Three ways to use AI to augment futures thinking—and when to avoid it

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Reframing Strategic Foresight in the Age of AI & Algorithms

Traditionally, <a href="https://www.frog.co/designmind/realizing-visions-of-the-future-through-strategic-foresight" target="_blank" rel="noopener">strategic foresight</a>—the discipline of creating informed, forward-looking views for an organization—has relied on analysis, human intuition, experience and creativity to identify signals, develop scenarios and craft strategies. This discipline incorporates different positions you can adopt to tackle future developments, as well as distinct lenses through which you can view the world. These perspectives now face the added dimension of technological advancement, particularly in the realm of artificial intelligence. The emergence of AI brings a new set of advantages that can augment human abilities and fundamentally transform the way that organizations approach futures thinking.
Recently, frog partnered with an AI-driven futures intelligence platform to spearhead an innovative strategic foresight initiative for a major infrastructure entity. By harnessing AI&#8217;s computational prowess, we streamlined complex layers of the strategic foresight process, integrating and analyzing thousands of signals of change to unveil transformative insights. This collaboration marked a significant leap, transforming the traditional scenario planning process into a dynamic, data-driven endeavor. The unique approach enabled our client to not only anticipate future shifts but also to align their <a href="https://www.frog.co/services/innovation-strategy" target="_blank" rel="noopener">innovation strategy</a> with emergent opportunities, setting a new industry benchmark for informed decision-making.
Essentially, the strategic foresight process comprises three major stages. AI can be leveraged across a range of activities across all three stages, significantly enhancing the scope and efficiency of foresight initiatives.
&nbsp;
<h3>Scenario Development</h3>
Lay the groundwork for your analysis, culminating with a range of potential futures around a focal topic. 
&nbsp;
<ul>
<li>Scan for signals of change</li>
<li>Identify causality between key variables</li>
<li>Generate AI-enabled scenarios</li>
<li>Craft vivid narratives of future scenarios</li>
<li>Create visual representations of the future</li>
</ul>
&nbsp;
<h3>Scenario Planning</h3>
Determine the impact of these futures on your business and formulate flexible and contingent strategies for each future. 
&nbsp;
<ul>
<li>Assess and simulate scenario impact</li>
<li>Evaluate robustness of various strategic responses</li>
<li>Review opportunity costs of different strategic paths</li>
</ul>
&nbsp;
<h3>Scenario Monitoring</h3>
Maintain ongoing vigilance to ensure that strategies remain relevant and responsive to changing conditions. 
&nbsp;
<ul>
<li>Scan for early indicators of potential scenarios</li>
<li>Conduct sentiment analysis</li>
<li>Track pattern evolution</li>
<li>Analyze response efficacy</li>
</ul>
&nbsp; 
When it comes to augmenting strategic foresight initiatives, <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/ffo2.99" target="_blank" rel="noopener">AI acts as a tremendous force multiplier</a>. It can process millions of possibilities in a second, identifying signals of change, patterns and correlations that may go unnoticed. 
However, it’s not just about computing power alone. AI can be trained to apply a sophisticated set of analytical tools—such as sentiment analysis or cross-impact analysis—to raw data, transforming it into actionable intelligence and enhancing the breadth, accuracy and lead time for strategic foresight activities. Additionally, AI can help to identify &#8216;weak signals&#8217;—early indicators of potential significant changes that are still subtle or infrequent enough to go unnoticed by humans, providing organizations with a <a href="https://www.frog.co/designmind/design-mind-frogcast-ep-42-shifting-from-performance-to-outcomes" target="_blank" rel="noopener">valuable head start</a> in adapting to changes.

AI can help to overcome the cognitive biases that often cloud human judgment. Thanks to its even-handed treatment of all available information, AI can reduce the potential for &#8216;confirmation bias&#8217; (the tendency to overemphasize information that confirms our pre-existing beliefs) or &#8216;availability bias&#8217; (the tendency to overweigh information that is more easily recallable). By incorporating diverse perspectives and objective analysis, AI systems can help organizations make more informed decisions, free from prejudices hidden in human judgment.
Proceed with caution: AI models are only as good as the data they learn from. This means that, although when used carefully they can help overcome bias, they can also inadvertently perpetuate existing biases or make flawed assumptions based on the data they&#8217;ve been trained on. The need for continuous human oversight and guidance—not just in decision-making but also in AI training, validation and monitoring—is essential to maintain the integrity of strategic foresight activities.

