Five
Views of the Future™
A
Strategic Analysis Framework
TFI's innovative strategic analysis framework, Five Views of the
Future™, allows us to take maximum advantage of a large variety
of proven methods when conducting our technology/market forecasts.
The framework is based on the five ways people view the future. The
descriptions below explain the rationale on which each view is based,
list several methods associated with that view, and indicate whether
typical results are quantitative or qualitative in nature.
Five
Views of the Future™
Each way of looking at the future has its advantages and shortcomings.
However, our experience has been that, typically, more valid forecasts
result from the use of a variety of methods from different views rather
than any one. Thus, in our technology/marketing forecasting projects
we normally use at least two views. These five views, as illustrated
in the Five
Views of the Future™ chart, individually and in concert,
provide the foundation for a powerful forecasting program.
Extrapolators BACK TO
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believe
that the future will represent a logical extension of the past.
Large scale, inexorable forces will drive the future in a continuous,
reasonably predictable manner, and one can, therefore, best forecast
the future by identifying past trends and extrapolating them in
a reasoned, logical manner.
Technology Trend
Analysis is based on the observation that advances in technologies
tend to follow an exponential improvement process. The technique
uses early improvement data to establish the rate of progress and
extrapolates that rate to project the level of progress at various
times in the future. Results produced by this technique are typically
highly quantitative. In practice, this technique is typically used
to forecast developments such as the speed of operation, level of
performance, cost reduction, improved quality, and operating efficiency.
Fisher-Pry Analysis
is a mathematical technique used to project the rate of market adoption
of technically superior new technologies and, when appropriate,
to project the loss of market share by old technologies. The technique
is based on the fact that the adoption of such new technologies
normally follows a pattern known by mathematicians as the "Logistic
Curve." This adoption pattern is defined by two parameters. One
of these parameters determines the time at which adoption begins,
and the other determines the rate at which adoption will occur.
These parameters can be determined from early adoption data, and
the resulting pattern can be used to project the time at which market
takeover will reach any given level. Results produced by this technique
are highly quantitative. The technique is used to make forecasts
such as how the installed base of telecommunications equipment will
change over time, how rapidly a new chemical production process
will be adopted, and the rate at which digital measuring devices
will replace analog devices in petroleum refineries, etc.
Gompertz Analysis
is very similar in concept to Fisher-Pry Analysis, except that it
better models adoptions that are driven by the technical superiority
of the new technology. However, customers do not suffer any significant
penalty for not adopting the new technology at any given time. Like
Fisher-Pry analysis, Gompertz analysis projects adoption by use
of a two parameter mathematical model. In similar manner, early
adoption is used to determine these parameters and the resulting
adoption curve. Results are highly quantitative, and the technique
is often used to project adoption of consumer products such as high-definition
television, camcorders, new automobile features, etc.
Growth Limit Analysis
utilizes a mathematical formulation known as the Pearl Curve to
project the pattern in which maturing technologies will approach
development limits. This can often be useful to organizations in
analyzing maturing technologies, in setting feasible research goals,
and in determining the utility of additional development spending.
The technique can also be useful in determining if new technical
approaches can be used to overcome apparent technical limits.
Learning Curve
techniques are based on the fact that, as more and more items of
a given type are produced, the price of production tends to decrease
at a predictable rate. For example, each doubling of the total number
of a particular items produced might result in a cost reduction
of 15%. In some cases, key technical parameters may improve in a
similar pattern. The learning curve phenomenon is reflected as a
straight line on log-log graph paper which makes projection relatively
simple. Results from the use of this are highly quantitative. The
technique can be used for setting price and technical performance
targets for developing technologies, particularly in the middle
stages of their development.
Pattern
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believe
that the future will reflect a replication of past events. Powerful
feedback mechanisms in our society, together with basic human drives,
will cause future trends and events to occur in identifiable cycles
and predictable patterns. Thus, one can best address the future
by identifying and analyzing analogous situations from the past
and relating them to probable futures.
Analogy Analysis
is based on the observation that the patterns of technical development
and market capture for new technologies are often similar to those
for like technologies in the past. In applying this technique, forecasters
identify appropriate analogies and analyze similarities and differences.
Normally, it is desirable to identify more than one applicable example
in order to minimize the probability of selecting false or inappropriate
analogies. The results from application of this technique are typically
semi-quantitative in nature, and are often presented as a range
of possibilities rather than a single projection.
