Welcome to the New ‘Normal’

Leaders everywhere are just waiting for the announcement that the multiple crises of financial instability, high energy prices, and low consumer confidence have passed and that ‘normal operations’ can resume, easy growth can be assured and things can just get back to normal. They are waiting in vain.

Instead they do not realise that this is the ‘new normal’. The crises that are apparent now will continue and new ones will emerge. Many old business models will fail and some old markets will disappear while new opportunities will emerge to those who can sense the changes around them. Instead of leadership returning to its carefree ‘salad days’ where a rising share price was enough to guarantee a comfortable life – welcome to a world of Wiki-leaks scrutiny, Occupy advocacy and rising social expectations of all organisations and their leaders.

Strategic Foresight is a disciplined approach that assists in how we lead in such turbulent and difficult times. One of the core precepts of Strategic Foresight is our understanding of how we interact with limits. I suggest that part of what makes this the ‘new normal’ is that these limits (there are two distinct types of limits) are being encountered by leaders, organisations and societies world-wide.

The first of these limits are the physical ones. These limits do not adapt to human intentions but rather we adapt (or not) to them. The famous foresight text – The Limits to Growth (LTG) – was published 40 years ago and yet is still utterly relevant today. When the Club of Rome asked a small group of savvy researchers to investigate if continued economic growth on a finite planet was feasible I’m sure you are not surprised that they answered that question in the negative. The answer went further to say that if you operated as if the limits did not exist then humanitarian catastrophe would logically follow. The catchy phrase used to describe this was “overshoot and collapse”.

Understandably a global furore followed and critics have responded with evidence of how innovation, technology and the human spirit have transcended limits (and will continue to do so); the Green revolution as a case in point. Still the LTG has not gone away and has instead had two major revisions and the negative answer to the question is still standing. More so, in 2008, the CSIRO undertook a retrospective study that matched 30 years of physical data to the LTG model. Their finding was that the physical data is tracking the overshoot and collapse model. Foresight is not about predicting collapse but instead working with the understanding that we have to lead and innovate in order to prevent collapse. Not to be defeated by the physical limits that exist but to accept that they just define the parameters of what is ultimately sustainable and beneficial for all.

The second type of limit that foresight tries to understand is the limits of our thinking. Nicholas Taleb published The Black Swan in 2007 and in it he explained how our faulty logic caused us to create false understandings of reality; these realities bound how we think and act until the unexpected event – The Black Swan – emerges to shatter that false understanding. We then see the falsity of that previous view but it can be too late to do much about it. The global debt crisis as a case in point; we have got ourselves into a mess that is now seen as both an utterly logical outcome of our prior actions and a seemingly irresolvable problem to deal with. Foresight believes that it is not sensible to have to experience something in order to discover how to prevent it occurring in the first place.

Coming to a better understanding of these two types of limits – those that are physical and those that we create for our thinking – and being able to separate the two – is a key foresight attribute. Such an understanding doesn’t cause turbulence and uncertainty to go away; for they are here to stay. Instead we just get more comfortable operating with them.

The other response to turbulence and uncertainty sees some leaders shorten their time frames, lower their ambitions and simplify their thinking in order to cope. Such a response is both rational and doomed; doomed because this approach merely magnifies the risks they face in the future and further removes the opportunities that exist now. Instead a different way is needed; one that embraces turbulence as a teacher and that employs foresight to sense where we are heading. Ongoing education is one of the keys; both formal and situational. Networks as sources of information, ideas and inspiration are essential as no-one can cope with complexity alone. Curiosity and courage in equal parts are a big help as is a healthy dose of scepticism about the completeness of their own thinking.

Author: Dr Peter Hayward

Dr Hayward is the Program Coordinator of the Master of Strategic Foresight at Swinburne University, the only postgraduate qualification in foresight that is offered in Australia. He will facilitate Swinburne's Executive Education Series, in the area of Strategic Foresight. The next session is on 27 & 28 June, 2012 in Melbourne. For further information call 03 9214 5687

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Dr Hayward is a foresight practitioner and academic. He specialises in helping organisations and communities act creatively with the future in mind – learning to see the world differently and find hopeful and inspiring futures. In his consultancy he has worked with a diverse portfolio of clients including international companies (Philips – Netherlands), corporates (Sanitarium Foods) and a range of Federal, State and Local governments.

Peter is an academic, writer, speaker and workshop facilitator and leader. His approach is based in systemic understandings of the present and the creation of powerful images of the future. Peter began his career as an accountant and economist working for the Australian Taxation Office moving to academia and consultancy after he increasingly became interested in change, the future and how it happens.