  Challenge Assumptions

AI can be used to support the <a href="https://www.frog.co/designmind/design-mind-frogcast-ep-29-human-creativity-meets-creative-ai">creative</a> side of scenario development. By systematically altering the input parameters, AI can explore a vast landscape of possibilities, including those that may seem counterintuitive or unlikely, but could still be of strategic importance. It can assist in crafting narratives using targeted prompts, helping communicate scenarios in an empathetic manner. Post scenario development, AI can help anticipate potential impact and outcomes of dozens, if not hundreds, of scenarios, generating opportunities and risks associated with each one. They can also be trained to suggest strategic pathways to prepare for various eventualities, leading to a more proactive and agile approach to strategic planning. 
Proceed with caution: AI, with its current capabilities, cannot yet replicate the complex interplay of emotions, empathy and interpersonal relationships, nor can it navigate the deeply ingrained assumptions that shape our worldviews. The activation of strategic foresight initiatives—turning strategic insights into actionable plans—not only requires human input, but an ability to challenge and redefine existing mental models. For example, convincing a team to adapt to a new strategic direction requires more than presenting compelling data. It involves empathy to understand the team&#8217;s concerns, communication skills to articulate the benefits of change and leadership to guide them through the transition. It&#8217;s about inspiring trust and fostering a shared vision of the future. While AI can offer us the &#8216;what&#8217; and the &#8216;when,&#8217; it is the human leaders who provide the &#8216;why&#8217; and the &#8216;how.&#8217; They use their understanding of organizational dynamics, stakeholder interests and emotional nuances to infuse data-driven insights with context, relevance and urgency.

  Boost Creativity

Ensuring continuous and real-time insights throughout the foresight process, AI bots can roam millions of research articles, news pieces and social media platforms according to pre-defined criteria in order to spot patterns and connect the dots across large data sets. AI&#8217;s ability to continuously learn and improve allows it to evolve its search algorithms over time, getting better at spotting patterns and identifying relevant signals. AI-enabled horizon scanning is like having a tireless scout that learns from its past performance to elevate the efficiency of its future tasks. 
Proceed with caution: Identifying patterns alone is not enough. Incorporating AI into strategic foresight brings us face-to-face with its &#8216;black box&#8217;—the opaque core of AI decision-making. The rationale behind the outputs generated by AI are not always clear and pose a challenge for decision makers. The quest for explainability isn&#8217;t merely academic; it’s about ensuring that the strategic choices carved out by AI&#8217;s complex neural networks can be understood, trusted and acted upon by those who bear the responsibility for their outcomes.

  Spot Patterns

Three ways to engage AI in your strategic foresight process now (and what to avoid) 

<h3>Finding the right balance</h3>
Successful strategic foresight balances imagination and exploration with evidence and analysis. It is grounded in the idea that the human experience is inherently complex, multifaceted and evolving. The molding of agendas must be a human-led process. While AI systems can analyze, predict and inform, they don&#8217;t possess nuanced understanding of human values, emotions and societal contexts. Even as AI technologies evolve and influence various aspects of our lives, it is humans who must set the agenda when it comes to the <a href="https://www.frog.co/insights/chief-challenges/making-connectivity-matter" target="_blank" rel="noopener">application of these technologies</a> and determine the ethical boundaries of their operation.</ul>
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<h3>Within your business, striking the right balance of a human-AI collaboration requires the following operational principles:</h3>
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<ul>
<li>Culture-first: Get your organization in the right mindset by prioritizing learning and adaptability to new ways of working. This means being able to deploy the right tools for the job, helping to facilitate diverse perspectives and agile responses to change.</li>
<li>Insight-driven: Gather insights from large datasets to inform decision-making processes. Interpreting data successfully means being able to understand new developments and apply foresight methodologies.</li>
<li>Tech-enabled: Build (or gain access to) the technological infrastructure that enables you to process and interpret complex information, supporting strategic foresight and development.</li>
</ul>
&nbsp; 
At frog, we believe that the inherent limitations of AI underscore the importance of human-AI collaboration—and this is reflected in the mindful way we harness AI in our client work. It&#8217;s a synergetic relationship: while AI brings computational power and objective analysis, humans bring contextual understanding and ethical judgment. This is particularly important in dealing with &#8216;wicked problems&#8217;: complex, multifaceted challenges, such as climate change, that involve high levels of uncertainty and are deeply intertwined with social and cultural contexts. 
AI has the potential to revolutionize strategic foresight, but the path to realizing this potential lies in a balanced partnership between AI and humans, each contributing their unique strengths to the process. The challenge now is to integrate this technology, not as a replacement but as an extension of our strategic acumen, ensuring that <a href="https://www.frog.co/services/growth-strategy" target="_blank" rel="noopener">the path to success in tomorrow’s world</a> is as human as it is data-driven.

