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Compliance and audit reviews
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Enter futures thinking. Focusing only on your immediate challenges is like walking along and staring at your feet. You might be fine, but you’re making it hard to avoid obstacles. Look up! You’re far more likely to reach your destination. That’s what futures thinking is all about. Looking out and up, to create a vision that can guide your business and your employees through an uncertain future.
What is futures thinking?
There is nothing magical about futures thinking. It’s not crystal ball gazing or fortune telling. It’s simply asking: ‘What happens after what happens next?’ By purposefully considering a 10 or 20-year horizon, you can steer toward your preferred future. It’s about preparation, not prediction. And it’s important to know this isn’t just a vague brainstorming exercise over a long lunch. There are well-established tools and methodologies to guide futures thinking, so organisations can prepare to respond to future challenges and opportunities.
Futures thinking is integral to effective risk management. It readies your organisation for various scenarios, and even if those exact scenarios don’t eventuate, the business has better tools to cope with whatever lies ahead.
It’s also the difference between leadership and management. Management is dealing with the problems in front of you. Leadership is being able to stand up with a vision for the future and bring your team along with you. It’s aligning people with the company vision and where it’s heading – steering the company more effectively even through choppy waters.
Foresight boosts profitability by 33%, market cap growth up 200%
If futures thinking still seems like a luxury item in tough economic conditions, it’s worth knowing how powerful it could be for your business.
A 2018 Danish study was published after following companies for seven years, measuring their level of corporate foresight and tracking their success. The firms with the best approach to corporate foresight achieved 33% higher profitability, and market capitalisation growth was 200% higher than average.
The researchers discovered the vigilant firms had embedded their futures thinking, using effective structures for R&D, marketing, and strategic decision-making. Many had also set up mechanisms to integrate start-ups, improving readiness for various futures.
You are already a future thinker
If the idea of incorporating formal corporate foresight into your business seems daunting, it shouldn’t.
You are already a future thinker. If you’ve booked a holiday, for instance, you know nothing is set in stone and the holiday might not happen. But you save up, choose your accommodation, and check the weather at your destination for that time of year. You’re looking ahead, then back-filling what needs to happen so you get to enjoy your trip. You know things might go wrong, so you also take out travel insurance.
You book a holiday because it’s your preferred future. Scale that holiday up – think of the preferred future for your organisation and back-fill so you know the kinds of steps you need to take to reach it.
At an organisational level, it’s about taking a longer planning horizon. At least 10 years. Ideally 20 or even 30 years. You have a destination in mind, where your organisation is still successful and relevant. It might not be doing the same core work it does now. You may need to transform and evolve your company to fit into the economic food chain of the future. But with higher profits and growth on offer, futures thinking is well worth the effort.
A strategy can bring certainty in times of polycrisis
There are four mega trends that are creating the Polycrisis we are living through, and they are impacting all organisations:
- Climate change: Natural disasters, aging infrastructure, managed retreat (moving to higher ground if you live close to the water), and climate-related events.
- Geopolitical tensions and wars: This includes changes in relationships with traditional allies, and concerns about the resiliency of supply chains for imports and exports.
- Technology shifts: New technologies are both a blessing and a curse as the speed of change is disruptive and can cause uncertainty. AI and its potential for good and bad is creating excitement and trepidation in equal measure – resulting in even more uncertainty.
- Global economic uncertainty: As Professor Sohail Inayatullah says, “Business as usual only works when the world is stable”. And after a decade of economic stability, the post- COVID world is anything but stable.
Futures thinking helps your business hold a steady, but flexible line through polycrises and uncertainty. Your organisation is better prepared for climate change and the changing geopolitical landscape.
Not only do each of these mega trends contribute to their own crisis, they each also exacerbate the other – and collectively create an even bigger problem: A Polycrisis where the sum is greater than the parts. Sometimes the sheer scale and challenges created by a Polycrisis can create a totally new crisis, in this case, a global mental health epidemic: The inexorable rise of many mental disorders including, anxiety, depression and substance abuse.
This is where futures thinking can also help build a stronger workforce. The global mental health epidemic is partly a reaction to the previous four megatrends – war, climate change, technological shifts, and economic hardship, all of which create uncertainty, leading to stress. This will affect your team; half of the world’s population will experience a mental health disorder in their lifetime, according to Harvard Medical research across 29 nations.
Building a strong vision for your business, and leading it with conviction, will help give your employees more certainty for the future. Demonstrating leadership, and having business continuity planning, will support your workforce to be a positive place that can retain its workers.
Taking a positive perspective and seizing opportunities
It’s human nature to envision dystopian futures – whole genres of movies and literature cash in on that tendency. But futures thinking is ultimately optimistic. It is a vital decision-making tool. It identifies opportunities and helps leaders know whether to grab these or decline them. It minimises losses and maximises wins. It lets you leverage new technologies like AI and minimise risks from the potential dark side of these innovations.
For business owners who are within 10 years of retirement, instead of sitting back and letting your company fund your lifestyle, it’s time to look out and up. Build a business that can outlive you – it will be more valuable, it will deliver better returns in the short term, and it will be a fantastic legacy to leave behind when you retire.
Acknowledgements:Lee Parkinson
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