In a 2005 Regent University publication, Pete Hammet cites strategic foresight as one of the leading leadership competencies. Fast forward around 20 years to today. This statement remains true. As Jedidiah Alex Koh notes in a 2022 Forbes Leadership Council article, foresight is an important leadership skill, particularly in advancing organizational growth. Given the growth demands on businesses, foresight leadership is a concept worth exploring.
Do you want to future-fit your organization? With evolving trends and advancing technology, there is an even greater need for today’s leaders to adopt the foresight principle in their leadership style. Keep reading to learn more about how this important leadership skill will help your company thrive during times of uncertainty.
Defining Foresight Leadership
Foresight leadership is the practice of identifying current and future trends that may impact a business and responding to those changes with strategic planning.
When someone engages in foresight leadership, they’ll do all of the following:
- Identify a list of potential changes the organization could make (aligned with that leader’s function) and how those changes might impact organizational success
- Record and track trends that may impact their business
- Track trends over different periods of time (short- and long-term analysis)
- Create and present analyses of these trends and potential business changes to other stakeholders
- Plan and create strategic responses
- Enact on plans that get ahead of these trends or in response to predicted scenarios and events
Some leadership and industry experts believe that strategic foresight is the most important leadership skill for today’s and future leaders. Successful leaders are effective at scenario planning by taking into account events and lessons from the past to influence their decision-making for the future while using innovation and collaboration to gain confidence to face the future. These leaders also run scenarios on how different changes to their organization could impact different business needs, such as revenue generation, employee retention, and productivity.
Foresight Leadership in Practice: 2 Real-World Examples from the Pandemic
The 2020 COVID-19 pandemic is a perfect example of what happens when executive leaders either take the time to consider potential events and respond to those events, or fail to do so and face the consequence. It was one of the rare times in our modern age when every business’s foresight leadership (or a lack of it) was on full display.
Exhibit A: Iberdrola, an energy company
Many companies were caught off guard by the pandemic. Some, however, were ready for it. Iberdola (a MentorcliQ customer) was one company that had a pre-existing disaster response plan enacted immediately at the start of the pandemic to ensure its customers and emergency service providers had adequate power infrastructure.
Iberdrola not only had a response ready to go for its customers, but it also took swift actions to protect its workers. Those were actions that could only happen as quickly and smoothly as they did because the company had created a disaster plan that allowed it to respond appropriately. That included moving to remote work quickly and effectively in a way that did not disrupt its services.
Exhibit H-E-B: A grocery chain
Grocery store H-E-B was also a great example of what successful foresight leadership during pandemic looked like in practice. The company had developed its pandemic response plan 10 years before the COVID-19 pandemic even started.
H-E-B’s pandemic response plan predicted the supply chain issues that such an event would cause, making it one of the few national grocery store chains that maintained critically-needed supplies in those first months after the world shut down and supply chains were squeezed.
So while people were running from store to store, desperate to find basic staples like bread, milk, eggs, and cheese, H-E-B’s disaster plan and item limitations were already in place nearly from day 1 of the shutdown.
Foresight is a must-have skill for leadership
Before you get too nervous: foresight leadership is not necessarily about always predicting the future. No crystal balls are required here. Not all events can be predicted, and some trends only follow major events that almost nobody could have foreseen.
Still, all organizations should expect some level of forecasting to be part of their leadership team’s skillsets. A Chief Accounting Officer will be responsible for forecasting accounts payable and impacts of not paying bills on time. A Chief Marketing Officer will need to forecast shifting consumer sentiment to understand when to change external messaging. A Chief Revenue Officer will need to forecast changes in revenue and how the sales pipeline needs to change to keep the business growing.
Business continuity and future planning efforts are needed across the C-Suite, as leaders must be able to foresee potential risks and scenarios they could face in the future or how changing existing strategies could potentially affect the business. They also need to think strategically and use foresight leadership to predict how different changes affect how the business performs and meets goals.
In effect, foresight leaders are visionaries. This mindset minimizes the potential impact of uncertain events because they have anticipated these scenarios and developed actionable plans accordingly.
Emerging Trends in Leadership and the Role of Foresight as a Crucial Leadership Skill
The leadership landscape is constantly evolving. It’s driven by external challenges, social shifts, and technological advancements. With greater interconnectivity, leaders face complex issues that require a “future thinking” approach and an application of the foresight principle. As a result, foresight leadership has gained prominence because it empowers a leader to navigate any uncertainty with agility and confidence.
One noticeable trend in the leadership industry is the shift from traditional hierarchical structures to collaboration.
Leaders no longer hold the sole decision-making power. Contemporary leaders encourage employees at all levels to practice innovation and collaboration. Foresight plays a role of importance in this because these leaders understand that the only way to thrive in a constantly changing business world is through employee engagement and implementing foresight into the organizational culture.
Finally, advancements in technology are fueling the need to adopt foresight leadership. Technology and digital transformation are happening at a rapid pace. The leaders (and their organizations) that can adapt to that pace will survive the evolution of the business landscape. Foresight leaders are the ones that can drive sustainable growth to their organization.
