Skill 8. Reviewing (Adjustment thinking).
The last critical type of foresight thinking requires looking at the recent past to improve our future. Nothing is perfect. Everything can be improved. How do you know when you are missing the mark? And when you fall short, how do you generate the momentum to change? That is the reviewing skill, and adjustment thinking. Like the other seven skills, reviewing is very helpful to a point, but it can also be overdone, and must be balanced with the other seven skills.
The first reviewing specialty we will discuss is Auditing & Change Management. Auditing is a subspecialty of both accounting and intelligence work that seeks to find out the real state of things, which may be very different from the state we think, or the state represented in the books. The Institute of Internal Auditors (IIA) offers certifications and conferences in this critical, and often-neglected specialty. Being constantly on the lookout for numbers that don’t seem right, and learning how to interrogate them, is a critical reviewing skill. If you are the bearer of bad news, you may not find a receptive audience, either. Sometimes you will need to get particularly creative in communicating a bad news message, and getting the political leverage you need to be accepted, as a whistleblower.
Harry Markopolous’s fascinating book, No One Would Listen: A True Financial Thriller (2010) details how his models and forensic accounting evidence predicted, with ever increasing evidence that Bernie Madoff was running a massive Ponzi scheme. Markopoulos alerted the SEC to this suspected fraud at least three times, in 2000, 2001, and 2005, each time with supporting documents, and two more times without documents, but each time they ignored him, and failed to follow up.
The Madoff fraud finally collapsed in 2008, losing as much as $64 billion for investors, making it the largest known financial fraud in US history. It is a classic failure of financial foresight to convert to successful strategy and action, and Markopoulos’s book is one of many on our Global Foresight Books list. Study it well, and ask what you would have done in his situation, to convert your excellent auditing skill to a successful outcome. Going to the press was one option Markopoulos could have utilized much better, though of course that would have involved legal risk, to both himself and to whatever online outlets would have published his warnings. Whistleblower protection laws are still weak, and whistleblowers must be willing to engage in a certain amount of self- and family-sacrifice if they wish to bring powerful actors to account.
As auditors of intangibles like our current values and expectations, good foresighters also want to be constantly on the lookout for any expressed or implicit group values, assumptions, forecasts, and expectations that don’t seem reasonable in a particular context. In Seeing What Others Don’t (2013), cognitive psychologist and decisionmaking expert Gary Klein discusses the premortem as a very powerful method to immediately audit for and eliminate groupthink, and the results of the premortem audit can be used by any group facilitator to help make inflated expectations more realistic. We can think of the premortem as a way to quickly audit the opinion of pessimists in the group who want to speak out, but are being cowed by group bias to believe in some obviously unlikely futures. A reverse form of the premortem can be used if you think the group is being unreasonably pessimistic, and you want to bring the optimists views out of the closet, to eliminate fatalistic thinking and get the group back on track to positive action. We discuss the premortem in Chapter 4 (Personal Foresight) as a way to see and fix emotional-cognitive biases in ourselves, but it is also a key group auditing strategy as well.
Change management is leadership and management intended to diagnose and fix an organizational problem. It includes to the specific set of practices we use to diagnose and turn around business processes and organizational strategy, often against political inertia. When firms get into trouble, they will often bring in a turnaround team, one with good experience in change management, and in instituting the drastic reforms that may be necessary when the organization’s structure or process has gotten out of alignment with the competitive environment. The Association of Change Management Professionals (ACMP) is a newer practitioner community seeking to standardize and promote this leadership and management subspecialty.
Like foresight and leadership, change management requires all the Eight Skills, but we classify it as primarily a reviewing skill because it first requires adequately diagnosing organizational problem, recognizing what is and isn’t working in organizational structure and process, then devising good strategy to fix key problems, using influence to get people on board with the change plan, executing reforms, and of course continually reviewing whether strategy and action are successful, and adjusting as necessary.
To prevent the need for a turnaround team in future years, some corporate boards of directors will even formalize some change management positions and processes in their organization during good times. As Murray Lincoln, one of the 20th century leaders of the cooperative movement liked to say, every company should have a “vice president in charge of revolution,” someone who’s primary task is to critique, challenge, and engender ferment among the more conventional colleagues. Regularly questioning our foundations is how they stay strong.
Like all the specialties we’ve described, change management happens as part of a Do loop, so the faster, more efficiently, and more frequently members of your organization can run that loop, the more adaptive you’ll likely be. Recall Boyd’s OODA loop, and Kotter’s eight-step model in Leading Change (2012). A good source on guiding group behavior change, using both influence and change management skills, is Grenny et al.’s Infuencer: The Science of Leading Change (2013).
These and other change management models stress strategies that include focusing on small behaviors that clearly signal the new direction to the group, publicly empowering the early adopters who model the changes you seek, and structuring the peer, physical, and digital environments to encourage change. Stephen Guise’s Mini Habits (2013) is a nice summary of the power of the “small good habit” strategy, both personally and for groups. Defining, asking for, and publicly rewarding small and very achievable “vital behaviors” that signal the new direction will help the organization change more rapidly and confidently.
Unlearning bad habits, and modeling forgiveness, both of others and yourself for past mistakes, may also be required. Jack Uldrich’s Higher Unlearning (2011) offers more on that. Resistance will be mounted, and must be dealt with caringly but firmly. Those who cannot accomplish the new behaviors signal their unwillingness or may have other learning problems, and can be given extra attention until they do, or are managed out of the firm.
