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Futures Studies and Management Development
FUTURES
STUDIES
MANAGEMENT
AND
DEVELOPMENT
Yehezkel Dror
Futures studies can make significant contributions to management by improving background information, stimulating new ways of thinking and providing decision inputs. Professor Dror shows how good futures studies, replacing the criterion of subjective certainty by that of objective uncertainty, pinpoint changes in management needed for long-term planning.
DURING the last decade interest in futures studies has increased enormously and this is reflected in the amount of literature, conferences and associations devoted to them. Their advancement in quality, however, has been slower, and it is an understanding of their qualitative characteristics which is essential for evaluation of their significance for management, private and public alike. First, it is necessary to take into account the probabilistic and even arbitrary nature of the future, as understood by homo sapiens. Especially in a period of rapid social change such as ours in which even stability of the rules of change is not assured, the future appears quite wide open. It is not the weakness of our predictive methods alone, but the nature of the investigated phenomena themselves which result in predictions being probabilistic in part, uncertain in other parts and dependent on various doubtful assumptions. Over-refinement of mathematical methods may do more harm than good by creating an illusion of quantitative exactness. For instance, in the Delphi Method much can be done to process more efficiently the expressions of opinions and to improve impersonal interaction between the participants. But no such refinement in techniques can overcome ignorance about the future by the participants in the Delphi panel and unequal distribution of good “intuition” about the future between different persons. Good futures studies should present the future in as correct a way as possible. This will often result in structuring of uncertainty, rather than in reduction of uncertainty. Indeed, taking into account the simplifying trends of our minds, good futures studies will often substitute objective structured uncertainty for incorrect subjective certainty. Professor Yehezkel Dror is at the Hebrew University of Jerusalem Editorial Board.
and is a member
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and real potentials
As futures studies improve and overcome weaknesses and inherent limitations, their relevance for management, at present confused, will become clearer and will increase. The naive view sees futures studies’ role in management as “helping decisions by predicting the probable consequences of main alterFutures studies are diffuse and include a natives”, but this is over-simplified. variety of contributions which are not always interrelated; some are direct and some indirect. Furthermore, they vary in their intensity and relevance to management according to : l
l
l l
the fields in which they operate, eg technological, political and demographic forecasting; the purpose for which they are used, eg marketing, political feasibility testing and management training; different time spans: short, medium, long and very long range; different countries, depending on the rate of change and the degree of institutional stability.
Management cannot ignore futures studies since both are intensely concerned with the future. Nearly all organisational decisions are unavoidably influenced and often shaped by assumptions about the future and by images of the future. Not only do specific expectations about the future influence specific decisions, but broad expectations concerning the future socio-political environment shape main strategies for organisational growth. Decision styles and strategies rely even more crucially on our opinion about the predictability of the future: on whether we believe that (a) we can know the future in detail, or (b) nothing can be known about the future, or (c) the future can be previewed in the form of structured
uncertainty.
The first view will lead us to detailed long-range programming, the second to improvisation and the third to modern planning and policy analysis. Organisational decisions, then, depend on images and the degree of predictability of the future, and any improvement in these would constitute an important contribution to management. The correct criterion for evaluating the contribution of futures studies to management is not whether any prediction is “exact”, but whether the prediction is more reliable (often by showing that the future is uncertain) because it is based on systematic use of futures studies. Without this, organisational decisions fall back on images of the future which are incorrect, partly because based on tacit assumptions. Futures studies should therefore force management to explicate these assumptions and re-examine them with the best available tools. Main actual and potential contributions (Table 1) of futures studies to management include the following : a Improving background information. The quality of management is dependent on the general background information and knowledge of the chief decisionmakers. Long-range perspectives on critical future developments and possibilities are often vague and lack a systematic approach. Futures studies would sharpen perspectives and provide a systematic approach.
