Futurists combine a host of interdisciplinary studies to describe how people could potentially live and work in the future. They’re not clairvoyants. Rather, they methodically build out possible scenarios through the careful analysis of external factors, trends and signals that are likely to have an influence into the future to assist decision-makers to manage risk and plan for potential outcomes.
By Angela Bowyer, Principal Consultant at Analyze Consulting
Business leaders would do well to emulate this approach when deciding which investments to make now, next month and into the future.
No investment decision is devoid of an effect tomorrow, next year or even three years’ time. With this in mind, businesses should understand where they want to be at a future date and then bear this in mind when making investment decisions. For investment decisions to be sound, they should not only consider the present circumstances but also take into account potential future scenarios.
Organisational resilience is built through understanding uncertainty by developing scenarios to challenge the status quo. This helps organisations anticipate potential challenges and adapt to change more effectively.
Build a holistic view
While it is easier said than done, it is feasible to build a holistic view by adopting a systematic approach that can be likened to peeling an onion. Start with the certainty of what you know today. Next, understand the ecosystem in which your organisation operates by looking not only at the business and industry sub-sector, but also the broader ecosystem, gradually bringing the lens closer.
Reactive investment decisions, made to deal with an immediate problem without considering the broader future thinking, are potentially short-sighted as they can very easily compromise your ability to be where you want to be in the future.
Return on investment
Any investment decision requires an understanding of the potential benefits to the business, which may not always be easily quantifiable through traditional financial metrics like ROI. As businesses increasingly adopt an innovation perspective, measuring the return on investment for strategic work or innovation becomes more challenging.
In such cases, businesses must use alternative methods to assess whether their decisions were sound investments. For example, they can look at metrics such as employee engagement and staff retention, which may not be direct but are crucial indicators of growth in the long term.
When seeking the assistance of partners to manage decisions and implement changes, it is essential to ensure a meaningful transfer of skills. A significant decision requires precise change management and analysis, and by absorbing the expertise of consultant partners, organisations can adapt more effectively and increase their agility.
Beware the hype
There is a risk that businesses get caught up in new technology hype. Remember, technology should never be implemented for technology’s sake, rather it should solve a problem for a business. Be critical – for example, is AI relevant to my business now? Will it be in five years? If not, certainly keep an eye on developments and trends, but focus on implementing technology that is fit for purpose.
With all this in mind, there certainly are a few key areas that are likely to dominate investment decision discussions. These include:
- Digital transformation: This has been around for some time but the pace is picking up markedly. Organisations need to streamline their operations and reach more customers, often on a global scale.
- Sustainability: ESG considerations are gaining pace globally. If a local business wants to compete globally, sustainability absolutely has to be part of investment discussions as the world is dealing with a consumer base that demands this.
- New ways of working: The world of work, whether it is office-based, remote or hybrid, will continue evolving into the future. How will this impact a business in three to five years? It is important for organisations to gear up to manage this without being reactive.
- Artificial intelligence: Everyone needs to be aware of this, even if it is not relevant to a business today, or even in five years’ time. It most certainly fills an important role in terms of automating important decisions and processes.
- Energy: Renewable energy is on the agenda globally. In South Africa, it is top of mind. Businesses will all be looking at very important renewable energy security decisions.
- Education and skills investment: South Africa has a young population with a staggeringly high unemployment rate. What are the opportunities in terms of skills development and filling important skills pipelines?
- Personalised communication: Consumers demand to be spoken to on a platform of their choice, and at a time that they choose. They expect this communication to be personalised to their tastes and behaviour.
- Financial inclusion: There’s an opportunity to think creatively of ways to promote financial literacy and stability – with the right intent – to bring more people into the formal economy and provide access to entirely new streams of customers.