In this episode, Jean-Pierre Lacroix, President of SLD speaks with Manpreet Juneja, a Design Strategist at SLD about a study we recently conducted on the subject of future readiness and strategic foresight. The study asked brands to consider the subject of the future and how well prepared they think their organization is to cope with change.
Transcript
Melinda: Hi, I’m Melinda and you’re listening to Think Retail. Today, Jean-Pierre Lacroix, President of SLD is going to speak with Manpreet Juneja, a Design Strategist at SLD about a study we recently conducted on the subject of future readiness and strategic foresight. The study asked brands to consider the subject of the future and how well prepared they think their organization is to cope with change. I’ll hand it over to them to tell you what the study revealed.
Jean-Pierre: Good day. My name is Jean-Pierre Lacroix and I’m President of SLD and I have with us Manpreet, who’s going to be sharing with us some key insights from the study that was conducted recently. Manpreet, why don’t you explain a little bit about what you do at SLD and a little bit background on the study itself.
Manpreet: Good morning, everyone. I recently joined SLD as a Design Strategist and I’m really excited and honored to be part of the team.
About the study, SLD basically conducted a global survey with approximately 800 respondents. The idea was to understand the level of awareness that brands have on strategic foresight methodologies. And also, to study what are the challenges they are facing in executing strategic foresight processes. The study basically took place between November 2019 and February. And once it was completed, participants were given scores that outline their readiness for the future along with a guidebook that helped them leverage strategic foresight to lead toward their sustainable future.
Jean-Pierre: Why is being future-proof so important for companies today?
Manpreet: We are in the middle of fourth industrial revolution and bracing ourselves to face a massive digital transformation. Some jobs will become redundant, replaced by automation. Companies will need trained employees in advance analytics to make better predictions. There is AI, IG, quantum computing, which will further increase the rate at which the information is being exchanged. And these are fairly new technologies with immense potential, which means businesses will need an upgrade to keep up with the changing needs in their respective fields. And organizations need to be future-proofed by proactively studying the trends, signals of change, and looking for a wildcard scenario.
For example, pandemic paired with an aging population. Envision similar probable scenarios in which the future may unfold and then develop strategies that can ensure relevance in a few possible configurations of future.
Jean-Pierre: Well, it’s interesting that we actually did a future planning scenario late in the fall last year and we actually predicted that in the next 10 years that we are going to have a pandemic. It’s surprising how soon that pandemic arrived versus our predictions.
Manpreet: Yes. That’s really scary how the pace has increased so much that the market is also uncertain about so many things.
Jean-Pierre: What we found interesting in the media is that a lot of governments have actually gone through these future-proofing scenarios on pandemics, but they couldn’t actually link execution from theory. It was an interesting insight that I think comes out in your study. So, let’s talk about what has changed that requires companies to have a high degree of future readiness.
Manpreet: So, there are two really important forces of change at play here. One is climate change and then breakthrough technologies. I think the rate at which change is affecting our lives has increased exponentially in past few decades. And we are currently experiencing uncertainties that are challenging all our imaginations. With recurring events of wildfire, extreme weather events, pandemic posing existential risks on one hand, and then we have rapid advancements in technology on another hand. This is kind of changing the market dynamics and making it ambiguous and volatile.
And to avoid such scenarios or to better leverage potential sources of disruptions from these scenarios, it is really important that organizations are future-proofed and ready to embrace the future instead of being surprised by it.
Jean-Pierre: Yes, I mean, future-proofing started as a platform within the military to identify potential scenarios and outcomes. And then Shell, about 30 years ago embraced that strategy to look at how resources, in finding oil, was going to be impacted. And who would have thought, you know, 10 years ago that oil prices would be where they are today? Who would have thought that when you look at technology, it’s been an enabler in this moment of pandemic, where people can work remotely from home? So, there’s kind of a silver lining when it comes to those technology disruptive forces on how they impact where we live our lives and who would have been able to predict that? Had organizations planned those future-proof scenarios, they would have been ready to anticipate some of these changes. Is that correct?
Manpreet: Yes, indeed. But our study identified that only a few organizations are really ready to face the future. With only 2 percent of participants ranked amongst the top 25 percent, they had 5-star ratings making them well-positioned to remain relevant, both in short term and long term. And more than half of the participants surprisingly scored less than average scores, which means they are focusing on short-term games and being vulnerable to disruptive forces of change and ideas that are believed to be a distinct concern. So, this is a problematic scenario for us right now.
Jean-Pierre: So, Manpreet, can you explain a little bit about this overall participant ranking? It sounds like a study that was conducted to evaluate a company’s future-readiness.
Manpreet: Yes. The study basically was conducted through online platform. We had a self-assessment tool, which participants could go through to self-assess their own capability to embrace the future. And based on their answers and understanding of the strategic foresight concepts, they were given ratings. Five-star basically being the really good rating and then it varied from four, three, two and then one being the lowest.
Jean-Pierre: So what you’re saying is, overall, only 2 percent of the participants ranked amongst the top 25 percent, the 5-star rating?
Manpreet: Yes.
Jean-Pierre: What other insights did you find in the study that was startling?
Manpreet: If you compare across industries, you start to see some patterns around general mindset that is shared amongst industry peers from various sectors. The 2 percent of participants who scored extremely well as compared to the other respondents, basically belong to health care sector. Which comes to no surprise because, well, it is about health care. Practitioners base their work in research and are quite well attuned with ongoing and future trends. And therefore, they take a long-term view for planning processes.
