This is the first in a series of five blog posts on future-proofing a company's strategic decision-making. An index of all entries in this series can be found at the bottom of the post.
Let’s admit it – every decision has its origin in dissatisfaction. There is always a difference between the current state of affairs and another, more desirable one that doesn’t exist yet. But despite our desires, the reality is that we are very risk-averse. The fear of losses that is hard-coded into human beings makes us consider high but uncertain gains unappealing. I personally would rather opt for a guaranteed fortune of 10 million euros over an uncertain 100 million.
The trends in our Future Forces 2019 report are curated as opportunities. We talk about uncertain shifts. A long-haul bus isn’t seen simply as a bus, but also as accommodation. Or a company that manufactures air purifiers for offices positions itself as being in the wellness business rather than offering B2B indoor air purification solutions. These are company identity related strategic decisions characterized to a high degree by uncertainty – some of them outright leaps of faith. They are built upon various insights such as trends, customer behavior and data, but they also require organizational structures that enable the company to deliver on its promises.
Making future-proofed strategic decisions is the only purposeful way to impact a company’s future.
And that’s easier said than done, as it involves quite a bit of difficult betting. Thanks to our human nature, we are risk averse and prone to killing good ideas in the cradle, either by demanding specific ROI calculations too early, or by surveying our current customers’ opinions about them. Make no mistake, we do have capabilities to imagine the future – but only from the point of view of our current limitations.
We are biased, and that’s good. It keeps the current business up and running. But is there a way to go beyond these biases? Yes – mathematical modeling is one such way. I also have another option in store for you at the end of this post – but more on that a bit later.
In a recent explorative case example, we were able to illustrate nicely how modeling can support strategic decision-making in the EU context. In this research project, we developed causal network modeling for scenario-based strategy work, where most of the data is qualitative and information about the future incomplete and uncertain. This translates into expert knowledge and opinions. The time scope was no less than 10 years, and the research question ”how to create a thriving digital business environment and equally distributed well-being in the EU.”
We engaged a number of experts from three different ministries in Finland, the tech industry, academia, and active citizens. The work informally contributes to the digital agenda setting of Finland’s 2019 EU Presidency. Take a look at the report here (in Finnish).
We wanted to challenge ourselves. Surely, findings from the context of decision-making in the entire European Union will also meet the decision-making demands of any company? There are a total of 28 member states and approximately 508 million people in the EU, and its combined GDP is 15.3 trillion euros.
Based on the EU research study, I have synthesized four ideas that will help future-proof strategic decision making in companies. I’ll dissect each idea in more detail in my next blog posts in the coming weeks.
- Idea 1: Mathematical modeling helps decision-makers identify their unconscious assumptions (and limitations).
- Idea 2: Big data about the future does not exist, but we can also model uncertain qualitative information, and this will lead to better decisions.
- Idea 3: AI is math on steroids. Getting familiar with using mathematical models prepares decision-makers to work with AI.
- Idea 4: Mathematical modeling is a way to engage with various groups of people. It makes a workplace more equal and diverse.
I am happy to chat with you if you would like to challenge your biases and assumptions about the future using cutting-edge scenario-based strategy modeling.
Oh, and the second way to identify and overcome your unconscious biases is to book a session with us where we will sit down with your industry experts, and translate our Future Forces 2019 insights into the context of your company.
Future-Proofing Strategic Business Decisions