Futures and horizons

Do you believe that you are now owning the last car you will buy?  Maybe that sounds improbable, but a piece on the UK’s BBC website argues the case quite well, saying ‘The central idea is pretty simple: Self-driving electric vehicles organised into an Uber-style network will be able to offer such cheap transport that you’ll very quickly – we’re talking perhaps a decade – decide you don’t need a car anymore.’

Someone sent me the article knowing that I was facilitating a workshop at the CIPD conference in November on OD&D and Change Skills to Drive New Business Models, and integral to the workshop is the idea that to help our organisations adapt into the future, we, OD & D practitioners, must keep future focused and develop horizon scanning skills.

Although there’s some overlap and debate between the terms futures, foresight and horizon scanning within the research/academic literature, in general, discussions of futures and foresight provide ‘a conceptual framework for a number of forward-looking approaches to informed decision making that includes long term considerations.’ (FAO 2013).

Keeping future focused is tricky but Philip Tetlock, in his book Superforecasting, reassuringly tells us:

  • The future can indeed be foreseen, at least in the near term. An analogy is weather forecasting – you may feel confident that you’ll need an umbrella this Thursday, but not that you will or won’t need one at a point in 2023.
  • Some people are much better at it than others.  The ‘foxes’ who ‘know many small things (tricks of their trade), are skeptical of grand schemes, see explanation and prediction not as deductive exercises but rather as exercises in flexible “ad hocery”, are much better at forecasting than the ‘hedgehogs’ those who know one big thing, and ‘aggressively extend the explanatory reach of that one big thing into new domains, and display bristly impatience with those who do not get it.
  • Forecasting is not a divine gift, but a skill that can be practised and improved. Tetlock offers an, online course,  Superforecasting Fundamentals that I’m tempted by but will stop myself registering (as I’m practicing paring down the amount of stuff I do).

An alternate to the course is the excellent resource The Futures Toolkit, ‘designed primarily as a resource for those who are new to futures thinking but should also prove useful to more experienced practitioners’.  It introduces futures thinking and offers a toolset ‘for gathering intelligence about the future, exploring the dynamics of change, describing what the future might be like’…

One of the tools in the kit is horizon scanning an approach used to identify early warnings of  potential threats, risks, emerging issues and opportunities, from the immediate up to 12 months away to explore how these trends and developments may combine and play out and what organisational impact they may have ‘allowing for better preparedness and the incorporation of mitigation and exploitation into … decision making processes.’  (What is Horizon Scanning, 2016).

Because horizon scanning is more about early warnings i.e. short term forecasting it can be used to help answer a question Tetlock asks:  ‘Is it a worse error to fail to try to predict the potentially predictable or to waste our time trying to predict the unpredictable?’ Consistent and continuous horizon scanning can stop the error of failing to predict the predictable, and what you do predict is likely to be more accurate if you are a fox thinker than a hedgehog thinker.

But we can’t stop at only looking at early warnings.  What about longer-term forecasting?  An extension of the single horizon scanning model is the Three Horizons model described as ‘a simple, intuitive way to encourage a conversation about the challenges in the present, our aspirations for the future and the kinds of innovation we might need in order to address both at the same time’.

  • The first horizon ‘describes the current way of doing things, and the way we can expect it to change if we all keep behaving in the ways we are used to.’
  • The third horizon is the future [long way out] system.  It is those new ways of living and working that will bring new patterns in existence.  It is transformative.
  • The second horizon is the transition and transformation zone of emerging innovations that are responding to the shortcomings of the first horizon and anticipating the possibilities of the third horizon’.

Knowing what horizon scanning is, and how it links to futures/forecasting is one thing – knowing what horizons to scan and how to scan them is another.   How do you actually horizon scan?   I do it via five main paths:

  • Scanning a range of magazines, journals, and newspapers for general coverage. The ones I skim read have changed over the years, but I find I’m still consistently and thoroughly reading The Economist, New Scientist, and The Atlantic.
  • Subscribing to daily/weekly email newsletters for focused coverage again I get several – some examples:
    • Tech: MIT Tech Review, Geekwire,  Information Week in Review
    • Science:  Science Daily
    • Business: Strategy+ Business, Fast Company, Harvard Business Review
    • Innovation:  Stanford Social Innovation Review, Open Data Institute
  • Looking at blogs and other info on specialised websites.  I have a lot bookmarked (I must pare them down) but I find I look most at the long now which has thought provoking blogs, as does the Practical Ethics blog – the latest is ‘should vegans avoid almonds and avocados?’  Workplace insight has info on workplace trends, and shaping tomorrow which is an ‘AI-driven, systems thinking model that delivers strategic foresight and anticipatory thinking in real-time’.  The big consultancies track ‘megatrends’ in various ways, See PWC’s example here.
  • Reading reports and surveys from various sources – think tanks, professional bodies, government and public sector organisations.
  • Talking to people and going to events – if you’re in the UK the Royal Society of Arts has excellent events – which are often livestreamed or available as web and pod casts if you can’t get to the event itself.

What happens with this scanning activity?  The idea is to apply it into your organisation design thinking.  For example, suppose we won’t need to own a car anymore in ten years (and the early warnings are pretty evident on this)?  What impact will that have on insurance providers?  Car manufacturers? Car maintenance outlets?  Car retailers?  Organisational benefits – if you offer a car as one or offer mileage payments?  Commutes to work?  People who drive cars for a living?  Software developers?  It’s likely that the reach of self-driving cars will extend to all organisations.  How could/should you start factoring it into your design work now?

My view is that horizon scanning is an essential skill for organisation designers.  Do you agree, if so how do you do it? Let me know.

Image: Economist, Unclouded vision

What triggers organization design work?

