Foresight capabilities vs risk management

02. Georgia, driving along Russian military road, Kazbegi

Foresight capabilities vs risk management

Instead of trying to predict and measure specific risks, focus on providing people with skills to respond to any hazard along the way.

Building foresight capabilities vs classic risk management: the road example.

Let’s consider a business, that needs to choose a road to drive from point A to point B, and has 3 different routes to choose from. Now, each route has its own fair share of potential hazards to car tyres, such as broken glass, nails, etc. How does the company decides which road to take?

In the classic approach, the business would need to find something tangible to measure quantitatively, such the amount of nails per kilometre. Then, they would have to calculate the potential risk per nail, the total mileage for each route, and reach a decision upon relative risk versus (for example) fuel consumption.

Now this approach has many inherent problems and unknown variables, in addition to being very bureaucratic and time-consuming. What if I get a flat tyre for any other reason? What if some other hazard presents itself, such as deer crossing? What if the chosen route gets a flash flood, or is closed for roadworks? What if the municipality clears the nails from one of the other routes? These examples represent abrupt change scenarios, both negative and positive, that radically alter the variables and the company needs to respond to.

The foresight approach does not try to predict the future (i.e. the road hazards), but instead focuses on how to respond to them. If I build the necessary soft skills and learn to think outside the box, I can then address any issue along the way.

So the company may focus on training its people how to change tyres, and how to better control the vehicles. Make sure that everyone has good signal connection to call for road assistance. Organise a road cleaning event to clear the most profitable route, which also promotes corporate responsibility. Or even develop the necessary technology to send the goods by drone instead.

The future is uncertain, so relying on past data for prediction is problematic at best. Training people for essential soft skills is the key to cope with any possible futures. Develop different scenarios, learn critical thinking, approach with innovative creativity, and envision ways to lead towards the most desirable outcome.