Octavio Egea

Arjun Shukla

Author

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Insight Report

Designing Mythologies: Building Worlds to Frame the Future

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Don’t fear the future. Shape it to suit your context by taking a proactive look forward. 

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Realizing Visions of the Future Through Strategic Foresight

<h3>Adapting to twists in the path</h3>
It’s a story that has been told many times over: Kodak’s journey from global photography giant to bankruptcy in the era of digital photography. The narrative usually plays out as a cautionary tale. Once upon a time, an incumbent failed to innovate and lost out to technically savvy new entrants. However, this misses an interesting subplot.
Between 1974 and 2006, <a href="https://edition.cnn.com/2012/05/15/us/new-york-kodak-uranium/index.html" target="_blank" rel="noopener">Kodak had a nuclear reactor</a> loaded with 3.5 pounds of enriched uranium in a secret underground laboratory in Rochester, New York. The reactor, which was used to perform neutron radiography testing, was an investment in cutting-edge technological research. This should have kept Kodak at the forefront of new photography and imaging products. But we all know what happened next: Kodak found themselves blindsided by new developments in digital photography and unfairly labeled laggards.
For many executives and organizations, with today’s backdrop of <a href="https://www.frog.co/designmind/reframing-strategic-foresight-in-the-age-of-ai-and-algorithms" target="_blank" rel="noopener">accelerating technological convergence</a>, the climate crisis and wider societal and systemic shifts, it can feel like one moment of inertia or strategic misstep could lead to obsolescence, or even becoming the next cautionary tale. The challenge lies not just in the ability to adapt to profound <a href="https://www.frog.co/designmind/design-mind-frogcast-ep-24-transformation-never-really-ends">transformation</a> driven by new technologies and elevated data literacy, but also in finding ways to proactively contribute toward a better future.
To make your mark, it is vital to carve out a path that&#8217;s innovative, resilient and adaptable in the face of relentless change and complexity. Continuous business reinvention is key: imagining what’s next and creating a brand-new business model, product or service. This requires answering the big questions. These might include: How do you safeguard the integrity of your brand in an era where GenAI-enabled bots mediate the relationship between you and your customer? How do you maintain a competitive edge in a market where consumer expectations are increasingly defined by sustainable practices and a robust ethical footprint? What are the first steps you can take to turn your future vision into present reality?
&nbsp;
<h3>Realizing strategy as a creative act</h3>
Strategic foresight is a discipline and mindset that equips organizations to effectively anticipate and navigate future uncertainties. Strategic foresight offers a springboard for businesses to continuously reinvent themselves, ensuring that their strategies are responsive to myriad forces impacting the market landscape. After all, the ability to anticipate future shifts is only as valuable as your organization’s capacity to reinvent itself in accordance with these insights.
A mainstay of business strategy for decades, strategic foresight has manifested in various forms, from scenario planning to adaptive strategy development. Central to its philosophy is the understanding that the path ahead is neither linear nor predictable—necessitating a culture of adaptability to be prepared for the onset of multiple possible futures. Here at frog, we use futurecasting to help clients—including the <a href="https://www.frog.co/work/designing-the-future-of-news-and-journalism-with-associated-press">Associated Press</a> and the United Nations—imagine possible futures and act accordingly.
Fundamentally, <a href="https://www.frog.co/services/innovation-strategy">strategy</a> is about creating choices, navigating through challenges and seizing emerging opportunities. It requires a multifaceted approach that breaks the shackles of conventional thinking. At frog, we view <a href="https://www.frog.co/designmind/strategy-creative-act-making-space-radical-ideas">strategy as a creative act</a>—a product of human imagination, curiosity and intuition that shares a symbiotic relationship with design, data and technology. Strategy provides direction, design shapes the path, data informs approach and technology enables execution.
The empirical perspective traditionally favored by consulting tends to prioritize quantitative analysis and <a href="https://www.frog.co/designmind/data-science-and-design-thinking-belong-together">data-driven insights</a>. While this approach has its merits and provides valuable information, it must be used in conjunction with other methods to capture the more nuanced, qualitative dimensions of strategic challenges and opportunities. The future cannot be captured in a spreadsheet: it is a living, breathing landscape of myriad possibilities.
When used successfully, strategic foresight can lead to opportunities and alignment across various aspects of the business and for different scales. Here are just a few examples.
&nbsp;
<ul>
<li>Launch new businesses and make bolder choices based on real-time needs</li>
<li>Transform brands, moving the organization into innovative, hyper-relevant positioning</li>
<li>Realize connected product and service experiences that push the boundaries of the possible</li>
<li>Uncover new ways to deepen engagement and elevate loyalty with customers</li>
