"FORESIGHT"

THE STRUCTURE OF THE FUTURE

The challenge of foresight is to see the structure of the future rather than the content, detail or shape of the future. This demands that we escape from the tyranny of form, of the physical, of the material and that we develop an appreciation of process, change and emergence. The structure of the future is contained in the present and in the past reinterpreted through the lenses provided by a new view of the present. The new view is seeing the nature of the environment as a compound complex adaptive system.⁶

The structure of the future is the relationships of an existing compound complex adaptive system. That is, it is the relationships between an organism that survives by adapting, the other similar organism that are part of its environment, and the larger adapting systems-industries, economies, communities-which it is influenced by and which it influences. The structure includes relationships to technology and the larger forces which affect the larger environmental context of the company. The structure also includes those forces which affect the smaller units of the enterprise-its individual employees.

Let's use IBM as an example. Now that we all know what IBM should have done based in the much easier "aftersight", let's consider how the structure of the future might have provided foresight. How we'll do it is to begin with an historical understanding of the business that IBM was in and the ways that it conducted that business. These were available to anybody at the time but did not reveal themselves in the approaches being used. Specifically, those approaches were focused on existing customers and future predictions of demand based on trends and analysis. [The original predictions based on similar approaches were extraordinarily bad-a total demand for 15 machines. Everyone "knew" the forecasting approach was now safer because there was existing experience and data.] The following are not in any necessary order. It is the interplay of factors that produce the patterns of meaning in complex adaptive systems.⁷

• The mainframe and its increasing power were the beginnings of an industry. The conditions in which it was succeeding were those that existed before computers existed or were in general use. From the perspective of complex adaptive systems, that means that the product is impacting its own environment and the new machines are encountering different conditions. The mainframe itself was creating the possibility and usefulness of smaller machines.

• Small computers were developed as "dumb" terminals to support the mainframe and were of themselves unimportant. However, the trend was to make these terminals increasingly intelligent. Again, the activity of an original entity changes its own environment and, in this case, it moves from being a "server" to becoming a competitor. But the move is unrecognised due to the language and thinking of "server to a master machine".

• Computer chips were becoming smaller, cheaper and integrated. That allowed the above two factors to increase velocity of development and became another element of the structure of the future that was different than the structure of the past. These chips were not a crucial part of large machine development and so were largely ignored as a factor. (The integrated circuit was invented for computer use but the first uses were washing machines and elevator control. It took about 10 years for the use in computers to catch on.)

• The increase in peripheral effectiveness for input, output and storing data increased ease of use and decreased the size of the machine so that more and more people and businesses could use them. This altered the structure of the marketplace and suggested changes in future machine design and use.

• Breakthroughs in technology in other fields, such as communications, dramatically impacted data and information which were at the heart of computers usefulness. As these changed, the number of people using them increased and the particular uses multiplied.

• Organizational forms began to change as people became educated in computers and their use. This began to move the market from specialised experts applying the processing power to specialised problems towards moving computers into the hands-and minds-of many new people and organizations. Even more, the organization implications changed the way that people could co-ordinate their action and these beginnings demanded still further changes to computer availability and use.

While not complete, the list suffices. The point is that the structure of the future altered beyond recognition from the structure that existed in the early days of the computer. This suggests specific directions that the future will take. Much more importantly, however, it suggests that the future will take different directions. This calls for a great increase in awareness, creativity and searching for new possibilities. As is frequently the case, the success of the past casts a shadow over the future that makes it forbidding and difficult to see.

Robert Axelrod's happy term, "shadow of the future" is useful here.⁸ He has studied extensively the nature of co-operation and competition as important elements of the structure of the future. His work has explored how strategies compete. His work has developed to new levels recently by incorporating work with complex adaptive systems models in conjunction with the Santa Fe Institute. The issue of concern is how single elements which are themselves adaptive can succeed in an environment of other adaptive beings. His findings indicate that if there is no view that current action will have future consequences to other participants and hence back to oneself in the future, then aggression and destructive competition will pay. If, however, there are future consequences to current actions from other players, then the future casts a "shadow" backwards to our current action and suggests co-operative behaviour as the fundamental context. Within this framework, competition is still going strong but the nature of viable competition changes.

Strategies compete with each other in a very impersonal way. That is, the strategies themselves must be adaptive and emergent if they are to succeed in a world of other adaptive strategies. In the current era of change, one of the main features of strategies is that they be emergent. That is, a strategy is no longer a matter of analysing the past trends and projecting them into the future. The nature of analysis has changed. The nature of projection has changed. The nature of the production of strategy itself has changed.

What is being called for in this approach is a shift from prediction to interpretation. Interpretation here is not meant as the application of science or logic to analysis. What is being referred to is a creative process of interpretation which goes beyond scenario planning into scenario generation and exploration. Scenario planning was an early step into the domain of realising that interpretation of trends, processes and conditions was more powerful than the interpretation of things like market data to assist in strategy development. Current status and recent history were seen to be trivial compared to larger trends. The success of scenario planning had to do with the ability to construct likely models of the future rather than in predicting which particular model would be "right".

Such an approach allowed for the adaptability of strategy to a world of emergence and did not require a foresight that didn't exist. Those who made good selections of principles from which to generate scenarios found that they were prepared for events as they unfolded and for which specific, detailed and costly preparation was not necessary.

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