Managing the Future

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• Publisher: Triarchy Press
• Year: 2011
• Print ISBN: 9781908009487
• eBook ISBN: 9781908009609
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

Equipping your organization for an uncertain future is a daunting task. If you're already over-stretched dealing with the pressures of today - it can seem like an impossible one. But building future planning into your everyday practices is not only vital - it's eminently doable. And who better to show us how than Stephen Millett - historian, futurist and management consultant for three decades? Managing the Future offers a straightforward and pragmatic approach to strategic planning. It takes an honest look at the limitations of forecasting, and shows (through real-life examples and a wealth of experience) how managers can best use a variety of futuring methods, including scenarios, horizon scanning and trend monitoring. Dr. Millett first outlines his Five Futuring Principles: they provide a clear theoretical framework for preparing an organization for the future. He then takes us through the practical steps involved in managing a forward-facing organization, including managing "e;futuring"e; (the external-to-internal process of scanning the environment to anticipate the trends that will affect your organization) and "e;visioning"e; (realizing the internal mission, values, aspirations and goals of an organization and its management, and then turning your organization outward to face the world).

Chapter 1. Continuity and Change

Futuring Principle 1: The future will be some unknown combination of continuity and change.

Several years ago a corporate client of mine asked “Do I really need to think about the future?” After a moment, I somewhat flippantly responded, “No, not if you are willing to accept whatever happens.” Perhaps the executive believed that the future was already determined, so he did not need to worry since there was nothing he could do about it. Or perhaps he was taking the opposite point of view that since the future cannot be predicted there was no use in wasting his time thinking about it. In either case, my response was correct, if not politic. As a pragmatist, I urge my clients to think seriously about the future, plan, and prepare for it – and then monitor events and detect changes according to new situations in order to adjust strategies to achieve goals.

It is in the self-interest of companies, especially new and growing enterprises that depend on other people’s money, to exude confidence of success in the future. Companies rarely admit a lack of faith in continuous growth. Business people tend to think in linear terms – they think the future will always be better than in the past. They assume that how things are going today will naturally continue into the future. Managers may also believe in business cycles, of course, because they learned them in college and business schools. Too often cycles, however, are rationalizations. When business is growing, complacent managers will claim the credit for themselves; but when business declines, the same managers will attribute reversals to uncontrollable circumstances and complain “How was I supposed to know that would happen?”

If market conditions and business operations remained the same for long periods of time, then preparing for the future would be less important than it really is. We would just plan to do more of the same. But time moves in only one direction, and the passing of time introduces variability, or risk. As the saying goes, change happens. Yet the uncertainty of change makes planning more difficult while it makes it more important to do. If we did not know that before, we certainly learned it in the global economic downturn of 2008, often called the “Great Recession”.

Astute managers learn quickly that business trends can be upset by changes, not all of them good. They acquire the skills to better anticipate the future and to adjust to it when necessary. With such skills, they are better prepared to deal with uncertainty. What holds for clever managers in particular also holds for clever people in general.

The future, which is still evolving and yet to occur from the perspective of the present, will be a product of both our own design and elements beyond our control that we often characterize as “chance” or “luck.” I believe that good luck can be maximized and bad luck can be minimized with forethought, planning, and preparation. There are indeed things coming that will be beyond our control; but if we do nothing to prepare for the future, then we deserve whatever happens to us, good or bad. We may not be able to control the future, but we can steer forward in desired directions.

Bad things have a way of happening on their own, but good things have to be made to happen. I admire students who prepare to do well on exams; young people who plan years in advance by taking courses leading to professions in medicine, law, and teaching; employees who work smart as well as hard by planning ahead; athletes who dedicate huge amounts of time and effort in practices leading to competitive victories; soldiers who plan and train for successful missions; architects who meticulously draw blueprints for highly complex building projects; carpenters and tailors who “measure twice, cut once;” actors and musicians who repeatedly rehearse for perfect performances; and business people who think through a strategy of required investments and actions to achieve their goals.

