The best books on Futures

Where did futures work emerge from?

There’s a really interesting history here. There are two main strands. The first one came out of the war, systems thinking, operations research, RAND, SRI, and that very technocratic American war effort. The second strand is postwar rebuilding. There’s a very influential book written by a Dutch futurist (he probably wouldn’t describe himself as a futurist, as he was one of the first) Fred Polak, The Image of the Future in 1954. Imagine what the Netherlands was like in 1954 – it was completely ruined by the war. He had this idea that if you wanted to change the future you had to have different images of the future. It’s a resonant idea in futures now.

You have this strand which is relatively analytical associated with American history and then this strand which is about preferred futures associated with Europe. A lot of the vision work in futures was developed through the Peace movement. People like Elise Boulding, Johan Galtung who are anti war, anti nuclear-war. Futures, as we know it now, is really a product of war and peace.

To what extent is futures work about doom and mitigating the bad and to what extent is it about idealism?

Roy Amara says there’s three types of futures: possible futures, probable futures, and preferred futures. People tend to do one or the other. Preferred futures are the bit from the peace movement; possible and probable are the bit from the wartime systems analysis work.

“The purpose of futurism is to disturb the present.”

Gramsci has that great quote about pessimism of the intellect and optimism of the spirit and I think a lot of futures work is about that. You have to be brutally analytical about where you are, but you still have to know what you want to get out of it. There’s a futurist called Wendy Schultz who talks all the time about how you can’t control the future, but you can change it. You can influence it by what you choose to do and what you choose not to do. So the only point in futures is to change what you do – there’s no point in constructing perfect views of emerging landscapes and then doing nothing.

What is that relationship between history, narratives, and futures?

There’s a saying that a good futurist needs to be a good historian as well. There’s a forecaster called Paul Saffo, who says you have to look back twice as far as you look forward. We did a set of fifty year scenarios for the Environment Agency to look at water futures. Originally, I was going to look back 100 years – following the rule – but people said you need to look further than that. We ended up with a 200 year map of public water in the UK. You see cycles from municipal to regional, you also see that the only time that there’s a serious attempt to address water quality is when there’s a crisis, when people get poisoned. Whether that’s cholera or, more recently, the Camelford disaster. We did something similar in a piece of work on housing a few years ago. When you talk to people who are involved in housing and you look at a 100 year, 150 year history they realise that the current British model – the owner/occupier/mortgage holder – is a very recent model, that wasn’t the state for most people until the 1960s/1970s. So this model where the mortgage holder has been the exemplar of the ideal housing is probably historically a blip rather than a trend.

What you get from looking back is that sense of patterns or disruptive moments. History doesn’t cycle, but you can’t escape from history. Things which have got long institutional patterns within them tend to recur in different ways.

It seems intriguingly different from the narratives one would associate with fiction. Thinking about patterns isn’t quite thinking about life in a way that makes human sense, it’s maybe more scientific.

I don’t know if it’s more scientific. But the reason we call scenarios scenarios is that when Hermann Kahn – he is allegedly the model for Dr Strangelove, this Germanic character who seems fascinated by nuclear war – when he was doing his nuclear war work for the American government and for others, constructing different alternative ways things might play out, he had an associate who was a scriptwriter and he said, ‘What are we gonna call these things?’ ‘Why don’t you call them scenarios? They’re not scripts, but they’re the underlying arc of the story.’ I’m fairly sure that if he hadn’t called them scenarios we wouldn’t have noticed the work.

You do get, especially when you start thinking about possible futures, the idea that the narrative needs to be coherent.

How accurate are the predictions of the people who wrote these books? Is there a huge amount of accuracy in your field and does this matter?

The minute the ‘prediction’ word gets mentioned futurists run for the hills. Futures work isn’t about prediction, because the future’s too complicated, it’s too complex. Gaston Berger – the French guy who set up the first futures practice in Paris – said the purpose of futurism is to disturb the present. When Pierre Wack was working at Shell on their scenarios programme he said, ‘What I want to do with the scenarios is to get the executives to read their newspapers differently’. It’s about seeing the world differently.

A lot of futures work is really just getting people to see a bigger picture of the system that they’re in, because when things do change quickly or change at all, they change because something outside their immediate system changes, and that creates disruption inside the organisation and its assumptions about itself.

Your first book is Arie de Geus’s The Living Company. He looks at companies with extraordinary longevity.

I like this book for several reasons: it’s very short, so when people come into the Futures Company and say ‘what should I read to get a flavour of futures work?’ I tell them to read this. While it’s written by Arie de Geus, Art Kleiner – who’s probably the best business writer in the world – worked on it. So it’s fantastically cleanly written.

