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How can businesses combine hindsight, insight and foresight to be better prepared for sudden change?

In the winter of 2019, the one thing every business needed to be better at (although perhaps most didn’t know it) was ‘horizon scanning’. In the mad scramble following the declaration of the pandemic it was clear that organisations of every type and size often lacked the level of predictive insight and awareness that could have better prepared them for Covid-19. Suddenly, there were so many interconnected questions to answer: were their people able to operate, businesses able to trade, production lines able to stay supplied – and all of this somehow safely.

Businesses and organisations increasingly operate in an environment characterised by regular periods of disruption. Environmental and climate risks are causing more frequent extreme weather, disrupting operations and once solid supply chains. Corporate hacking and cyber threats are proliferating. And then there are all the emerging commercial trends to keep track of and changing customer behaviour to understand and respond to.

The organisations best set-up to thrive in this environment are likely to be those that understand both internal and external risks to their business and are sufficiently adaptable to operate effectively when sudden material changes occur. The role and value of insight capability that can enable decision-makers to plan and prepare is now incredibly clear, particularly as the leading voices in global health predict other epidemics as globalisation continues to give viruses the chance to spread worldwide.

Learning from the past, present and future

When we help clients to build the resilience of their organisations, we always emphasise that analysis has to combine hindsight about the past, insight about the present and foresight about the future. Maximum value can be obtained when you combine all three, enabling you to make truly insightful decisions about what needs to change.

We believe that genuinely effective insight capability is only possible when you understand what you do, and don’t know about your organisation. Let’s imagine a fictional company, and explore the three facets of insight they need to develop.

It’s a couple of years after Covid-19, and “Medexaco” – a medical devices firm is trying to understand why it was so slow to respond to the pandemic’s challenges to its business. Given their sector and the nature of the crisis, why did they lag behind other companies in their response? 

The company’s board is clear-eyed about one thing: the company clearly lacked ‘adaptive capacity’, were overly reactive, and were in effect only setup to respond to a crisis once it was too late. In hindsight, the organisation had had low awareness of business risks and opportunities, with particularly low scores in situational awareness and foresight and also a lack of clarity around vision and values.

Letting the future inform the present

So how do you stay better focused on the near future? In short: you need to develop an intelligence and horizon scanning capability, to provide senior leaders with advance warning of emerging or imminent risks to the organisation and its supply chain. 

At Medexaco, the pandemic had revealed an over-reliance on two particular suppliers, distantly located, without whose materials the company couldn’t produce its most profitable product line. Realising that they needed to better understand their operating environment and where possible, reduce complexity and ambiguity when making decisions, the board decides to invest in corporate insight as a new and core function. 

This is an increasingly common approach in many businesses. Once you take a structured approach to collecting and assessing information relevant to your goals, new levels of management and pre-emption become possible. It brings intelligence analysis and media scanning in-house, building your capacity to discern important developments both inside and outside your organisation, improving day-to-day and longer-term decision making.

A culture of 'informed response'

Medexaco realise that they now have access to deeper operational insights into their situation, but information alone isn’t the whole picture. It’s important that this mindset percolates through an organisation, helping everyone to make decisions with increased confidence. This is important given the common institutional effects that discourage change within a business.

By this point, Medexaco’s board have achieved something bold: they’ve admitted failure, been transparent and honest about what went wrong, decided to use the recovery process as a learning opportunity. Finally, they’ve encouraged their people to share in this new mindset. Learn from the past, stay alert in the present, be prepared to predict and respond to emerging threats.

Better business

Every successful organisation would like to think that its decision making was “evidence-based”. In an era of proliferating risks and continuous change, this means making effective use of relevant business and market data, backed by an organisational culture that encourages learning and adaptation. This is how you develop real, ‘protective intelligence’.

As many have observed, the last year has provided a lot of ‘teachable moments’ to business – that they need to speed up their digital operation, reassess their property footprint or diversify their supply chains. It has also provided a valuable lesson in the value of horizon scanning and demonstrated how it builds the resilience of any organisation. In reality, the systematic harmonising of past, present and future insights is just a better way of building a more resilient business.

Written by Caroline Field and Richard Bond