In a world where new buzzwords appear almost daily—from “metaverse” to “hyperautomation”—it’s easy to become overwhelmed and cynical. Many of these terms promise a lot but deliver little when dug deeper. A new such concept but perhaps deserving of our attention is strategic foresight.
Strategic foresight is a concept that helps organizations navigate uncertainty, identify long-term trends and make strategic decisions that last over time. But how can it be used and what role does it play in relation to innovation and system innovation?
What is strategic foresight?
Strategic foresight is about examining possible futures to understand how today’s decisions can affect tomorrow’s reality. It is not a prediction of the future – because the future is uncertain and complex – but a structured process for exploring alternative scenarios and identifying opportunities and risks.
This is done by collecting data, analyzing trends and forces of change (so-called drivers of change) and creating different future scenarios that help organizations prepare for both expected and unexpected events.
A method for working with strategic foresight
A common method for working with strategic foresight is “scenario-based planning”. The process can be summarized in the following steps:
- Environment analysis
Identify trends, drivers and uncertainties by collecting data from various sources, such as technological innovations, political changes and social trends. - Identify key variables
The environmental analysis identifies the variables that are most uncertain and that have the greatest impact on the future. - Create scenarios
Based on those key variables, several alternative future scenarios are developed. A scenario can describe an optimistic future, a pessimistic scenario and an intermediate situation. - Analyze implications
Each scenario is analyzed to understand the opportunities and risks it entails for the organization. Here you can explore questions such as: What skills will be needed? Which new business models can become relevant? - Develop strategies
Build strategies robust enough to handle multiple scenarios. The goal is not to choose the “right” future, but to be prepared regardless of which future becomes reality. - Follow-up
The future is ever-changing, so it’s important to regularly revise scenarios and strategies based on new data and insights.
Examples of strategic foresight in practice
A well-known example of the successful use of strategic foresight is Shell, which since the 1970s has used scenario planning to navigate an uncertain energy market. Their ability to anticipate oil crises and embrace renewable energy early has been critical to their success.
Another example is the public sector’s use of strategic foresight to plan for demographic changes, such as aging populations and migration.
The importance of future scenarios
Future scenarios are at the heart of strategic foresight. They help organizations to:
- Identify risks and opportunities
By imagining different futures, one can prepare for the unexpected. - Develop flexibility
An organization that has prepared for different scenarios can adapt to changes more quickly. - Drive innovation
Future scenarios can inspire new ideas and solutions that would not have been apparent in a traditional strategy process.
When does strategic foresight fit – and when does it not?
Strategic foresight is best suited when:
- The organization faces high uncertainty and complexity.
- Long-term decisions must be made with limited information about the future.
- Innovation and change are central to the business.
However, it is less effective when:
- The organization needs to act quickly on urgent problems.
- The problems are well known and the solutions are obvious.
- Resources or commitment for long-term planning are lacking.
Strategic foresight, innovation and system innovation
Strategic foresight and innovation go hand in hand. While innovation is about creating new products, services or processes, strategic foresight helps organizations identify which areas are most critical to innovate in.
System innovation – which involves changing entire systems, such as energy, transport or education systems – requires a long-term perspective that only strategic foresight can provide. By mapping the systems’ dynamics and possible futures, organizations can plan and implement comprehensive changes with greater precision.
E.g. strategic foresight is a tool for understanding and preparing for the future in a changing world. Through methods such as scenario planning, organizations can create robust strategies, identify opportunities and drive innovation in a way that is both sustainable and forward-looking.
To succeed, however, it takes time, commitment and a willingness to embrace uncertainty. Strategic foresight is not always the solution – but when it is used right, it can be the difference between leading development or being overtaken by it.
