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WORKING PAPER
Navigating Uncertainty with FutureCastingBy Stephen Wunker and Charlotte Desprat
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Why FutureCasting?
Plotting the future has long been a dream for executives, and much ink has been spilled in recent years about scenario planning, wargaming, and other techniques. However, the path to resilience is rife with obstacles:
To address these challenges, we at New Markets developed FutureCasting–a process for plotting the future that combines action and rigor. This process is divided into five steps:
Plotting the future has long been a dream for executives, and much ink has been spilled in recent years about scenario planning, wargaming, and other techniques. However, the path to resilience is rife with obstacles:
- Organizations are too focused on putting out fires to think about the long term, making them more likely to miss out on key opportunities
- Companies ignore major potential disruptions in their operations and markets, and fail to connect the dots when these disruptions happen in analogous sectors
- Long-term scenarios are seldom linked to short-term action implications
- Executives focus too narrowly by thinking in terms of projects, not their overall strategic position and portfolio
To address these challenges, we at New Markets developed FutureCasting–a process for plotting the future that combines action and rigor. This process is divided into five steps:
1. Plot Known & Unknown
The first step in preparing for the future is knowing your environment. You can do this through a variety of research methods, from stakeholder interviews and competitive intelligence to deeper primary / secondary research (supplemented by customer research in Phase 2).
As you gather your data, it is important to structure it in an actionable way by separating out the facts from the assumptions. The Uncertainty Matrix is a powerful tool to do just that, as it divides your knowledge into four distinct categories:
As you gather your data, it is important to structure it in an actionable way by separating out the facts from the assumptions. The Uncertainty Matrix is a powerful tool to do just that, as it divides your knowledge into four distinct categories:
- Known Knowns: What are you pretty sure about? Now, how much of what is “known” is based on historical pattern and faith rather than contemporary data? What might you pressure-test? Are there big dependencies on certain factors which should be called into question, given how much has changed in the last year?
- Unknown Knowns: What knowledge may lurk elsewhere in your organization that might provide real-time information on the market? What are front-line staff seeing with regards to customer behavior and support needs, for example? What might suppliers tell you about how competitors in your industry are acting?
- Known Unknowns: What are you sure you don’t know? Be comprehensive, breaking your uncertainties into fields such as economics, customer behavior, new business models, and more.
- Unknown Unknowns: This quadrant can feel the emptiest, but it is often the most important. What factors might swamp other considerations? How might your context change in ways that upend large swathes of assumptions? This is where scenarios will be especially useful later in the process.
2. Map What's Coming
To make your business resilient over time, you need to factor in possible changes in your environment. They will vary in nature, ranging from regulations and technology to economic and social trends – all of which will have a more or less significant impact on your customers and competition.
These changes don’t all happen at the same pace, or with the same degree of intensity. Some are a slow burn, others will move fairly quickly and visibly, and a few key ones might progress steadily until a sudden shift takes place. Breaking them apart will be key to understanding how you should prepare for these shifts yourself.
In the midst of changing circumstances, you must make sure you understand your customers’ needs so that you can evolve with them. This is where Jobs to be Done is an especially powerful tool. Unlike other frameworks, Jobs to be Done shifts the focus of customer research from past behaviors to discovering your audience’s real, underlying motivations. Jobs to be Done doesn’t just ask what your customers are buying, but why – allowing you to remain close to your audience as their context evolves as well.
Combine this customer analysis with assessment of other trends, such as emerging technologies, to assess where the world is headed.
Then stress test how you’ll fare in each scenario, and determine what would enable you to do better in each of the scenarios created.
These changes don’t all happen at the same pace, or with the same degree of intensity. Some are a slow burn, others will move fairly quickly and visibly, and a few key ones might progress steadily until a sudden shift takes place. Breaking them apart will be key to understanding how you should prepare for these shifts yourself.
In the midst of changing circumstances, you must make sure you understand your customers’ needs so that you can evolve with them. This is where Jobs to be Done is an especially powerful tool. Unlike other frameworks, Jobs to be Done shifts the focus of customer research from past behaviors to discovering your audience’s real, underlying motivations. Jobs to be Done doesn’t just ask what your customers are buying, but why – allowing you to remain close to your audience as their context evolves as well.
