Making sense of the shadowy uncertainties of the future is never simple, but the goal of foresight research isn’t to predict a specific future outcome. It’s to identify the disrupting forces in our markets, our businesses, and our lifestyles while the disruptors are still just whispers; while there’s still time to anticipate them and use them to our advantage. These disruptors are also called discontinuities, because they spawn discontinuous change. They start out as weak signals — subtle tremors that are hard to detect — but if we know what to look for, it’s possible to recognize them before they develop into the huge tectonic shifts they threaten to become.
There are clues that can help us spot weak signals, but only if we understand the context in which they arise, and that requires us to understand the why. Discontinuities are the effect, so we need to identify the underlying trends and drivers that cause them.
DRIVERS AND SCENARIOS
Trends and drivers of change are omnipresent, but individual trends are seldom noteworthy on their own. Trend patterns and their possible confluence hold the greatest threat of discontinuous upheaval. Anticipating the convergence of drivers is particularly challenging, because critical drivers can come from unexpected directions — often changes we’re convinced have no bearing on our businesses. Foresight analysis must cast a broad net when examining trends, because if we look too narrowly we’ll miss key influencers. Too narrow = too blind. It’s not uncommon for market disruption to grow out of a perfect storm of drivers from technology trends, lifestyle shifts, market pressures, and political change — regulation and deregulation, government subsidies, patent rulings, etc. These are all categories of drivers we regularly scan in our foresight research services.
Understanding the likely interactions of drivers allows us to forecast possible future scenarios that may arise. Unlike predicting the future, scenarios don’t have to come true to be valuable, because they prompt us to think in new directions and to examine possibilities that might not have occurred to us previously. This is essential, because if we can see possible futures before others do, we can develop new products, new markets, and new customers ahead of our competition. Discontinuities, if discovered early, offer huge opportunity. If discovered late, they hold tremendous threat of disruption. The winners are those who spot and act on the opportunities first.
In the fall of 2011 we published foresight research on possible civilian uses of drones, also known as unmanned aerial vehicles (UAVs). Military UAV technology had developed significantly over the prior decade, and we saw that technology trend intersecting with strong congressional support and growing business advocacy for civilian UAV use. At the same time, increasing time sensitivity drove online consumers to demand same-day delivery to replace brick and mortar instant gratification, and in the fierce online market, retailers sought to use same-day delivery as a competitive differentiator.
This convergence of drivers led us to forecast that UAVs might supplement and eventually replace air freight delivery services for small packages, eventually making same-day delivery of online purchases the norm. On Dec. 1, 2013, over two years after our report’s publication, CBS 60 Minutes aired an episode unveiling “Amazon’s secret R&D project” to deliver packages by drones. Amazon also saw the possibilities and opportunities represented by the confluence of these drivers.
FORESIGHT IN THE INNOVATION CYCLE
Amazon’s intended use of drones as a delivery vehicle is an excellent example of how foresight analysis must drive vision and action if it’s to deliver on its promise. No matter how keen the foresight, if you fail to act on it, it’s useless.
Foresight analysis must lead to insight. Could a given scenario possibly affect my business or market in any way? Does the scenario suggest possible ways I can improve my value proposition to my customers, or open doors to new customers and markets? If I don’t respond, might this scenario represent a threat to my current market position and differentiation? If this plays out, how should I best respond, and what signals should I monitor to measure if it does develop?
If the answers to these questions leads to vision — that great idea we all attribute to innovative brilliance — then we’re off to the races. While many believe that the cultivation of a great idea is the end product of a successful innovation process, it’s merely the starting point. These good ideas strengthen our value proposition to our customers, providing us with competitive differentiation. But when combined and enhanced with complementary good ideas, each providing its own competitive advantage, we can become unassailable in our markets. That’s the goal of the ideation and elaboration phases of an innovation journey. There still remains the hard work of developing an appropriate business model, the testing and refinement of that model, and the planning and execution of a practical go-to-market strategy.
AN HVAC EXAMPLE
If I was to choose a single example of a seemingly unrelated industry driving change in HVAC, it would be consumer electronics. The war for our living rooms is raging, and it’s centered on the television. Amazon, Google, and Apple are quietly preparing their own “Television 2.0” offerings for Internet-based entertainment delivery, but it won’t stop with the television.
“Smart living rooms” will begin with the TV, but will soon incorporate intelligent lighting, music, appliances, and heating. Smart appliances already communicate with the smart grid to determine the most energy-efficient times to operate. Phillips’ Hue lighting system lets you set the color temperature of LED lighting throughout your house from your mobile device. And its recent $3.2 billion purchase of Nest demonstrates Google’s interest in intelligent home heating control. The proliferation of micro-sensor technology (MEMS) integrated with intelligent control won’t stop with our homes, either. Industrial and commercial applications will quickly follow. Buckle your seat belts and return your tray tables to their upright position. Foresight analysis signals that things are about to get very exciting.