scale, with their full potential yet to be grasped. In terms of digital transformation, the arrival of AI is crucial, with the spotlight on generative AI. In its case, the extent of the possible future impact is unsure simply because it is an entirely new factor in the early stages, and it is still developing.
Regarding sustainability, in my opinion, the full impact of this essential transformative force is still underestimated. A few years back, it was often treated as a single trend. Now everyone understands it is becoming a significant transformational force, and companies are exploring it from many directions, such as water conservation, waste management, energy efficiency, biodiversity, and curbing ocean acidification. It's fascinating to see the shift from questioning if sustainability was a significant trend at all to delving deep into its various subtopics. And it's certainly not the end of its development. The quest for sustainable development will remain a major topic as long as we all live, simply because it will take decades to achieve it.
“Today's main transformative forces in business are definitely generative AI on the technology side and sustainability on the societal influences side,” says Dr Sebastian Knab.
SS: You personally have a special passion for sustainability and urge for the adoption of the so-called Doughnut economics model – a framework for sustainable development, which was developed by University of Oxford economist Kate Raworth in 2012. Why?
SK: Yes, I believe sustainability isn't just a transformational theme. It's an existential concern for us all. It calls for change at every level and differs from digitalisation because it's a matter of existence. Now, different definitions of sustainability and frameworks can be considered to explore actions within the realm of sustainability. One well-known framework is the United Nations' Sustainable Development Goals. The benefit of that framework is that it is somewhat well-known and includes important topics. However, it is a result of many discussions among different organisations and has its limitations in terms of accuracy. For instance, it names economic growth as a goal in itself. If you follow the sustainability debate, you see that there is an ongoing debate between those experts who believe that sustainable development can be reached within a paradigm of economic growth and others who say it’s impossible to combine both.
My personal preference is the 'doughnut economic' model. The 'doughnut' represents the balance between environmental limits and social necessities. There are boundaries we can't surpass without harming our planet. But we also have minimum societal requirements, such as housing, water, and food. Finding the sweet spot between these two is the real challenge and the essence of sustainability. If we don't achieve this balance, we face survival threats, but if we don't meet social needs, societal issues arise. As an organisation, you can use this model to identify your areas of improvement and where your impact is strongest. Despite not being widely recognized, it's a critical concept when understanding and defining sustainability. On top of its compelling logic, it’s based on widely acknowledged science (e.g., the planetary boundaries by Johan Rockström et al.)whose progress can be measured.
The role of sustainability will be essential, that's for sure
SS: Leaving aside the need to protect nature, reduce emissions, and other necessary contexts: How significant a role will sustainability play in the future of business in general?
SK: Monumental! Consider a scenario for airlines where intra-European flights become non-existent, replaced by train travel. With changes like these, enterprises need to think innovatively. If flights in Europe cease, what is an airline's purpose? The options could include operating trains or running short-range electric aircraft, essentially acting as aerial taxis.
SS: So, it's more complex than we usually think.
SK: Much more. Sustainability transitions don't occur in isolation. They require simultaneous action across the globe and across sectors. It's not solely about consumers choosing eco-friendly alternatives, corporations altering their practices, or governments setting regulations. All these aspects must work together, requiring a forward-thinking, proactive approach across all levels. Partnerships, collaboration, and systemic innovation will be key.
“Those who don't adapt to a sustainable world risk obsolescence. So, it's wise to make the tough calls now and transform proactively rather than be forced by challenging circumstances,” says Dr Sebastian Knab.
SS: Can a sustainability approach be leveraged to create a competitive advantage?
SK: Our experience with various projects shows that envisioning different sustainability-related scenarios can incite creativity and inspiration. It's a profound exercise to position ourselves in the year 2035 and deeply consider the state of the world. What does our desired future look like?
SS: Can you reveal more?
SK: Firstly, we'll focus on significant opportunities that could arise in a 10-year horizon in a specific industry. The next step is to link them to the present via back-casting –tracing our way back from the opportunities to the present. This opens an understanding of what opportunities to seek in the next three, five, or seven years. And that will set us on the path. The beauty of this method lies in its ability to merge visionary thinking with tangible planning. It pairs inspiration with actionable steps, creating a dynamic synergy that's incredibly potent. Not only does it give us a clear roadmap to our desired future, but it also has the power to engage and motivate people, making them active participants in this transformative journey.
Get the free Future of Generative AI report
SS: Let's return to digital transformation. Disruptive technologies, like AI, are shaking up industries, and companies are speeding up efforts to leverage their power. Your team recently released the “Future of Generative AI” report - a cross-industry study uncovering critical trends and emerging business opportunities. Can you give us a sneak peek of the report's findings?
SK: As foresighters, our role is not about making precise predictions; instead, we explore diverse possibilities. This approach has been well-received, especially in areas like generative AI, where the level of uncertainty is high. Our recent report exemplifies this methodology: we identified 30 trends impacting the future of AI rather than forecasting a single outcome.
SS: 30 trends is a lot if companies should have relied on strategic foresight to find direction to steer their strategies...
SK: Good point! In our projects, we usually start with 300 or 400 influencing factors that are impossible to act on in isolation and, by way of our methodology, process this large amount of data, transforming it into something more easily digestible: tangible future scenarios. That's why within this report, we subsequently created four different scenarios based on the major uncertainties, namely the pace of technological advancement and regulation in the AI space. Each scenario reflects various potential realities, not predictions. In the most favourable scenario, we envision rapid technological progress matched with effective and consistent regulation. In this context, we identified roughly 40 opportunities spanning multiple industries.
SS: Can you give an example of one particular sector?
SK: Certainly, in the healthcare sector, for example, one opportunity we identified was providing highly personalised advice based on real-time data and an individual's history. This involves creating a tailored plan that dynamically adapts to one's behaviour, offering advice on things like diet and exercise. The plan also incorporates the person's grocery shopping and meal preparation, knowing what's in their fridge and suggesting suitable meals. Essentially, it's a comprehensive personal assistant dedicated to one's health and well-being. That's just one example among the many we've explored.
SS: Big changes are also expected from AI in the labour market. How can we effectively envision the future of work, with all possible challenges and opportunities, and how can we take proactive steps to prepare for it adequately?
SK: The impact of the current technological shift is significant, affecting both individuals and organisations. Change is so rapid that one could be doing things more efficiently or differently within a week's time. In our organisation, this has triggered a reconsideration of routine tasks, such as writing proposals or creating scenario videos. The possibility of disruption at every step is real - if a competitor finds a better or cheaper way to do things, they can potentially out-compete you.
To underestimate the power of change is to deprive yourself of the future
SS: Well, is there any advice on how to react to this?
SK: For those at an executive level, the approach is twofold. First, it’s crucial to ensure that teams embrace this change, stay up to date with the latest advancements, and integrate them into daily operations. On the other hand, executives should focus on the strategic implications of this shift. This includes potential threats to the business, potential shifts in business models, and significant opportunities for transitioning from current practices to future-ready ones, ideally quicker than the competition. While we see many minor, somewhat uncoordinated adaptations happening at the operational level, there's an evident lack of strategic initiatives that look at the broader, more significant shifts. This is an area where we should direct our focus.
“The understanding and navigation of these more significant shifts, such as the rise of AI, could well be the differentiator between businesses that merely survive and those that thrive in the future,“ says Dr Sebastian Knab.