I frequently find myself in conversations with family business owners and whenever I bring up the importance of strategic planning, I often get a puzzled reaction – Why should I spend time in strategic thinking in a world that is constantly changing? It feels like trying to see the future by looking at a crystal ball. It is there that I realise that we need to revert to the basics.

Spending time to think and plan strategy is crucial for establishing a sustainable competitive edge, yet the changes and turbulence that is constantly around us means that it needs constant work and updating. However, all this turbulence and fast change has pushed many business owners and leaders down a common pitfall.

The purpose of strategy is that of creating a long-term plan for developing a business’s competitive advantage and growth. However a common conceptual error I see today is that many business leaders, if they actually devout any time to strategic planning, do that on a very short-term basis and narrow timeframes, resulting in a perpetual review of the same objectives with only minor adjustments.

When one considers the speed at which most businesses are reasonably capable of moving i.e. laboriously slow compared to the rate of external change, by the time any two-year plan is executed the future will have moved further out of reach. This means that strategy’s mission-critical responsibility — to chart a clear organisational direction and follow through with a robust execution plan — is being overridden by the immediate pressures of resource allocation and everyday operational tactics.

This means that the immediacy of day-to-day operations can lead to a strategic process that is more about ticking boxes and filling spreadsheets, which are they left ignored or unused until next year. This means that any strategic plan is missing out on one of its crucial deliverables – FORESIGHT.

Strategic Foresight, like other business disciplines, is both an art and a science, but without a standard methodology it is left to be something abstract and unusable. So here is a simple 10-step process of how your strategic planning efforts can provide much needed foresight.

1. Signal Detection: Businesses need to combine primary research and expert insights to detect early signals of change. That is why a data driven culture in a business is so important and why market research is constantly becoming a need.
2. Identify Trends: Trend Identification: Measure trends using trajectory, based on quantitative data, such as market activity.
3. Macro Themes: Identify overarching themes by prioritising trends with significant data-driven impact, leading to strategic discussions.
4. Uncertainties: Address the unpredictable by categorising uncertainties and prioritise them to cover a wide strategic range.
5. Develop Hypotheses About the Future: Generate broad hypotheses by combining trends and uncertainties, using tools like 2×2 matrices and Monte Carlo simulations, a powerful automated statistical technique that uses variables to model a range of possible outcomes, to minimize bias.
6. Develop Scenarios: Scenarios should be put together specifically to make decisions, and should always be research-backed.
7. Bridge to Strategy: Use scenarios to perform a SWOT analysis, challenging assumptions, and testing the organisation’s adaptability to future conditions.
8. Strategy: Use the traditional strategic planning to align stakeholders and gain executive buy-in, focusing on key decisions.
9. Strategy Execution: Align organisational roles with strategic goals, establish new performance metrics and execute operational tactics.
10. Measure, Recalibrate, Restart: Teams should institute a way to continuously monitor progress and be able to make agile adjustments to tactics in response to real-time market feedback and evolving business landscapes. While the overall process is linear, there is no end to this work. Teams should maintain a cycle of strategic foresight through continuous signal detection, trend identification and the development of actionable insights.

We live in a far more complex world today than some 3 or 4 years ago. Businesses need to not only have a strategic mindset and thus spend time to seriously draw up their strategic plans, but they also need to augment this by strategic foresight which means looking around you and amending & revisiting your strategic plans accordingly. So I ask business leaders to stop thinking about crystal balls and to do all that is necessary to gain strategic foresight – various case studies prove that it is effective, it’s within your reach if you devote time to it and it will help you navigate your business through the constant waves of disruption.