How can foundations better anticipate ways in which the world is changing around them? This is a challenge for every organization functioning in what the military has termed a “VUCA world.” The acronym refers to an operating environment characterized by Volatility, Uncertainty, Change and Ambiguity. For decades now, I have worked with senior business executives to help their organizations spot, anticipate and remain resilient in the face of VUCA challenges.
Thanks to support from the John S. and James L. Knight Foundation and the Council on Foundations, we recently surveyed nearly 100 foundation executives about how well-equipped they felt to navigate a more turbulent future. The main findings detailed in the report No Time for Complacency comment on the ability of foundations to detect and respond to early signals of threats and opportunities. The findings suggest that even though foundations closely follow their changing world, they may be overly confident in their collective ability to grapple with unanticipated changes.
In view of this cautionary note, we convened a small gathering of 35 foundation leaders at the Council’s recent Leading Together conference to explore this topic. The spirited discussions that ensued unearthed two key issues specifically for the philanthropic community in general.
Reducing Blind Spots
Nearly all participants acknowledged their foundations had missed important external developments, and the president of one community foundation volunteered an example. Her Board was deciding what to do with a donated tract of land. An energy company had approached them about leasing access rights for hydraulic fracturing (fracking). The extra income the firm offered would benefit the community and so the staff had staked out, just temporarily, what parts of the tract would be leased if approved by the Board.
The foundation’s leaders decided to trek out, with boots and coats, to take a look at the lot themselves. To their surprise, word got out rather quickly about the fracking option and various community groups organized to stop it. The idea was temporarily abandoned because the reputational costs and push back were too great. Through education and communication, the foundation eventually secured a non-surface lease that provided financial support to the community while limiting impact on the land.
This is a telling example of why peripheral vision takes work. Everyone in this situation was thoughtful and acted with care and due diligence. Their clear-eyed operational focus, however, came at the price of reduced peripheral vision, which requires a wide angled look to prevent blind spots. Most weak signals of trouble or opportunity are first visible at the edges of your business. Waiting for them to appear at the core means you are too late. The personal computer revolution that blind-sided IBM, for instance, started outside the main frame business, with small companies, graphic artists and other specialty players. Likewise, the LED revolution that forced such giants as GE, Philips and Sylvania to get out of the light bulb business started in flashlights and exit signs—far away from their profitable core segment offering bright warm lighting to illuminate home or office spaces.
The Need for Scenario Planning
To see the future sooner, you need to scan the horizon, pick up weak signals, connect various dots, and then communicate your insights via compelling narratives to get others on board. The earlier story about the donated land sparked group discussion in Miami about the importance of thinking through multiple scenarios when making strategic decisions. Leaders expressed concern that they, and many other foundations, were not fully grasping how societal polarization, significant funding decreases by the federal government, discontent with elites, troubling questions about social media, AI, concerns about privacy—plus various other major trends—were affecting the roles, functions and social perceptions of foundations.
While discussing this, I mentioned a 2016 study our company did with the Knight Foundation to map out social, economic, political and technological forces into multiple scenarios to better understand fissures in American democracy. As insightful as these scenarios were, they still misread the fallout of the Trump election and the Facebook backlash of late. It clearly takes special, ongoing and rigorous leadership efforts to see around corners and then to develop strategic responses to these external developments that may otherwise rock your world.
The good news is that this daunting challenge is not about being the smartest executive in the room, or even having collected the smartest group of people around you. Above all, it’s about having the right approach and mindset. Many practical tools and proven success stories are ready for use by vigilant leaders, as described in my new MIT Press book with George Day titled See Sooner-Act Faster.
To keep our conversations going and learn further from each other, please tell us about some big things that your own foundation missed in the past five years or perhaps saw early. We also would love to know why you think this happened and what you and others could/should be doing to continue to stay ahead of important undercurrents in your own field and beyond.
About the Author
Paul Schoemaker is an author, educator, researcher and entrepreneur in strategic management, decision making, innovation and leadership. He served on the faculties of the University of Chicago and the Wharton School for many years, founded several companies, and published over a hundred articles plus eleven books. Paul has worked with multiple foundations, including their boards as well.