I have been undertaking forecasting and planning projects for managers and executives in corporations, non-profits, and government agencies around the world for about 30 years. During my career, I have learned many lessons the hard way. I have supplemented my experiences by much reading and thinking about the theories that support the practices. I discovered that my clients took my forecasts more seriously when they understood the principles behind the methods – when they realized that well considered expectations should be acted upon rather than dismissed as just made-up guesses about the future. The purpose of this book, therefore, is to share my thoughts and experiences with both emerging and experienced managers so that they, too, can do a more professional job of anticipating the future.

The two most common mistakes in thinking about the future must be addressed first. One is the common assumption that the future will be all continuity, so that trend projections from the past to the future will nearly always be valid. Such trend projections are typically linear or cyclical extrapolations. The other mistake is the opposite assumption that the future will be mostly changes with little regard for the past and present.

The nub of the first futuring principle is that the future has always been and always will be (most likely) a mixture of both continuity from the past and changes from the present and future. We perceive continuity through our awareness of trends and our recognition that things today are products of the past. Because we cannot know the future in any direct way through our perceptions, we can never be certain exactly what combination of continuity and change will come in the future. Let us first look at the basic science of time to see what it tells us about the nature of the future and how we might better manage expectations for it.

Time’s Arrow

In 1927 the British astronomer Sir Arthur Eddington used the term “the arrow of time” to capture the image of time flying in only one direction. He was an early defender of Albert Einstein’s theories of relativity, including the concept of space-time. Physicists have long recognized that time is asymmetrical, meaning that it cannot move both forward and backward, only forward. Fundamentally, within the known laws of physics, time travel back into the past is physically impossible, despite the imaginations of such skilled novelists as H. G. Wells. The British physicist Stephen Hawking speculated that if the universe stopped expanding and then started to contract, time would flow in the opposite direction, from the future to the past, so that we would remember the future but we would not know the past. Later, he reversed his position and concluded that time, or at least the human perception of it, would still flow from the past to the future.¹

One scientific explanation of why time travels in only one direction is the Second Law of Thermodynamics, which says that, in the absence of new energy, the natural state of things (any organization or system of molecules) flows in only one direction, from order to disorder. This process is called entropy. An everyday example of entropy is the well-known fact that heat flows from hot (a higher energy level of molecules) to cold (a lower energy level of molecules), unless an outside force redirects it. In a similar way, time passes from the past, which represents a higher state of order (that which has already occurred), to the future, which constitutes a lower state of order, because so many things could happen relative to what did happen. The uncertainty of the future appears as a lower state of order. No outside force, however, has ever been identified that changes the passage of time from the past to the future. In addition, the principle of entropy states that events flow in a one-way sequential order of cause-and-effect relationships, whereby past causes lead to future effects but effects never change the causes that preceded them.²

We have many popular expressions that capture similar ideas, such as “A stitch in time saves nine” and “You can’t undo the past.” In addition, we perceive time’s arrow every day in such phenomena as the cumulative effects of physical wear and erosion, decay, and our own aging. What we often fail to see, however, is that business wears out with time, too. We often think that the future will be a continuation of today, but according to the Second Law of Thermodynamics, unless we add new energy to the enterprise, business like all systems of molecules will decay as time moves forward.

An implication of the linear and sequential nature of time is that we cannot know the future through our senses and experience because it has yet to occur. In this regard, our everyday perceptions of time are well aligned with the physics of time. Another implication is that, if time moves in only one direction, then, like a straight arrow, it might have a linear path of certain continuity with the past and present.

Time’s Target: The Future

If we use Eddington’s metaphor of time’s arrow, does that also mean that time has a trajectory toward a designated target in the future? Does linear time lead us to a predetermined destiny? While it is popular to talk about fate, most of us do not realize that everyday notions about time and the future have been highly influenced by thousands of years of religious beliefs and philosophical concepts. There are elements of fatalism in Judaism, Christianity, Islam, Hinduism, and Buddhism. In religious terms, the one way arrow of time is called divine predestination. In the natural and social sciences, it is called determinism.

