Next Practices / Technologies Tools and Methodologies : Strategic Foresights in VUCA World

Introduction

This is the time of disruptive leadership changes. In a VUCA world—one characterized by volatility, uncertainty, complexity, and ambiguity—traditional leadership skills will not be enough. The need for leadership in the face of uncertainty is a key requirement. The business environment will be inherent with volatility, uncertainty, complexity, and ambiguity characteristics. The VUCA world of the future will be formidable and loaded with opportunities. Sensing the future to compete in the present can be done by three-step foresight to insights to action cycle that will allow leaders to sense, make sense of, and win against dilemmas. There are specific techniques, ranging from storytelling to simulation gaming, as well as real-world examples to help to turn the VUCA world on its head through creative use of vision, understanding, clarity, and agility. There is hope for leaders face the constant tension—a dilemma in itself—between judging too soon and deciding too late.

Drivers for Strategic foresight Capabilities

In a fast changing business environment, the capabilities to develop strategic foresights are of paramount importance to the capability of a company to innovate continuously. This is the type of innovation, which normally goes beyond the single product, or service changes, to embrace change in the whole organization.

A key leadership insight for working in vuca situations is recognizing the dilemmas embedded within them. Unlike problems to be solved, dilemmas are those unsolvable, unanticipated, messy – yet potentially positive – issues and challenges that every leader faces.

Projects in vuca environment have become more demanding with compressed schedules, aggressive goals, and complex technologies, often leading to frustration for all. There is a requirement for a new model and new skill sets to navigate this VUCA world. Leaders need to call attention to the challenges, but also need provocative ways to generate believable hope.

Strategic foresights to insight to action cycle – Model Implementation

Research on innovation in fast changing industries has yet to show the mechanisms through which organizations develop strategic foresight, which is the antecedent to continuous innovation and change.

The Foresight to Insight to Action Cycle provides a way of engaging with the VUCA risks in search of opportunities. Such a turnaround is exactly what leaders must do in response to the complexity of today’s world. This term was coined at the US Army War College, which is the graduate school for generals-to-be in Carlisle, Pennsylvania.

The deeper meaning of each element of VUCA serves to enhance the strategic significance of VUCA foresights and insights as well as the behavior of groups and individuals in organizations.

V – Volatility:  The nature and dynamics of change, and the nature and speed of change forces and change catalysts.

U = Uncertainty: The lack of predictability, the prospects for surprise, and lacks the sense of awareness and understanding of issues and events.

C = Complexity: Multiple forces with confounding issues, chaos, and confusion that surround the organizations.

A = Ambiguity:  The haziness of reality, the potential for misreads, and the mixed meanings of conditions with cause-and-effect confusions.

Strategic foresight is the ability to create and maintain a high quality, coherent and functional forward view and to use insights arising in meaningful ways; for example, to detect adverse conditions, guide policy, shape strategy, and to explore new markets, products, and services. It represents a fusion of futures methods with the strategic management methodologies. Foresight is a universal human capacity, which allows people to think ahead and consider, model, create and respond to, future eventualities.

Strategic foresight also requires a combination of analysis and creativity, which constitutes rigorous imagining. The paradox of foresight is that, although it is a ubiquitous human capability, it is remarkably underdeveloped in most of us. Everyone thinks about the future, but do not get prepared well. Strategic Foresights to insights to action model may be viewed as framework for making sense of data generated by structured processes to think and act about the future.

Complexity yields to Clarity. Leaders must help others make sense out of complexity. Complexity management is a methodology that deals with the analysis and optimization of complexity in enterprises. Effects of complexity pertain to all business processes along the value chain and hence complexity management requires a holistic approach.

With its roots in 1976, the article of Ansoff, managing surprise and discontinuity – Strategic Response to Weak Signals built the theoretical fundamentals. His work postulates that discontinuities could be perceived by weak signals and if companies are prepared for strategic discontinuities, they are able to identify their developments to be armed for it. Political and economic fog of uncertainty makes it necessary to prepare the company and to reduce the response time to weak signals. Strategic Foresight is a process for the strategic generation of knowledge to enable action.

Ambiguity yields to Agility. In an ambiguous world, leaders must be ready to anticipate shocks. Leaders cannot surrender to ambiguity—that would lead to analysis paralysis and confusion. Rather, leaders must learn how to be agile and responsive. The VUCA world rewards networks because they are agile, while it punishes the rigidity and brittleness of hierarchies. Develop strategic foresight, to sense and understand the context around the dilemmas that challenge leaders. Strategic Foresight is the first step in any good strategy process; the search for external forces and environmental factors creates the context for both strategy and innovation.

Insight is the core element of any good strategy, but insight is scarce, and it does not just happen. Insight is most likely to happen as a result of hard work, open-mindedness toward future possibilities, intuition, and a touch of serendipity. Insight must be communicated clearly, so that not only it is understood but also needed to engage. Leaders learn when to act and how to learn from actions. Decisions still need to be made in the world of dilemmas, but leaders must be tuned to the emergent realities around them in order to decide the action and time to act.

Leaders need a flexible learn-as-you-go style—since most dilemmas keep changing faces. Strategy leads to decisions and action—in order to make a difference. Even when the action begins, it must be carried out with agility—in order to respond to the inevitable corrections that will be required. Firm action is needed, with an ability to flex.

The Foresight to Insight to Action Cycle was designed to stimulate winning decisions in a world where leaders must concentrate on dilemmas— while others continue to focus on problem solving.

vuca

VUCA

 A shift in emphasis is necessary, leaders must be both problem solvers and dilemma managers, but the emphasis must be on the latter.

Even though leaders cannot accurately predict in the world of dilemmas, they can tune in to what is going on around them. Leaders can improve thier abilities to sense and make sense. They can learn to be flexibly firm. They can prepare for success in the uncertainty zone created by dilemmas. Leaders can learn how to get there early, most of their time.

Business Value

Strategic Foresights is defined as the meta-discipline of the 21st Century. Professional Futurists help organizations anticipate trends and envision positive outcomes in every domain, allowing them to operate in confident participation of the future instead of a passive or fatalistic acceptance of what may happen. Strategic Foresights combines the ideology and evaluation of Futures Studies with the application of Strategic Leadership. This is necessary to pursue preferable futures and aspirations, as well as implementing the change that occurs within organizations as intentional action is taken to pursue those futures.

The Foresight to Insight to Action Cycle provides a simple discipline of readiness. The Foresight to Insight to Action Cycle can help to get there early, and the greatest value comes from experiencing the whole cycle. Foresight provokes insight, insights spark action, and action reveals lessons that can only be learned in the field, to avoid repeating old mistakes and to suggest new futures to explore. The art of getting there early is achieved through using the cycle repeatedly. The dangers of the VUCA world yield to vision, understanding, clarity, and agility, to help leaders resolve the tension between judging too soon and deciding too late.

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