Leadership is about predicting the future

I think entrepreneurship and leadership are about predicting the future and the place of your business in that future. According to “Lead from the Future: How to Turn Visionary Thinking Into Breakthrough Growth” that 75% of the people they surveyed reported that their planning and forecasting horizons are never more than five years out. Only 10% plan for eight to ten years or more. If you are only thinking two or three years ahead, years five to ten might bring you an unwelcome surprise that you haven’t planned for.

Routine management

At the root of the problem is the processes by which senior management develop its strategic choices and priorities, which are overdetermined by their existing ways of doing things. That is the present-forward fallacy, the seductive notion that an existing business can be extended out in time indefinitely by continuously making improvements to it. Where the job at hand is routine management. But when markets shift, consumer preferences change, or new technologies emerge, leaders who solely think in a present-forward way are often caught unawares, busily working to solve today’s problems but utterly unprepared for the even bigger ones that are on their way. If a strategy is simply extrapolated from the present forward, your existing processes, rules, norms, and metrics will get in your way.

Future back thinking

Instead of present-forward, the authors suggest you go future-back. Developing it from the future back reduces the likelihood that you will perpetuate your existing realities. Future-back is iterative and nonlinear. It’s the way of thinking that is needed when the objective is to go beyond your organisation’s established ways of doing things. Virtually every mature company tries to produce breakthrough innovations, but often what they tout as the wave of the future is just an incremental improvement on what they are already doing. To fully leverage the potential of inventions like these, you need to think in a different direction, from the future back. Future-back thinking and planning begin with exploring and envisioning — that is, actively, intensively, and imaginatively immersing yourself in your organisation’s likely future environment and then determining what you must do to not only fit into that environment but to actively shape it to…