Many company leaders approach strategic planning and achieving goals in a linear manner that’s too shallow and too focused on the short term. I’m going to show you a better way of identifying the consequences of change, sensing smarter options, and positioning yourself for a better future.

Pressure for fast results and quick fixes from crises like COVID only exacerbate the bad habit of short-term thinking, as management teams have their hands full putting out fire after fire in order to keep their companies alive.

But those preparing to win the future aren’t letting themselves stay trapped in the challenges of today—they’re plotting potential scenarios and making bets for how to succeed tomorrow.

They aren’t thinking of a logical series of steps; they’re picturing a system of events and the direct and indirect influence of their effects.

The key is anticipating and understanding not only first-order consequences of a given situation, but second-order consequences and beyond.

Especially in a crisis, most people focus on, “How’s my business going to survive?” But we also need to be asking questions like:

  • What are the knock-on consequences of the initial shock to our situation that are going to start to surface?
  • Can we start cons those issues to identify all possible outcomes?
  • How can we look for potential patterns and design plans to account for the trouble of tong with the challenges ahead, to avoid double whammies?

People talk about “emerging stronger” from the pandemic, but what does that really mean?

Rather than just learning how to react to a particular crisis, we need critical thinking tools to consider how to respond to shocks generally.

Or even better, how to anticipate what shocks could happen.

Or even better than that, anticipate shocks and start making bets that you think could actually play out in your favor in the future.

Switch from Linear Plans to Network Patterns

When most people think about strategic planning, they count a sequenced set of tasks, to set goals and break down their approach in a step-by-step fashion.

They say, “We want a 50% e in customers in the next 12 months.” And then they start plotting a path backwards from there.

And while working backwards is an excellent tool for simplifying paths to goals, it’s a shallow scenario planning tool. It ignores unanticipated, unplanned, or most importantly UNCONNECTED events, trends, or decisions.

There’s a powerful tool I use a lot, especially at Singularity University, called the Futures Wheel. It lets you view any relevant factors and events as a system, so you can see the relationships between multiple layers of potential interrelated effects.

The Futures Wheel was originally developed by Jerome Glenn in 1971graduate student, and quickly became a favorite tool among educators, trainers, and consultants to help peink about consequences and make better decisions.

Future Wheel COVID Virus Outbreak

Future Wheel – COVID Virus Outbreak

The Futures Wheel is unique in that you’re placing yourself into a visual relationship with an entire ecosystem of events. You’re not only considering a given event or trend in order to see the direct effects, but also getting to see the greater context of 2nd-, 3rd-, and 4th-order consequences. The ones that will have the greatest long-term impact and are often blind spots when we’re caught up in shallow, short-term reactions to emergent situations.

It gives you a much richer source of insight for making favorable decisions. Instead of a line from point A to point B, you can have an entire map of the landscape of possible challenges and opportunities. You have a 10,000-foot view, so instead of considering goals or relevant factors in isolation, you can see a system at play.

It’s a great way to organize your thoughts about potential future events and trends. You can forecast what might happen by looking at alternative scenarios or actually show the interrelationship between challenges and problems.

And it can also help you orient toward the past, to understand how your current situation became what it is, and therefore what might be done to improve. What exactly has happened? Could you have seen any of it coming? What have you learned?

Anticipating Your Future

I often use the Futures Wheel when consulting with companies and on ExecCamps. For example, managers could tell me, “We have slow software delivery.” So then we’d ask, “How is that happening?” and plot out some of the reasons. “We’ve got long development cycles. We’ve got poor collaboration between teams. Etc.” Once we can see the relevant factors, we can extend out further to understand why each of those situations is what it is.

Then we can begin to i the best potential points to make changes: “What are some trends that are emerging in your company, your industry, or the world?” And based on that, “What are the next-level effects that could happen?”

Another example might be to consider a global economic downturn in the near future. ‘s going to be the first thing to happen? People are going to have less revenue coming in, and they’ll probably be feeling more anxious about their finances. So they’re probably going to look at spending less.