Combine this customer analysis with assessment of other trends, such as emerging technologies, to assess where the world is headed.
Then stress test how you’ll fare in each scenario, and determine what would enable you to do better in each of the scenarios created.
But how do you know which customer behaviors are here to stay?
To grasp your customers’ changing context and needs, consider mapping out their entire journey – from the events that trigger their purchase all the way to the aftermath of their experience. Combining journey mapping with Jobs to be Done gives you an extra degree of precision on each step of the process, including where it succeeds and where it falls apart. From there, you can pinpoint more granular opportunities and uncertainties.
3. Chart Alternative Futures
At this point, you should have large amounts of data to sift through –from customer and stakeholder input to competitive intelligence and analysis of analogous industries. These trends will all contribute to shaping your business’s future, but to varying degrees. So how do you decide what to focus on?
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The key is to pick out the most uncertain and impactful trends of the bunch. These trends will become the axes of your scenario matrix / matrices, allowing you to map out what the future holds in each quadrant (see example below). Next, examine the future in each quadrant and pinpoint the relevant threats and opportunities. Working your way backwards, plan out the action steps you can take today to address each of them. Applying FutureCasting to Retail Banking With the rise of fintech and increasing importance of convenience, a retail bank could use FutureCasting to devise its channel strategy with the long-term goal of increasing customer loyalty. |
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Note: You can use more than two axes at once or multiple matrices side by side.
4. Create Options
Looking at the opportunities you surfaced in each scenario, decide how many bets to make, of what type, at what level, and with which timeframe. This is where having clear guidelines and expectations around investments from the get-go will be critical.
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But having a shortlist of potential investments is not enough –you must organize them in a coherent, flexible portfolio plan. Over time, each opportunity will become more or less appealing, depending on the likelihood of their associated scenario. For this reason, make sure to identify and monitor key signals tied to each scenario. As these signals evolve, you can adjust the level of investment you make in a given opportunity accordingly.
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5. Review, Adapt, Repeat
The world doesn’t stop changing once you’re done with your FutureCasting work. As new trends appear and others wane, certain scenarios become more or less likely, and your strategy in turn will need adjusting.
To stay on top of trends, consider dedicating some resources to spotting and monitoring trends across various areas over time (e.g., regulation, technology, demographics). Consider institutionalizing this trend scanning capability, through venture capital partnerships, dedicated staff, intrapraneurship programs, crowdsourcing, or other tools . Get reports on findings regularly, with clear implications on which scenarios seem more likely. Then you can stress-test your current strategy against the new, updated scenarios, and adjust your bets accordingly.
FutureCasting cannot be a one-off effort. It must become an ongoing, systemic part of your strategy and operations. Keep this in mind as you start your first FutureCasting work and gain key stakeholders’ support. They will prove invaluable for the long-term success of your efforts.
To stay on top of trends, consider dedicating some resources to spotting and monitoring trends across various areas over time (e.g., regulation, technology, demographics). Consider institutionalizing this trend scanning capability, through venture capital partnerships, dedicated staff, intrapraneurship programs, crowdsourcing, or other tools . Get reports on findings regularly, with clear implications on which scenarios seem more likely. Then you can stress-test your current strategy against the new, updated scenarios, and adjust your bets accordingly.
FutureCasting cannot be a one-off effort. It must become an ongoing, systemic part of your strategy and operations. Keep this in mind as you start your first FutureCasting work and gain key stakeholders’ support. They will prove invaluable for the long-term success of your efforts.
Sample of Potential Approaches
FutureCasting in Action: Case Study in Healthcare
Project Objective
A large U.S. healthcare provider to employers wanted to understand what revenue expansion opportunities existed beyond their offering and devise a portfolio strategy based on their long-term potential.
Final Outcome
By the end of our FutureCasting project, our client had a sophisticated understanding of its blind spots and a roadmap to plan against possible futures. The client could approach future disruptions with more confidence and resilience.
Using the data we had gathered during Phases 1 and 2, we prioritized a shortlist of opportunities to focus on and selected the most uncertain trends with the greatest impact on their success. From there, we built out a two-dimensional matrix displaying each scenario to prepare for (see matrix on the right).
Having mapped out the steps needed to address each scenario, we built out a balanced portfolio strategy that accounted for opportunity size, appeal to employers, operational synergies, company advantages, risk, and other factors. Critically, we laid out a set of signals to watch out for over time, so that our client could pivot based on which outcome seemed more likely.
