Future Shaping for Active and Collaborative Strategising

August 22, 2023

By Katri Valkokari, Sofi Kurki, Juuli Huuhanmäki, Jyri Rökman, and Kalle Kantola

Business strategists could be forgiven for being content merely to draw up contingency plans to meet the range of foreseeable situations that the future might hold. But wouldn’t it be even better to create strategies for influencing that future?

The recent and ongoing flow of extreme global business environment changes calls for a new mindset and tools for strategy work. Strategies vary in their emphasis and scope of assumed control. For some, the business environment is considered an external force that primarily requires timely adaptation from the company. At the other extreme, shaping strategies refers to understanding the business environment as a co-created system that individual actors, such as companies, can affect through strategic choices and actions. In this article, we introduce future shaping, a novel conceptual construct that combines and synthesises multiple viewpoints with active strategising.

It is widely accepted that strategy development requires an analysis of the business environment. Future shaping, however, calls attention to the longer-term goals of the strategy. This requires a more ambitious future orientation and a more sophisticated foresight approach. It has been noted that strategy processes today mainly employ the same approaches as 40 years ago. Of the respondents to the recent follow-up of a 1983 study, “Strategic Planning in the Fortune 500”, 85 per cent follow a strategic planning cycle. What has changed in the past 40 years is the realisation that for a successful strategy, not only the whole company but also its stakeholders need to be engaged (Halal et al., 2021). This stakeholder engagement calls for collaborative strategising. In summary, today’s main challenge is not strategy analysis but how to turn it into actionable business plans in a continuously changing business environment.

Future shaping takes this challenge on and asks what a forward-looking, actionable strategy needs in order to engage stakeholders broadly. Future shaping starts from the identification of trends and drivers that indicate emerging changes in the business environment. It then takes a step further to imagine and create a more desirable future to which people can aspire, businesses can aim, and a critical mass of actors can align. This turn from a passive tracking of potential exogenous threats towards the cultivation of an active strategic agency enables perceiving grand global and societal challenges, such as the green transition, as opportunities. In short, future shaping means paving the way for a preferred future for all.

Desired future is thus the ultimate goal of ambitious future-oriented shaping strategies. A systematic exploration of alternative futures can enable the following:

providing a systems view of the evolving dynamics of the operating environment to identify change drivers and barriers
restructuring current value chains to renew industrial sectors and cross their boundaries
boosting the change through the comparison of alternative development paths resulting from different strategic choices
building novel business opportunities, shaping markets and being a timely forerunner or an active creator of network effects

What are the key elements of future shaping?

We have identified four central aspects of future shaping to be (figure 1) strategic foresight, active strategy, business environment, and strategic partnerships. In the following sections, we discuss each and show how they contribute to the future-shaping approach.

Strategic foresight as the basis for actively impacting futures

Future shaping is rooted in foresight approaches and co-creative visioning of the future. Strategic foresight is sometimes reduced to mere information gathering about signs of change and creating strategies for optimal positioning. For future shaping, however, the purpose of foresight is to maintain an active and open view of the future. Analysing trends, drivers, and emerging technologies serves as an inventory of possibilities one can start leveraging when moving toward a desirable future.

In less turbulent times, strategic decision-making has relied much on decision-makers whose vast experience from endured challenges has helped tackle novel strategy issues. However, companies increasingly face situations that lack analogies to the past (Scoblic, 2020). Strategic foresight mimics possible real-life situations by constructing images of alternative futures. It then evaluates possibilities for action in these radically different future worlds. Moreover, strategic foresight helps to evaluate the preferability of alternative futures and to identify action toward a desirable future (Bell, 1997). This evaluation, and thus understanding of future valuations, needs to account for a diverse set of viewpoints, ranging from aspects of future society to understanding future customers and environmental limitations, to allow the vision for the shaping strategy to be future-proof.

