PREDICTION AS INTERPRETATION

There is an approach, however, which is a match for this understanding, this ability to predict. And the results of that approach are consistent with the kind of foresight needed by strategists. That is, the foresight needed is to know the direction of things in time for adjustment to be made and for survival and success to be achieved.

What can be predicted is not end results and end forms. What can be predicted is process, organization, integration and continuation of kind rather than specifics. The scale of prediction has changed. Foresight is a matter of interpretation rather than information. There are tools of interpretation that provide foresight which is not merely extended hindsight. What can be predicted in a compound complex adaptive world? This is a world of emergent cause and effect with constant occurrences which are not extensions of the past but creations of the past. Not until we get beyond our merely linear even multi-linear-cause and effect thinking and move to interpretative approaches that can include emergent cause and effect will we become competent in this required field of prediction.

Emergence is a new kind of cause and effect. It is the cause and effect of living entities and the phenomena related to them. It is that kind of cause and effect where "the interaction of the elements or entities gives rise to higher-level properties that are not apparent in the lower levels nor predictable from those levels.⁴ Examples include intelligence from a grouping of neurones, life from a collection of cells, prices and a marketplace from a collection of merchants, Internet from a collection of computers, the phenomenon of Microsoft from a simple programme and a few suppliers to an exploding market. At a very simple level a 'team" emerges from the interaction of some groups of people but, no matter how many structured approaches we apply, many times no such phenomenon occurs.

Consider how it is possible for the Swedish company Stora to have survived for over 700 years.⁵ Obviously it could not have predicted a future this long. Conditions in the world have dramatically changed many times in that time period. Yet Stora remains and prospers. It's strategies have altered over time. The strategy of Stora has been emergent rather than predictive. By being aware of its own basic purpose-the survival of the enterprise and the provision of livelihood for its members-and the structure of the future, the corporation has allowed what emerges from its environment and its own actions to be the source of its future action.

© 1996 Elsevier Science Ltd, International Journal of Strategic Management, Long Range Planning