Leaders elaborating upon business forecast have fast become the trend in conferences and seminars across the world. What is in fact concerning is that leaders developing a tendency of following up on the forecasts with generic “strategic plans”. To understand how important it is for leader to develop a foresight for evolving or designing an organizations’ future, it is absolutely necessary to understand and acknowledge the distinction between forecasting and fore-sighting.

Forecast distinguished from foresight
Forecast is a definite statement or statistical estimate of the occurrence of the future event. It involves rigourous analysis and rational study of the past patterns and emerging trends. Forecasting is a part of strategic planning but foreseeing the future is more of art than science. Forecasting is aided by very well developed statistical tools where as foreseeing is a stroke of creative imagination – often supported and / or validated by the business forecasts.

The relationship between forecast and foresight can be explained as:

Forecast involves deep analysis and one develops business insight through deep understanding of the business environment, which includes stakeholders’ expectations and market dynamics.

From the comparison shown above it is clear that forecasting or developing various scenarios is the task of strategic planning functions and providing foresight is a leadership responsibility without which any amount of strategic planning and change management efforts will never be successful.

Leaders’ foresight
It is essential that leaders are endowed with foresight as it has the power and potential of transforming the industry. In the absence of which, the organization is deprived of opportunity of having a peep at the future even before it actually arrives and reaching there ahead of the competition would certainly be missed. In other words opportunity to create market leadership position in the future is lost. Leaders with foresight can put their organization ahead of competition by changing the very basis of competition and thus charting a path for transforming the industry.

Take for example the business environment of 1970s and 1980s, when business leaders were talking of the effects of globalization but a very few of them chose to act because in practice they never really felt the impact of the so called phenomenon of globalization. The real impact of globalization was realized by businesses only during the decade of 1990s, when consolidation through mergers and acquisitions across the industry had become the norm of the day. The call being “buy or be bought” to gain access to scarce resources, ready markets and so on and so forth. Even the companies like IBM had faltered for a while. Only the best prepared and managed companies survived the onslaught of globalization. Now let us consider how one of the greatest leaders of our times – Jack Welch – had prepared his company for the future even before it arrived during early 1980s. He described the winners of the future by insisting that companies hanging on the ways of 1980s will not be around in 1990s and thus spelt his vision of being “No.1 or 2 – fix, sell or close”. And from that foresight flowed a series of changes in the structure, portfolio and culture of the conglomerate that by 1990s, GE was one of the most competitive companies on the planet and found it riding confidently on the waves of globalization when other companies were caught unprepared in uncharted waters.

How then leaders develop this ability of foreseeing the future, by which they provide a future competitive advantage for the company?

Developing leadership foresight
The ability of foresight comes from the business insight – practical insight on technological capabilities and developments, geo politics, demographics, voids in markets space, under served markets and aspects that determine the dynamics along the value chain of the company.