We hear expressions in our everyday language that reflect fundamental beliefs in predestination and fate, such as:

•Everything will work out OK in the end.

•It was meant to be (or it wasn’t meant to be).

•It was fate.

•It is in His hands.

•What will be, will be (Que sera, sera).

•It is written.

I once heard a story, allegedly true, about a Protestant bishop a few years ago who was receiving a briefing on trends in his church. The graphs showed many trend lines that were declining over time: membership, attendance, collections, etc. At the end of the gloomy presentation, the bishop sighed and commented, “Well, I guess we’re having a bad century.” He likely had no doubt that “business” would recover and continue on the path to the Day of Judgment.

Many business people with strong religious beliefs may accept the doctrine of predestination in their private lives but still engage in planning and hard work in their secular enterprises. If you were to draw up business plans and run an enterprise based on predestination, then you would have to accept either success or failure accordingly. We see a lot of fatalism based on wishful thinking in cases of start-up companies and entrepreneurs who are very confident of riches in the future. Very few corporate executives and venture capitalists, however, would accept fatalism as the premise for future business success, especially when large sums of money are at stake. They accept business plans based on business models, management experience, and market trends and opportunities, but rarely on faith alone. If they were to rely upon any divine guidance, it would be the axiom that God helps those who help themselves.

Parallel to the religious beliefs in predestination run purely secular concepts of the future determined by natural forces of physics, chemistry, and biology. Time’s arrow can be viewed as a force of nature in the same way as motion is calculated in Newtonian mechanics. Newtonian physics is deterministic in the sense that exact causes will have exact results every time. Statistics are also deterministic in that data are expected to fall with a determined frequency distribution that looks like a bell curve on a graph. The natural determinists say that we do not need God to predict the laws of nature. This line of reasoning leads to the conclusion that we could know the future if only we recognized the natural forces that were carrying us to it.

In the Enlightenment of 18^th century Europe, philosophers turned to the logic of Newton to explain social as well as physical phenomena. They searched for the basic forces of history like the laws of motion and gravity. They proclaimed a new arrow of time, and they called it “progress.” Their concept was that mankind moved through history according to certain social dynamics that were leading to a state of individual and social perfection. One such advocate was the Marquis de Condorcet, a mathematician and philosopher at the time of the French Revolution. During the winter of 1793-1794, while in hiding under the shadow of the guillotine, Condorcet wrote an essay in which he argued that the methods of science could be applied to the problems of society. He saw time as having but one direction: it propelled people toward the goal of universal human rights and justice. His view of progress became a dominating intellectual force during the radically changing economics, politics, and social relationships of the Industrial Age. The idea of progress from rational philosophy crossed back over into science with the view that evolution was a biological corollary to progress toward greater complexity and higher levels of development. Although Darwin assigned no direction to evolution, many of his followers did. Some went so far as to speculate that evolution was directing the species toward perfection. The so-called Social Darwinists viewed the concept of progress in society as being virtually the same as natural selection in biology.³

During the 19^th century numerous philosophers, professors, and social experimenters characterized human progress across history as a march toward utopia.⁴ Perfection could be achieved on earth in the here and now. The concept of progress as time’s arrow was most famously championed in the 19^th century by Georg Hegel and Karl Marx. In very simple terms, Hegel built further on the concept of history as a dynamic of human progress. He conceptualized history as inevitably moving through a dialectical process of changes...

Table of contents

• Front Cover
• Copyright Page
• Contents
• Dedication
• Introduction
• Chapter 1. Continuity and Change
• Chapter 2. Anticipating the Future
• Chapter 3. Futuring and Visioning
• Chapter 4. Well Considered Expectations – Potential Errors and Remedies
• Chapter 5. Updating Forecasts with Trend Tracking
• Chapter 6. Managing Futuring
• Chapter 7. Managing Visioning
• Chapter 8. Managing Applications and Benefits
• Chapter 9. Managing Expectations
• About the Author
• About Triarchy Press
• Index
• Related Titles from Triarchy Press
• Back Cover