Active strategy – building the future competitive edge

At the heart of future shaping is the idea that “the future cannot be predicted, but it can be invented.”¹ Our current world is a result of innovations that have shifted the shared expectations and perceptions of possibilities. Their creators have understood the technological opportunities and have been able to match them with societal needs for paradigm-shifting breakthroughs. For example, Apple deployed the macro-trend of media consumption of the time by introducing a device that set brand new expectations for cell phones. The reframing of the cell phone as an internet and entertainment device set off a novel wave in the communication revolution (Flaig et al., 2021).

Therefore, an essential aspect of future shaping is enabling creative visioning as the basis of strategy formation. Key tools for a future-shaping active strategy include future-oriented practices such as knowledge-building through participatory methods and design thinking. More generally, future shaping demands an attitude prioritising the ability to make use of the future in the process of innovating the present and, with this perspective, create something that everyone needs but no one has been able to long for yet.

The art of guessing² – the business environment is changing all the time

Future shaping is informed by analysing the complex and dynamic systems forming the business environment. The innovation landscape is increasingly volatile, uncertain, complex, and ambiguous (VUCA). These dynamics can no longer be addressed in conventional “linear” terms such as “technology push” or “market pull”. As complexity science has pointed out, the causalities in a complex network of actors (such as an ecosystem) are extremely difficult to point out. By now, it is clear that business environment analysis limited to customers and competitors is insufficient. The actions and aims of a broad range of other stakeholders need to be understood.

Currently, the different paths of how the imagined futures might come to reality are under-explained and under-explored. This deficit is at the heart of disruption. The structure and paths of change are not sufficiently understood. We all need novel tools to understand how the systems co-evolve and how our actions – intentional and emerging – are intertwined and connected. Competitors engaging in collaborative shaping actions to overcome disturbances by, for example, pooling resources at a communal level can produce resilience in an otherwise turbulent environment (Beninger & Francis, 2021). The dynamics of the business environment can be examined through (both present and future) actors and their strategic intentions and actions. Different application domains of autonomous vehicles provide good examples of how current actors are bringing forward their views on the future of flying³ (Finnair), robot cars⁴ (Google), or autonomous ships⁵ (Rolls-Royce). Sensitivity to the environment needs to be combined with agility, and even the forerunners need to be able to change their path. Just ask yourself: can you kill off your well-planned business model in a week – and create a new one the week after? And with whom should you scan the new opportunities arising from future visions?

The future is built together – strategic partnerships and ecosystems as tools for future shaping

Future shaping involves not only finding measures for implementing one’s own vision of the future but understanding the competing visions and finding complementarities with them, along with analysing cross-impacting goals. Therefore, in forming strategic partnerships, one should consider stakeholders who can affect or be affected by the shaping efforts and take action to address them. For instance, Novell found a way to push through its new operating system for LANs by selling off major parts of its other business to reduce competition and send a strong signal to other manufacturers about its commitment to innovation (Hagel et al., 2008).

The key to ecosystem composing and orchestration is generating shared meanings together with key actors. Popularised by Peter Senge, the idea of a shared vision should not be limited only to individual organisations. Ecosystems shape the future. This becomes crucial, as does the need for effective boundary spanning when parties have different and colliding interests. Thus, at the ecosystem level, exchange and interaction practices set the boundaries and rules of the game for an entire system and different futures within it. Through ecosystem thinking, one can recognise dependencies between actors and distinguish between the ecosystem actors that can be guided, influenced, or even controlled, and the factors that remain immune to shaping efforts.

Bring the future into the present – how can we evaluate futures?

Assessments of preferable futures are tightly connected with valuations that make a certain future preferable to others. Preferability, even in business, involves a broader set of considerations than profitability alone. In recent years, companies have witnessed the strength of political consensus and introduced various environmental assessment methods on top of traditional methods of business case analysis. Hence, the valuations of desired futures are counted in local currency and increasingly involve environmental factors and other, less-tangible units closer to social norms and values.

Strategic foresight mimics possible real-life situations by constructing images of alternative futures.