Ways Leaders Use Strategic Foresight for Decision-Making
The practice of strategic foresight empowers leaders to anticipate the future, plan out potential scenarios, and develop strategic decision-making. These are critical qualities of foresight leadership that could spell the difference between success and failure when organizations face uncertainty.
In addition, the foresight principle provides leaders with more confidence about their decisions, knowing that they’re in a position where they can make better decisions.
1. Develop “future” thinking
Horizon scanning is a crucial element of foresight leadership.
When you engage in horizon scanning, you attempt to predict the future and understand the context and environment in which certain scenarios and problems occur. It means the ability to fully identify the best solutions for those problems (before the problems occur).
As a business leader, unpredictability is the only thing you can count on 100% of the time. Anything that can change, will change. It’s usually just a matter of when that change occurs, and whether you or whoever is responsible for it saw it coming.
Thankfully, most trends have some lead time. It just takes paying attention or making predictions to identify and prepare for those changes appropriately.
Applying the foresight principle is also about equipping yourself and other leaders within your organization with the tools and knowledge needed to effectively manage any situation. It could involve training your employees on the use of new or emerging technologies that are becoming critical to your business’s success. Or, you may need to find creative ways to improve your processes to minimize disruption and maintain resilience should the unexpected occur.
2. Scenario planning
As a leader, you and your leadership team will need to map out possible outcomes for the anticipated disruptive events to your business processes. Scenario planning is a critical aspect of adopting foresight leadership within an organization.
When you anticipate various possible scenarios, you can also identify the risks and benefits of each action you may take in response. It gives your organization the flexibility to develop various strategies that can minimize the impact of each, which in turn encourages more resilient decision-making.
Remember the H-E-B example we mentioned earlier? That was a perfect example of a company that deployed scenario planning strategies. Which, consequently, has many other terms, such as disaster planning. Ultimately, scenario planning deals with envisioning what could happen and creating a response plan in case that reality comes true.
Dewey Defeats Truman
Among my favorite examples of scenario planning outside of the COVID-19 pandemic happened after the 1948 presidential election.
In what is now an infamous journalistic snafu, the Chicago Tribune accidentally ran the headline “Dewey Beats Truman” (whoops). If you know your presidential election history, President Truman had a rather decisive victory in the electoral college (303 to 189), with a reasonable popular vote victory of 49.6% to Thomas E. Dewey’s 45.1%.
In the face of upcoming events — and elections, in particular — it’s common for news organizations to prepare multiple headlines so that they can get to print or on the air faster. It’s a more mundane form of scenario planning, but it’s a good case study of what’s happening behind the scenes of organizations where foresight leadership can make or break that organization’s success and reputation.
Thankfully for the Chicago Tribune, the event was embarrassing but not devastating. Still, as Life describes it:
“The reason for the picture’s immortality? It’s not the headline itself, although that titanic error is, in its own way, rather marvelous — the screw-up was the result of an early press time and a poor prediction. Instead, the picture endures because of the look of unabashed, in-your-face delight in Truman’s eyes.”
3. Long-term vision
In connection with promoting a functional, forward view in today’s leaders, foresight leadership drives them to continually look ahead toward achieving sustainability and longevity. It isn’t limited to anticipating emerging trends and assessing potential risky situations. Having a long-term vision as a leader motivates teams and aligns essential activities so that everyone can work as one unit toward a shared purpose.
It’s what separates visionary leaders from all other types of leadership skills. They foster a sense of unity and direction in the team.
4. Agile decision-making
Using strategic foresight enables leaders to make both better and more strategic decisions. In keeping with the foreboding theme of the business landscape filled with uncertainty and constant change, agile decision-making refers to a leader’s ability to respond to each scenario uniquely, especially for situations you had not anticipated among the possible situations in your business risk assessment.
Knowing that you can be agile enough to use foresight in each decision gives your team confidence in your leadership. And when employees have confidence in their leadership, good things are bound to happen.
How to Prepare New Leaders for Foresight Leadership
A few decades ago, leadership qualities were thought to be fixed personalities or traits. Either you were born with it, or you weren’t. We now know that that’s not entirely true. While nature does explain some aspects of who naturally excels in leadership positions, many characteristics of leadership can be taught, especially through mentorship.
Companies can prepare new leaders early by enrolling them in high-potential mentoring programs. Once those high-potential employees are tapped for leadership positions, they can be enrolled in more hands-on and intense leadership development programs.
A startling 68% of CEOs say they weren’t ready for the job, and 40% fail within 18 months. And that’s just the number who are willing to admit it. Now imagine how many other organizational leaders in and outside the C-suite are also struggling in secret.
Solve that leadership problem with a straightforward framework:
- Start mentoring leaders as early as possible.
- Create a repeatable process for identifying and highlighting potential leaders.
- Enroll them in training and mentoring programs.
- Allow them to job shadow so they can see what effective leadership looks like in practice
- Once they’re ready, move them up gradually so they’re more likely to succeed
Not sure how to properly match, manage, and grow leaders in mentoring programs? We’ve got you covered! Book a demo with MentorcliQ today to learn how our award-winning program solves some of the biggest leadership development challenges companies face right now.