Futures orientation – developing strategic thinking, decision-making and action08.01.2020
What does organisational futures orientation mean and how can it be developed, especially in terms of enhancing an organisation’s strategic capability to anticipate the future?
For the past two years, Verona has been intensively developing its’ organisational futures orientation. With many positive impacts on both our own and our client organisations’ strategic, systemic level understanding of the future capabilities and competences to be developed, this work has been a great success. In short, our experiences are much in line with the recent studies on corporate foresight*, highlighting the role of organisational futures orientation in driving long-term, sustainable business growth. That is, companies that are been systematically developing their organisational futures orientation, have been found to have a superior capability to:
- Scout different trends and change drivers
- Identify potential future markets
- Build a strong competitive position
- Secure their long-term survival and success.
The way in which this futures orientation should be developed from the point of view of developing strategic capabilities and competencies is now summarised in three theses.
1. Creating a broad, systems view of the future change drivers helps organisations to develop their strategic capabilities and competences with a clear, long-term goal orientation
Grapping together a basic understanding of megatrends does not make an organisation futures-oriented. More in-depth knowledge of the various phenomena and their interdependencies is needed to be able to assess their impacts on future markets and other new business opportunities with some degree of reliability. This, in turn, requires continuous processing and systematic structuring of the information at hand. Being exposed to various types of information (e.g. email and newsletters, news channels, traditional media and scientific literature), when we are awake, we are forced to constantly limit the amount of information we process. As a result, we may end up over-feeding the knowledge capital with our own biased preferences, preconceptions and experiences.
On the other hand, as futurist Elina Hiltunen points out in her recently published book Coming tomorrow – how megatrends shape our future**, when anticipating the future, we must always combine facts with imagination. Besides discussing the strategic future goals of an organisation, organisations should be more open to imagine alternative futures. In doing so they would better understand how to achieve those goals, regardless of changes in their operational environment, and what are the actual competences to invest on to stand out in the long-term.
2. Creating a shared understanding of the alternative futures and their impacts on the business environment motivates for continuous learning and skills upgrading
As we can see from the picture, according to recent global surveys, less than a quarter of business executives believe that their staff has the skills that meet their future needs. Even fewer of them consider expertise and other human resource matters to be high on their priority list. As many organisations are still investing in new skills mainly through recruitment or acquisitions, these figures are of no surprise. Considering that futures-oriented companies are growing 200% faster than their peers and that they are 33% more profitable than companies in the average, the currently dominant practices are neither durable nor cost-effective. Most importantly, this requires a stronger link between an organisation’s strategic direction and its’ processes of strategic capability development.
Lacking methods for renewal?
The best performers of the future will be found from organisations where the development of strategic capabilities and competences are on everyone’s agenda, from the top management to the lowest performance stage. This calls for a shared view of the major future change drivers and phenomena as well as of their impacts on the business environment in question. As a result, it will also be easier to first identify and then to motivate the employees to develop the thus the actual future needs and demands. This does not only increase the employees’ motivation to for continuous learning and skills upgrading but strengthens the image of a more socially responsible employer brand.
3. Maintain and develop your organisations’ futures orientation through active participation in expert networks outside your organisation
The systemic changes are often difficult to foresee. In order to explore the growing complexity as well as the many underlying interdependences or contradictions of both present and future markets, the use of professional and proactive foresight methods and tools is recommended. Yet, it will not be enough. Miscellaneous dialogue is needed both within and outside the organisation. In addition, besides adopting new approaches, methods and processes to anticipate the future, attention should be given to the employees´ active participation and learning in networks.
Collaborative networks are great in supporting and challenging the strategic intents of an organisation: What kinds of information and data processes are needed to broaden our understanding about the major change drivers and their impacts on our company? What kinds of partnerships are needed when designing future markets? Should we build a network of our own around a specific mission or a theme – or should we rather join one of the many already existing networks? And finally, how to better implement the thus conceived ideas into our daily work, into the existing business ecosystems? Obviously, these networks and network effects aren´t built in a day or two.
How to get started?
Regardless the size or industry of an organisation, its competitiveness always leans on the level of its strategic capabilities and expertise. As we have seen during the past two years at Verona, investing in the organisational futures orientation as we call it – has helped both ourselves and our customers to clarify the strategic long-term intents and to ensure the effectiveness of strategy implementation. Therefore, we argue that developing organisational futures orientation is an important cornerstone for developing strategic thinking, decision-making and action.
If your organisation has already identified a need for developing its’ organisational futures orientation, the best way to get started with is to increase strategy-focused dialogue between management and employees. It is also a good idea that you ventilate your ideas outside the organisation, by actively engaging in discussions with your peers or experts in other fields of industry. All in all, the key factors for strengthening organisational futures orientation are: 1) The wealth of knowledge about the future change drivers, thus enhancing the alternative views about the future, 2) The power of dialogue, thereby creating a shared understanding about the strategic goals, and 3) The active involvement in external expert networks, which embraces continuous learning and diversity.
* One of the most important reports is the Corporate Foresight Benchmarking Report 2018: How leading firms build a superior position in markets of the future by Rohrbeck, Kum, Menes, Jissink and Gordon. Aarhus BSS, School of Business and Social Sciences, Aarhus University, 2018. 18 p.
** Published in Finnish, see Tulossa huomenna — Miten megatrendit muokkaavat tulevaisuuttamme?