Future Thinking Bias or Foresight-Inspired Strategy

company strategy

By Svyatoslav Biryulin

Many companies are happy having their three-year strategic plans (or even five-year ones). But such a short-seeing might be dangerous in the long run.

Look at bitcoin price history:

btc price history
Source: https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp

The first bitcoin was mined and introduced in 2009 by Satoshi Nakamoto, and its price was zero at that moment. After that, the price rose incrementally for several years, but it was in the fall of 2016 and 2017 when hysteria began – almost everyone around us started talking about cryptocurrencies, blockchain, and ICO. If one bought a hundred bitcoins or two in, say, 2010, they would have been fabulously wealthy today. 

Look at another picture – Amazon sales history:

Annual Net Sales
Source: https://www.repricerexpress.com/amazon-statistics/

At the point where the chart starts, in 2004, Amazon was ten years old. The company was founded in 1994, and the first transaction was made in 1995. At that time, there was much skepticism about the future of e-commerce, especially after the dot com crash at the beginning of the 2000s. Only few people believed in those days that someday internet giants would become a significant threat to conventional media or brick-and-mortar stores. Apparently, Jeff Bezos, a founder of Amazon, was among them, but the malls’ shareholders and newspapers’ publishers weren’t. 

In his book “The Road Ahead,” published in 1995, Bill Gates, the co-founder of Microsoft, noted that entrepreneurs and CEOs tend to overestimate the changes that will happen in two or three years and underestimate the ones that will lead to major shifts in a ten-year time horizon. But this is a natural human trait I call “future thinking bias .”There are several reasons why we are inferior future thinkers and prone to believe that the future will be pretty much the same as the present. 

Future thinking bias

First of all, human beings are not skilled by nature to think long-term. Our brains are the masterpieces of evolution, but it didn’t teach us to think strategically because it was unnecessary. Our ancestors were concentrated on two principal tasks – to survive here and now and pass on their genes. Nowadays, we try to find other meanings in our lives, but we started doing so en masse not more than a couple of centuries ago. But the human brain evolves at a snail’s pace and doesn’t keep up with technical progress. We still have difficulties thinking about the future.

Second, we all have our worldviews as the sets of concepts, convictions, and mental models that underpin our belief that we can efficiently interact with the world, we believe that we “know things .”Thinking about future changes implies attacking and questioning these worldviews, which is always painful.

Third, the world is changing, but it is doing so not that fast as the authors of VUCA, BANI, or even TUNA (TUNA stands for Turbulence, Uncertainty, Novelty, and Ambiguity, the term was introduced by Oxford University) world try to show. Even such a massive shock as COVID-19 didn’t turn our world upside down. Customers’ habits, traditions, and conventional wisdom evolve incrementally. The world of 2025 will be pretty much the same as the one of 2022. And looking not more than 3-4 years ahead makes us subconsciously protect our current strategies and business models, especially if they are successful. If the world won’t change significantly in three or four years, why change things that work? Moreover, we tend to overestimate the signs that the world will remain the same and underestimate signals indicating that it won’t. This notion is known as the “confirmation bias.” 

Foresight is not a way to predict the future because it is unpredictable by nature. It is, rather, a cognitive exercise, helping participants overcome “future thinking bias .”Whatever we think about the nearest future, it is hard to argue that the world will be different in ten years. Envisioning the long-term future, ten years ahead or more frees our minds from natural constraints and, thus, unleashes creativity. Embracing the fact that the world is changing helps the team members stop protecting their current strategies and begin perceiving the signals of change as sources of inspiration rather than threats. 

And the foresight process is not a flow of consciousness. Instead, there is a repertoire of tools helping make it efficient – from Horizon scanning and Emerging issues analysis to the Three horizons and Futures wheel. 

Foresight-inspired strategy

But all the above doesn’t mean we need to devise and formulate ten-year strategies. We all are under the illusion that the accuracy of short-term plans is higher than long-term ones. The future is unpredictable however far you look into it – for one hour or ten years. You recently had at least one moment when all your plans for a day (very short-term ones) fell through after colliding with reality. That’s why I try to avoid using the “strategic planning” term – “long-term plans” have few chances to come true. 

Instead, we need a strategy as a set of relatively short-term actions, well-planned and agreed upon by team members, inspired by and alined with the insights we received from the foresight work. Foresight provides us with a general direction, and strategy helps us implement our intentions.

About the Author

Svyatoslav BiryulinSvyatoslav Biryulin is a former CEO and general manager of several large enterprises. Since 2016 he has been working as the founder and CEO of his own consulting company. The company focuses on strategic consulting helping organizations devise, formulate and implement new strategies for a successful future.

Svyatoslav is the author of many articles on strategic management, foresight, strategic analysis, and several books. He lives in Ljubljana, Slovenia.


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