Back in June, I had the pleasure of speaking in Washington D.C. about creating resilient strategy – that which is able to achieve high-level objectives and goals while being responsive to potential changes in the external environment.
In my presentation, I said:
“[In an uncertain environment] we might understand the relationship between cause and effect, but we’re not sure if the cause is going to happen. Elections are a great example of this. By the end of this year, you’re likely to have one of two different presidents, and they have very different policies and approaches which will impact your industries and your organisations, and as a result, your workforces. We know something big is coming, but we’re not sure which way it’s going to go. …In organisations, we typically publish one strategy, one official future of the organisation. …We need to think broader than that blinkered view for resilient strategy. The world is too uncertain to have just one official view of the future”.
In applied foresight, we conduct environment scanning to identify external trends and events that might impact our strategy, and scenario exploration to determine how to achieve success in a range of plausible futures. These scenarios become a lens that can be used to validate and inform strategy.
If the events of the last 36 hours have anything to teach strategists, it’s that these lenses are critical. Many organisations have only their official future to plan towards. Any planning for the future requires a range of assumptions. By exploring a range of plausible alternate futures, we are able to make these strategies more robust and resilient should those assumptions be false.
Today’s the day for experts who make singular predictions about the future, rather than multiple forecasts, to reconsider the wisdom of that approach, because the official future of prominent forecasters has been wildly inaccurate this time around. First Trump would never be taken seriously as a presidential candidate. Then he would never clinch the nomination and be on the ballot. As late as July, Nate Silver no less said that his surge shouldn’t be taken seriously. Then he would never become President. Then, when it was clear that the president-elect would be Trump, US stockmarkets were going to have their worst slump in history. As I write this, the NASDAQ, S&P 500, and the Dow are all marginally up for the day. We are so enamoured with our “official” view of the future that it’s sometimes hard to recognise when we’re in Ambiguous, Unprecedented, Uncertain territory and it’s time to discount our certainty in models which are based on past observations.
In foresight, we talk about VUCA – an environment that is Volatile, Uncertain, Complex, and Ambiguous. That environment requires us to think beyond our models of how the world used to work and to formulate alternate scenarios. You can’t predict the future based on models of the past when the whole paradigm has shifted. Models about politicians don't apply a candidate who breaks every rule of politics - in that case, you're in unprecedented territory.
Trump’s ascension to the presidency is just one of a multitude of signals towards a “closed world” pattern that’s emerging. Brexit, Hanson’s return to parliament in Australia, and the Olympics’ first ever refugee team are amongst these. At the same time, we have signs of an “open world” – one that is more collaborative and global - the TPP, the Paris Accord, and global mobility are amongst these signals. The reality is that both patterns exist in parallel, both patterns are highly influential on societies, industries and organisations, and that both need to be considered as lenses by which you should validate strategies to make them more robust.
If you want your strategies to be resilient to this VUCA environment, you’ll need to develop a set of plausible futures – multiple forecasts, not single predictions, about what your operating environment and conditions might look like over your planning horizon. It's time for the experts to add alternate futures - ones which are plausible, even if not probable, to their forecasts and models. Welcome to VUCA.