{"id":104001,"date":"2023-05-26T18:10:00","date_gmt":"2023-05-26T22:10:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=104001"},"modified":"2023-06-01T11:49:37","modified_gmt":"2023-06-01T15:49:37","slug":"future-back-thinking","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/future-back-thinking\/","title":{"rendered":"Using Future-Back Thinking to Shape Your Company’s Tomorrow"},"content":{"rendered":"\n

What’s future-back thinking? How can it boldly take your business into the future?<\/p>\n\n\n\n

In Lead From the Future<\/em>, business strategists Mark W. Johnson and Josh Suskewicz argue that, to drastically improve your organization’s chances of successful growth in the long term, you must anticipate and shape the future rather than simply react to challenges as they arise.<\/p>\n\n\n\n

Read more to learn about this approach and how it can work for your business.<\/p>\n\n\n\n\n\n\n\n

Why Use Future-Back Thinking<\/h2>\n\n\n\n

No one can predict the future<\/a>. But, as a business leader, you can<\/em> improve your organization’s longevity, relevance, and growth in the long term. To do so, you must change your focus from short-term concerns and time horizons to the future you<\/a> want to see five to 10 (or more) years out<\/strong>. <\/p>\n\n\n\n

The authors explain that future-back thinking allows you to respond to changing market realities by anticipating threats and opportunities on the horizon, thinking outside your company’s established processes and approaches, reinventing your business or an aspect of it, and meeting unmet demands in the market with innovative products, services, and processes. <\/p>\n\n\n\n

Additionally, the authors explain that the future-back thinking approach can be applied to different types of organizations other than businesses.<\/p>\n\n\n\n

(Shortform note: It’s true that future-back thinking can apply to different organizations, though in sustainability and climate crisis planning, it’s called backcasting<\/em><\/a>. Backcasting can help identify strategies and actions to achieve a desired future state, such as a low-carbon economy. Similarly to future-back thinking, backcasting starts with setting a long-term goal, such as reducing carbon emissions<\/a> by a certain percentage by a specific year, and then working backward to identify the actions needed to achieve that outcome.)<\/p>\n\n\n\n

Why Present-Forward Thinking Is Ineffective<\/h3>\n\n\n\n

The authors explain what the conventional, short-sighted mindset and strategic approach for business leaders is (what they call present-forward thinking<\/em>) and why it leads to failure for many. Present-forward thinking happens when you focus solely on solving short-term problems, which leaves you unprepared for looming problems and opportunities. When senior leaders get stuck in present-forward thinking, they become attached to the past and reactive to the present. As a result, their companies grow rigid and get bogged down in their processes, regulations, and norms.<\/p>\n\n\n\n

Present-forward thinking makes your business more vulnerable. This is because thinking and planning this way blinds you to transformative opportunities that could assure your company\u2019s stability and growth. The authors explain that senior leaders often assume the future won\u2019t look much different from the present and tend only to think one or two years ahead.<\/p>\n\n\n\n

(Shortform note: In an interview on the Great Leadership with Jacob Morgan<\/em><\/a> <\/em>podcast, Mark Johnson elaborates on the current-state mindset, saying that it drives essential business operations like product development, marketing, and research and development, with the goal of serving current customers. These essential operations will make up 90% of your business’s daily operations. The problem arises when you assume you can extend current-thinking operations indefinitely\u2014sooner or later, rapid changes in technology and customer expectations<\/a> will likely render your current core offerings obsolete. Present-forward thinking has its place, but when that\u2019s the only mindset you have, you\u2019ll be unprepared for the future.)<\/p>\n\n\n\n

The Foundation of Future-Back Thinking<\/h3>\n\n\n\n

According to the authors, it’s important to understand two foundational aspects of future-back thinking. Then, you can move through the three-stage process of future-back thinking. Let’s take a look at these two aspects.<\/p>\n\n\n\n

Breakthrough Innovation<\/h4>\n\n\n\n

According to the authors, breakthrough <\/em>innovation\u2014innovation that creates new markets rather than just improving or updating current offerings\u2014is at the heart of long-term growth and relevance. Even if your company is doing well currently, its growth will likely stagnate without effective breakthrough innovation strategies<\/a>, and your company will fail in the long term.  <\/p>\n\n\n\n

The authors explain that established companies often overlook the importance of breakthrough innovation because they believe they can survive in the long term by focusing only on improving their company\u2019s core offerings. These types of incremental core innovations aren’t enough on their own to ensure growth and longevity.<\/p>\n\n\n\n

Additionally, many executives often overestimate the risks of investing in such innovations. But, the authors argue that you can manage these risks and, importantly, that the cost of not <\/em>taking innovation risks is much higher than sticking to safer incremental innovations.<\/p>\n\n\n\n

The Discovery Cycle<\/h4>\n\n\n\n

The other foundational aspect of future-back thinking is an exploratory, cyclical learning approach in which you investigate, imagine, <\/em>and experiment<\/em> to develop insights and solutions to problems and opportunities. The steps of the discovery cycle are:<\/p>\n\n\n\n