For those leaders seeking motivating examples of how much organizational change can be accomplished when an organization faces real crisis, read William Bratton, Turnaround (1998), on the NYPD, Lou Gerstner, Who Says Elephants Can’t Dance? (2003), on IBM, and Carlos Ghosn, Shift (2006), on Nissan. These are three rather impressive turnaround stories captured well in the business literature (even if their CEO’s take credit for more than they should). Turnarounds always require some forgiveness of old grievances and willingness to abandon old ways (forgiveness and unlearning, Skill 8), and some time for the (usually new) leader to learn the lay of the land (learning, Skill 1) and to try new things (innovation, Skill 2) before employee judgment is rendered. In other words, employees need the freedom and the trust to be able to mentally start their Do loops again.
The last set of reviewing specialties that we recommend all foresight professionals understand, and know how to use, is Benchmarking & Quality. Benchmarking involves determining best practices (“quality”, at the firm level) by looking widely and carefully at the competitive environment, to understand how others do things that you do, if anyone is doing them better, and how you can institute measurements around those best practices, which you can continually review to guide you to where you want to go.
The Benchmarking Network (BN) is a resource (not a community) that lists a variety of industry benchmarking associations. One good benchmarking community is the Balanced Scorecard Institute (BSI). Balanced scorecards are a well respected business performance management tool, developed by Robert Kaplan and David Norton in 1992, that focus the team on a small, mentally memorable set of financial and non-financial performance items, giving them target values, and generating corrective interventions when performance falls short of targets. The first and still the majority of such scorecard systems use four organizational vision and strategy perspectives: Customer-Stakeholder, Financial, Internal Processes, and Organizational Capacity (People and Technology) performance.
Scorecards can be linked to a strategy map, to leading indicators (early signs of change), to various outcome measures (“lagging indicators”),and to strategic initiatives to achieve desired targets. Scorecards must be aligned to current management strategies, and thus redesigned when that strategy has outlived its usefulness. Proactive leaders can use them to signal when a crisis is emerging, and to initiate politically painful change.
Niven’s Balanced Scorecard Step-by-Step (2006), and Kaplan and Norton’s, The Strategy-Focused Organization (2001) and Alignment (2006), are a few good balanced scorecard primers. The Balanced Scorecard Institute offers a BS Professional and BS Master Professional certificate. Results-based management is another scorecard style management approach that gets all the actors to plan, measure, and review the results of their interventions. It is gaining popularity in nonprofit sectors, and for dealing with any abstract projects where predefining ideal outcomes and impact are important to keep the organization accountable. The International Red Cross provides a nice overview of their use of results-based scorecards.
The last classic reviewing subspecialty we will discuss is Quality. We’ve previously discussed the Shewhart-Deming OPDCA quality cycle, which is a low-speed, high accuracy variation of the Learn-See-Do-Review cycle (Do loop). From Deming’s perspective, reviewing comprises the last two steps in the OPDCA cycle (both “Checking” and then “Adjusting” after inspection). When we view it as two fifths of the Shewhart-Deming cycle, we can clearly recognize that reviewing is a critical practice skill for all adaptive organizations.
In business contexts, quality is defined as the “non-inferiority or superiority” of a product or service, or its “fitness for purpose.” As we pursue quality, we should always ask when satisficing, and using the 80/20 Rule, is good enough for what we need. We should recall Voltaire’s adage to perfectionists that “the best is the enemy of good.” We need only achieve quality that is sufficient for the purpose and the strategy. Many business competitions have been won by more rapid development and better promotion of technically inferior but still useful products or standards. All the format wars we have seen in technical products (AC vs. DC, VHS vs Betamax, CDMA vs. GSM, etc.) have taught us that quality is just one element of adaptiveness.
Learning from your customers the quality they need, by quickly running several Do loops, and then hitting that target consistently, is more important than being the best. Nancy Tague’s Quality Toolbox (2005), is a good primer for useful quality management methods. The American Society for Quality (ASQ) is the leading US quality practitioner community. There you will learn about such subspecialties and methods as TQM, Lean Six Sigma, and many others. They also offer many certifications and conferences. Eight magazines and journals
Good foresight consultants continually review, adjust, and critique their own work in order to keep improving professionally. Those that build critical feedback into their production activities, including anonymous feedback when politics or friendships might otherwise weaken its quality, and who subject each step in their process to after-action evaluation will rapidly improve. But critiquing isn’t enough. After we find fault we must seek a practical way to fix what we don’t like. And if we can’t fix it, we must learn to live with and continue to value what exists. After all, to be human is to continually make mistakes, and to continually hope to better ourselves, by trial and error.
We hope this overview of the Adaptive Foresight and Management model is helpful to your practice. To deepen its value, the Eight Skills would benefit from online diagnostics for self-assessing and 360-feedback assessing each skill in individual, team, and organizational contexts. It will also need training curricula to help those weak in any skill to build it up, and create skills-complementary teams. All of this should be done in a quantitative manner, to help validate the model.
Our model is Creative Commons BY-SA licensed, so any reader is free to adapt it themselves if they like. We will do many further adaptations ourselves in future versions of the Guide.