Embracing the Avalanche of Change (Part 1)
How the insights industry can constructively engage with uncertainty to meet the future with confidence
This series of articles was first presented at the ESOMAR global congress in Toronto in September 2022
Preface
Let's stop future-proofing and trying to keep out the future, and start building resilience by constructively engaging with uncertainty. In this paper, we outline plausible possible futures for the insights industry, and advise on how to navigate towards a successful future.
In part 1 we review context for change and introduce the concept of Scenario Planning
Introduction
Predicting, particularly when it is about the future, is difficult; This was the rather quizzical comment once made by Nobel Laureate Niels Bohr. In our world, which is experiencing greater volatility, uncertainty, complexity and ambiguity (“VUCA”), predicting the shape of what is to come in two or three years (let alone 15 years), would seem ambitious if not foolhardy. In this paper, we are not attempting to make predictions about the future—any prediction would almost certainly be wrong—but instead we will outline a range of plausible possible future scenarios for the insight industry. For instance, futures that will allow reflection and encourage dialogue on the best ways to manage (and be resilient to) uncertainty in the face of the avalanche of change ahead of us.
Recent Ernst & Young research found that half of the world’s CEOs now view uncertainty as the single biggest external threat to their business. Meanwhile, perversely, in 2020 the FTI Consulting Resilience Barometer found that most companies in the UK and US are actually less resilient to change than before. Having one’s head in the sand is not good strategy. Carl Sagan once observed that “extinction is the rule, survival is the exception”. A tsunami of change is gathering pace, posing an existential threat to the market research function and industry. The question we face is: can we imagine this future so that we may evolve to meet it, or are we simply to face what comes and hope for the best?
“extinction is the rule, survival is the exception”
The first industrial revolution saw manufacturing processes push out craft and artisan production. The economy grew in the aggregate, but well-established sectors and a way of life disappeared, never to return. In his book Why the West Rules—For Now, anthropologist Ian Morris shows graphically that human progress is slow—almost invisible—until it isn’t (see Figure 1). The introduction of Watt’s steam engine in 1776 proved to be a critical inflection point in the development of human society. The second and third revolutions saw the rise of mass production and then information technology to automate production. Each continued to winnow out industries and sectors ill-prepared for the future they brought.
Figure 1: What bent the curve of human history? The Industrial Revolution (Brynjolfsson & McAfee, 2016).
The fourth industrial revolution, or Industry 4.0, centres on technologies that capture, optimise and deploy data. The speed of change, its scale, scope and complexity, has no historical precedent and will disrupt every industry to a greater or lesser extent. For the insights industry it is the confluence of connectivity, passive data gathering, computational power, advanced analytics, machine learning and artificial intelligence that each give rise to existential questions. However, the danger is that we do not even start to discuss strategic responses to this new world until the tidal wave is upon us. This fourth industrial revolution promises to bring about another profound change.
What is scenario planning?
“I had the feeling of […] being the eyes of the pack and sending signals back to the rest”, Pierre Wack (Chermack, 2018).
Scenario planning emerged more than 60 years ago in response to the challenge of decision-making under unpredictable uncertainty. Futurist Herman Kahn, one of the very early exponents of scenario planning was described by Scientific American as: “thinking the unthinkable”. Shell was an early pioneer, using this technique in its much-heralded Group Planning department under Pierre Wack. Wack saw scenario planning as a way of “changing the mental map of managers”, (Chermack, 2018)—i.e., getting them to consider alternative futures than the ones they were currently aligned with. Peter Schwartz, US futurist and co-founder of the Global Business Network which specialised in scenario planning, tells us that scenarios are tools for ordering one's perceptions about, and potential responses to, alternative future environments, in which one's decisions might be played out.
Moreover, van der Heijden (author of Scenarios: The Art of Strategic Conversation), views scenario planning as a natural thinking tool for use in strategic conversations; in short, a technique for challenging assumptions and pre-existing models, and encouraging fierce strategic dialogues around how best to see opportunities and navigate an uncertain future. Thus, the key is to think of scenarios not as predictions about the future, but more as a way of strategically reframing what is going on. It is a technique for outlining possible “future histories” in the context of the insights industry. This mapping out of scenarios allows us to reflect and decide (given the strengths of our industry) what the best possible strategic place in which to play in the future is, given our talents. US economist Edgar Fiedler once noted that: “He who lives by the crystal ball soon learns to eat ground glass”. Therefore, to reiterate, we are not making predictions. We are instead identifying key evolutionary pathways and critical uncertainties, providing an informed view on how they are most likely to impact on our industry, as well as providing some guidance on how to prepare for these different eventualities in a timely way.
The three arrows of time
The approach we are using is based on an adaptation of the Ramirez and Wilkinson technique, as outlined in their 2018 book Strategic Reframing, which introduces the concept of there being “three arrows of time”. First, there are things from the past catching us up now or later (the momentum of the past); things that have already happened that will continue to have an impact in the future. Second, there is the present going forward—the future embodiment of action planning. Thirdly, there is the future coming towards the present— future developments coming towards us independent of our will.
Figure 2: Three arrows of time (Ramirez & Wilkinson, 2018).
Arrow one
We have chosen to describe Ramirez and Wilkinson's “first arrow of time” as “power trends”. The key here is to identify the fundamental big-ticket issues that are most likely to affect the insights industry. We are looking for trends that are presently widely acknowledged, extensively shared and debated by influential sources.
Moreover, where there is sufficient evidence to suggest that this is a substantive trend rather than a short-term fad that's likely to disappear or correct itself. These themes reflect the core underlying drivers of what is happening in the world. We began the process of understanding where the world of insights and customer experience is heading by first exploring the wider world. There are many frameworks for doing this, with it usually being a version of a political, economic, social and technological (PEST) analysis.
Arrow two
We have labelled the second arrow “accelerating present”. This talks to the likely future impact of decisions taken today. Here we embrace William Gibson's point that the “future is already here, it's just not evenly distributed” (2003). We had the opportunity to look at particular features and developments of what's happening at the leading edge of thinking as it relates to the insights industry. This will help us to better understand and start acquiring a more informed read of how this is likely to play out over the 15-year horizon of our scenarios. In this case, we are trying to avoid the trap of the Amara's Law. This tells us that there's a tendency to overstate the impact of specific technical developments and issues in the short-term, whilst at the same time still managing to underestimate their power and impact a decade or so out.
Arrow three
We identify and prioritize the critical uncertainties heading our way; by “critical” we mean the uncertainties that are out there are most likely to have a major impact on the insights industry. This takes us to Ramirez and Wilkinson's third arrow: “the future coming towards the present”. Here we are looking at what the most likely possible futures we need to anticipate are, and prepare for over a 15-year period. Again, it is not about predicting what is likely to happen, but more to do with using our analytical and creative thinking skills to pinpoint those uncertainties that have a high probability of happening and are also likely to make a high impact on the industry. We can then compare and contrast these with scenarios where there is a lower probability of this uncertainty happening, or less likely to make an impact on the industry, whilst also looking at all points in between.
As we begin to consider these three arrows of time in more detail, it is useful to remember Arthur C. Clarke’s (1973) three laws:
1. When a distinguished but elderly scientist states that something is possible, they are almost certainly right. When they state that something is impossible, they are very probably wrong.
2. The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
3. Any sufficiently advanced technology is indistinguishable from magic.
In part 2 we will explore each ‘arrow of time’ in more detail