backcasting in business
18
sep

Backcasting… almost as easy as saying ABCD

Exponential change

The future is changing at an exponential pace. New technology is emerging, and for us, normal humans, it is difficult to translate all these developments to everyday business. However, we must. Looking back at what happened in the past and extrapolating this into the future will not work anymore.

The following picture was made by theemergingfuture.com.

exponential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With 2012 as the starting point, the graph shows us just how fast techology is developing. Every twelve to eighteen months, computers double their capabilities, and so do the information technologies that use them. We are now in 2019, meaning that we have already achieved a 64 times higher development in technology compared to 2012. If we look 10 years ahead this is a staggering 32.768!! Today, small startups are creating paradigm shifts instead of large corporations, universities and governments.

6th wave of innovationaccelerating growht in technology

 

In the above graphs the exponential trends are translated in real life examples. In the first graph we see how we have evolved through already 5 waves of innovation, and the 6th is about to emerge. It can clearly be seen that the duration of the wave is shortening, whereas the level of innovation is increasing. It also tells us that the 6th wave is about sustainability. If we want to survive on Mother Earth we will have to consume in different ways and use technology to reduce the impact on the earth’ ecosystem. In the second graph the key innovations of the last decades and centuries are stated. Do you notice the exponential curve we have experienced the last decade?

So how can we deal with this future?

How can we, as a business, struggling to getting things done for today and maybe even tomorrow, already take into account developments that will take place the day-after-tomorrow?

The answer is that we have to stop forecasting and start backcasting.

What is backcasting?

Backcasting is  a term first coined by John Robinson in 1982. [8] It is a planning method that starts with defining a desirable future and then works backwards to identify policies and programs that will connect that specified future to the present.[1] 

It is illustrated by the following picture, that was made by The Natural Step. The Natural Step is an organisation that helps organisations to move strategically toward sustainability. They have developed the ABCD method. We have translated their ABCD method to a wider application in business. This will enable you to start backcasting and start planning for the future!

backcasting in business

A. Assessment

First we have to be aware of what is happening around our organisation. What are the trends and developments that we can see that will impact our organisation? Even if the technology is not ready yet, it will be in 10 years time! So, we imagine a future state and think of who we as a company want to be in that future. We define a clear and ambitious goal for that future (call it a vision) to give us direction.

B. Baseline Assessment

We now have to define where we stand compared to where we want to be. How does our current portfolio look like? Which future projects do we have right now? What is going well and what is not? What is our current business model? Which technologies do we need to explore if we want to reach that final state? What kind of markets do we need to enter? And what should we stop doing? Basically, we adopt a strategic portfolio management approach leading to a clear innovation scope.

C. Creative Solutions

Now that we have identified where we are heading and have defined the boundaries of the sandbox we want to play in, we can start ideating. This can be done in various ways. A good starting point is to tap into the potential of your employees. It is proven that most successfull innovations come from your employees, not from the board level! If we don’t have the knowledge ourselves, we will have to start working with other companies.

D. Devise a Plan

We will make a distinction between short term and longer term steps. The “low hanging fruit” can be done immediately and will bring instant benefits. For the longer term initiatives we need a flexible method like design thinking or lean startup. Since the initiatives will take into account an unknown technology and/or unknown market, we will first have to learn what works. By taking one step at a time, iterating constantly, learning and adapting, we have a better chance of reaching the desired future.

Of course, our environment is changing constantly and maybe even outpacing us. But we take this into account in our actions. We have no alternative. Here is the reason why:

Standing still is the fastest way of moving backwards in a rapidly changing world – Lauren Bacall