He links a futures sense of the wider world with a sense of learning and very humane psychological models about the purpose of the business. It has this very open model of change. One of the things he talks about is a famous paper by David Ingvar, where he talks about the fact that we’ve always got images of the future in our heads. That might be something quite trivial like, ‘I’m going to a meeting later on and I’ll need to get the Tube or the Metro or whatever’, to something much larger, like ‘if that happens, I’ll have to react like that’. He talks about how you create that awareness of change inside a business, how you get that sense of reading the newspapers differently. The real value of this book is it links that sense of a wider system – a wider view of the world – with how organisations learn. There’s a lot of stuff around how organisations learn in here, which is a really valuable connection between futures and learning, and then how they respond in a way that admits to some humility.

Is humility them looking after their employees, acknowledging their failings?

I think mostly it’s about acknowledging their limits. De Geus was quite a senior Shell executive, he ran the Brazil organisation, he ran parts of Africa for a time before he went into learning and planning. There’s quite a long discussion in here about why they didn’t pull out of South Africa, when they were under pressure to divest from South Africa. He talks about that in the context of a meeting in Angola, where they did pull out. In one of the private conversations the most senior person in the Marxist government said ‘you were a bunch of cowards, you ran away, and once you’d gone everybody else went as well, and you should have stayed.’

And then he tells a story about – this is the learning thing – how in Ethiopia when a Marxist regime came to power, because of the Angola experience they decided to stay. It was quite risky being an employee of a Western-owned business in Ethiopia in the revolution. The red committees would take people away, so they effectively told the head of their unit in Shell: if someone didn’t show up to work find out what’s happened to them, if they’re still not there at lunchtime go and talk to the government and say ‘if we don’t have our employee back by the end of the day, we’re going to turn the oil off’. Quite a high-stakes game.

Where that led Shell is that when a group of South African businesses approached and said, ‘We want to do some scenarios for post-Apartheid Africa,’ Shell seconded one of their scenario team to go and run some scenarios, which effectively created a set of stories for possible futures for South Africa, with members of different ethnic groups, different political groups and white business people – nobody from the government. Although there’s a bit of mythology about those scenarios, the Mont Fleur scenarios, I think it’s probably fair to say that they did influence the way in which the ANC thought about the transition, because there was a set of shared stories about failed transitions and successful transitions which had come out of that week-long scenarios process.

The next book is Three Horizons, by Bill Sharpe. Why did you chose this book?

I chose this book for a number of reasons and one was completely self-serving. I was part of the group that evolved the Three Horizons model. Originally it was developed by Bill Sharpe and Tony Hodgson, both of whom are friends of mine. It started being used for the first time in a piece of work we did for the British government on the future of transport – infrastructure systems – and out of that we started thinking about what it did as a model. There’s confusingly a Mckinsey model called three horizons, from the late 1990s, which asks managers to think about short-term, medium-term, long-term, and keep them all in their head at the same time. It was only when we researched the paper that we realised we were using somebody else’s name – by then it was too late.

This is a systems model about the way things change. The first horizon is where things are now, in any area: whether it’s energy or finance or whatever, what the dominant practice is, the dominant institutions, the dominant models. The third horizon is what could change, what the future could be like. In the middle, the second horizon, you have an area of contested change: where you start seeing how the systems need to change if you’re going to go from one thing to another thing.

Bill subtitles this book ‘The Patterning of Hope’, because he sees it as a tool to influence change. I’ve used it as a way of understanding the dynamics of change in sets of scenarios, where you’re not saying that any of these scenarios is better than any of the others, they’re all possible futures. There it helps people understand what would change if that scenario came about. So you start understanding who the actors are involved in change, what the institutional changes might be, what the regulatory changes might be, how long that might take.

One of the very difficult issues in futures work is how do you get from a map of some possible futures – a set of future landscapes – to knowing what to do. One of the things that Three Horizons does is it gives you a relatively explicit way of knowing what to do. So as a tool it’s very attractive. It’s also very simple. When you draw it up on a wall with a group of people who are not futurists, not technically trained, and say this is the tool we’re going to use to understand the future, they look at it for about fifteen minutes and digest it, then they start using it. One of the powers of Three Horizons as a model is that people who are not skilled in futures work can engage with it quite quickly, they can use it usefully, they can create purpose from doing it.

Sharpe writes about future consciousness – which is something that we all have most of the time. I was wondering, on the basis of that, how this relates to small examples from our own lives. Is success related to the extent to which we can reach that third horizon?