On a more fundamental level, there are and will remain differences in preferences and valuations regarding preferred futures. While these differences are a fact of life, they also impact cultural and business value assessments. Values are embedded in our views of the present and future opportunities as we continuously trade between the costs and benefits of our choices. In a complex networked business environment, these evaluations are not easy.

The core of business strategies is the ability to define a preferable future from one’s own perspective and make decisions based on independently relevant values. However, it is not enough, as competing visions for preferable futures affect the likely outcomes of any future-shaping efforts. It seems inevitable that actions intended to produce a “good” future occur in a mesh of widely differing actions, striving to achieve competing, possibly mutually excluding, goals.

The valuation of different potential futures precedes the actors’ orientations and actions. Future shaping is an approach that helps to consider questions about whose visions of the future come about, why some visions become performative, and who has the capacity to extract their visions to actionable agendas and build a competitive edge by shaping the future. A vision that can shape the future answers the genuine needs of the stakeholders, and it needs to be actively implemented.

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This article was originally published on May 19, 2023.

About the Authors

Dr. Katri Valkokari works as a research manager at VTT within the research area of Foresight and Data Economy, and as a docent at Tampere University. Her research has been published in a wide range of journals as well as edited books on the topics of knowledge and innovation management, network practices, and ecosystems. She has over 20 years’ experience on both research and practical development work regarding business networks, ecosystems, and networked business operations.

PhD. Sofi Kurki works at VTT Technical Research Centre of Finland as a senior scientist focusing on corporate foresight and strategy. She has a background in futures studies both as a practitioner and scholar at the University of Turku.

MSc (Tech.) Juuli Huuhanmäki is a research scientist at VTT Technical Research Centre of Finland. Her areas of expertise and work focus on corporate foresight and strategy.

MSc (Econ) Jyri Rökman works at VTT Technical Research Centre of Finland as a research scientist focusing on impact assessment and corporate foresight.

DrSc (Tech.) Kalle Kantola is a Vice President, Foresight and Data Economy at VTT Technical Research Centre of Finland. He has several positions of trust around innovation, digitalisation, and business strategy.

Footnotes:

This quote has appeared in literature in slightly different forms. It has been attributed to at least Dennis Gabo, Abraham Lincoln, Ilya Prigogine, Alan Kay, Steven Lisberger, Peter Drucker, and Forrest C. Shaklee.
Quoting futurist Bertrand de Jouvenel, the method used by futurists 1 and 2 is mostly based on “the art of guessing”. Research has shown that even highly merited scholars fail more often than they succeed in producing accurate judgements on future events over a long time range (Tetlock 2005).
https://newatlas.com/finnair-future-fleet/10520/
https://www.discovermagazine.com/technology/googles-car-is-the-face-of-future-robots
https://www.forbes.com/sites/jessicabaron/2019/01/07/rolls-royces-autonomous-ship-gives-us-a-peek-into-the-future-of-sea-transport/?sh=3a322e84659f

References

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Beninger, S. & Francis, J.N.P. 2021. “Collective market shaping by competitors and its contribution to market resilience”. Journal of Business Research, 122. pp. 293-303.
Flaig, A., Kindström, D. & Ottosson, M. 2021. “Market-shaping strategies: A conceptual framework for generating market outcomes”. Industrial Marketing Management, 96. pp. 254-66.
Hagel, J., Brown, J.S. & Davidson, L. “Shaping strategy in a world of constant disruption”. Harvard Business Review. October 2008.
Halal, W.E., Garretson, J. & Davies, O. 2022. “Updating strategy for a high-tech world: constant change from the bottom up and the outside in”. Foresight, Vol. 24 (1). pp. 37-54.
Scoblic, J.P. 2020. “Learning from the future: How to make robust strategy in times of deep uncertainty”. Harvard Business Review. July-August 2020.
Senge, P. 1990, The Fifth Discipline: The art and practice of the learning organization, Doubleday, New York.