Through market trends analysis and internal briefings, our team surfaced a variety of potential revenue expansion opportunities to explore further, including around tailored telehealth applications and occasion-specific clinician engagement, with key assumptions and uncertainties tied to each.
We then conducted 30 in-depth interviews with current target customers to surface new opportunities and evaluate the appeal of each idea by linking them to their Jobs to be Done.
1. Plot Known & Unknown
Through market trends analysis and internal briefings, our team surfaced a variety of potential revenue expansion opportunities to explore further, including around tailored telehealth applications and occasion-specific clinician engagement, with key assumptions and uncertainties tied to each.
2. Map What's Coming
We then conducted 30 in-depth interviews with current target customers to surface new opportunities and evaluate the appeal of each idea by linking them to their Jobs to be Done.
3. Chart Alternative Futures
Using the data we had gathered during Phases 1 and 2, we prioritized a shortlist of opportunities to focus on and selected the most uncertain trends with the greatest impact on their success. From there, we built out a two-dimensional matrix displaying each scenario to prepare for (see matrix on the right).
4. Create Options
Having mapped out the steps needed to address each scenario, we built out a balanced portfolio strategy that accounted for opportunity size, appeal to employers, operational synergies, company advantages, risk, and other factors. Critically, we laid out a set of signals to watch out for over time, so that our client could pivot based on which outcome seemed more likely.
5. Review, Adapt, Repeat
Going forward, our client was able to review these plans periodically on its own and shift its priorities as customer needs and payment schemes changed in the marketplace
A large U.S. healthcare provider to employers wanted to understand what revenue expansion opportunities existed beyond their offering and devise a portfolio strategy based on their long-term potential.
Final Outcome
By the end of our FutureCasting project, our client had a sophisticated understanding of its blind spots and a roadmap to plan against possible futures. The client could approach future disruptions with more confidence and resilience.
Using the data we had gathered during Phases 1 and 2, we prioritized a shortlist of opportunities to focus on and selected the most uncertain trends with the greatest impact on their success. From there, we built out a two-dimensional matrix displaying each scenario to prepare for (see matrix on the right).
Having mapped out the steps needed to address each scenario, we built out a balanced portfolio strategy that accounted for opportunity size, appeal to employers, operational synergies, company advantages, risk, and other factors. Critically, we laid out a set of signals to watch out for over time, so that our client could pivot based on which outcome seemed more likely.
Through market trends analysis and internal briefings, our team surfaced a variety of potential revenue expansion opportunities to explore further, including around tailored telehealth applications and occasion-specific clinician engagement, with key assumptions and uncertainties tied to each.
We then conducted 30 in-depth interviews with current target customers to surface new opportunities and evaluate the appeal of each idea by linking them to their Jobs to be Done.
1. Plot Known & Unknown
Through market trends analysis and internal briefings, our team surfaced a variety of potential revenue expansion opportunities to explore further, including around tailored telehealth applications and occasion-specific clinician engagement, with key assumptions and uncertainties tied to each.
2. Map What's Coming
We then conducted 30 in-depth interviews with current target customers to surface new opportunities and evaluate the appeal of each idea by linking them to their Jobs to be Done.
3. Chart Alternative Futures
Using the data we had gathered during Phases 1 and 2, we prioritized a shortlist of opportunities to focus on and selected the most uncertain trends with the greatest impact on their success. From there, we built out a two-dimensional matrix displaying each scenario to prepare for (see matrix on the right).
4. Create Options
Having mapped out the steps needed to address each scenario, we built out a balanced portfolio strategy that accounted for opportunity size, appeal to employers, operational synergies, company advantages, risk, and other factors. Critically, we laid out a set of signals to watch out for over time, so that our client could pivot based on which outcome seemed more likely.
5. Review, Adapt, Repeat
Going forward, our client was able to review these plans periodically on its own and shift its priorities as customer needs and payment schemes changed in the marketplace
FutureCasting In Practice: FAQ
How does FutureCasting Fit In With My Company's Strategic Plan?
Many organizations starting a FutureCasting exercise already have a strategic plan in place. So how do you incorporate the results of your FutureCasting process in your company’s long-term vision?