I’m a member of the Association of Professional Futurists, which is a relatively small international organisation. Amongst those members there’s quite an interesting body of work which is around personal futures. There’s a very good book by a man named Verne Wheelwright about that. He’s published all his workbooks online, to help people who want to do it. Being able to see how those bits of possibility might translate into something larger is valuable personally. Personal resilience ends up being a really important characteristic of the difference between people who survive and thrive and the people who struggle. I think some of that resilience comes from the sense that you’ve got more resources and more opportunities than you think you have when you’re stuck.

It’s an interesting question, about whether you could use it to do individual futures, I’ll talk to Bill about it. He’s a technologist by background and when he left Hewlett Packard in Bristol he moved to West Wales because he wanted to be able to write more and think more. The book is called the patterning of hope for a reason, because he sees, and I don’t think he’s wrong about this, the most important thing about Three Horizons is being able to connect that sense of what can you change and how can you change it with where you are now. Where you are now is what’s stuck – what in the current system is stuck? And what in the current system is a possible route to change.

He points out it’s easy to get into thinking ‘those first horizon people, they’re bad.’ You see innovation in horizon 2. But equally – as he points out – you also need most of the horizon 1 systems to carry on functioning. We expect to be able to get money out of the wall when you put a cash card into it. We expect the light to come on when we turn on the light switch – maybe not in all parts of the world but certainly in the UK. Even if you want it to change you have to have a way of changing without destroying what’s there at the moment. That’s a source of either systemic breakdown or, on an individual level, of nervous breakdown: I must kill everything that’s happening at the moment. That is not the way change happens in a productive way. And we know from lots and lots of historical examples that when change does happen in that disruptive fashion – you completely destroy the existing system – typically you get a lot of misery in the short term and then it replicates itself later on because it hasn’t changed, it’s just been killed.

This seems as a model so humane, so realistic.

It’s a lovely model. I think of these books this is my favourite book and I think it has that same quality that Arie de Geus’s book has. It’s very warm. Humane’s the right word. It’s positive. It is very easy to get into futures and just think Mad Max and dystopias. But it is about what we do to change – that’s what futures is about: what can we do to make change?

Let’s move on to the next book, Technical Revolutions and Financial Capital by Carlota Perez. What is the argument of this book?

Carlota Perez comes out of a whole set of arguments which basically go back to Kondratiev. Kondratiev was the Soviet economist who said there seem to be long-wave downturns and upturns in cycles of around fifty years. He got shot by Stalin for his trouble. He first wrote the paper in 1924. There follows seventy years of argument whether it’s true – the price evidence seem to think it’s true: long upswing, long downswing – and why it’s true, and there’s different views on that: some of it’s about economics, some of it’s about capital investment, some of it’s about innovation cycles. Carlota Perez effectively cut through the disputes.

She said: if you go back to 1771, you can see five technology platforms which broadly correspond to the Kondratiev models. First you see cotton and canals; then you see rail and steam; then you see electricity and steel and chemicals; then you see oil and autos; then you see ICT, digital technologies. They all follow a very similar pattern of approximately fifty years (though the dates change). There’s a long period of installation, which is basically about putting infrastructure in – funded by finance capital – that gets ahead of itself, the uptake is not as fast as you’d expect it to be, finance capital gets impatient, there’s a crash. Then all those bits get picked up very cheaply by production capital, businesses with customers, and suddenly you get this acceleration, money starts being made hand over fist and then it all slows down because the market matures. Then you start getting things like institutional push-back, new forms of regulation, you start seeing slowing rates of return, and then finance capital starts looking elsewhere for the next wave.

That’s quite a simple version of it, but one of the things I still hear a lot at conferences is: ‘technology is speeding up, there is no constant except change.’ When you look at the current ICT technology surge through Perez’s model, what you see is that we’re three-quarters of the way through the technology S-curve, and you can see that in how hard it is for the technology companies to make serious money. This week we had the Belgians telling Facebook they were acting illegally. We had a German court ruling about Google. All those things happen in the final quarter of the cycle: the technology has got out of hand, the companies have got over-powerful and you start seeing slowing returns and regulatory pushback.

“A good futurist needs to be a good historian.”

