Futures thought of the day

My futures and foresight thought for the day (yesterday) was simply this:

Intuition and imagination are necessary but insufficient elements of good foresight work.

Great quote about predicting the future

I just finished the book China Airborne: The Test of China's Future, by James Fallows, which is by far the most interesting book about China that I have yet read.  Fallows' narrative is entertaining and engaging, and yet he is able to use the development of a modern commercial airline industry as a very effective proxy for framing and (trying) to grasp the scale of both potentials and challenges in China.

At the very end he has a great line about the challenge in predicting China's future that I just loved:

But I know how much is in flux, and how much is at stake.  It is not an evasion of analysis but a recognition of China's complexity, and the world's, to say that a wide range of outcomes is possible, and that it is worth watching very carefully signals like those I have mentioned to recalibrate our estimates.

That's simply an awesome and elegant quote that I think captures the tentativeness and openness more or us should adopt in our thinking about the futures of complex life.

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

More technological revolutions

In the last post just before New Year's I included a graphic that combined the three horizons framework from Sharpe and Hodgson with the the cyclical sequence of tech-driven economic change.  As promised, here is an additional graphic (build for upcoming content) that illustrates the various technological revolutions that Perez talks about in her book, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages.

We built the waves using the tech revolution start dates ("big bangs") and end dates that Perez identified and built the projected 5th and 6th waves using mean averages of the previous waves.

What's really interesting to me, and what I would really like to focus on more, is the idea that, if in fact innovation is accelerating globally, then will these waves begin to overlap more as the cycle (the "surges") shorten?  The result, I suspect, would be greater turbulence as the different surges, each at different phases in their life cycle, wreak increasing havoc (just kidding) through culture lag, dislocation, and what not.

Mapping technological revolutions onto three horizons

The three horizons framework developed by Bill Sharpe and Tony Hodgson is a favorite of mine, as it is both versatile and provides an good framework to explore interactions and dynamics.  And so, as I was working on new Infinite Economy content, I began mapping recent technological revolutions, a la Carlota Perez, onto the three horizons framework.

Recent technological revolutions mapped onto the Three Horizons

As detailed in her excellent book, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, Perez develops the notion of long waves of economic eras ever-so-briefly introduced by Schumpeter into a full-blown and well-researched framework of technology-driven economic change.  In the book, Perez talks about the "great surges of development" that have occurred five times since the advent of the Industrial Revolution.  I'll post another graphic later to gets at these "surges," but it's enough for now to say that these waves of change, and the complex dynamics behind them, map perfectly onto the Sharpe and Hodgson 3H framework.

Back to thinking about the future

One of our folks recently shared around an HBR.org article entitled,"Four Keys to Thinking About the Future."  Needless to say, we were all a bit underwhelmed by the advice in the article.

1. Enhance your power of observation
2. Appreciate the value of being (a little) asocial
3. Study history
4. Learn to deal with ambiguity

I think we were just a tad disappointed to find this (digitally) printed under the HBR banner, since it felt vague and light enough to feel futures-self-helpy.  We also pulled up the recent post I wrote on "5 things you can do to think like a futurist" (admittedly with just a little trepidation, wanting to make sure that what I had wrote initially as a very light and quick post didn't turn out to be exactly what the HBR.org post was). Fortunately, it wasn't.

To recap, 5 things you can do:

• Scan
• Diversify your sources
• See the world systemically
• Swing both ways
• Be humble

But, since we are in the midst of prepping all of the updated foresight training modules for 2014, it's probably as good a time as ever to put a little thought into how we would replace the "4 keys" from the HBR.org article with a more sophisticated and rigorous set of guidelines for thinking about the futures.

Measuring the effectiveness of foresight

Lately I've been thinking about how to measure whether or not foresight work has been effective for an organizational client.  Not that this is a new topic by any stretch of the imagination, but it struck me the other day that, well, of course you can try to measure the impact of your foresight work.

A starter list of metrics might include:

• Did you (the organization) develop a new product or service or enter a market (that is profitable), which you otherwise would not have, based on some finding or outcome from the foresight work?
• Did you create a new market as a result of the foresight work?
• Did you end a product or service or leave/avoid a market that you otherwise would not have, as a result of the work?
• Did you avoid, or were you unusually prepared for, an event or development as a result of the work?
• Did you establish something aspirational (vision or goals) as a result of the work, which continues to inspire and orient the organization?
• Did you establish an ongoing foresight activity (like scanning) as a result of the work that continues to inform organizational decision-making?

We'll keep working on this list, but it's a reasonable place to start.