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

5 things you can do to think like a futurist

Intent on beating the retailers at their own game, and seeing as New Year’s is the natural holiday for futurists, today we’re going to leapfrog both Thanksgiving and Christmas to start dispensing advice for the New Year!

And so here are five things you can do to think more like a trained futurist*.

Scan.  Scan, scan, and scan some more.  Trained futurists engage in a continual exercise classically known as environmental scanning.  For us it’s like breathing.  Find and flip through a lot of news and developments.  This isn’t classic research; it’s more like dipping your face into the fire hose.  Over time you’ll get a sense of patterns and shifts emerging out there in the world.  This is the raw info feed about the world from which trained futurists continually refine their notions of the nature of the possible.  It is from here that we typically pull the weak signals that we weave together into emerging issues.

Diversify Your Sources.  Whether you’re engaged in scanning or conducting more in-depth research, diversify your information sources and go farther afield to sniff out developments that might be important.  When scanning, this helps us identify emerging issues arising outside of classic industry/sector boundaries that might drive change that is in fact relevant to our concerns.  When doing research or even strategy development, the experiences, perspectives, and frameworks from outside of our concerns can often provide a breakthrough, through reframing or simple inspiration.

See the World Systemically.  Always ask yourself about connections, about the relationships that bind what you’re looking at with many other things in the world.  Think about upstream drivers and downstream effects.  Think about first, second, and third order impacts.  See the world around you as a web, see the strings of that web vibrate as feedback ripples around you.  Try thinking and note-taking in pictures, in diagrams that connect actors with each other and that link causes with effects with further effects, with even further effects.  And think about complexity: about how inputs don’t always relate to outputs; about sudden, unexpected shifts in the system; and how unexpected patterns can emerge from the undirected interactions of lots of individual actors…

Swing Both Ways.  Regularly alternate between deep dives into the work of great scholars and intellectually rigorous conceptual frameworks and the surface-skimming, social network-sampling activities of scanning.  Theory and mental models matter, so do not ignore them.  Always forecasting the futures of complex issues based solely on intuition and gut feeling is a poor practice.  At the same time, you need to draw upon your intuition and the capacity of your mind to see something entirely new.  Moving back and forth between these two approaches will keep your mind fresh while challenging it to always be rigorous and self-critical.

Be Humble.  Remind yourself that you don’t actually know how the universe works…

*recall: trained futurists are fundamentally dealing with the issue of change in society...

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 on the Future

The older I get the less I feel the need to define for everyone else and the more I become comfortable with just defining for myself.  For some time I have been thinking about the things that distinguish professionals who call themselves “futurists.”

Futures studies is one of those unknown academic fields.  Indeed, even within the field there are those who argue that it is not, perhaps, a true field yet.  In any case, the label given to students emerging from futures studies is unfortunate: futurist.  Like “democracy,” “democratization,” and “strategy” this is a term that is terribly overused and misused, adopted by a very wide cast of consulting/speaking/thinking characters out there in the wild world.

Those coming out of futures studies are concerned with understanding change, with anticipating change, and with helping people to shape change.  But because the field is currently so… unregulated, and in fact may never become strictly regulated, the variety of methods, preferences, and degree of training among those claiming the title of futurist give rise to an extremely wide array of practices and objectives.

As a trusted colleague frequently points out, there is a considerable body of literature now built up around futures studies, so often grad students or newcomers end up reinventing things that they simply hadn’t been aware of beforehand.  While I risk doing the same thing, I have been occasionally returning to the exercise of trying to sort and distinguish between the various professionals who tend to work specifically and explicitly on the “the future.”  This is a schema based on my current thinking.

Let’s sort individuals according to two spectra: the purpose of their work and the underlying approach of their work.  Purpose can be thought of as the intent or objective of the practitioner.  Approach refers roughly to the sources of information and the ways of knowing upon which they build their work.  Using both spectra as axes we create a typical 2x2 matrix.

Figure 1: the basic 2x2 matrix

Purpose runs from anticipating change on one end to shaping change on the other.  The extreme left of anticipating change would be sincere attempts at prediction; more tentative or careful forecasts would fall to the right of that.  Crossing over the Y axis, efforts at shaping change would run from light efforts to shake people out of their assumptions all the way to grand attempts at social change.

The Y axis of approach runs from methods that rely entirely on participant knowledge and responses on the bottom end to the upper end with work that is entirely dependent on quantitative data (and likely disdains most intuition not based on “facts”).

Using these two axes we can play with plotting a variety of methods that are commonly used by “futurists”.  This is just a sample, to be sure; if we were to plot methods common to, say, urban planners, the quadrants would probably fill differently.  And this is just a quick generalization.

Figure 2: common methods plotted

Now, to follow classic business management practice, let’s give the quadrants labels and identities.  We’ll call the Data-Driven/Anticipate Change quadrant the Analyst quadrant.  The Analyst’s domain is about explicit models and information, and it’s about needing to understand.  Below that is the Intuitive/Anticipate Change quadrant, which is the domain of the Sage.  Merriam-Webster.com defines sage as “wise through reflection and experience,” and that aptly describes the methods and motivation within this domain.  To the right we have the Intuitive/Shape Change quadrant which we label as the domain of the Provocateur.  The Provocateur’s work is to shake people out of their assumptions and their complacency.  Finally, we have the Data-Driven/Shape Change quadrant, which is the domain of the Planner.  By definition, Planners want things to happen, and they lean towards information and structure to accomplish that.

For added fun, we can perhaps start to overlay archetypes, and specifically the brand-related use of archetypes developed by Mark and Pearson in The Hero and the Outlaw.  The Analyst domain is probably where the Ruler archetype feels most comfortable.  The Sage archetype would fit the Sage domain.  We might place the Magician in the Planner domain and the Outlaw and the Jester might both fit into the Provocateur domain.

Figure 3: the four quadrants

Knowing many actual trained futurists as I do, and having met a great many people who otherwise call themselves “futurist” or whose work focuses on the future, I think individual professionals have preferences or biases that tend to draw them into one quadrant more than others.  I myself was trained very much from the Provocateur’s domain, yet naturally gravitate towards the Sage quadrant (but higher in the quadrant and closer to the Analyst domain), while consciously wanting to explore the Analyst domain more.

Of course, what becomes obvious once you start staring at this matrix is that a really good futures or foresight process will glide across more than one quadrant.  While some engagements are wholly within a single domain (say, a futures-driven creativity/ideation workshop resting comfortably in the Provocateur domain), many probably do, and all probably should, move across multiple domains.

A process could begin in the Analyst domain say with some Emerging Issues Analysis, dip over into the Provocateur space for some Manoa scenario process, and then conclude in the Planner quadrant some Participatory Action Research (example 1).  Alternatively, it could start in the Sage mode with some Forecasting by Analogy, move to the Analyst mode for validation and additional perspectives from Learning Curves (and maybe some technology adoption curves), then end in the Provocateur mode with participants oriented for creating new products/services through morphological analysis (example 2).

Figure 4: processes across the matrix

In fact, you could probably develop this further to make it an easy-to-use process develop framework.  Aligning your project with client needs (archetypes) and making sure to include strengths from each of the quadrants would seem to always be beneficial.  This would just be a framework to help someone do that.

Well, this is not exactly where I had planned to end up when I started this post, but this is an interesting place to pause for now.