  1. Investigate:<\/strong> Explore possibilities and develop insights and assumptions about the problem or opportunity by collecting information.<\/li>
  2. Imagine:<\/strong> Brainstorm solutions to the problem or innovative ideas.<\/li>
  3. Experiment:<\/strong> Test your ideas to yield more insights. Take the insights you gain and return to step one to investigate and develop them further. <\/li><\/ol>\n\n\n\n

    This approach supports the future-back thinking process, which is dynamic and constantly evolving in response to changing environments and new insights.<\/p>\n\n\n\n

    Mastering the Discovery Cycle With Discovery Skills<\/a><\/strong>

    The discovery cycle steps echo     the essential Discovery Skills<\/a> outlined in The Innovator\u2019s DNA<\/em><\/a>. These five skills\u2014associative thinking<\/a>, questioning, observing, idea networking<\/a>, and experimenting<\/em>\u2014are similar to the discovery cycle steps as they can help you further develop innovative ideas and solutions:

    Associative thinking<\/em> involves     making connections<\/a> between seemingly unrelated ideas, concepts, or experiences to generate innovative solutions.

    In questioning<\/em>, you question common assumptions about markets and products.

    Observing<\/em> involves carefully watching and learning from how people interact with a product.

    Experimenting<\/em> entails taking a hands-on, iterative approach to test ideas, hypotheses, and prototypes in order to learn and refine innovative concepts.

    Idea networking<\/em> involves actively seeking diverse perspectives and engaging in collaborative conversations with individuals from different backgrounds to     generate new ideas<\/a>.

    Step One of Johson and Suskewicz\u2019s discovery cycle (investigate), encompasses questioning<\/em> and observing<\/em>. Step two (imagine), includes questioning<\/em> and associative thinking<\/em>. And experimenting with ideas through testing is shared by both the discovery cycle and Discovery Skills. Idea networking is inherent in future-back thinking dialogues.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    The Three Stages of Future-Back Thinking<\/h2>\n\n\n\n

    The authors break the visionary process into three stages. They explain that they don\u2019t intend for you to use these stages as a rigid checklist but, instead, as a flexible framework that you can adapt. The stages of future-back thinking work best as a collaborative process that includes regular, structured dialogues between senior leaders informed by the discovery cycle process.<\/p>\n\n\n\n

    (Shortform note: Collaborative, exploratory dialogues can be challenging when there are many people with different perspectives at the table. To overcome these difficulties, Kim Scott outlines seven key steps to successful team collaboration<\/a> in Radical Candor<\/em><\/a>: listening, clarifying, debating, deciding, persuading, executing, and learning. However, although some aspects of future-back thinking entail making impactful decisions, Johnson and Suskewicz emphasize that your dialogues should focus on exploring over decision-making<\/a> and executing. Therefore, you could visit Scott\u2019s steps of deciding and executing later in the future-back thinking process after you\u2019ve sufficiently moved through the other five steps.)<\/p>\n\n\n\n

    Stage 1: Create Your Vision <\/h3>\n\n\n\n

    This stage involves three steps:<\/p>\n\n\n\n

    1. Anticipate the future landscape. <\/strong>Identify a time horizon\u2014how far into the future to set your vision for the company. Consider when new paradigms and trends may become relevant and mature enough to create market disruptions<\/a>.<\/li>
    2. Think about how your business will fare in the future. <\/strong>Examine potential threats and opportunities, and determine which is likely to play a larger role in your future so that you can develop a strategy to either respond to threats or take advantage of opportunities.<\/li>
    3. Construct a future vision. <\/strong>Describe what services or products you\u2019ll offer, how you\u2019ll create value in the market, and how you\u2019ll address necessary factors in future growth. To solidify your vision, the authors recommend you develop a compelling story that describes it.<\/li><\/ol>\n\n\n\n

      Stage 2: Convert Your Vision to Strategy<\/h3>\n\n\n\n

      Now that you have a future vision, you must convert it into a strategy that will bring your vision to life. According to the authors, your strategy contains three connected components (which they call portfolios). These components are interdependent and respond to change. You must look at all three together to get a holistic view of your visionary plan and update each component as new insights emerge.<\/p>\n\n\n\n

      1. Develop a long-term financial picture of your business. <\/strong>This helps you estimate the revenue and profits your future vision will likely yield. First, identify a growth target<\/em> that aligns with your future vision. Then, calculate what the authors call your growth gap <\/em>and figure out when your growth gap is likely to develop.<\/li>
      2. Develop an innovation roadmap. <\/strong>This outlines the steps you need to take to achieve your growth target. It includes your company\u2019s core, proximate, and new growth projects, and any undertakings that will develop the company’s capabilities to support growth.<\/li>
      3. Develop a resource plan. <\/strong>This outlines where you’ll invest your financial resources and human resources and where those resources will come from.<\/li><\/ol>\n\n\n\n

        Stage 3: Realize Your Visionary Plan<\/h3>\n\n\n\n

        At this stage, you\u2019ve formed a vision and developed a new growth strategy in service of your vision. To realize your visionary plan, you must structure your teams to embody your strategy and then execute it. There are two steps in this stage:<\/p>\n\n\n\n

        1. Structure your organization to carry out your strategy. <\/strong>Involve your senior leadership, position your breakthrough innovation teams for success, and establish a discovery cycle process to oversee new projects.<\/li>
        2. Execute your strategy. <\/strong>This has three phases: