Managing a business can oftentimes feel like you’re looking through a kaleidoscope. No matter how hard you squint, you’re just never fully certain of what lies ahead. The future seems like a tantalizing blur of possibilities. And for many business leaders, the “what if’s” are left to be mere afterthoughts.
Unseen opportunities and pitfalls lurk around every corner. You may not have noticed how often you’ve been blindsided by events that, on reflection, had been brewing under your nose. That said, the pressing question is no longer just about how we adapt to change, but rather how we can anticipate it.
This is where the power of strategic foresight comes in. With the right strategy, you can eliminate surprises and never have to deal with the most frightening question of all: How did we miss that?
How Do You Plan When You Can’t Predict?
The world moves rapidly, faster than anyone could imagine, and the business landscape is no exception. Technological advancements, socio-political shifts, economic tides – these factors, and more, interplay in ways that can drastically alter the course of a company. The volatility, uncertainty, complexity, and ambiguity (VUCA) that define our times have made the traditional, static approach to business planning obsolete.
Planning when you can’t predict involves a mental shift from the deterministic view of the world to the probabilistic one. It’s about understanding that, while you cannot know with certainty what the future holds, you can anticipate different scenarios based on the patterns you observe and the insights you gather.
Strategic foresight, also known as futures thinking or futures studies, helps organizations do just that. It’s about exploring – not forecasting – plausible scenarios through various methodologies (e.g., horizon scanning, visioning, back-casting).
You’re looking at a spectrum of possibilities rather than a single, predictable outcome. These scenarios are provocative stories, hypotheses not predictions, about how the future may play out.
Each scenario entails a different approach. This is akin to chess: While you can’t predict your opponent’s exact moves, understanding the possibilities enable you to strategize and react in real-time (just watch “The Queen’s Gambit” and you’ll understand).
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Examples of Scenario Planning
As mentioned, strategic foresight is about looking at the periphery, identifying weak signals of change, and envisaging possible futures to better understand the present’s complexities. Simply put, we learn from the future. Let’s explore how various businesses can stretch their thinking to accommodate the opportunities and threats that the future might hold:
1. Retail Industry
In the retail industry, consumer preferences, technology, and market dynamics can shift rapidly. Scenario planning can help retailers anticipate these changes:
- Scenario 1: A surge in e-commerce driven by changing consumer behavior and technology adoption.
- Scenario 2: A decline in brick-and-mortar stores due to heightened online competition and increased regulatory burdens.
- Scenario 3: A new competitor enters the market and disrupts the status quo with an innovative business model.
For instance, if we look at the rise of Amazon, traditional retailers had to imagine a world where e-commerce dominated. The ones who adapted early by investing in their own online platforms were able to maintain competitiveness, while others struggled to keep up.
2. Energy Sector
A lot of people downplay the usefulness of scenario planning, but they’ve probably never heard of how Shell has done it almost flawlessly. They employed scenario planning to anticipate the oil crisis in the 1970s. When tensions in the Middle East culminated in the crisis, they were prepared and managed to gain a competitive edge.
On that note, some possible scenarios in the energy sector are:
- Scenario 1: Rapid advancements in renewable energy technologies drastically reduce reliance on fossil fuels.
- Scenario 2: Geopolitical tensions leading to interruptions in oil supply.
- Scenario 3: New environmental regulations imposing stricter standards on carbon emissions.
3. Healthcare Industry
Another real-world application of strategic foresight is how the healthcare industry navigated the COVID-19 pandemic:
- Scenario 1: Pandemic is contained through widespread vaccination, robust public health measures, and improved treatments.
- Scenario 2: The pandemic persists with recurring waves of infection and causes vaccine supply chain disruptions, surges in demand, and the worsening of the mental health of healthcare workers.
- Scenario 3: New variants emerge that evade existing immunity.
4. Gaming Industry
Gaming companies are no strangers to the dynamics of uncertainty. A case in point is how Nintendo anticipated the rise of casual gaming. By developing the Wii with its user-friendly design, they targeted a broader demographic, carving a new niche and achieving enormous success. The company may also consider these other plausible scenarios:
- Scenario 1: Virtual reality (VR) becoming mainstream, significantly changing the gaming experience.
- Scenario 2: A shift in demographics leading to an older average gamer age.
- Scenario 3: New regulatory restrictions imposed on loot boxes and in-game purchases.
5. Fast Food Restaurants
Fast food chains should always be on the lookout for changes in the competitive arena. This is where we’ll get a bit creative. Here are some possible response strategies to specific scenarios that a restaurant branch could implement:
- Scenario 1: A fast food restaurant is faced with an influx of customers in the drive-thru that’s leading to long wait times.
A multi-lane drive-thru can reduce wait times and improve customer satisfaction. This would, of course, require adequate space and efficient internal operations. (I’m looking at you McDonald’s and Jollibee).
- Scenario 2: The brand wants to improve customer retention and increase the frequency of purchases.
Implementing a loyalty program can incentivize repeat purchases. Offering rewards or exclusive offers to loyal customers could lead to an increase in sales. For this response strategy, we can take inspiration from Starbucks.
- Scenario 3: A delivery platform wants to look for ways to expand its delivery service in non-traditional locations.
Delivery to parks offers a unique service to customers wanting to enjoy their meals outdoors. This could require partnerships with local parks or GPS geo-tagging technology to identify precise customer locations.
- Scenario 4: It’s high time that restaurants rethink the concept of online delivery for rainy days.
It would be interesting to see how restaurants come up with their own version of a “rainy day menu” – a special, temporary set of options that they could offer on days with bad weather. Since consumers often prefer staying at home during bad weather, rather than going out for meals, this leads to potential drops in sales.
For example, a restaurant could offer comfort food items that are typically enjoyed on cold, rainy nights, such as soups, hot sandwiches, or warm desserts. Alternatively, the restaurant could offer discounts or special combo meals that are only available on rainy days. From a marketing perspective, the restaurant would need to quickly communicate these temporary menu changes to their customers via email alerts, social media posts, or push notifications.
Related article: How Successful Asian Companies Leverage Corporate Foresight
Let’s Navigate Uncharted Waters Together
Simply going with the flow is no longer sufficient in today’s winding business environment. The volatility and unpredictability of markets demand a proactive approach. With strategic foresight, you no longer have to squint into the future. You can, instead, use innovation methodologies as a compass to navigate the ebbs and flows of business.
The Embiggen Group has one of the most well-established strategic foresight services in the world. Together, we can traverse the choppy waters of venture building and innovation, arriving at a future where you’re not asking, “What if we did this back then?” but rather, “What lies on the horizon and how can we seize it to our advantage?”