Predicting the future and focusing your innovation program

Derek Cheshire offers some advice on how to identify the drivers of future trends and develop new product and service ideas to drive your innovation program and your business.

The best way to ensure that your business not only survives, but thrives, is to know what the future holds. Many people profess to do this already but what is it exactly that they are doing? From existing management information you might be able to predict the amount of resources required (both human and material) as well as the features of your competitive environment. How far in the future can you do this without resorting to sticking a wetted finger into the air? The answer is probably less than 12 months.

The question is, how far can we look into the future and with what certainty? The answer is anything from 5 to 30 years is possible, and that would certainly help with crafting strategy and changing the direction of even the largest multi-national business if this is required. But how?

Most people are familiar with the passage of a ship on the ocean that leaves a wake behind. By examining the wake and knowing how much time has passed, one or more experts could tell you something about the ship, its speed and course. Now imagine that you are at the tail end of the wake but you are in the present, the ship is in the future and not visible to you. If you could pick up all of the bits of information that are present, look at the patterns, and have access to experts then it is possible to gain sufficient information to predict the future for your company.

Predicting the future has developed into a whole new topic known as Futures. Most gurus will use prediction, based on facts, certainty and giving you answers. It sounds safe but its usefulness over time is limited and it does not deal with the uncertainty of the future. Futures uses a degree of imagination, stories (or scenarios) and a whole lot of questions to rigorously examine the future and it can look decades ahead.

Businesses might wish to use futures to quantify risks and opportunities, craft strategies, inform investment decisions and fuel their innovation programs. Government and other public sector bodies have broadly similar aims – creating policies, identifying areas for intervention, investment and education needs.

The first stage of a Futures program is a huge information gathering exercise (remember the analogy of a ship’s wake, we need all of this information). At the same time there needs to be some degree of focus. We cannot just generate the answer to the question “What does the future look like?” A more reasonable question might be “What does the market for personal computers look like in 2020?” or “What will the requirements for transport infrastructure in Wales be in 2025?”

Once these areas have been identified, we then begin to look at the drivers that affect these areas and existing trends that are already apparent. We also look a little further afield and scan the time horizon as far ahead as we can. All the time we gather information, taking care not to filter it too much as the “signals” that we are looking for easily get lost in the “noise” and we never know at the start how much weight (or credibility) to attribute to the information we are gathering.

At this point we have an idea of what we wish to look at and the various factors that might affect it. Now we add the questions, what if oil process tripled or the population halved, working through a number of scenarios and seeing how this changes the future. Then we throw in the wildcards: Who predicted 9/11 in the USA or the bombings in London? Who foresaw the so-called credit crunch?

And how can we make this tangible at the end of the exercise? There are two main ways of examining strategy, observing the future from the present and working out how to get there, and the most powerful version — which is to look back toward the present from the future and describe how we got here. This is where our storytelling skills come into their own and we generate buy in.

We can predict the future up to 30 years ahead in order to inform strategy making and investment decisions for public and private sector bodies by using:

  • Information from expert groups
  • Widely available information
  • A number of carefully chosen scenarios
  • Both existing knowledge and by introducing wildcards
  • Storytelling and other creative techniques to facilitate information gathering and generating buy in.

Derek Cheshire is an innovation strategist and expert on the topics of innovation and business creativity. He is creator of the Innovation Equation, author of articles such as ‘Slow Innovation’ and ‘How To Generate 20 Business Ideas Over Coffee’ and has appeared on the CNBC program ‘The Business Of Innovation.’ E-mail Derek at [email protected] or visit www.creative4business.co.uk.

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