<li>Identify the essential capabilities required to future-proof your organization</li>
</ul>
&nbsp;
<h3>Mapping the strategic paradigms of futures thinking</h3>
Each organization—depending on its unique context, culture and circumstances—develops a distinct relationship with the future that profoundly influences how it perceives and prepares for what lies ahead. At different times, and in different contexts, the future might be perceived as a threat, an opportunity or something malleable that can be shaped to a strong vision. Through working with clients, we’ve identified the four main categories of strategic foresight.
Future-Shield
Protecting from further impact of adverse and unanticipated events
When an organization must adapt retrospectively just to survive, we call it “future-shielding.” This is not necessarily a result of ineptitude. Life isn’t always predictable and sometimes, we form strong and knowledgeable convictions of what is likely to transpire and end up being wrong. The challenge in this context is to pivot and adapt to the new reality that has emerged, while minimizing potential damage to people, product, revenues and brand.
At frog, over five decades, we have witnessed numerous such challenges across a multitude of sectors. Against the backdrop of rapidly changing media consumption and an evolving industry landscape, we helped one of the largest non-profit news agencies identify and navigate upcoming challenges and potential opportunities. We also worked with a major computer hardware manufacturer to revive the at-risk inkjet printer category with innovative product concepts. Using a combination of Gen Z research and futures thinking, frog created a vision that was embraced by the client and helped them find their new niche.
Future-Proof
Mitigating risk to existing plans based on expected outcomes 
“Future-proofing” essentially refers to a series of strategic activities that companies can take to prepare themselves for the potential negative impact of future events. Utilizing elements from risk management, future-proofing is a defensive position, where reactions to individual events can be detected and tackled with a series of actions that anticipate impact. This is usually the domain of large, mature incumbents with a million moving parts that need time, space and a plan to maneuver themselves in-case “things go south.”
At frog, we recently used this approach to help a global leader in air traffic control and airport performance drive bottom-up change and think of the unthinkable. Understanding the evolution of their role in the context of new modes of mobility helped them develop an ambidextrous approach where they began to inculcate divergent strategic thinking while continuing to incrementally improve their core business activities.
Future-Ready
Adapting to change by monitoring and analyzing new opportunities
“Future-ready” organizations look at the future from an adaptive and anticipative standpoint, positioning themselves to take advantage of new opportunities as they appear. This approach moves away from a deterministic methodology and into the realm of plausibility, asking “what could potentially happen?” instead of “what is likely to happen?”
Envisioning plausible futures helps craft an inherently flexible strategy. Along with a core approach, a series of contingent pathways can be activated should things proceed differently than anticipated. For instance, frog was commissioned by one of the largest tech companies in the world to envision how the metaverse will impact human life over the next decade. The program asked for divergent yet convincing narratives and a clear long-term strategy that enables them to find their spot in this emergent ecosystem.
Future-Shape
Defining new business and culture shifts and assessing threats proactively 
Companies that “future-shape” usually have strong internal convictions and aim to take the lead on defining what the future looks like. They generally tend to buck the herd mentality prevalent within the sector. While some may perceive future-shaping as “risky” or “ambitious,” the payoffs are potentially huge—it indicates to the wider ecosystem where you believe the most value can be delivered. This approach is somewhat idealistic in its nature and requires that organizations define a clear vision, ambition and pathway to not only bring this idea into reality but shape the perception of stakeholders and bring them onboard. It’s an approach aimed at shaping the systems and environment around you to build the future you want.
More recently, one of the largest infrastructure conglomerates in the world challenged frog to develop flexible, adaptive and contingent strategies to help position them as key players in the future of mobility and energy storage. The initiative tied their long-term corporate intent to a set of ambitious, yet practical activities that generated an immense, immediate impact for them. New business lines, strategic alliances and a future-oriented organizational mindset positioned our client as one of the most innovative companies in their domain within a matter of years.
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<h3>Applying different lenses to strategic foresight</h3>
To harness the full potential of strategic foresight, organizations must embrace a variety of lenses to think about the future, ensuring they remain agile and adaptable in the face of uncertainty. Unfortunately, a universal formula doesn’t exist, since this is determined by a multitude of forces shaping a company’s internal and external context. In general terms, there are three lenses that we apply at frog when thinking about the future. The key is to decide which approach (or combination of approaches) is right for you.