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TRAINING
Tolerance of ambiguity; acceptance of uncertainty as challenge. Risk as a value
Personal acquaintance and good work relations with main persons engaging in predictions relevant to organisation. A “feel” for their reliability. A “feel” for fallacies and mistakes in predictions
Good knowledge of principles prediction methods. Good knowledge of methods of handling uncertainty. Good knowledge of futures studies relevant to organisation
Thinking in terms of uncertainty, alternatives, probabilities and crossimpacts
of
Tolerance of ambiguity; acceptance of uncertainty as challenge
Suspicion of misplaced certainty; capacity to learn from various types of persons engaged in futures studies, including more esoteric ones; viewing the future in terms of open systems
Good knowledge of methods for handling uncertainty. Familiarity with main ideals of futures studies
Input into specific decisions
thought
Thinking in terms of uncertainty, alternatives, probabilities and crossimpacts
and
Broadening processes
Personality values
STUDIES
Interest in the future; tolerance of radical change; tolerance of ambiguity
knowledge
FOR USE OF FUTURES
Tacit knowledge and patterns of behaviour
OF MANAGERS
and qualifications
AND
A “feel” for the long-range future; habits of search for relevant information; capabilities for critical and open minded reading of general futures studies; improved “tacit theories” about the future
Explicit
Capacities
OF DEVELOPMENT
Familiarity with long-range predictions and with long-range prediction methods; some familiarity with good science fiction
capacities
OBJECTIVES
Thinking in terms of uncertainty, alternatives, probabilities and crossimpacts
intellectual
1. PROPOSED
Improving background information
Types of contributions
TABLE
3 B CC
E
,b P
p N
8
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Broadening thought processes. Futures studies would encourage open-ended thinking and recognition of uncertainty and probability as inevitable facts of the human and organisational condition, and as a challenge and opportunity. They would encourage a longer view of the decisions under consideration and an increased sensitivity to cross-impacts between apparently unrelated events often handled by different parts of management; rigid “tacit theories” (ie one’s basic world view) would be revised in the light of other opinions and longer-range possibilities. Creativity, and an awareness of the necessity of gearing present action to alternative images of the future would also be significant contributions to improving management. The educational function of futures studies is thoroughgoing; they would lose their value if viewed in a narrow and technical way. Input into speczjk decisions. The most immediate impact that futures studies can have on management is in producing specific predictions that serve as inputs into concrete decisions. Prototypes of such contributions are consumer demand, availability and price of new technologies, probabilities of takeovers of countries by military coups etc. Short-range and stable issues may be predicted with a good degree of accuracy, and long-range predictions, though less exact and reliable where certainties are sought, can at least reveal uncertainty, so that the organisation, if it is equipped to face and cope with uncertainty, will be helped in making specific decisions.
The various techniques of futures studies will be reflected in the purposes for which management uses futures studies : scenario construction is very important for relating present decisions to future goals and images; extrapolation is a technique for short-range predictions as they affect decisions; the Delphi method is effective in the educational and informational function; model design aids consistent thinking and exposes cross-impacts; the invention of alternative futures encourages open-ended thinking and creativity etc. The main problem is how to use these techniques in combination and most effectively. This requires a sophisticated understanding of them and thorough awareness of their potentials and limitations, though not necessarily knowledge of their technicalities. To summarise: the potential relevance of futures studies to management looks impressive, but quite complex. Incorrectly used, futures studies can be counter-productive (eg by providing a mistaken feeling of certainty). The managerial system must also be equipped to use futures studies correctly and to this end management must satisfy a number of pre-requisites and conditions. Similarly, futures studies may well have to re-adjust some of their characteristics in order to serve management-but this issue is beyond the confines of this article. Required
characteristics
Getting the most out of futures studies requires management system, eg : l
a variety
of changes
in the
Every organisation must have internal futures studies professional staff. In a small organisation this function could be fulfilled by one person on a
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Futures Studies and Management
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part-time basis. In a large organisation a number of people might be needed. But without good in-house expertise it is impossible to use appropriately futures studies done outside the organisation, even when prepared for its own specific needs. Such staff should be qualified professionals who would also be involved in the decision-making of their organisation. Relations with outside futures studies organisations must be established, so as to keep in contact with work in progress and to contract for special studies dealing with problems of specific concern to the organisation. Futures studies techniques must be introduced into the decision-making procedure. For instance, standard alternative scenarios of the main situations relevant to an organisation should be prepared; every alternative decision should be considered in relation to these scenarios, and the effects of changes in the scenarios noted; all reports describing the state of the organisation should deal with broad future implications, with explication of assumed future states of relevant variables etc. All these techniques must be revised to take account of emerging reality in general and accumulating organisational experience in particular. Much more demanding is the requirement that established patterns of organisational decision-making should be revised in the light of futures studies. This involves some hard changes: many modern practices are quite incorrect when evaluated by advanced futures studies. The hardest case is that of organisational planning which is now receiving increasing attention. Its methods have usually been based on assumptions of certainty, whereas what is needed is increased capacity to handle uncertainty by structuring it, and this is where futures studies can help. Uncertainty implies an ambiguity not recognised by traditional methods and the new approach would show up the extent of ignorance about the future.