Well, what does that mean? One effect could be that restaurants are going to be impacted. People won’t go to high-end restaurants; they’ll go to Fast food restaurants, because they’re cheap. Local and neighbourhood restaurants may need to offer cheaper convenience meals and partner with delivery companies with smaller margins for potential wider audiences. We could also consider other areas: how will these behaviors affect health, other local businesses, farmers, and supply chains, for example?

You might not always be happy about the scenarios you explore, but it’s better to recognize them and prepare than to bury your head in the sand or pretend things will carry on the way you’d prefer.

The investors and businesses who aren’t worried about surviving next week, this is where they start their strategic planning. They’re out on the third-order e VC’s are using this type of thinking to decide where to make bets in companies. “There are 100 future scenarios. If we put $100,000 on each, one of them is going to hit. And if that’s our company, that’s a billion-dollar company.”

The model just gets richer and richer. You can look at today, you can look at the, and you can look at history. And you just keep building it out. Ultimately, this informs how you might make decisions about what bets you want to make, or where you think your business might need to be able to take advantage or defend.

Example: AI Increased Capability

Let’s use artificial intelligence as an example of an emerging trend.

What are some of the effects? Increased automation of manual tasks, a shift from AI research to implementation, or latent data (once thought useless) suddenly becomes extremely valuable.

What are some of the secondary consequences of each of those? Low-skill jobs start to go away, data offers wonderful insight or is weaponized. So what are the consequences of those things? And the next? And possible effects after that?

When you see those potential patterns, it opens up opportunities or threats. You could ask, “How well is our business set up to respond to mass automation?” If you run a 100,000-person company with lots of people doing manual jobs, what is that going to mean? How might you need to think about using automation, not to scare your employees, but to get the benefits? Do you need to start thinking about retraining or upskilling people?

These are decisions companies have to make, and you can give yourself a strong head start by using the Futures Wheel to anticipate and inform those decisions.

Future Wheel AI Increased Capability

Future Wheel AI Increased Capability

Using the Futures Wheel’s not easy to see the big picture when you’re in the day-to-day of just trying to keep a business running. The Futures Wheel is a great tool to quickly give you that perspective and level of critical thinking and then help you formulate a strategy for where you might want to go for the future.

You can start this on your own, and in 10 minutes, you’ll likely be surprised with how much information you generate using a block of post-its, a digital whiteboard or add something to the canvas I’m creating. And when you do it in a team for 30 minutes, it actually blows your mind how much information you generate.

And the real value is often not actually the data that you capture, but the quality of conversation you have as a leadership team when you visualize these things. It can be incredibly profound.

I use this method with great effect for both senior leaders and product leads to start considering the impacts of an event or trend at the organization level and the product level respectively.

Now, you might be wondering, “Well, how do I know what factors or trends to even consider?” Fortunately, that’s the easy part, because it’s often the thing sitting right in front of your nose that you never get a chance to deeply consider. This will help you flesh it out and get a big picture of what it means and where it fits into your current and future reality.

The important thing is to practice. You could try using the Futures Wheel to look retrospectively at how an event happened. You could investigate the potential effects of a current situation. Or you could consider possible future scenarios.

Here are a few questions to get you started:

  • What’s a significant challenge your company’s currently facing?
  • What’s a trend that you’re curious about, and wondering how it might impact your business?
  • What’s something that you really have no idea about and are curious if it could potentially impact your business?
  • For a given trend, what are some of the potential scenarios?
  • If this is true, what would happen next?
  • And do the effects start to group together? (That’s where it starts getting interesting.)

I recommend you use the Futures Wheel anytime you’re faced with an important decision, as well as using it regularly as a proactive tool for evaluating trends and deciding what bets to make with your resources.

I’ve yet to see this method fail to provide immense value. I’d love to see what you come up with. Feel free to send me a picture of your Futures Wheel and let me know what new insights, questions, or conversations emerge for you.