Strategic Conversations for Strategy Development: Horizon Scanning, TOWS & Scenarios

by Donna Dupont & Leon Young

 

My interest in strategic foresight started when I began working in the field of health emergency management. Working at the provincial level, I was amazed to witness the high degree of system complexity and uncertainty that existed during emergency events. Like many people, uncertainty can be a difficult position to comfortably embrace. The uncertainty led to my interest in looking for ways to better anticipate emerging issues, risks and changes, in order to proactively build the necessary internal capacity to respond to future emergency events. This ability to rebound and bounce back has been referred to as resilience. I now work with organizations to integrate strategic foresight methods into their traditional planning cycles. My colleague, Leon Young, also started in the field as a practitioner drafting contingency response plans for the Australian Defence Force. Motivated by an apparent lack of organisational strategic foresight, Leon now passionately builds strategic thinking capacity within organisations.

The practice of thinking about the future is something we all do naturally. When we imagine possible futures, explore options, weigh pros and cons, and design plans, we’re using foresight. According to Policy Horizons Canada, increasingly organizations and governments are using foresight tools to think creatively and systematically about the future. It has been said that ‘the best augers are those who divine from the portents of the past’. The future is not predictable per say, but we do argue that it is possible to understand the shape of the future. A structured approach to foresight can generate fresh insights to help inform today’s decisions.

Strategic foresight is a methodology that aims to enable organisations to attain a competitive advantage in future environments. It provides a structured way to investigate the future, and an opportunity to learn from the past, observe the present and anticipate the likely consequences of decisions on the future. It’s a methodology that supports strategy development, a design process that functions to deliver unique perceptions or mental models instead of business-as-usual-thinking. It requires a progressive build up of new ways of thinking about the path forward.

Awareness and understanding of the broader external environment is a critical aspect of strategic foresight, it’s the practice of anticipating emergent forces that may have an impact on an organization’s current strategic direction. One method to support this understanding is called horizon scanning.

Horizon scanning is a tool to help detect where current trends and emerging issues may converge in unexpected ways. It presents new opportunities to understand patterns or conditions shaping a problem space, including complex challenges, which can change quickly. This tool can also provide a structured framework for organizations to identify opportunities for high impact investments and activities by understanding weak signals and patterns that can be amplified or dampened for an improved outcome.

Scenarios are another common tool to stress test and challenge strategies, policies and complex topics. Strategic foresight scenarios are provocative, yet plausible, alternative images of the future. Where did this idea come from? Foresight and the use of scenarios goes back to the 1950’s, where the RAND corporation used scenarios to investigate different military defense strategies during the Cold War. RAND corporation’s Herman Kahn became known for communicating about the future through stories told in the future.

Good scenarios incorporate rigorous analysis and data, but they are also driven by profound and insightful imagination. They are not about predicting the future, but about making better decisions today.

A useful tool to better understand the strategic choices is a TOWS Analysis, a variant of the SWOT Analysis, it begins by first analyzing the external environment (threats and opportunities) and then the internal environment (weaknesses and strengths). The second part of this process includes a TOWS Matrix to help explore options that organizations can potentially pursue. The outcome of this process is a set of evidence-based strategic options that are actionable and feasible. It should be said though that this process is difficult to complete without an understanding of the organization’s vision and the future operating environment. The last is commonly narrated through scenarios.

Strategic foresight can enable organizations to build a view of their preferred future to help drive breakthrough innovation with differentiated products and services. Scenarios are tools for telling stories, they provoke and facilitate conversations about complex issues, uncertainty and ambiguity. Exploring multiple, divergent futures provides a unique opportunity for learning and exploring ideas. Common ideas within all scenarios can provide opportunities for change and innovation towards building a resilient path forward.

Strategic foresight is a necessary skill set within all organizations, especially for those that want to attain a competitive advantage. The individual methods are varied however the process is generally the same. Understanding the shape of the future through processes such as horizon scanning and scenarios, can lead to the generation of a set of plausible and actionable strategic options that the organization may pursue to reduce and manage uncertainty. At some point you need to stop thinking about the future and start doing.

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Written by:

Donna Dupont

Chief Strategist, Foresight & Design

Purple Compass

Leon Young

LTCOL, Future Concepts Strategist

Australian Defence Force

Below is a link to a video on scenarios:

Impact and Influence of Shell Scenarios

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