S-curves, uncertainty, and investment

Figure 1: basic VFS s-curve

Yesterday I had a great conversation with some folks from out of town and at some point our foresight work came up.  In discussing with them some of the industries in which their clients operate, I drew some diagrams to help illustrate some of the foresight-related points that I was trying to make.





Beginning with some s-curve diagrams like Figure 1, I started mapping out where our foresight work leads up to, and overlaps with, things like venture capital and investing in start-up companies.  We talked a bit about where (on the curve) you are likely to find different people focusing, and for what reasons.  Obviously futurists are trained to deal with the stretch that encompasses the Foresight and Innovation zones, even though many clients are asking for help with things that are already into the Reactive zone and the New Normal.

Figure 2: cone of uncertainty

We talked a bit more about the emergence of new technologies and the patterns of exploration and experimentation of business models and new ventures that almost inevitably takes place (the Innovation zone), which led to some talk about uncertainty and the narrowing of possibilities as time progresses.  Here we would normally think about the classic "cone of uncertainty," pictured in Figure 2.  The basic idea in most futures work, as it is in weather forecasting (where they also use cones of uncertainty in forecasting), is that the further into the future one gets the more uncertainty increases.  And I think most people intuitively grasp this, so it's not usually a difficult concept.

During the conversation I started lining up these different concepts, again to illustrate some points in the conversation about how our foresight work typically relates to other business activities.  In doing so, I had to reverse the cone of uncertainty to accurately capture the progression of things and the direction of change in our levels of uncertainty.  What resulted, reproduced in Figure 3, was a layering of three basic charts:

• A reversed cone of uncertainty identifying where core foresight work really operates in relation to the gradual reduction of new possibilities (e.g. new tech, startups, and emerging industries), on top of,
• The s-curve chart I earlier detailed to talk (initially) about "thought leadership" and consulting work, layered over,
• The classic s-curve of issues/tech development that is so common to foresight work

Figure 3: all 3 charts, aligned

A couple of things were of particular interest to me as I connected these charts.

A.  There is something about that dark, dashed lined in the reversed cone on the top.  What I mean is, I think there is something about crossing that line that typically represents a move from a more wide-open futures mind-set (shuffling possibilities, struggling for a useful framing of the many uncertain possibilities) to a more focused concern with driving change and/or beginning to lay real bets (take options, as some would say).  To the left of that line, I think organizations are more likely to be in a scanning/discussion/scenario forecasting type of mode.  To the right, as things begin their slow work of shaking out, individuals feel more confident to begin positioning themselves or use the emerging outlines as a real guide for action.

B. At the risk of delving a little too much into some inside baseball, I think different schools of futures, and certainly different traditions of anticipating change, are more comfortable, or perhaps are better able to have their art flourish, along different stretches of that cone.  I suspect many of the folks trained in the "Manoa" schools are most comfortable and most artistic to the left of that line, while still having a facility as they begin to cross the line.  I think those trained at Houston might gain a bit more momentum in their art as they hit that line.  And I think, if it bears out, it's probably to do with the philosophic and methodological emphases that the two schools have traditionally had.

And again, I personally think that most good foresight practices work better when we move beyond, say, a three year time horizon.  I think that once we are into the Reactive zone real subject matter experts will, generally, have a better sense of the shape of the near-term future, and importantly the nuances of standards, competition, and emerging regulation, than will good futurists (who are not also genuine subject matter expects in that topic).

Figure 4: reversed cone of uncertainty

Working the hype cycle, part 2

In my previous post today, "Working the hype cycle, part 1," I mentioned how I was wondering where on the Gartner hype cycle one would plot the entrance of the big consulting firms into a thought-leadership space.  After discussing it further in-house, I found myself thinking not of the hype cycle so much as the classic s-curve of issues development.

Trained, professional futurists, in addition to a great many other professionals, often use s-curves as our own thumbnail sketches as that sigmoid function is found so often in the maturation of public policy issues, development of technology, diffusion of tech, etc...  And so I began to think in terms of the s-curve, and more specifically, I began thinking about where you would expect to find different consultants entering a thought leadership/idea space.

Figure 1 is the result of my most recent thinking.

Figure 1: applying the s-curve to mapping thought leadership

Something like 2/3 the way through the curve you can see (what we're surmising as) the typical entry point for major consulting firms.  The reasons are neither terribly mysterious nor necessarily nefarious.  It generally isn't until about that point in the development of an issue that there is sufficient "trend" data or enough cases to study to begin to propose any sort of "best practice" action in response to an issue confronting a large organization.

Firms run by trained futurists, such as ours, are oriented below that point, spanning the entire first 2/3 of the curve, but often most useful in the Foresight Zone just before the "Application Gap."  And the application gap refers to the period of time in the development of an issue in which there is very little in the way of sound new wisdom to apply; no best practices to implement, no well-studied improvement projects to launch.  Just people more comfortable with risk and ambiguity deciding to wade in/strike early.

Put simply, our job is to help frame the full set of issues that will be cascading over you in the years ahead.  How can you make a truly informed decision regarding the "big" issues of the next 2-3 years without understanding the the waves of issues following right behind them?

Working the hype cycle, part 1

Yesterday, as I was reviewing some reports from the last couple of years from some of the big consulting firms like McKinsey, I idly wondered about how to interpret the entry of the big C consulting firms into any particular topical area.

Most of the big firms today like to claim thought leadership in their various practice areas, so their reports tend to be written as deeply insightful probes into an issue of critical future importance to (potential) clients.  But I have found over the years that for any particular area, a true subject matter expert would often not find anything they had not already read about or discussed with other experts for years, and sometimes decades.

And I'm not digging on anyone here, just thinking about what it means, in terms of the maturity and "lifecycle" of a big issue, that the big C firms have decided to start addressing it for (potential) clients.

Almost as a joke, I posted the following question yesterday on Twitter: "Where do we plot an issue on the @Gartner_inc hype cycle if the major consulting firms are piling into the space?"

Gartner Hype Cycle Special Report 2013

I got a couple of quick and clever answers from colleagues @nextwavefutures and @changeist, and their responses made me realize that I will now have to actually play with plotting this on the hype cycle.

More to follow shortly.