Another startling insight came from grocery and supermarket industry, which appear to be lagging in the ratings with low scores. It illustrated a general neglect amongst the legacy practices towards changing demands from the market. Of about 40 percent of the participants from grocery and supermarket industries scored less than average scores, earning a two-star rating in general. One would think that you know, yes, there are new payment systems, there is AI in backend and delivery systems that are being tested, but this industry seemed to be neglecting some of the major disruptors in the long run. For example, climate change.
There are innovative startups who have started identifying the specific needs and are focusing on specific needs of the market by experimenting in concepts like zero-waste stores. And then we have technologies like Ikea’s hydroponic systems, which allow people to grow food in their kitchen. So these industries in grocery, basically grocery and supermarket could face disruption from outside their industry. And they could be completely blindsided about it.
Jean-Pierre: So what is the level of understanding and awareness of the term strategic foresight?
Manpreet: Let me start with the definition of the term strategic foresight itself. It is a planning-oriented discipline related to future studies. Ultimately, what it does is it allows organizations to be future-proofed against various trends, ideas, and events that may not be obvious or currently impacting their businesses but may have potential to occur in not so distant future. So future-readiness studies reveal that almost half of the survey respondents were not well aware of the concept of strategic foresight. Only 48 percent understood strategic foresight as a corporate strategy that is linked to alternate futures.
About 19 percent associated it with scenario planning process. It was surprising to note 14 percent of survey participants thought it was just another marketing plan, showcasing the need that there is a requirement for training and education about this subject.
Jean-Pierre: It’s interesting. I mean, I was discussing this issue with clients and attendees at different conferences. And one of the challenges that companies face in strategic foresight is that the average tenure of a CMO or Brand Managers are about three to four years. And I would say the same with the CEO in the U.S, a tenure about six to seven years. So, it’s really hard to have a strategic foresight initiative within an organization, that it really is focused on short-term goals and short-term gains. There’s a whole corporate culture shift that needs to happen, I think, for people to embrace strategic foresight
Manpreet: That’s true. Indeed, there is a need to build an internal capacity to make strategic foresight an integral part of organization culture. This can start with initiating engagement with experts in the field to lead the process in the beginning and then eventually adopting the future-proofing methods into strategy formulation practices. Because it will no longer be important to just ensure profits but also relevance, which could be at stake in the long term.
Jean-Pierre: Especially when you look at sustainability now, something that has been on the horizon and in most strategic plans for the last 20 years, it’s now become a heightened issue amongst Millennials and Gen Zs as to how they select their brands. And so, some of these future-proofing trends are things that have been emerging on what I’d call a continuum. And it’s ironic that companies still have not embraced the imports of these until they become critical issues.
Manpreet: Yes. That’s true. And that brings to the thought that future is just not evenly distributed. Right? There are trends that are happening in some parts but in such a globalized connected world, we do have to keep an eye on what’s happening and what are the weak signals.
Jean-Pierre: Who within your organization do you believe should be involved? And how does it differ within the study?
Manpreet: So strategic foresight is a creative process. We need people to participate in the process, give their insights and understanding about the trends. And the answer is all levels of organization should be involved in strategic foresight process, which is contrary to the general notion that long-term visioning and scenario planning with strategic foresight is the responsibility and concern of senior members or a specific department. Which was resonated in our study with 41 percent of respondents agreeing to the fact that or thinking that strategic foresight is not their concern.
And this gleans to the fact that quite a few organizations are either still following a rigid hierarchy or working in silos, where all levels of organizations are not involved in the planning process. And therefore, they may lack the alignment with company’s core values and vision in the long term.
Jean-Pierre: You know, we see that often, where our company is invited to provide strategic foresight within a certain company. And ironically, in most cases, it’s actually driven by maybe the head of innovation who have, you know, a long-term view of their new product, pipeline or marketing. Very seldom do we get engaged by the CEO or the COO as a platform to define the entire direction of the organization and how they can remain relevant. And even through our process, very often it is one department that leads involving other areas of the organization but not from a structured standpoint.
Manpreet: Yes, it just needs a whole shift in the mindset of how you envision the organization and success.
Jean-Pierre: I just want to rewind and then wrap up. Are there other insights that you can share with the audience coming out of this study?
Manpreet: I did share some tidbits from the survey but the report goes further to uncover valuable insights that are relevant to the industries today and it takes deep dive into each topic.
Jean-Pierre: And is there any reports on sld.com’s website?
Manpreet: Yes, they are up on the website and a part of our ongoing outreach. You should have your free copy at sld.com.
Jean-Pierre: Fantastic. Manpreet, thank you very much for your time. Thank you for sharing some insights of future-proofing study and look forward to sharing more insights as we continue to explore this topic. Thank you very much for joining us today.
Manpreet: Thank you so much for your time also. Thank you for having me today.
Melinda: As JP and Manpreet both mentioned, the study is available at sld.com and we’re also going to link to it in the podcast description. If you’re interested in finding out more about how we can help brands be better prepared for the future, you can also reach us at info@sld.com. We would also love your feedback or thoughts about subjects you’d like us to explore on “Think Retail.” If you have any ideas, let us know. Thanks for listening.
