Pondering if Groupthink Hampers Your Expansion Strategies?
In a bid to quadruple its business in the next 10 years, Thermal Co., a global manufacturer of heat transfer systems, has turned to Strategic Foresight - a forward-thinking approach originally developed by the US Military and validated by Shell. This process is designed to help manufacturing leaders achieve alignment and take concerted action towards a shared future by enabling them to anticipate uncertainties, explore multiple future scenarios, and collaboratively create flexible strategies.
The strategic question posed for Thermal Co. was: "What bold decisions must we make to generate $1.4B in net new revenue in the next 10 years?" A one-day leadership working session was held, involving the building of four scenarios describing the world in 2035, ranging from industry consolidation, rapid technology obsolescence, and a radically transformed workforce.
The process of Strategic Foresight forced the Thermal Co. leadership team to abandon aspirational language for operational specifics. It revealed hidden assumptions about customers, competitors, and capabilities that teams didn't realise they disagreed about. The disagreement among the leadership team was due to different priorities: half wanted to double down on proven capabilities, a quarter pushed for adjacent market expansion, and the rest advocated for entirely new business models.
Common investments, warning signs, and accelerants of change were identified across all four scenarios. These common elements were used to influence the company's three-to-five-year strategic plan and decisions that had been stalled for six months were incorporated into Thermal Co's annual operating plan with clear go/no-go criteria.
The process of Strategic Foresight also aids alignment and action by reducing strategic blind spots, stress-testing key assumptions, enhancing cross-functional collaboration, and enabling ongoing monitoring and adaptive updating of strategies. By integrating this structured, collaborative approach, manufacturing leaders at Thermal Co. are now aligned around a shared understanding of the future, enabling decisive, coordinated action towards long-term resilience and competitive advantage.
The cost of misalignment for Thermal Co. was $1.4 billion, the difference between their historical 6% growth and their aspirational 11% growth in core markets and entry into three new ones. The process of scenario planning, traditionally taking months to complete, can now be completed in days with clear planning and strong motivation.
In conclusion, Thermal Co.'s adoption of Strategic Foresight is a testament to the company's commitment to future-proofing its business and driving growth. By embracing this forward-thinking approach, Thermal Co. is well-positioned to navigate the complexities of the modern manufacturing landscape with agility and discipline.
- In the pursuit of quadrupling its business within a decade, Thermal Co., a global manufacturer, recognized the need for financial planning, and they incorporated diverse business strategies into their annual operating plan, aiming to generate $1.4B in net new revenue.
- Strategic Foresight, previously adopted by Thermal Co., facilitated alignment within the leadership team, untangling hidden disagreements about customers, competitors, and capabilities, and fostered a coordinated approach to finance and business decisions in the manufacturing industry.