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Analytical Lens
Learning from historical data to inform and guide future-oriented decisions 
Leveraging the Analytical Lens entails historical extrapolation to derive informed opinions about the future. You can usually analyze tons of information and create compelling, content-heavy opinions that might potentially withstand scrutiny of past events to develop best practices and avoid potential pitfalls. However, when used alone, <a href="https://www.frog.co/designmind/strategy-as-a-creative-act-ii-the-limits-to-management-consulting">this type of thinking is inherently reductionist</a> as opinions on the future are rooted in past events. If the future ceases to follow convention, this approach can become counterproductive.
Speculative Lens
Exploring a wide array of future possibilities with creative and divergent thinking 
Conversely, we have the Speculative Lens. By speculating on an individual topic’s variables and events and describing them holistically, organizations can encourage thinking outside of the box, capture divergent perspectives and incubate controlled and constructive friction. For example, at frog we collaborated with wearable tech brand MACHINA to <a href="https://www.frog.co/work/clothed-in-chaos">imagine fashion as survival in the face of climate crisis</a>. This approach utilizes tools such as brainstorming sessions, brainwriting and wildcards. However, preparation and alignment on the tools and processes used for speculation is important for this method to produce successful results. These sorts of generative exercises are useful but must be considered at a deeper level to have lasting value. “Two-minute futures” designed over the course of a couple of workshops could risk superficiality and potentially fail to withstand in-depth examination, providing limited value for an organization.
Systems Lens
Connecting across systems to build flexible and adaptive strategies 
Finally, the Systems Lens uses a suite of tools to explore the gray area between either end of the spectrum, applying design principles to strategy and innovation. It entails the use of logic, imagination, intuition and systems thinking to explore the possibilities of “what could be” and to create desired future outcomes. By thinking about the interconnections and causality between different variables, exploring feedback loops and weak signals and synthesizing the insights derived from the analysis, organizations can obtain a deep and thorough understanding of the world around them.
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<h3>Shaping new realities and possible futures</h3>
Returning to our protagonist from the beginning of the story, Kodak was able to adapt and reinvent itself. Today, Kodak is recognized as a pioneer that revolutionized photography and still leading in new ways—<a href="https://www.indiewire.com/features/craft/oppenheimer-cinematography-imax-hoyte-van-hoytema-1234886893/" target="_blank" rel="noopener">recently building entirely new IMAX film stock</a> for Christopher Nolan’s 2023 movie, Oppenheimer. Kodak’s journey serves as a vital lesson for other corporations: even industry giants are not immune to the tides of change. And in today’s era of accelerating, unabated and discontinuous change, it’s worth questioning: how might organizations proactively identify and integrate emerging developments and market shifts, rather than being outpaced by them?
Ultimately, the organizations setting themselves up for success are the ones who dedicate time, resources and energy to imaginative and rigorous explorations of possible futures. Remember, as humans, our perception of reality is often anchored in cognitive biases, deeply ingrained mental models and subjective opinions of the past. Acknowledging this and having a structured reflection on what may be around the corner enables change that resonates across the cultural fabric of your organization and helps escape the “business as usual” mindset. Ask yourself: How is your organization preparing for the unknown? Are you simply following the well-trodden path, or are you ready to forge a new one?
Want to learn more about strategic foresight? Check out our latest article, <a href="https://www.frog.co/designmind/reframing-strategic-foresight-in-the-age-of-ai-and-algorithms" target="_blank" rel="noopener">Reframing Strategic Foresight in the Age of AI &amp; Algorithms,</a> to find out how some of the latest developments in AI are forever altering the landscape of futures thinking.