The best way to guarantee that your results are heard is to include your company’s current assumptions about the future in your research. By pressure-testing your leadership’s longstanding ideas, your FutureCasting exercise will not simply lead to a potentially separate strategy for the future, but also directly verify or invalidate your company’s current thinking. Indeed, it is far more likely for the company to dismiss your recommendations if they seem irrelevant to its current trajectory than if they question or confirm it.
How Do I Overcome People's Resistance to Change?
Resistance to large change efforts is very common, particularly in large corporations with deeply engrained assumptions about the market. It is easier to do business as usual than to adjust to a different reality. So how do you make sure your FutureCasting exercise is effective, especially if it forces your team to question their current approach?
Here are a few pointers to get you started. First, you want to get the right stakeholders and decision-makers involved in your exercise from the get-go (or at least made aware of it). Second, telling a compelling story will be key when sharing out your results. And third, set up a system with your FutureCasting team that rewards decisive action and an inexpensive head-start on new initiatives to encourage forward thinking (e.g., incentives for teams that cut their losses early).
Who Should Be Involved in This Effort?
It is critical to include the people directly responsible for translating strategies into granular action plans, and the stakeholders responsible for giving the go-aheadon these initiatives.
But it isn’t enough to simply involve the key decision-makers inside the organization –your FutureCastingexercise must account for diverse perspectives as well. Companies all too often fail to grasp the full picture of their environment by selecting a narrow set of inputs. Avoid this pitfall by including people from a wide range of backgrounds. This includes a mix of functions / roles; both longstanding and newer employees; as well as established leaders and known contrarians. In addition to guaranteeing you a fuller understanding of your context, including such a wide range of people will make internal buy-in for your results much more likely.
Many organizations starting a FutureCasting exercise already have a strategic plan in place. So how do you incorporate the results of your FutureCasting process in your company’s long-term vision?
The best way to guarantee that your results are heard is to include your company’s current assumptions about the future in your research. By pressure-testing your leadership’s longstanding ideas, your FutureCasting exercise will not simply lead to a potentially separate strategy for the future, but also directly verify or invalidate your company’s current thinking. Indeed, it is far more likely for the company to dismiss your recommendations if they seem irrelevant to its current trajectory than if they question or confirm it.
How Do I Overcome People's Resistance to Change?
Resistance to large change efforts is very common, particularly in large corporations with deeply engrained assumptions about the market. It is easier to do business as usual than to adjust to a different reality. So how do you make sure your FutureCasting exercise is effective, especially if it forces your team to question their current approach?
Here are a few pointers to get you started. First, you want to get the right stakeholders and decision-makers involved in your exercise from the get-go (or at least made aware of it). Second, telling a compelling story will be key when sharing out your results. And third, set up a system with your FutureCasting team that rewards decisive action and an inexpensive head-start on new initiatives to encourage forward thinking (e.g., incentives for teams that cut their losses early).
Who Should Be Involved in This Effort?
It is critical to include the people directly responsible for translating strategies into granular action plans, and the stakeholders responsible for giving the go-aheadon these initiatives.
But it isn’t enough to simply involve the key decision-makers inside the organization –your FutureCastingexercise must account for diverse perspectives as well. Companies all too often fail to grasp the full picture of their environment by selecting a narrow set of inputs. Avoid this pitfall by including people from a wide range of backgrounds. This includes a mix of functions / roles; both longstanding and newer employees; as well as established leaders and known contrarians. In addition to guaranteeing you a fuller understanding of your context, including such a wide range of people will make internal buy-in for your results much more likely.
Closing Thoughts
Planning for uncertainty is far easier said than done. Plotting the future has long been of great interest to executives, and the last few decades saw a proliferation of tips and tricks to do so –especially in the form of scenario planning. But for all its good intentions, scenario planning has become synonymous with lengthy processes yielding few action items.
To address these challenges, we developed FutureCasting to plot the future in a rigorous and actionable way by:
To address these challenges, we developed FutureCasting to plot the future in a rigorous and actionable way by:
- Staying market-focused and customer-centric
- Drawing clear lines from macro issues to micro action implications
- Not only preparing for the future, but also shaping it
New Markets Advisors is a boutique consulting firm that helps companies determine what to bring to market and how to do it successfully
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