Stay Ahead of the Curve: Glimpse Into the Future of Your Industry

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"The best way to predict the future is to create it."

The statement is attributed to Peter Drucker.

You have a strategy? It will fail.

All strategies fail sooner or later. They fall victim to our inability to predict the future.

The only certainty about the future is that it will be different than we expect.

But those who think about the future in a structured way gain an advantage.

In this article, I’ll tell you about a tool that can be of much help if you also want to stay ahead of the curve.

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Data-driven illusion

“While hard data may inform the intellect, it is largely soft data that generate wisdom. They may be difficult to "analyze," but they are indispensable for synthesis – the key to strategy making.”

Henry Mintzberg, The Rise and Fall of Strategic Planning

Making strategic decisions based on current data is like predicting tomorrow’s weather based on today’s temperature.

“Don’t make strategic assumptions – rely on data.”

This is a quote from a LinkedIn post. Its author works for a big consulting firm. Such firms are zealots for ‘data-driven strategies’ because they are their money-makers.

They drown clients in oceans of data. And clients like it because the amount of data creates an illusion of safety. But regular swimming in the oceans of data won’t make you an Olympic champion.

·       If you take your temperature and see that you have a fever, it’s worth taking medicine.

·       If you notice a speed limit sign and see that you’re driving too fast, you should hit the break.

These are examples of data-driven decisions.

This approach works well for simple decisions regarding the present. However, a strategy is a set of complex decisions regarding the future.

1.     You never have complete data about your current situation, it’s too complex.

2.     All the aspects of the situation are changing all the time, which makes it untraceable.

3.     The future is never a linear continuation of the past.

If you doubt this and want to have some fun, read some old future predictions, like this one.

You might also be interested in my second newsletter Strategy in Three Minutes.

Foresight, not forecast

The future doesn’t exist and, thus, can’t be predicted. This was the first thing I learned when I began studying foresight at the Institute for The Future.

Strategic foresight is not a crystal ball that can show you the future. Professional foresighters aren’t astrologists or fortune-tellers.

It is a type of group work you can do with your team to create a plausible future vision.

This vision may be wrong. But it is not a problem because our goal is not to predict the future. We seek to create a future scenario where we want to live and work. And then, we will try to build it with our strategy.

Most things that surround you are invented by people. They didn't try to guess the future; they created it. And you can do the same.

The future is unpredictable, but it is creatable.

Foresight is the set of frameworks that can turn our vague visions, anticipations, and abstract ideas about the future into a structured hypothesis that can become a foundation for our strategy.

A traditional approach to strategy entails three steps:

1.     Anticipate the future (for instance, using scenario planning)

2.     Find an optimal position for your business in this future

3.     Develop a plan

A foresight-infused approach to business strategy implies different stages:

1.     Create a plausible vision of the future you’d like to live and work in

2.     Ask yourself what needs to change in the world for this scenario to come true

3.     Craft a strategy to make it possible

Using foresight will switch your mind from a passive to a proactive mode.

I've conducted dozens of foresight games and seen how many invaluable insights the teams received when they began to think about the future in a structured way.

If you’d like to organize a foresight game for your team, you can read more about it on my website. Here, I will tell you about one foresight tool you can use to develop a better future vision.

Check out my book Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism.

The Three Horizons

At any given moment, we live on three time horizons.

Horizon 1, or H1, represents what shapes our life today, such as technologies, beliefs, traditions, laws, habits, etc.

For instance, in 2024, most people go to school, receive education, have a job, get married, raise children, live in apartments or houses, watch TV, use social media, don’t work on Sundays, drive ICE cars, etc.

As you can see in the picture (red dashed line), the significance of many of these things will gradually diminish within 5-10 years. In 10-15 years, many of them disappear.

H2 (black dashed line) represents things that are entering our lives right now. We see them, we know about them, but they haven't yet become integral parts of our lives. Generative AI is a great example.

H3 (green dashed line) represents things that are below the radar so far. Few people can discern them, let alone predict their future. But some will become what Generative AI is today within 5-10 years and will be deeply ingrained in our lives in 10 years or so. Foresight professionals call them 'pockets of the future,' 'weak signals', or 'emerging issues.'

How to use The Three Horizons:

1.     Start with H1. Make a list of significant things that shape your market today. What is the norm for the industry? What technologies, traditions, notions, and beliefs are typical for the market players? How do people do things today? What are the key characteristics of your industry now? Portray your market here and now.

2.     Switch to H3 (not to H2!). What emerging signals do you see? What are the slight changes that may become massive shifts in the future? What happens on the fringes of our market? What new technologies or new ways of doing things are emerging? What business models that may seem marginal today will become mainstream in 10 years? Unleash your imagination and creativity, and build a bold future picture of your industry.

3.     Switch to H2. What will happen with your H1 list in 5-10 years? Which ‘pockets of the future’ from H3 will gain momentum? Which technologies, business models, traditions, and habits, whose future is still uncertain today, might become widely accepted tomorrow?

Create a plausible picture of your industry in 5-10 years (H2). Use it for your strategic planning.

If you have any questions on how to use the three horizons, do not hesitate to message me.

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