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Want to know how to lead your business into an uncertain tomorrow? First, let’s consider how humans perceive the future. 

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Succeeding in Uncertain Times

<h4>The future never ceases to amaze us.</h4>
On one hand, we’re obsessed with it. We fret about the uncertainties of tomorrow and the impact they may have on our own lives, the lives of people around us, and on the institutions that matter to us most. We try to anticipate future events and the changes that come with them in order to embrace, adapt or fight as needed.
On the other hand, both as individuals and as organizations, we’re often caught napping by the rapid onset of uncertainties. Corporate history is littered with tales of organizations that were blindsided by trends that now seem imminent and obvious.
How can we better position ourselves for an uncertain future? To understand this, we must first understand ourselves.
How humans see the future 
The most common way we anticipate future changes is by using historical extrapolation. We exercise our pre-existing mental models, experiences and knowledge to form opinions on what the future might look like. This makes sense, right? The future often seems obvious in retrospect, but looking ahead, it could manifest itself in so many different ways.
However, our future projections are usually based on a narrow focus on the breakout effect of a handful of trends or forces. We do this as a way to isolate and manage the potential for uncertainty. Although this is a comforting way to work, it limits a full understanding of what’s possible. Sometimes, the future looks nothing like the present. Other times the future simply means continuity of the current status quo. Often, it is a bit of both.
In an organizational setting, the effects of radical changes over a medium-to-long time horizon are further exacerbated. Despite claims (often indignant and impassioned) to the contrary, structured, long-term thinking is rarely embedded into the cultures of most organizations. This is likely because the business machinery built over the last few decades was created to assure the delivery of results under predictable conditions. Frameworks like historical forecasting, competitive benchmarking, ”best practice” analysis and value chain mapping can only use a static snapshot of the past to aid decision-making for the future.
Furthermore, product/service lifecycles and their corresponding time to market are getting shorter, while the variety offered to customers has broadened significantly. The corresponding incentive structures discourage long-term thinking. Companies promise to deliver long-term value but are in fact obsessed with short-term goals and immediate results.
This short-term focus is evidenced by the decreasing time horizon of strategic planning in modern business history. In the 1960s, organizations made 10-year plans. In the decades that followed, five-year and then three-year plans became the norm, Now, companies make 90-day “action plans.” Unfortunately, reducing time horizons doesn’t necessarily lead to flexibility. Too often, it simply breaks down existing rigidity down into smaller chunks.

While most organizations have some formalized idea of where they want to go, what they really need is a structured reflection on the potential drivers of change and the capabilities to respond to them. So, how can executives and institutions thrive in an environment of uncertainty? 

Position your organization to make the most out of a dynamic and unpredictable business environment. Nokia started off as a pulp and paper mill. The Indian IT giant Wipro started off as manufacturer of refined cooking oils. At a certain point in the past, these companies made a conscious decision to allocate their limited resources to develop new capabilities based on their understanding of the changing business landscape. <a href="https://www.frog.co/designmind/the-disruptor-playbook" target="_blank" rel="noopener">Disruption</a>, discontinuity and shock are not the same concepts. Each require the ability to pivot, adapt and capitalize on change.

