By Yvette Montero Salvatico
The Current State: Good Intentions, Poor Results
Having spent the majority of my career as a finance professional for large, multinational firms, I know intimately the Herculean (and often fruitless) task of strategic and financial planning.
By the end of my 13-year tenure within Disney, for example, the various planning processes (annual, five-year, capital, etc.) continued year-round, overlapping and creating a cacophony of competing models, templates, and deliverables that, ultimately, had little to do with the future.
In fact, the only discernible mention of a true futures forecast came in the form of a footnote on the final page of the five-year plan that briefly highlighted potential “risks and opportunities” over the plan horizon.
None of the dozens of five-year plan reviews I participated in ever even acknowledged those risks and opportunities—I guess that’s what you get for being just a footnote.
The Sad Truth
My corporate planning experience is not unique, but rather indicative of the realities being repeated across industries and countries each and every day.
Most current corporate-planning functions are focused on creating this seemingly endless number of annual, five-, and even 10-year plans, all using the same, antiquated, industrial-age mindsets and principles.
Leveraging linear extrapolations of the present and attempting (in vain) to simplify the growing complexity of our interconnected world, these processes are largely focused on managing risk and meeting short-term targets. But they fail to look outside the organization for either threats or opportunities.
Rather than seeking to provide a meaningful map to chart the future, these plans exist to placate senior leadership and investor growth expectations by setting unachievable targets and then filling in the resulting gap between today and tomorrow with “TBD” placeholders for cost-cutting.
The World Has Changed. Why Haven’t Our Models?
While these quantitative-based, Excel-generated models may have served us well in a previous era where social technology did not exist and global financial markets were largely independent, our existing processes have quickly become futile exercises in long-term planning amid our interconnected, volatile, uncertain, complex, and ambiguous environment.
When have you ever seen an annual operating plan that accurately forecasted the 12-month period it was attempting to predict? If you have, I suggest immediately playing the Powerball lottery and using your incredible crystal ball skills for personal benefit!
In the midst of this unprecedented environment of accelerating change, it’s really not surprising that organizations continue to cling to these outdated models like a worn and familiar “blankie.”
We are scared, and there’s something strangely comforting about seeing a printout of a forecasted income statement for the year 2018 where all the numbers add up and tie out. I mean, if our spreadsheet says it is so, then certainly we can make it so, right?
Not so fast.
A New Strategic Planning Process: Create the Future
So it is clear that our current models, processes, and mindsets are no match for the emerging business landscape, in which disruptions are more likely to come from outside your industry than from an existing competitor, and where it seems that as soon as we’ve chosen a path, it’s made obsolete by converging technological, social, and economic forces.
In fact, some organizations have become so frustrated with the inability to accurately forecast more than three months out, that they have thrown their hands up and completely abandoned long-term planning all together, content just to battle short-term fires as they erupt. While this “head in the sand” method is probably no more ineffective than the models most are using today, there is a better way.
In the midst of all this chaos, many firms have found a “new” way to successfully navigate their organization’s future.
These innovative firms have (re)discovered a 40-year-old discipline called strategic foresight, which is enabling them to not only avoid the plethora of potholes this emerging environment can produce, but also take advantage of the multitude of hidden opportunities for potential growth that this new, complex landscape can serve up.
By leveraging both qualitative and quantitative data, and continually scanning the macro-environment (where societal, technological, environmental, economic, and political trends emerge and converge), strategic foresight provides the tools to transform our existing corporate planning processes (and mindsets) to become adaptive and resilient in these uncertain times.
Unlike the planning processes most firms use, futures thinking does not attempt to predict the future because, let’s face it, that’s impossible. Instead, these proven models (when effectively infused into your corporate culture) can do something much more powerful … they can help your organization create whatever future it desires. Strategic foresight allows us to make sense of the emerging landscape, develop aspirational futures, and create detailed road maps to achieve them.
I think I know what you are thinking.
If strategic foresight is really this miracle elixir for our broken corporate strategic-planning processes, why isn’t everyone jumping on the futures bandwagon? Well, while many firms (large and small) are beginning to embrace futures thinking as the way to effectively navigate and capitalize on the chaotic business landscape, it’s not an easy transition.
To successfully leverage strategic foresight, organizations must completely transform not only their models and processes, but more importantly, their culture. You see, while strategic foresight is a discipline, we believe it is best served as a philosophy—as a new mindset for your entire organization.
This type of shift does not happen overnight, but with the right foundation and strong leadership support, we have helped many firms begin to own their futures once again. Together we can promote the future from its current role as an ignored footnote to a beacon lit in perpetuity that can provide your organization with continual guidance on achieving even its most inspiring long-term visions.
About Futurist Yvette Montero Salvatico
The former head of the Future Workforce Insights division at The Walt Disney Company, Yvette Montero Salvatico led the effort to establish an internal area of strategic foresight expertise, dedicated to identifying future workforce trends and assessing their potential impact on human capital strategies.
In 2011, she joined futurist Frank Spencer as a principal at Kedge, a foresight and futures, innovation, creativity, and strategic design consultancy.
Salvatico is an experienced speaker, addressing large audiences on topics such as business policy, diversity, and foresight. “In the 21st Century world of complex ideas and practices, successful leaders, businesses, and entrepreneurs must learn to adapt, be resilient and flexible, and create transformational strategy,” she says.
To learn more about Kedge, visit KedgeFutures.com.
To book Salvatico to speak at your next event, click here.
Click here to hear Yvette’s podcast interview on The Inkandescent Radio Show!