Leveraging the Pandemic’s Disruption to Adopt Foresight and Drive Innovation
By: Kristine Metter, Ms
Tags: Governance, Innovation, Covid 19, Foresight, Nonprofit

Leveraging the Pandemic’s Disruption to Adopt Foresight and Drive Innovation

The 2020 pandemic forced most organizations to change rapidly and adapt in a crisis mode. Once the immediate crisis settled, the pandemic caused a call to action and new attention to the importance of innovation. Long-standing business models won’t deliver the same results as before. But making that transition is tough. Leaders were initially too busy to think beyond the immediate. Then there was denial about the need to change and a sense of loss for the “good old days.”

Once an organization is ready to move on to the future, it needs to establish solid practices to guide its efforts to innovate. Adopting and embracing a culture of foresight is one framework to explore new strategies and new business lines, especially during this period of uncertainty and when there are no available best practices to follow. The connection between foresight and business innovation is strong.

Barry Barresi’s article, Advancing Foresight Governance, introduces us to three descriptors critical to advancing your association’s ability to embrace innovation and build new business lines to better serve your members and stakeholders. These descriptors include monitoring drivers of change, accepting the imperative of innovation, and leading organizational reinvention. This article drills down a little deeper to provide a few practical tips on how to develop your organization’s culture of foresight and link it to business innovation.

Foresight Basics

Foresight is a discipline that allows organizations to scan for weak signals, analyze them, and make decisions based on that information. This scanning and analysis can be messy and non-linear, but it does provide an opportunity to explore new ideas in a critical way.

When thinking about foresight, it is important to set the right time frame. Most leaders live in annual budget cycles and strategic plans that last for two or three years. Foresight pushes out to a ten-year horizon or even further. Foresight does not equal predictions. No one has a crystal ball, and no one precisely knows what the future will bring. As a result, foresight includes variables that allow for the consideration of multiple possible futures. These provide flexibility in contemplating how things will play out between the present and the alternate future. This looping enables organizations to adjust their strategies continually.

Using the pandemic as a spark, McKinsey recommends adopting a “strategic crisis-action plan” to guide the organization through several horizons. By looking at the alternate futures and several horizons, “uncertainty diminishes, and the next normal becomes clearer.”

The next step is scenario planning. Here, boards outline a variety of options against these possible futures and different horizons. This holistic view helps to surface potential risks where the organization may want to take a defensive posture and identifies opportunities where the organization may want to make proactive moves. This combination of looking for opportunities and shoring up against risks engenders confidence in the outlined various scenarios.

Blau and Lubetsky offer these key questions for scenario planning in their August 2020 blog in the Harvard Law School Forum on Corporate Governance. Many of them hold up for association governance as well.

Which of our previous expectations need to be rethought?

What are the biggest threats to our current business in these worlds?

Based on what we have learned from the scenarios, are there other factors that we haven’t considered?

Are there new uncertainties that have emerged or clarity on existing uncertainties that require a shift in how we think about the future?

Which scenario best describes the world that management is preparing for, and is there any scenario they seem to be ignoring?

What would we need to do differently if any of these scenarios become the future?

Are there other scenarios that we should consider?

The Board’s Role and Board Mindset

The board’s responsibility for driving the post-COVID strategy and foresight should be an essential component of their work. The practice of foresight will not necessarily give you the answers, but it does help set a framework for how to think about the future. This is particularly challenging when there is significant uncertainty. However, creating a safe space for difficult conversations, and putting everything on the table leads to an exploration of all options and the generation of new concepts. This long list of ideas can be winnowed down by asking the extent to which each supports the organization’s missions.

Another crucial component for the board is its mindset, especially given the extended time this pandemic plays out. In this McKinsey article, the authors suggest that boards need to balance optimism and pragmatism and remain resilient. Boards should work hard on both these aspects, and it takes intentional effort and time to maintain the energy to drive through this work.

To help the board through this challenge, encourage them to focus on long-range priorities and outcomes rather than immediate problems, which should be the staff’s responsibility. Trower and Eckel offer a few questions for reflection in this BoardSource blog.

How well is the organization doing and what evidence supports that assessment?

What might the future hold and how can we best position the organization for that future?

What do we want to be out in front of and what should we wait and see about?

What is within our control and how can we leverage those things?

The Foresight Governance Journey

Most associations will find themselves somewhere on a continuum of experience with foresight that ranges from novice to expert. ASAE’s ForesightWorks User’s Guide offers tools to assist an association and its board in following a “journey” toward a culture of foresight.

At its core, an association should create a foundation and culture of foresight by continually sharing foresight articles and examples, regularly bringing foresight concepts to the board, and having strategic conversations that incorporate foresight. After setting the foundation, the association moves into foresight application with a “visioning, planning, acting” framework. This might include envisioning a preferred future from among the many alternate futures previously generated and embedding forecasts into strategic planning retreats. Acting with foresight sets the board up to make better decisions and provide strong leadership for the association’s long term health.

Foresight and Business Innovation

ASAE’s Advancing Busines-Venture Innovation research explores an association’s readiness to develop new business lines. Like the foresight journey, this research finds that associations have varying degrees of capacity in eight domains. One of these domains is foresight governance. When thinking about innovation and business development, the board and staff should use foresight to identify stakeholders’ emerging needs and an expanded definition of whom the association serves. As outlined in the research report, these five questions help an organization understand its foresight capacity concerning business development.

My association strategy development activities include assigning responsible staff or committees to monitor drivers of change to inform our next planning cycle. My association uses changing conditions to identify and justify programs and services for sunsetting. My association incorporates priority drivers of change into our content strategy to focus on relevant articles and learning opportunities. My association is continually monitoring and testing our current business model against potentially disruptive drivers of change. My association incorporates foresight into brainstorming and innovation processes to identify new needs and customers to serve.

From Planning to Action

All the foresight discussions and planning are essential steps to take before acting. They outline the various possible futures and opportunities for the association to provide new solutions for its stakeholders. Tobias Heger defines it well when he says, “foresight focuses on opportunity detection instead of problem-solution-market fit.”

However, most associations move slowly, and boards resist risk. That is where applying design thinking, agile, or lean principles helps the association to drive forward. Instead of getting all the details worked out, it is often better to strive for incremental changes and continually refined iterations of a new business line. The scenarios developed through foresight become the basis for future business models and strategies to implement through sprints for scrums on a continuous cycle. This allows testing against the various possible futures.

As we look toward 2021, embedding foresight governance into an association’s culture has never been more important. An association’s success in the coming year depends on the board’s willingness and ability to incorporate foresight into its discussions, planning cycles, and fiduciary responsibilities. Peter Scoblic sums it up well in his HBR article, “In times of great uncertainty, it’s difficult to formulate strategies. Leaders can’t draw on experience to address developments no one has ever seen before. Yet, the decisions they make now could have ramifications for decades. The practice of strategic foresight offers a solution.”