Anticipate and enact change

When developing a core strategy, an organization must consider developing contingent strategies around it that get activated due to an internal or external trigger. Whether it is initiating the development of a new product, expansion to an adjacency or entry into a new market, a contingent strategy could take many forms. Businesses need to develop the capability to monitor technologies, regulations and competitive dynamics to understand how these forces work together in a system.

Inculcate strategic flexibility

Know what your organization does well and continue to build on these core strengths, but be cognizant of when is the right time to disengage from one capability or develop another. For example, restaurants that traditionally prioritized dine-in experiences have had to adapt to offering delivery capabilities during the COVID-19 pandemic while dining in is no longer an option. No matter what’s in store, preparing for the future is about developing a deeper knowledge and awareness of your organizations strengths and capabilities to better understand their changing relevance .

Reflect on the relevance of your capabilities

In volatile environments characterized by liquidity, companies are compelled to capitalize on the transient advantages that they hold and increase their malleability. One way to achieve this is to delegate complete sections of the delivery process on to third parties more capable of effectively and efficiently cover them and focus what you’re good at. Adopting a distributed operating model and joining/establishing business ecosystems provides organizations with a distinct advantage. It enables them to maximize value for their clients while using their limited assets wisely, thereby enhancing strategic flexibility.

Leverage the power of ecosystems

Organizational agility goes beyond deployment of the agile methodology and into the realm of people. It means understanding collaboration dynamics, developing scalable processes and building a culture of getting sh*t done, often with limited resources and in an ambiguous environment. There’s no universal formula to instill this attribute across all organizations in a uniform manner. However, agile organizations respond better to change, make quicker decisions, think on the move and develop new capabilities, which is all necessary in uncertain times.

Instill organizational agility

Companies that want to thrive in the future need to take the lead on defining what the future looks like. There exists a clear correlation between a company’s sense of purpose and their ability to innovate and transform themselves. Whether this has to do with changing customer preferences or introducing a new technology, ambition-driven companies need their finger on the pulse to justify major strategic decisions, especially for the medium- to long-term time horizon.

Define your purpose

Creativity encourages managers and executives to get out of siloed thinking and question the way things have been traditionally done. Developing this quality emboldens companies to look beyond the world of data and into the world of possibilities. It allows us to ask not just “who are we?” but also “who could we be?”
The future is rarely an agglomeration of individual drivers. Markets and technologies exist in systems, made up of numerous individual factors that are inextricably interlinked to each other. That’s why change often requires entire segments of the system to be reimagined.  By embracing the attributes mentioned above, organizations can position themselves to not only survive, but to thrive in the future—no matter what it holds.

Embrace that artistic drive

How to future-proof your business

Octavio Egea is Executive Strategy Director at frog Madrid. For 20+ years, Octavio has been helping organizations decipher, navigate and thrive in complex industry contexts, deploy new growth platforms and embrace innovation to drive superior alpha. As Executive Director of frog’s EMEA Strategy practice, Octavio leads a team of passionate strategists assisting start-ups and global corporations in identifying emerging opportunities, developing growth strategies, building new businesses, and creating innovative and meaningful experiences that resonate with customers and employees.

As a Strategist, Arjun designs pathways to growth and profitability amidst constant change. He is passionate about helping people, teams and companies create long-term, scalable businesses by helping them evolve their capabilities. He has over six years of experience in conducting market studies, sectorial analysis, opportunity assessments, and designing business models. Curious about all things involving change, Arjun loves detecting patterns where few exist and looking for inconsistencies where patterns seem obvious.