Precursor Trend
Analysis takes advantage of the fact that, often, the development
of one technology lags by a constant period the development of another
related one. For example, the first application of technical advances
in passenger cars typically occurs approximately four years after
their application in race cars. Similarly, the application of new
technologies in commercial products tend to follow laboratory demonstration
by a relatively constant period. One can, thus, project the status
of the lag technology at some future date by observing the status
of the lead technology today. This technique also allows the extension
of lag technology forecasts by building on forecasts of lead technologies.
Results from using this technique are highly quantitative.
Morphological Matrices
provide a formal method for uncovering new product and process possibilities.
In applying this technique, users first determine the essential
functions of the product or process. Next, they list the different
means by which each of these functions could be satisfied. Finally,
they use the matrix to identify new, reasonable combinations of
these means that could result in practical new products or processes.
Results of the application of this technique are qualitative in
nature. The technique can be used to identify non-obvious new opportunities
for a company. This technique can also be used to identify products
and processes that competitors might be developing or considering.
Feedback Models
provide a means for accounting for the interactions that will connect
technical, economic, market, societal, and economic factors as the
future unfolds. In using this technique computer models are developed
that mathematically specify the relationships between each of the
relevant factors. For example, advances in technology may result
in improved products that may result in increased sales that may
provide more funds for further advance in technology. The results
of this technique are highly quantitative, but are often used to
examine qualitative consequences of trends, events, or decisions.
The technique is most commonly used in the formulation of high level
strategies or policy.
Goal
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believe
that the future will be determined by the beliefs and actions of
various individuals, organizations, and institutions. The future,
therefore, is susceptible to modification and change by these entities.
Thus, the future can best be projected by examining the stated and
implied goals of various decision-makers and trend setters, by evaluating
the extent to which each can affect future trends and events, and
by evaluating what the long-term results of their actions will be.
Impact Analysis
provides a simple, formal method for taking into account the fact
that, in a complex society such as ours, trends, events, and decisions
often have consequences that are neither intended nor foreseen.
The technique combines the use of left brain and right brain thinking
to project the secondary, tertiary, and higher order impacts and
implications of such occurrences. Results are qualitative in nature,
and the technique is often used to analyze potential consequences
of projected technical advances or to determine areas in which forecasting
efforts could best be directed.
Content Analysis
is founded on the concept that the relative importance of social,
political, commercial and economic issues are reflected by the amount
of media attention the issue receives. Thus, by measuring, over
time, changes in such factors as column-inches in newspapers, time
allocated on television, and, more recently, number of items on
the Internet, forecasters can project the direction, nature, and
rate of change. In the technical arena, this technique can, to some
degree, be used to project advances in new technologies, as well
as growing market attraction. The results of use of this technique
are often displayed in a quantitative format. However, they are
typically used only for qualitative analysis.
Stakeholders' Analysis
is a formal method for taking account of the influence that various
individuals and institutions can have on the way the future develops.
It explicitly identifies those people and organizations, internal
and external, that have a "stake" in particular decisions, projects,
or programs; analyzes the importance that each individual or group
assign to these issues; and the relative influence that they may
have on developments. The results from this technique are normally
semi-quantitative. The technique is often used to test the validity
of forecasts that might be impacted by unexpected opposition or
support.
Patent Analysis
is based on the presumption that increased interest in new technologies,
together with conviction of their practicality and appeal, will
be reflected in increased R&D activity, and that this, in turn,
will be reflected by increased patent activity. Thus, it is presumed
that one can both identify new technology opportunities and assess
the state of development of given technologies by analyzing the
pattern of patent application in appropriate fields. Results from
the application are often presented in quantified terms; however,
their use in decision-making is normally based on a qualitative
evaluation.
Counter
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believe
that the future will result from a series of events and actions
that are essentially unpredictable and, to a large extent, random.
Therefore, one can best deal with the future by identifying a wide
range of possible trends and events, by carefully monitoring developments
in the technical and social environments, and by maintaining a high
degree of flexibility in the planning process.
Scanning, Monitoring,
and Tracking techniques are founded on the observation that,
for most new technologies, a finite, often considerable, amount
of time is required to bridge the gap between conception and commercialization.
