Future Forecasting 101
No one, not even the most brilliant, can consistently predict the future with accuracy. Despite the claims of many technical analysts, the markets have never been wholly predictable. That’s because we are incapable of analyzing things that have yet to occur. We analyze history; we predict the future.
But how can we do this with some degree of confidence? Where does one begin and how do we build greater certainty into an increasingly complex, discontinuous, seemingly chaotic environment?
For starters, forecasting the future of your business with some degree of certitude may not be as difficult as it might first appear. Indeed, with the right questions, it might even be surprisingly simple. Assume complexity and you get it; seek simplicity and you likely achieve clarity and greater understanding.
We know, for example, that business cycles always ebb and flow. No rocket science there. We know that consumer demands and purchasing trends will continue to change. Customer expectations of “better, cheaper, faster” will continue unabated. Competition will therefore always become more intense. Shareholder scrutiny and stakeholder expectations will continue to increase. Regulations will become tougher, new technologies will reshape how business is done and tomorrow’s marketplace will be different than it is today. It’s all rather predictable, isn’t it?
The hard part in forecasting the future is being able to focus on those changes that will matter to your organization. Those that will almost single-handedly have the greatest impact, either positively or negatively, on the way you do business. The ability to actually “see” those changes before they happen requires, first and foremost, a vision of the future – for you can only “see” those things of which you are acutely aware. That is because you’re “looking for” them to happen.
Future focusing is mindfully observing the changing landscape, in all its various and peculiar manifestations, with a purpose in mind. That clarity of purpose enables you to anticipate relevant events and develop appropriate strategies to capitalize on them. It enables you to develop or augment business initiatives in the light of new realities, to utilize new tools and deploy resources that can influence emergent developments and enable you to design appropriate responses.
A good vision articulates the future destination, where tomorrow begins, and encourages employees to ask provocative questions rather than mindlessly repeat old, conventional, irrelevant answers. It also empowers key performers to likewise imagine a future of possibilities, to translate what “can be” into what “will be” and to act on their own personal desires for a better future. Burt Nanus has rightly observed that “there is no more powerful engine driving an organization toward long-range success than an attractive, worthwhile and achievable vision of the future, widely shared.”
Beyond the necessity of having a good vision, future forecasting requires an openness and indeed inquisitiveness about the forces currently shaping our world and the concomitant need to contemplate appropriate strategic responses.
This begins by involving your key stakeholders in a “vision audit” – by asking a lot of good questions, such as:
Do we know where we are going and do we all agree on that direction?
If we keep going along our current path, where are we likely to end up?
Will the current path serve us (i.e., our customers) well?
Do our existing structures, processes, personnel, culture, incentives and information systems (among other critical “drivers”) support this direction?
If your current vision does not enable you to deal confidently with the emergent forces shaping the world, then it isn’t up to the task that lies ahead. And, if you know that to be true, then you are gambling with the future of your organization (and, most assuredly, your own future as well).
Forecasting the future and setting a strategic course for the desired destination are essential requirements of leadership. As the architect of your organization’s future, you must begin to think like an architect. Because your defining act will be to build an organization with the agile and innovative DNA capable of embracing a future fraught with enormous challenges but also incredible opportunities.