Organizations are founded in response to a past that is less than desirable. A group of individuals with a stake in a shared vision of creating a new condition spend a lot of time, effort, and resources to bring an envisioned entity into existence and to energize it to function productively and progressively. However, during the building/development process, temporal realities shift every day from present to past just as fast, if not faster than the rate of development and scaling of the entity. That is why it is incumbent upon leadership to incorporate strategic foresight at every phase of an entity’s life cycle. Let’s consider the role of the governing board not only as policymakers but also in ensuring the long and relevant life of an organization.
What do boards do?
Whether referred to as boards of directors, boards of trustees, or governing boards, these are groups of individuals who are elected or appointed to monitor the financial solvency of an organization along with ensuring that the executive leadership is operating the entity with fidelity. In other words, during the development of an entity, those individuals who agreed on the entity’s purpose for existing, its mission and values, usually constitute the initial governing board. In the Harvard Business Review, Tedlow (2008), explains, “every product or service has two components: the core (the product’s primary purpose) and the augmented (additional functions and features)” (p. 19). For boards, job one is to protect the core purpose for the entity’s existence as they ensure its future relevance Nelson, 2015). In addition to shepherding an entity in the present, boards must regularly envision the entity’s possible futures and anticipate ways it can thrive, as well as withstand any potential threats.
In most cases, a board's only employee is the chief executive officer (or executive director). They rely primarily on this relationship to ensure that they receive the necessary information they need about the financial, operational, and cultural well-being of the entity they govern. Moreover, boards are expected not to interfere with the day-to-day operations of an entity. A board’s influence occurs through their policymaking and on the strength of their relationships with the executive and their team. They also seek external resources and partnerships to bolster the entity as it grows and augments.
At the early stages of new entities, the board is acutely anchored to the present as they ensure that the entity is properly vetted and credentialed with the applicable government agencies. They are concerned with ensuring that there are enough funds to operate. They might also assist the executive with identifying qualified individuals to fill important roles. Again, establishing a healthy rapport with the executive and the executive team is paramount. However, the essential role of boards is to always maintain a vision of the entity in a future state. This is usually where boards engage with strategic planning processes.
Strategic planning or strategic foresight?
Much has been written about strategic planning and its primacy in business and organizational affairs. Flanked by strategy and planning theories, strategic planning, as described by Boyne (2010), is the process of applying reasoning and analysis to ensure the success of an organization both in short and long-term futures. However, strategic planning has also been criticized as an exercise in futility, expensive, and a distraction from more pressing organizational issues (Boyne, 2010). After multiple meetings to develop a strategic plan, most are left on a shelf or in an electronic folder, until the next cycle of planning beckons its resurrection.
Despite the quantum acceleration of challenges and changes within industries, government services, and nations around the globe, most strategic planning processes are only considered 3-5 years in the future (or the near future). Stories of the industrial downfalls of companies that once thrived can be traced to a lack of foresight (Tedlow, 2008). Either the executive or governing leaders refused to acknowledge the changing landscapes, technologies, or behaviors concerning new goods, services, or policies. Many strategic plans also failed to include objectives that anticipate how changing demographics have forced/required organizations to include employees, managers, customers, and other stakeholders from diverse and/or marginalized backgrounds.
When we think about the rapid and complex changes taking place in all enterprises, those entrusted with the fiduciary, and “missional health”, of all types of entities would do well to become well-versed in strategic foresight. And while some might think this responsibility rests with the chief executive, boards are obligated to envision the future existence of the entity well beyond five years. Nelson (2015) provided a thorough examination of how boards should engage with strategic foresight in the Board Leadership newsletter.
Strategic foresight allows governing leaders to perceive changes in the organization’s contextual environment, anticipate possible implications, and choose actions that may support an organization’s ability to thrive in the future. It also enables the board to maintain an offensive posture that’s reminiscent of the founders of the entity (which fulfilled a need for its existence). Not only does strategic foresight engage the imagination of multiple futures, but it also enables boards to create alternative scenarios to anticipate what systems, resources, and thinking would be required to achieve what they agree to be preferable futures. But what makes strategic foresight distinctive and superior to planning is the inclusion of the board members’ inner lives in the foresight process. Strategic foresight also brings the members’ assumptions, biases, worldviews, and personal narratives to bear. Beyond data analysis, quarterly performance indicators, or market share, strategic foresight summons board members’ creative thinking and exploration of the edges of what (and who) is known (and unknown) about the entity. As a process, strategic planning doesn't acknowledge the value of internal drivers that stakeholders access during their meaning-making or deliberations about how to own and articulate (Nelson, 2015) the vision for the entity within the context of potential futures. Strategic foresight, when done well, brings these human elements to the surface.
Using strategic foresight tools, boards can envision new horizons, consider emerging trends or weak signals, and envision multiple possibilities when juxtaposing changes in politics, economics, demographics, related industries, technologies, and human behaviors (including themselves). Therefore, engaging in strategic foresight invites boards to anticipate how the entity might fare across multiple alternative future states over the long term, as opposed to planning for operational positioning in the next 3 to 5 years. This type of foresight compels boards to question how best to sustain the entity’s purpose, the vision of its founders, and its relevance in response to rapidly changing landscapes, stakeholders, and constituents.
References
Boyne, G. A. (2010). Strategic planning. Public service improvement: Theories and evidence, 60-77.
Nelson, R. (2015). Strategic Foresight: A New Obligation for Boards of Directors. Board Leadership, (139), 1–8. https://doi.org/10.1002/bl.30015
Tedlow, R. S. (2008). Leaders in denial. Harvard Business Review, 86(7–8), 18–19.
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© Zabrina Epps, 2024
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