There’s no future in predicting the future

The new normal
The term “new normal” has been coined to describe this period of incessant change and uncertainty. It explains that we have a set of new dynamics in the ever-changing global economy.

As such, our conventional planning approaches are no longer effective. Why? Because they rely on a series of assumptions for variables such as exchange rates, market growth and customer preferences. These assumptions are nothing short of predictions about the future – bets we take about future conditions in order to achieve our planning objectives. When these are invalid because of unexpected shifts in the environment, our plans become useless.

Developing strategy for the future
But it is possible to set strategy for the future. We just have to change the way we approach the challenge. How we do so is different to the conventional approach for developing strategy. But it seems more consistent with our views about learning and adaptation in a constantly changing environment.

Our research reveals 7 key principles underpin effective strategy in changing and uncertain environments:

The future does not exist a priori – The future is not pre-determined, or “waiting” for us to reach it. Fatalism has little place in setting strategy for the future!

The future is a set of possibilities that can be influenced by our purposeful behaviour - The choices we make today will drive our actions. These actions will always have a set of consequences that we then “discover” tomorrow. The discoveries we make will then influence and shape the choices we make on the following day. And so, we can influence the shape of our future.

No monarchy has fomented its own overthrow – Because the elite in organisations and society usually have a vested interested in retaining their positions of power, it’s difficult for them to envisage a future that is radically different to the present. Others, unencumbered by power and privilege, are better suited to envisaging the future.

Embrace the uncertainty in the situation - Accept that events can unfold in different ways due to this uncertainty.

Recognise that alternative futures are possible - As these events combine in different ways, we recognise that the organisation faces alternative futures. Don’t try to predict which future will unfold for the organisation.

Focus on developing the capabilities needed for alternative futures – The essence of strategy in uncertain times is to understand the “winning” position in each of the possible futures, and then to identify the capabilities that will be needed to support these positions. Capability development is the key to success in this approach.

It is better to be vaguely right than precisely wrong – as Clem Sunter remarked,  we cannot be precise about the nature of the future. We can only set off in the right direction, and keep modifying our approach as the information becomes more precise.

Leave a Reply