Why Your Strategy Needs a Futurist
This article was first published on INSEAD Knowledge, as Why Your Company Needs a Resident Futurist, September 10, 2015:
Being far-sighted about your strategy can help you prepare for the big global changes already unfolding.
I’ve spent quite some time trying to understand the world of tomorrow – as far away as 2035. I’ll then be 66 years old and ready for retirement, which puts things into perspective – at least for me.
This actually started during my university days more than 20 years ago, when I decided to attend a seminar about the aging population. I was finishing up a course in demographics as part of economic history. The topic of the seminar may sound boring to some, but intrigued me based on the focus of the past semester. The speaker was clearly ahead of his time. He invited us to a future world that looked very different, at least in terms of demographics. Today, the story he told us about the aging Western society has come true.
It was this course which sparked my interest in forces larger than the industry-level trends normally captured by the traditional strategic tools used today (e.g. Five Forces). Also, it became clear that businesses needed to interact and adjust to their changing environment, and that it was easier to ride the wave than go against it. Still, most businesspeople seem blissfully incurious about these large forces. We keep ourselves busy with everyday business life, and focus on the short-term rather than allowing ourselves time to reflect on the more distant future. It’s just so far away that it doesn’t feel relevant.
“Futuring” as a strategy tool
One tool that I find useful in handling this is ‘futuring’, a systematic process for thinking about, imagining, and planning for the future. There is even such a thing as futurists, people who explore predictions and possibilities about the future based on current trends. Meanwhile associations, such as the World Future Society, provide relevant forums for discussion and analysis.
One technique Futurists apply is identifying mega-trends. A mega-trend is a global, sustained and macro-economic force of development that impacts business, economy, society, cultures and personal lives, thereby defining our future world. But that doesn’t mean that only organisations of global prominence—such as the UN, OECD or a select number of Fortune 500 CEOs and strategy teams—should think about them. They are relevant to all of society, both the public and private sector.
While short-term trends may be important for certain companies, mega-trends are what will ultimately shape consumers’ future behaviour and needs. Organisations of all shapes and sizes will have to not only adapt but also discover relevant opportunities to get actively involved in the ongoing change. Everyone has a role to play in co-creating the best possible future.
Five global mega-trends
A colleague and I recently embarked upon a futurist experiment. We combed through 5000+ pages worth of reports on social, political and business trends issued by leading institutions over the last five years, in search of overarching themes. We then clustered our findings in groups, which involved several iterations and a workshop. Finally, we found that at least five global mega-trends seemed to pop up over and over again.
These are the mega-trends we spotted, which the Inquentia Trend Report 2015 describes in more detail:
1. Digital society
The digital society connects both people and objects, digitises goods and services, enriches everything with information and automates human labor.
2. Aging population
The world’s population is aging, on average. A proportionally smaller workforce supports more seniors, who are more active and engaged as workers and consumers.
More and more of us have moved into cities, especially in the developing world. Cities become mega-sized innovation labs and catalyse growth.
4. Global Growth
Everything grows – populations, economies, and wealth. The developing world is the key growth engine as the global middle class expands, particularly in Asia.
The consequences of climate change and unsustainable resource depletion hit home. Corporate sustainability is an urgent need – and a competitive advantage.
Start the conversation
The five mega-trends we have selected are already upon us. They won’t be unfamiliar to diligent consumers of media, but too few managers have seriously thought about their business implications. The key question any company at least has to ask themselves is -“What does this trend mean to us?”. Some of the mega-trends will be highly meaningful, and some not. There are certainly other mega-trends out there that we haven’t covered.
As a first step, companies should at least be starting conversations around this question and searching for the mega-trends most applicable to them.