Thus, if one is alert, he or she can discern changes in technology,
market, and other business factors in time to take maximum advantage
of these changes. All three techniques are employed to identify
and evaluate developments that might materially impact the organization's
operations and strategies. Although the three techniques are similar
in many respects, they differ in purpose, methodology, and degree
of focus.
- Scanning seeks to identify
any trend or event that might impact the organization and is,
therefore, by design, essentially unfocussed.
- Monitoring is designed to
follow general trends in specified areas and is, thus, more focused
than scanning.
- racking is designed to carefully
follow developments in a limited area and is, consequently, highly
focused.
Results from each of these techniques can vary between highly quantitative
to basically qualitative. However, in general terms, results are
less quantitative in scanning activities and more quantitative in
tracking activities.
The Alternate Scenarios
technique provides a structured method for integrating a number
of individual forecasts into a series of comprehensive, feasible
narratives about how the future might develop. It provides a vehicle
for combining many forecasts in a format that allows decision-makers
to effectively relate the implications of the combination of all
forecasts. The results from this technique can range from highly
quantitative to purely qualitative depending on the objectives of
the effort, its organization, and purposes to which it will be put.
This technique is typically used to assist executives in critical
decision-making. Although a single scenario can be used for making
decisions, the use of a series of alternate scenarios allows executives
to take account of the fact that the future can never be projected
with certainty, and to determine how appropriate flexibility can
be built into plans.
Monte Carlo Models
are computer models that take explicit account of the fact that
all projections of future trends and events are, fundamentally,
probabilistic in nature. In this technique, all of the steps involved
in the development of a new technology are identified, and their
inter-relationships specified in a mathematical model. Numerical
values are assigned to the probability of each event occurring in
various different ways and to the length of time it will take each
event to occur. The model is then run a large number of times to
determine the probability of various overall outcomes. The results
of the technique are highly quantitative, and the technique can
be used to project technology development times and patterns, to
allocate resources, and to track the development of emerging technologies.
Intuitors BACK TO
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are
convinced that the future will be shaped by a complex mixture of
inexorable trends, random events, and the actions of key individuals
and institutions. Because of this complexity, there is no rational
technique that can be used to forecast the future. Thus, the best
method for projecting future trends and events is to gather as much
information as possible and, then, to depend on subconscious information
processing in the brain and personal intuition to provide useful
insights.
The Delphi Survey
technique is a method for taking advantage of the talent, experience,
and knowledge of a number of experts in a structured manner that
allows an exchange of divergent views without direct confrontation.
The technique involves initial projections, usually in quantitative
terms, of future events. After the initial projections are correlated,
participants are asked to explain, anonymously, their differences
in a series of follow-up rounds. Results are normally semi-quantitative,
and the technique can be used to project future technical, market,
and other developments, to uncover fundamental differences of opinion,
and to identify non-conventional ideas and concepts.
Nominal Group Conferencing
is a formal technique for structuring the input from a number of
subject matter experts. The technique is similar in some ways to
"brain storming", but its structure requires all participants to
take active part in the process. It also requires participants to
use their brains in a series of different ways, i.e., to individually
generate new ideas, to silently assess the ideas of others, to jointly
examine the implications of new ideas with others, and to formally
evaluate a series of options. The results of employment of this
technique are typically semi-quantitative. Nominal Group Conferencing
is often used to project future developments, to uncover new business
opportunities, or to identify new solutions to old problems.
Structured and
Unstructured Interviews are methods for gathering and correlating
the thoughts and opinions of a collection of experts about how the
future will unfold.
- Structured interviews are
similar to traditional opinion polls in that the people conducting
the interviews know ahead of time the information they are seeking
and structure the interview to get this information as efficiently
as possible. The use of personal interviews rather than written
surveys promotes participation, decreases the probability of misinterpretation,
and assists in assessing the qualification of participants. Results
are typically quantitative in nature and can be used to project
such items as potential market size, rate of technical advance,
and general business factors.
- Unstructured interviews,
on the other hand, are used when the subject area to be addressed
is less well defined. The interviewer begins each session with
only a limited concept of how the interview will be structured.
In large measure, each question is based on the answer to the
previous question. The interview is essentially free form, and
the results can be either qualitative or semi-quantitative. This
technique is particularly valuable in identifying key issues,
clarifying general concepts, identifying additional experts, and
formulating future structured interviews and surveys.
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