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Is there evidence that foresight works?

May 24, 2017

We were asked the other day – what is the evidence that foresight works? Particularly, does scenario planning lead to better outcomes? Why should an organisation engage in this sort of thinking?

The importance of the question – and that it can be answered – is highlighted by the recent McKinsey report on Long Term Thinking – see https://bymckinsey.com/global-themes/long-term-capitalism/where-companies-with-a-long-term-view-outperform-their-peers. The report has led to the launch of an index of long time horizon companies, as evidenced by their public reports relating to investment, earning growth, margin growth, quarterly management and earning per shares growth. And of course a long tem view needs supporting by a view of what futures might hold. So how do organisations improve their view of futures?

As Business Schools have increased their footprint, many managers have been exposed to scenario planning as a tool for strategic thinking. While there are many variants of scenario thinking and many other tool sets – see for instance Patricia Lustig’s “Strategic Foresight” – http://unlocking-foresight.tizrapublisher.com/k3ba3k/ – scenario planning has been the most widely used methodology. I first came across scenarios when I was asked to take a strategy role at ICL and found that nobody had a view of where the IT industry was going and wrote up my experience in “Scenario Planning: Managing for the Future”, see http://unlocking-foresight.tizrapublisher.com/jq0ovb/

SAMI has of course many case studies on our web site www.samiconsulting.co.uk which together build a picture of what works and what does not, as does the literature based on the Shell experience eg

Another perspective can be found in “Scenario projects in Japanese government: Twenty years of experience, five tales from the front line” which can be found at http://unlocking-foresight.tizrapublisher.com/ka4o8s/

Directly tackling the evidence through evaluation in different environments, we know of a classic book on the use of Foresight in Research – which for instance evaluated how to get better results from Delphi following 25 years of experience in Japan – Research Foresight, Ben R Martin and John Irvine, Pinter, 1989. A more recent article is Martin, Ben (2010) The origins of the concept of `foresight’ in science and technology: an insider’s perspective. Technological Forecasting and Social Change, 77 (9). pp. 1438-47. ISSN 0040-1625

A paper evaluating corporate performance linked with foresight is https://www.researchgate.net/publication/236897761_The_Value_Contribution_of_Strategic_Foresight_Insights_From_an_Empirical_Study_of_Large_European_Companies

Professor Gerard Hodgkinson’s article on scenario planning https://www.research.manchester.ac.uk/portal/en/publications/troubling-futures(1ef0e652-6a9c-4d6b-b287-ef8e5ec99100).html discusses the role of scenario thinking in attenuating biases.

And Philip Tetlock’s work on Forecasting in Superforecasting, Crown, 2015, develops mental tools for improving the accuracy of forecasts (here mainly over the near term) which coincides with Japanese results above – diversity leads to better results. An HBR article summarising it is https://hbr.org/2015/02/what-research-tells-us-about-making-accurate-predictions .

To find out more, SAMI is running a number of training courses on aspects of foresight throughout the year – details can be found on www.samiconsulting.co.uk/training

Written by Gill Ringland, SAMI Fellow and CEO.

The views expressed are those of the author and not necessarily of SAMI Consulting.

If you enjoyed this blog from SAMI Consulting, the home of scenario planning, please sign up for our monthly newsletter at eSAMIsignup@samiconsulting.co.uk and/or browse our website at http://www.samiconsulting.co.uk

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