In January, Corporate Path Leadership was thrilled to earn a Foresight Certification from the University of Houston. The program focuses on planning for the future and helping corporate and public entities determine the factors that might shape their opportunities ahead.
While the mention of futures brings to some images of sci-fi movies and anticipating alien invasions, it is much more pragmatic at heart. A better description might be conducting an “insurance program” for current business plans through a model similar to one used for forecasting the path of a hurricane.
In the example of a hurricane, data from ships, radar, aircraft and satellites all provide signals both strong and weak. Those collective signals are evaluated and help determine not only the primary predicted path for the storm, but also a range of alternative possibilities.
For foresight planning in business, the signals that are evaluated come in the form of trends and analyses of possible business impacts and outcomes. Just like a hurricane model, a strong foresight plan presents a baseline or primary outcome for the business as well as a range of alternative possibilities.
BLOCKBUSTER AND NETFLIX
It’s not often that you meet the thing that kills your business – even less so when it comes cap in hand. In 2000 Blockbuster ruled home entertainment when along came Netflix, a struggling online mail order company in need of cash. Its CEO offered to sell up for $50 million, but was laughed out of the building. John Antioco, head of Blockbuster at the time, felt the offer was ludicrous.
We all know what happened next. Netflix got into streaming, people stopped renting DVDs. Blockbuster was slow to react and fell into decline. Today Netflix is valued at more than $70 billion. Blockbuster Video is all but dead.MSN Money 11/212017
So why should a business be interested in this type of research and planning?
The reality is that no one can truly predict the future. However, too often businesses ignore signals in the marketplace that impact their business until it is too late. Examples of companies from Blockbuster to Borders to Kodak are all once large successful companies that were exposed to signals of change in the future and chose not to act on them.
Foresight helps a business understand what the signals could mean, rates the signal on a combination of probability and impact and then ties that outcome to actions to be taken to help the business adapt as the signal may strengthen in the future.
We all appreciate success when it arrives. But it is precisely at this point in time when we need to be most cognizant of the marketplace around us and those signals that can anticipate some of the possible changes to come. The more you can apply some simple foresight techniques to your business planning, the better the “insurance plan” will be that you don’t end up becoming the next Borders or Blockbuster this year.