On Forecasting, Backcasting & Design Thinking

For several hundred years and especially since the industrial revolution, humanity including business & politics lived with the firm assumption of unlimited resources & somehow controllable linear predictability of future states based on current activity.

During that time, strategic planning was done mainly via forecasting, meaning predicting in a linear and controllable way a future outcome based on current activity & investment.

As we all know, within a short time, and amplified during the last 20 years our felt reality has become dominated by limited resources and many sustainability issues as well as by a globalized world that has become uncertain because of much higher complexity as a result of the many and ever increasing sophisticated & interconnected systems we create and live in.

The result is that linear predictions have become almost impossible and complexity combined with limited resources makes forecasting much more difficult as higher degrees of uncertainty and risk have to be taken into account into the forecasts. This reduces the value of forecasting as a strategic planning tool.

During the same time, and especially the last 10 years, innovators have been more and more inspired by design thinking, a tool & mindset for problem solving that is characterized, amongst others by

- natively addressing complexity & non-linearity
- treating so called ‘wicked problems’
- doing much deeper qualitative behavioral research
- iterative & early trial & error exercises
- human centerdeness & co-creation

The design mindset likes challenges and complexity and tries to produce future desirable states for a better life. That’s specifically the reason why design thinking and it’s derived disciplines like service design, user experience design, business model innovation, sustainability policy and behavior design, social innovation, open innovation…etc have gained momentum the last years with an ever growing awareness rate amongst managers and policy makers.

But what is different in design thinking as far as forecasting is concerned ?

The planning component of design thinking is rather characterized by backcasting than by forecasting.

Wikipedia on backcasting:

Backcasting starts with defining a desirable future and then works backwards to identify policies and programs that will connect the future to the present. The fundamental question of backcasting asks: “if we want to attain a certain goal, what actions must be taken to get there?” Forecasting is the process of predicting the future based on current trend analysis. Backcasting approaches the challenge of discussing the future from the opposite direction.

…a method in which the future desired conditions are envisioned and steps are then defined to attain those conditions, rather than taking steps that are merely a continuation of present methods extrapolated into the future”…

It seems obvious to me that design thinking gains momentum because of a very different felt reality in many respects and that backcasting is in fact the strategic planning part of design thinking as both design & backcasting imagine a future desirable state (excluding non desirable ones which is not the case in forecasting) and by imagining several alternative & feasible scenarios to get there. It is not surprising that backcasting as a method was first developed and used by the sustainability community and is a key concept of the ‘Framework for Strategic Sustainable Development’ pioneered by Karl-Henrik Robèrt, founder of The Natural Step, an international nonprofit dedicated to applied research for sustainability, in cooperation with a global alliance of universities, businesses, and other NGOs.

In other words, design thinking and the growing use of the design mindset in business and public sector innovation and strategic planning is closely linked to the sustainability issues that the world faces on a global level as well as by people’s desire for better product/service experiences but also for better ethical & emotional experiences within that changing world.