Over the summer we’ve been ruminating on a question a client asked us; What do we perceive as the single biggest emerging threat to businesses? (other than geopolitical events). While we wouldn’t usually get pinned down to ranking risks or even publish our analysis, we felt, in this case our thoughts are timely and valuable to a wider audience.

Our answer is: the dying art of strategic imagination is the biggest threat as we see it. It’s not an ordinary risk, but from the numerous reports we are sent by clients, it’s clearly emerging and we believe it’s due to a growing reliance on AI. What is the threat outcome you may ask, well its akin to losing a sense, which for leaders who rely on vision, can be catastrophic.

While data-driven decision making is vital, relying on it solely should never be enough and is rarely the sole driver of successful strategy decisions. The art of creative thinking and unleashing the imagination on a problem is the corner stone of strategic planning. It helps to plan for the unpredictable and identify the information gaps.

The ability to envision scenarios after assessing the facts, overlaying the intelligence and then prioritise into an order of probability is a skill that leaders use from politics to business. This is what clients tell us they need more of when faced with market disruptions, competitive threats, or an unexpected crisis, but reporting has started to sound the same.

Businesses increasingly rely on data analytics to drive decision making and AI is playing a bigger role in that process every day. Data shows us the past to a high degree of accuracy and therefore planning assumptions become ‘knowns’, which lead to an index of likelihoods, but you need focused imagination and, I would suggest; nefarious, devious, risk-smeared imagination, to unlock the unknowns. Blending imagination with intelligence allows us to support leaders to understand risks, build resilience, create contingency plans, and develop innovative strategies to stay ahead.

In my previous career, in the military, I was taught to imagine the enemy, understanding their mindset, to try to think like them and to imagine their next move and then prepare for likely outcomes and exploit weaknesses. For businesses, that ‘enemy’ could be an economic shock, a competitor, or a geopolitical event.

Visualising the Unthinkable

We could pick an increasing number of examples to highlight the point from terrorist action to natural disasters, but the collective post event analysis from the last decade, tells us the same story. Those who dare to imagine the worst and engaged in war-gaming exercises, survived better or thrive. The other story that emerges is the hidden danger that many fall into, namely the complacency that process can create. The idea that because they have introduced inductive methods and created an emergency plan, then they are ready for anything.

Leaders are beginning to understand the powerful combination that imagination and intelligence are. In the office at Sparten it has been termed ‘imaginence’ and it holds a place in our decision-action cycle to ensure that we incorporate it into analysis. Whilst the term I admit is cheesy, it reminds us to overlay intelligence to a context and imagine the outcomes and to imagine them through the eyes of different characters. In other words, to use empathy as a tool to access different perspectives. Of course there are dangers to be alive to, such as cognitive bias, over-reliance on intuition, analysis paralysis, and the inconsistencies of humans and so appropriate counter strategies need be applied.

The two i’s

Strategic imagination is the ability to envision scenarios in enough detail that it helps you map your responses. This is exactly what leaders need when faced with tough strategic decisions, threats, or crisis. When explaining our ‘imaginence’ approach we use the poacher turned gamekeeper analogy. It’s helpful to understanding the psychological shift someone has to go through to understand the merging of two characters, because there is an inherent group of values that are attached to each character and we have found those are understood and identifiable to most cultures. The reason the poacher can become a good gamekeeper is where they align on the Venn diagram, but it is the poachers need to poach that provides the motivation to outwit the gamekeeper who is essentially the ‘enemy’. After all, hunger makes a better hunter.

The majority of businesses and leaders would naturally identify as gamekeepers with assets to protect from outside threats and therefore they naturally find it hard to embrace the poacher mindset as it goes against their core values and beliefs and therefore acts to highlight their vulnerabilities, which is why so many businesses and leaders look to advisors, like Sparten, to ‘red team’ their assumptions and advise on strategy.

Visualising the Unthinkable

Technology is a tool for reimagining potential as well as being an established enabler for efficiency, but what we hear from business and leaders is that a reliance on it and in particular basic AI models, is creeping in and that is akin to leaving the gate open for the poacher to walk in. Intelligence isn’t just about analysis and forecasting, it’s about actively shaping tomorrow. Successful leaders and businesses use imagination to craft a vision of where the market is heading, or where they want to take their company. By blending the creativity of imagination with the precision of intelligence, leaders and businesses can not only survive disruptions, but thrive.