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Lessons from future-prepared firms

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By Lucy Stanbrough | June 24, 2022

Research suggests that future-prepared firms – who have invested in building corporate foresight units – outperform the average by a 33% higher profitability and by a 200% higher growth.

With a never-ending stream of change companies must continuously innovate to stay ahead of the curve and manage risks effectively. A key part of this is staying alert and curious for signals of change – continuously reviewing assumptions around the risk landscape and exploring potential futures to ensure strategy is fit for purpose. While this may seem like an additional burden on top of an already full to-do list, there are benefits. Research suggests that future-prepared firms – who have invested in building corporate foresight units – outperform the average by a 33% higher profitability and by a 200% higher growth. While there is no one silver bullet framework, course to take or software that can be deployed to gain this magic badge of being a ‘future-prepared firm’, the research study found that foresight activities must be integrated with a firm’s strategic planning processes, innovation, and operational activities.

Changing landscapes

Horizon scanning, well-formed research questions, and not being afraid to challenge existing processes are all foundation blocks underpinning the transformation of information into action. Getting to grips with all of these elements is essential as there’s no shortage of change. WTW’s own research found a 63% probability that one or more “hundred-year events” will occur in any given decade. And a 26% chance that multiple such events will occur in the same decade1.

COVID-19 is already broadly viewed as being a once-in-a-lifetime or once-in-a-century pandemic, yet research by Metabiota estimates the annual probability of a pandemic on the scale of COVID-19 in any given year to be between 2.5-3.3 percent, which means a 47-57 percent chance of another global pandemic as deadly as COVID in the next 25 years. These numbers illustrate the importance of preparing immediately for future outbreaks, which is especially pressing with the current multi-country outbreak of hMPXV in non-endemic countries.

Since the low probability of occurrence doesn't mean non-existent probability, it is becoming ever-more important to incorporate wild cards into your horizon scanning, foresight scenarios, and strategy testing. This includes both negatives such as the current questions around global food security and geopolitical uncertainty, and future utopias such as a fully climate positive future imagined in ‘The Future We Choose’ by Christiana Figueres and Tom Rivett-Carnac.

Challenge perspectives should include a diverse range of backgrounds and people, as well as lenses of risk and opportunity to stress test thinking. A critical view is critical as it is rarely the event you’ve planned for the most that causes problems it’s the unforeseen or unimagined. Tools and thought pieces I continue to come back to include Arup’s Drivers of Change card deck, continually talking to new people to understand different perspectives, and horizon scanning through potential futures by opening a search browser and looking at what others have imagined for “Future of” AND “in 2100”.

The power of Once Upon a Time

Another tool is stories themselves. Science fiction has significantly influenced technological innovation and scientific research – whether serving as inspiration to colonise Mars in the case of Elon Musk, or painting a picture of future worlds like inventor Simon Lake, who became inspired by the idea of undersea travel after reading about Captain Nemo's adventures in ’Twenty Thousand Leagues Under the Sea’.

Many technology companies employ the services of futurists and writers to share insight and describe worlds they – and their customers – can strive for. In 2015, Microsoft commissioned ‘Future Visions’, where contributing authors were inspired by inside access to leading-edge work, including in-person visits to Microsoft’s research labs, to craft new works that predict the near-future of technology and examine its complex relationship to our core humanity.

Building a culture of risk

While being ‘right’ or targeting innovation and novelty are seen as highly desirable outputs from scenarios building exercises, the real value comes in transitioning from a ‘one and done’ process into an activity that ties together teams and strategy. Building a futures perspective into the culture and DNA of the company can foster mutual understanding among teams who bring different perspectives and responsibilities on what alternative futures could look like and potential disruptors you may face – that’s the real value-add that moves process into culture.

Earlier this year in a webinar hosted by our Airport Risk Community, the point was raised that while the exact scenario didn’t unfold as planned for the airport, the process of preparing and testing their resilience enabled this global transport hub to respond infinitely more effectively. The team had the muscle memory of working together, knowing who was responding, and what capabilities were available – this is something that comes with time and needs to be nurtured.

This is something we’ve been exploring in the WTW Research Network through the use of narrative storylines that weave together risks and trends that are often considered in isolation. We find the process of considering these futures helps move the narrative from “prepare for one”, to “prepare for all”. Something important to keep in mind as you read this year’s WTW Research Network Annual Review 2022 and learn new perspectives from our research partners; whether that’s understanding how we’re improving catastrophic loss estimation using supercomputing, or getting up to speed with resilience to hostile activities in the grey zone – there’s something to stimulate everyone’s horizon scanning activities.

Author

Head of Emerging Risks Research

Lucy Stanbrough MSc, BSc, is a Research Manager at the Willis Towers Watson Research Network. Prior to joining the Research Network, she worked for the Innovation team at Lloyd’s on a range of thought leadership projects and market communities, including: cyber scenarios; virtual reality; NewSpace; city resilience; synthetic biology; climate related risks and disaster risk finance.

Before joining the insurance industry Lucy spent over 10 years as a natural hazards and GIS consultant, alongside working at the UCL Hazard Centre. Lucy has contributed to a number of books on the use of technology and online systems pre, during, and post-disaster. She maintains an interest in the integration of scientific knowledge to business applications, and connecting knowledge to people, and people to knowledge.


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