Imagine yourself in 2026. That’s when the life cycle of an S&P 500 company is expected to shrink to 14 years — less than half the 33-year average in 1965, and down from 20 years in 1990, according to the strategy firm Innosight.
In its spring 2016 executive briefing, Innosight identified a chief culprit for decreased longevity: “organisational inertia and lack of long-term vision”.
Enter the futurist — “a methodical analyst of capabilities, customer needs and trends, and competitors who helps to synthesise these factors and formulate future goals,” said Michael Baccala, US Assurance Innovation Leader at PwC.
Consulting a futurist or even building futurist responsibilities into a company role like CFO is becoming more common. Here are six ways to look ahead more effectively:
Use solid data as the quantitative foundation. A skilled futurist will recognise the value of data from the outset, said L. Gary Boomer, CPA/CITP, CGMA, a strategist with Boomer Consulting in Manhattan, Kansas. “Data and analytics are a hard trend, and CFOs need to look at the future value of that data from several perspectives.” Boomer identified four key points:
- Real-time data is more relevant and valuable than old data.
- Predictive analytics are more valuable than historic analytics.
- Data security and privacy are of utmost importance.
- How can we use the data to add value?
Look for creativity and communication as the qualitative foundation. The data a futurist works with are trends, events, and issues, signals about patterns that indicate probable futures, said Gail Bower, a revenue strategist and president of Philadelphia-based Bower & Co. Consulting. From there, a futurist can develop scenarios to support strategy and other decision-making. So besides knowing how to read the numbers produced by data analytics and artificial intelligence, a high-level futurist will have the skill to interpret them — and make them tell a story. “Top-rate futurists are curious, highly creative, highly intellectual, communicative, self-aware, and can remain neutral about what the data show,” said Bower, who holds a Strategic Foresight Certificate from the University of Houston.
Give your futurist time outside the daily grind. This is particularly important if your CFO wears the futurist hat as well. “CFOs have real and immediate pressures to meet expectations of investors, clients, suppliers, peers, and employees on a daily basis,” Baccala said. “It’s very easy to get bogged down by efforts to address these needs. They will consume and exceed the capacity of your resources, if allowed.”
Give them “futurist’s privilege”. Futurists need to be able to speak truth to power and initiate a discussion about the longer term, even when it isn’t comfortable. “This is especially important when having to steer a large enterprise across narrow straits,” Baccala said. Hear them out, he advised, “even when it’s not the easiest or most practical path. Big bets are sometimes necessary”.
Don’t let your futurist exist in a vacuum. When left to do a company’s heavy lifting on their own, “futurists are not right all that often”, cautioned Heidi Pozzo, founder of Pozzo Consulting in Portland, Oregon, and a former CFO at a paper and packaging company. “Rather than focus on one person to predict the future, businesses should build in mechanisms to understand customer needs and trends.” So while the futurist works the data to glean forward-thinking insights, “top leaders should also visit customers to understand the customer’s business”.
Keep your futurist accountable. Some charismatic types who claim the title might practise what’s known in high-tech companies as “innovation theatre” — that is, positing smoke and mirrors in place of solid, data-driven insights and direction. “The problem with most futurists is that there’s zero accountability. It’s like being a weather forecaster,” said James R.F. Berkeley, managing director at Ellice Consulting in London. “Maybe you’ve got fantastic ideas, and you’re able to build a seductive rapport with your audience,” but you’re not sharing or offering anything concrete that helps develop the next generation of products or services, for example.
You should also consider from where your futurist derives his or her expertise. Some adopt the title without formal certification, while others obtain advanced degrees from places such as the Hawaii Research Center for Futures Studies at the University of Hawaii. Organisations such as the Association for Professional Futurists offer paid memberships to applicants who meet at least two of seven criteria, including postgraduate study in futures research or teaching experience with futures methodology.
So approach the futurist with an open mind but also professional scepticism. As Berkeley put it: “It comes back to the value proposition. The definition of progress and success should be, ‘Am I definitively better prepared for the future rather than merely adapting to the past?’ That’s the litmus test.”
— Lou Carlozo is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Chris Baysden, a senior manager for FM magazine, at Chris.Baysden@aicpa-cima.com.