Therefore the use of futures studies in organisations requires quite far-reaching reforms in the basic patterns, with acceptance of structured uncertainty as a framework. The main difficulty is that many of these changes go beyond organisational structure, procedure and process; they are related to organisational “culture” and to basic patterns of organisational behaviour. A new and sophisticated decision-making “culture” would be needed. To get the most out of futures studies, organisations would need to undergo fundamental changes, amounting to a change in organisational culture. This can only be achieved through managers, whose characteristics would be transformed by management development and training. What transformations of this kind, then, can and must be achieved ? This is difficult to specify because of the scarcity of relevant experience and the way in which organisational use of futures studies ties in with the improvement of decision-making in general. Both analytically and practically, it seems to me quite impossible and undesirable to isolate futures studies from other approaches to the improvement of complex decision processes, such as systems and policy analysis, stimulation of organisational creativity, self-evaluation and learning, etc. From the point of view of long-range organisational efficiency and growth, only redesign of
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all dimensions of the organisational decision system acting in integration with each other, makes sense. It is important that in recognising alternative futures organisations should be equipped to choose between them; they must have methods for handling irreducible uncertainty; they must be able to process relevant data within the organisation and therefore must cultivate a broad of organisational decisionapproach to futures studies. The improvement making should be considered as a whole, of course, but it is permissible for our limited purposes to focus attention on management development and training. Management development and training can be analysed according to: 0 Intellectual capacities; l Explicit knowledge, ie information and data; l Tacit knowledge and patterns of behaviour; l Personality and values. Such development and training would be directed at enabling management to make the best use of futures studies for organisational purposes. By crosstabulating, we get a matrix of development and training objectives which permits us to identify the main output specifications for our development and training activities. A preliminary form is suggested in Table 1.
Development
and training
contents and methods
Table 1 shows that some of the development and training objectives relate to basic characteristics of management. They therefore have implications for the longer-range features of management development, such as recruitment, rotation and advancement-the details of which depend on local conditions and go beyond the scope of this article. The improvement of organisational decision-making and increased use of futures studies are shown to be interdependent. There is scope for useful training activities directed mainly towards futures studies. Such training activities should be followed up with guided reading, study days etc. But specific training related to futures studies will have little impact unless futures studies have a place within the organisation itself.
Conclusions There is little doubt that futures studies have important implications for management, which go far beyond the role of detailed predictions in the making of specific decisions. More important is the awareness of the probabilistic structure of the future, the inevitability of much uncertainty and the consequent need to transform organisational decision processes. This is the perspective which, in my opinion, should guide management development and training. Techniques, detailed studies and specific methods deserve attention; but they can easily be overrated. What is needed is management development and training for new patterns of policy-making, and this is where futures studies can contribute and thus gain applied significance.
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Literature Instead of burdening this article with references, I prefer to offer to the interested reader a short list of recommended readings which would form a basis for introducing futures studies into management practice. I have tried to include either the best available books or typical studies which cover the main ideas. This list is based on literature in English. The best single book on futures studies from a decision-making perspective is Joseph P. Martino, Technological Forecasting for Decision-making (New York, Elsevier, 1972). An excellent combination of methodological sophistication and global predictions is Herman Kahn and Anthony J. Wiener, The 2’2ar 2000 (New York, Macmillan, 1967). A more popular presentation is Alvin Toffler, Future Shock (New York, Random House, 1970). Longer range speculations are well presented by Burnham Putnam Beckwith, in ‘The Next 500 Years (New York, Exposition Press, 1967). The work in the United States Commission On The Year 2000 is demonstrated in Harvey S. Pcrloff (ed.), The Future of the US Government (Englewood Cliffs, NJ, Prentice-Hall, 1971). Good technical introductions are William F. Butler and Robert A. Kavesh (ed.), How Business Economists Forecast (Englewood Cliffs, NJ, Prentice-Hall, 1966) and James R. Bright (ed.), Technological Forecasting for Industry and Government (Englewood Cliffs, NJ, Prentice-Hall, 1968). Detailed studies related to concrete issues are well illustrated by the various studies of the Institute for the Future, Middletown, Connecticut, USA. Good futures studies periodicals in are Futures and Technological Forecasting and Social Change. A broad view of modern futures studies is provided by Challenges from the Future: Proceedings of the International Future Research Conference, 4 volumes (Tokyo, Kodansha, 1970). A policy sciences view of futures studies is developed in Yehezkel Dror, Ventures in Policy Sciences (New York, American Elsevier, and Amsterdam, Elsevier, 197 1).
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1973