Managers as futurists

By: Stephen Millet, Founder and President of Futuring Associates LLC
4 September 2012
 

The recent Great Recession fundamentally changed many business models and operations. Companies, from the very large to small start-up enterprises, had to cut employment costs to shore up company finances in the face of highly uncertain revenues. A large number of those lost jobs will never be restored in the future, because companies are learning to perform many functions more efficiently through automation and better utilization of human talent. Fewer employees are performing more tasks with the help of technology than ever before, including tasks previously performed by overhead staff and consultants.

The recession turned thinking about the future upside down

The managers who engaged in serious thinking about the future of customers, competitors, economics, and government regulations previously relied heavily on external consultants. They did not have the education or experience in forecasting to make their own predictions. The foresight consultants, however, almost vanished in the Great Recession. The visionaries, trend extrapolators, and scenario facilitators failed to anticipate the demise of their own industry! In the meanwhile, in the tight years of the last recession, managers had to take a more personal interest in forecasting. The Great Recession turned a lot of thinking about the future upside down – old trends and assumptions about the future as a continuation of the past turned out to be dead wrong. Now managers have to do their own “futuring” because they may not have budgets for external experts, especially when so many of them lost credibility as well as work due to the economic upheavals of 2008-2009.

 “Future-telling is the process of forecasting and anticipating trends and potential events in the external business environments.” 

 

Managers may now rely on Internet foresight services that provide great amounts of trend information, expert opinions, and forecasting tools. The fees for accessing online services are much less than the professional fees of consulting futurists. In other words, the digital revolution in automation of services is just as profound as the automation of manufacturing, with futurists losing their clients like so many company employees lost their jobs. The turn of events means that managers have access to forecasting resources that they did not have before, but it also means that they have to rely more heavily upon their own expert judgment to generate relevant and meaningful views of the future.

The difference between ”futuring” and “visioning”

Let´s now turn to the second reason why managers have to become their own futurists. In the past, managers may not have done “futuring” at all. “Futuring” is the process of forecasting and anticipating trends and potential events in the external business environments. It provides a forward-looking perspective on the broader context of business. It also prepares managers mentally to deal with potential issues beyond their immediate control. There is a fundamental difference between “futuring” and “visioning” and many managers will do visioning, including strategic planning, without doing futuring. The result may be plans that totally miss emerging business opportunities. It may leave strategic plans as little more than wishful thinking.

During the 1980s, many corporations decentralized and delegated previous corporate staff functions to division and product line managers. This was done to reduce corporate overheads and to make lower managers more accountable for business performance. Corporate planning offices were closed. In some cases, the division and product line managers picked up some professional planners, but in many cases they became their own strategic planners. Over the last three decades, planning became a critical skill for all levels of managers. Since the 1990s, it has become even more important for entrepreneurs seeking venture capital. Who would risk investing in a start-up company without a compelling business plan?

Yet the managers who acquired the skills of planning did not necessarily gain the complementary skills of futuring. They either relied on external expert futurists, as mentioned above, or they just assumed that the future would be a continuation of the past. Worst of all, they may have simply ignored external trends and written up business plans in a vacuum. This will not do in the future. Managers will learn to generate their own forecasts, or at least how to use their own intuition given the facts that they can so easily acquire over the Internet.

Here are recommendations to managers to improve their skills in both futuring and visioning:

  • Learn the theories, best practices, and skills of futuring to supplement strategic planning. This includes trend analysis beyond trend extrapolation, methods for expert judgment, and scenario generation.
  • Directly relate the trends and issues of futuring to specific patterns in customer behavior and emerging business opportunities. Seek ways to directly link futuring with visioning.
  • Develop your own point of view of the future, combining both external and internal elements, and communicate it with others, not just to convince them to see the future as you do but to engage others in a discussion of different potential points of view. This allows us to make the process participatory, with resulting buy-in and cooperation of others.

 

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