 (Each of my blogs in August is an edited extract from my book Organization Design: the Practitioner’s GuideThis is the second – from Chapter 4)

Organization design work starts in many different ways. Sometimes a practitioner is presented with a new organization chart and told to ‘make it like this’; sometimes it can be a casual conversation that results in a piece of work; at other times, it can be a feeling or statement that something needs addressing (an opportunity or a problem); and frequently it can be a planned piece of work developed out of a particular strategy – for example, a merger. Sometimes it is the practitioner who starts the conversation: ‘Does this need design work?’, and sometimes it is either the client or someone else in the situation who raises the question.

Almost without exception, behind the question ‘Does this need design work?’ is a changed, changing, or predicted-to-change organizational context. It is this context of change that is the trigger for design work. The question ‘Does this need design work?’ enters someone’s consciousness either as a reaction to a changed context or as a recognition of a current context in flux or as a prediction of an about-to-change context. In the example below, a consultant was approached by a board member of a multisite educational organization in the Middle East. The consultant summarized their discussion as follows:

‘You are clear that the Institute does need to change. It is federally funded and has a commitment to operate efficiently, offer a high-quality educational experience to students, and create ecosystems of innovation and entrepreneurship that help take the region into twenty-first-century growth and productivity. The government has stated that your emphasis now has to be on building future-facing capacity, capability, and hard and soft skills in the local workforce in order to reduce reliance on expats. What you are looking for, at this point, is support in:

  • Taking the agreed strategy and, from it, developing an implementable operating model and OD
  • Developing the detailed implementation plans with success metrics
  • Executing the plans and measuring the benefits realized by the new operating model and OD
  • Ensuring that Institute staff, students and stakeholders understand the need for change, how it is to be achieved, and their role in making the change successful. [/]

In this example, the conversation on design work was triggered by the recognition of a political and economic context currently in flux, resulting in the need to create ecosystems of innovation and to reduce reliance on expats by building local capability.’

In most cases, organization members are able to identify current and short-term context changes, but they have a harder time with long-term horizon scanning. However, this is what is most likely to sustain an organization’s existence and keep it thriving. Amazon’s CEO, Jeff Bezos, is well known for his rare skill in holding a long-term perspective, which has led to Amazon’s huge success. Amazon is continuously designed and redesigned with the long-term perspective in mind. Every year Bezos reissues his 1997 letter to shareholders stating his position on long-term thinking. The full letter is long, but its main point is that Amazon cannot realize the potential of its people or its companies unless it plans for the long term.

The desire to work to short-term around OD work is attributable to several factors, including the requirement to hit quarterly earnings targets, lack of management or leadership time to reflect and discuss a longer-term future, constant ‘firefighting’, being rewarded only for immediate results, and/or not caring about the future of the organization because current decision-makers will not be part of it.

Short-term design can be useful to help address an immediate problem – providing the problem is solved and is not just the symptom of the problem. Often, though, short-term decisions on design can compromise longer-term value and bring the risk of having to ‘unpick’ the work and redo it (See: Silverthorne, 2012).

One of the roles of an organization designer is to help clients and other stakeholders understand the risks of responding only to short-term triggers and to understand the value of taking a longer-term view. Ron Ashkenas, consultant and author, offers three points for developing and then optimizing designs that have a longer-term horizon (5–15 years).

‘1    First, make sure that you have a dynamic, constantly refreshed strategic ‘vision’ for what your organization (or unit) will look like and will achieve 3–5 years from now. I’m not talking about a strategic plan, but rather a compelling picture of market/product, financial, operational and organizational shifts over the next few years. Try to develop this with your direct reports (and other stakeholders) and put the key points on one page. This then serves as a ‘true north’ to help guide key decisions.

2    Second, make sure that your various projects and initiatives have a direct line of sight to your strategic vision. Challenge every potential investment of time and effort by asking whether it will help you get closer to your vision, or whether it will be a building block to help you get there. Doing this will force you to continually rebalance your portfolio of projects, weeding out those that probably won’t move you in the right direction.

3    Finally, be prepared to take some flack. There may be weeks, months or quarters where the results are not on the rise, or don’t match your (or analysts’) expectations. Long-term value, however, is not created in straight lines. As long as you’re moving iteratively towards the strategic vision on a reasonable timeline, you’re probably doing the right things. And, sure, you can always do more. But just make sure that you’re doing things for the right reasons.’

It’s important to keep communicating to stakeholders, as Bezos does, the reasons for taking a longer-term approach and to be continuously designing the organization.  It helps to back up the communication with narrative and quantitative information that ‘provides a holistic picture of the business, describing the economic, environmental and social performance of the corporation as well as the governance structure that leads the organization. By embedding environmental, social and governance (ESG) data into financial reports, a company achieves an effective communication of its overall long-term performance’ (Silverthorne, 2012).

People in organizations weak at horizon scanning, future thinking and forecasting can look for help in various quarters. As Thomas Frey, World Future Society, points out:   ‘Since no one has a totally clear vision of what lies ahead, we are all left with degrees of accuracy. Anyone with a higher degree of accuracy, even by only a few percentage points, can offer a significant competitive advantage’

Whether your perspective is short-term or long-term, the thing to bear in mind is that:

‘Any organizational structure should be temporary. Organizations have no separate existence; they function as tools of the business. When businesses change their priorities … then organizations must be changed, sometimes even discarded. That is why it is so wrong to encourage employees to identify with the organization – they need to identify with the business. If you are a Bedouin, it’s the difference between the tent and the tribe. As for building an organization, I think [Henry] Mintzberg got it right when he suggested that two things must be settled – the division of labor and co-ordination after that. But again, any division, any organization is always temporary.’ (Corkindale, 2011)

Do you think organization design is triggered by changes in the external context?  Let me know.

Image Hot topic: trigger points – myth or magic?