You were talking about prediction earlier – this isn’t necessarily a prediction, but it’s a pattern. Being able to think about the world through patterns allows us to make sense of it; otherwise we’d just get caught up in the moment. When I talk about this book with people I use car analogies because we’ve finished the car cycle. We’ve still got cars – they haven’t gone away – but cars are not the leading-edge sector any more. If you go back to the 1960s, which was the last bit of the car cycle, you started seeing parking meters coming in, and drink driving legislation, and a bit later on you start seeing pollution controls, all that sort of regulation comes in. Effectively we’re seeing the same thing now with technology – going back to that idea that one of the things good futures work should do is make you read the news differently. When you’re thinking with this model in your head and you’re looking at the news, you can see that probably selling your technology shares – not Apple but the rest of them – is probably a good idea. Maybe selling your Apple shares is a good idea. These are not companies which are going to carry on booming for much longer.

That also opens up other questions – we can’t predict what the next platform is going to be. She talks about platforms being an integrated set of innovations. You can start getting a sense that you’re going to start seeing finance moving into a new area through the next decade. We’re in 2015 now, we’re probably ten years, fifteen years away from the end of the ICT cycle, when finance will start looking for the next thing.

How much does someone’s knowledge that they are in a predictable cycle influence their behaviour?

That’s an interesting question. In academic terms this is a very influential book. I’ve seen it compared by one author to Marx’s Capital even though it’s 170 pages of text. I’ve seen it compared to Schumpeter’s book on business cycles. So, academically it’s influential. I don’t think yet it’s escaped from the academic and consulting/think tank world into the policy word. But I think as it does that – and she’s certainly trying quite hard to do that – it will start influencing the way people think about sectors, and think about behaviour.

Your fourth book is Richard Normann’s Reframing Business. What’s the argument of this book?

I’m not a big fan generally of strategy books. I think there’s probably fewer than five good strategy books out there. But certainly, when people say ‘can you give me a book that’s good to read on strategy’ I recommend this, maybe also Good Strategy, Bad Strategy, maybe John Kay, that’s it.
Richard Normann was a business consultant for a long time. This book sums up his life’s thinking. He was involved in futures work all through his career and had a very strong futures sensibility. What I liked about this book was it applies a lot of futures thinking and futures ideas in a slightly indirect way to the way businesses think about markets and the way they think about acting to make markets. It’s a fantastically rich read, he’s very broadly read, a huge fan of music – suddenly you’ll get a little music reference popping in.

He has a relatively simple model of the big change shaping the business landscape. His way of putting it was really ugly, it was service-ification, e-ification, and experience-ification. Frankly, he could have probably done with Art Kleiner to edit that bit for him. But that idea that you’re seeing different forms of service, different forms of digital behaviour, and different forms of experience behaviour in markets is a simple way of thinking about how markets are changing. We’re fourteen years on from when he wrote it and those are still the three things which are really shaping the way in which people behave in markets. He also talks about the way in which businesses can use that understanding of big changes to re-make markets. So he talks about prime-movers who don’t just compete, they reshape the entire market so everybody else has to follow.

Being Scandinvian, he’s a huge fan of Ikea. Ikea changed the economic relationship, they changed the place the thing got made, they changed the way it got put together, they changed the people who assemble the furniture – that effectively re-designed the entire market. He also talks about Ryder Services, an American logistics business. They were one of the first businesses to say, rather than just moving your stuff in trucks, we will manage your logistics business for you: embedding all of the logistics data into a new business which became a service business for logistics. He talks about Tetra Pak, the way that they effectively re-designed the carton to reshape milk distribution. It’s probably the best example of somebody who has taken a futures sensibility and applied it to the way in which businesses operate strategically.

He has this model of the conceptual past – and why he says conceptual past rather than the past is obviously because the past is a construction – the present (which is arguably a construction as well) and the conceptual future. This three-by-three model has the ‘everyday discourse’ other futurists talk about, but it also has unconscious thinking and the official story: the consciously extracted domain. He talks about the way in which you need to understand all of those things. It’s quite cerebral. But it fits with quite a lot of other futures. There’s a wonderful model called ‘Causal Layered Analysis‘, which talks about different layers of change, including metaphor, including world view, including systems. That sense that when we’re thinking about the world we’re not just thinking about it on one level we’re thinking about it on multiple levels and we need to be conscious of all of those levels is another futures model called ‘Integral Futures‘, which was developed in Australia by Richard Slaughter, based on the work of Ken Wilber, and one of its boxes is about the individual unconscious, which tends to get overlooked in futures work.

I like this book because it’s quite demanding of the reader. It’s not an airport read. It’s a very dense book. But also it rewards the reader, it’s very rich, it’s got a lot of tools in it, it allows you to think about business and the way leading businesses behave in a different way from a lot of the everyday discourse about that, which is often associated with heroic chief executives.

So, according to that model, you’re thinking about the individual unconscious?

Corporate unconscious as well.

What is corporate unconscious?

Companies always have a corporate unconscious. If you think about corporate culture, the classic phrase about corporate culture is ‘the way we do things round here’. But what tends to sit behind ‘the way we do things round here’ is a set of assumptions which came from somewhere, but nobody really knows where any more.

Could you psychoanalyse a company?

Art Kleiner keeps popping up, he’s written a fantastic book about the Core Group. Because this interview is about futures and not about business I didn’t put it on the list. What he talked about there was that quite often the core group in a business is not the people who you’d expect from the list, the people who end up influencing the way a business behaves may not always be people who work for the business, they may be people who used to work for the business. He doesn’t quite psychoanalyse the business there, but he certainly talks about the way in which the assumptions of the core group, the history of the core group, the views of the core group end up influencing the whole business in a way that people don’t often realise. That’s not quite an answer to your question but I certainly think it’s true that you can understand businesses at that – not necessarily psychoanalytical layer, but certainly at a psychological layer: in the way they think and the way they behave and the way they act.

We should move on to the last book.

This is such a depressing book. This is The Limits to Growth: The Thirty Year Update. A lot of people, what they remember about The Limits to Growth is it was published in 1971 and was completely lambasted by economists, technologists, lots and lots of people. What it has sitting underneath it is a model of the world, a model of the world economy, which links population, food, industrial production, pollution, a few other things, it’s quite a complicated systems-dynamics model. Obviously it’s only a model, it’s a picture of the world, it isn’t the world itself. But what it said was that if our behaviour as a society didn’t change, we would end up with industrial collapse in the mid-2020s and a population collapse in the mid-2030s.

Economists said, ‘Oh well, that’s obviously wrong because there’s going to be an economic response to those changes’, and technologists say, ‘Oh no that’s obviously wrong because we’ll find technology to change those things’. This is the thirty year update, around the same time it came out some academics did some work looking at Limits to Growth as a prediction and discovered that the way the world had gone since 1971 was an alarmingly close fit to the Limits to Growth model. There were some things wrong with their first model and they’ve improved it.

There are two things here. At the moment we’re in an overshoot and collapse path, but the first thing is that they’re very clear we can change that, we can still change that now. The second thing is, when you talk to the technologists and the economists a lot of their models assume that things happen straight away. This is a system dynamics model, so it’s got a lot of delays, it’s got a lot of buffers. No matter how good the technology is – and we learn this from Carlotta Perez as well – it takes time. Sometimes putting a technology fix in shoves the can down the road rather than fixing the problem. Sometimes it just doesn’t come in fast enough to solve the problem.

Given where we are – exceeding our planetary limits – this is probably the single most important futures book out there right now. For both the reasons that the core model is clearly reputable now – it’s proven itself over time – and also because it does have some observations about how we’d need to change to make change happen, to get out of overshoot and collapse. There’s a state in which you overshoot and oscillate, where you’re sometimes over the limits and sometimes under the limits, which gives you enough capacity to get back. We’re getting alarmingly close to the point where we don’t even have that option any more.

Is it true that in the 70s they were accused of being like Malthus?

Malthusians, yes. In the 1970s this was a very clear expression of an environmentalist world view – it was commissioned by the Club of Rome and effectively the people who lined up on the other side were not environmentalist in their world view. And you still see the same thing. The dominant establishment was technologically driven, economically driven, and that’s still the case. Probably much more so than it was in the 1970s. It wasn’t used to hearing arguments about planetary limits in the 1970s. You had a classic clash of world views. It wasn’t about the model, it was about what the model was saying about a view of the world. That’s quite a useful thing that futures can do sometimes. When you do a set of scenarios I quite often say, ‘What’s the world view that sits underneath these different scenarios?’ Understanding what those are is often as important as any of the rest of the work. At least once you understand what your assumptions are about the future, you can start arguing about whether those assumptions are reasonable and whether they’re a fair thing to hold. It goes back to metaphors and layers of meaning. Sometimes when you make those values explicit you realise that those aren’t values you want to be holding, but you’ve been ticking over in the everyday organisational behaviour: horizon 1 behaviour.

As you said: this is a very depressing book. In terms of their popularity in futures work and in terms of how much people want to hear about them, what’s the difference between books like this and books which talk about business?

If you want to be a rich futurist, you write an optimistic book about America’s future. As long as it gets a decent publisher exposure, your fees and your invitations on the speaker circuit just blossom. Whether it’s honest or not, I don’t know.