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How to drive ROI on Customer Experience Strategy and Design

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The Business Value of Customer Experience 

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<div>What are you doing to deliver exceptional customer experience?</div>
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<div>What does quality Customer Experience look like to your business?</div>
<div>What steps are you taking to deliver exceptional Customer Experience?</div>
<div>How will you unify your teams to pursue better experiences that lead to increased customer loyalty and sustainable business value?</div>
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<div>What&#8217;s in the report: </div>
<ul>
<li>Ways to uncover CX opportunities in your business.</li>
<li>Strategies to communicate and measure the impact of CX initiatives.</li>
<li>The 4 Effects of Better Customer Experience.</li>
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Nieves Padilla

Nieves Padilla is a Senior Strategist at frog Madrid. Combining an innovative mindset and a practical approach to make data-driven decisions, she is able to conceptualize complex business challenges in order to drive change in organizations. She brings more than 8 years of experience in strategy consulting engagements involving customer experience transformation, organizational transformation and corporate and portfolio strategy for worldwide companies within industries such as financial services, transport, services or tourism &amp; entertainment.

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Not all customer experience strategies are made the same. Here are some ways to think about defining quality CX and unlocking its full potential in your business.

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Your Business, Your CX: Defining Quality and Unlocking Potential

Fierce competition and consumer power grow at parallel paths. Traditional means of differentiation—the kind based on product or service features alone—are no longer enough. In other words, purely functional attributes will fail to impress customers into sticking around for long. To win the battle for customers at a time when there is a seemingly unlimited range of options available, the charge is to seek new sources of competitive differentiation. Customer experience (CX) is now the best lever that companies can use to compete.
But what does quality CX look like in your business? From meeting consumer expectations to assessing organizational capabilities, this will be determined by many factors. Read on for ways to think about how to define quality CX in your business to start unlocking its full potential.
First, what does ‘customer experience’ mean? 
CX is not the same as customer satisfaction, nor is it the same as customer service. CX is also not the result of any one initiative. For instance, while quality CX inspires customer loyalty, exceptional experiences are rarely the result of customer loyalty programs alone. To further complicate matters, not all quality experiences are the same in every business or across all industries. The marketplace influences what types of interactions customers already demand and which experiences will lead to competitive differentiation.
Put simply, <a href="https://www.frog.co/designmind/building-loyalty-customer-experience/" target="_blank" rel="noopener">CX is the sum of all interactions a customer has with a brand over time</a>. On an individual touchpoint level, products and services lead to exceptional experiences when they include features and interactions that customers deem acceptable to use, offer some level of preference and inspire joy. Finding the right balance in these attributes—and knowing which of these will offer the most value for your organization—requires deep understanding of customer needs specific to your business.
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All this is to say that there simply is no one-size-fits-all solution. At frog, we use what we call a ‘Relationship Framework’ to define and evaluate a company’s CX. It prizes three factors above all as a guide for businesses looking to create meaningful, sustainable relationships across the customer lifecycle. These include:
&nbsp;
<ul>
<li dir="ltr">Breadth: The frequency of interactions across a customer’s experience.</li>
<li dir="ltr">Depth: The extent to which emotional, higher order needs and desires are being met.</li>
<li dir="ltr">Consistency:The connectedness and cohesiveness of a brand’s ethos through the interactions it creates with customers.</li>
</ul>
To learn more about these three factors and how they contribute to exceptional CX, see the course <a href="https://www.linkedin.com/learning/design-thinking-customer-experience/welcome" target="_blank" rel="noopener">Design Thinking: Customer Experience</a> on LinkedIn Learning taught by frog Executive Strategy Director Geoffrey Schwartz.

Because CX is a holistic assessment that involves many individual moments, knowing where to start improving experiences can be daunting. It involves first identifying what qualifies as exceptional CX specifically for you and your business. This will help to clarify what’s possible and will help avoid misconceptions about intended results. Here are some ways to think about uncovering opportunities for improving the quality of CX in your business.

New tech alone cannot save major flaws in a business’s overall offering, but it can lead to new ventures, offer forward-looking alternatives and influence new processes that improve overall CX in a measurable, scalable way. One example of using tech to improve CX is frog’s collaboration with DBS, a multinational financial services group. For DBS, frog designed and launched a paperless and signature-less mobile banking service. Not only did it engage new technologies and platforms, it helped DBS outperform competitors in customer acquisition and retention.
Of course, the integration of tech-enabled experiences goes far beyond initial launch. Even with emerging technology, it is important to think long-term about their implementation. For instance, a hotel chain may decide to digitize their room service offering to seem more modern to guests, but if the service is reliant on devices that quickly become obsolete or on software that is not maintained, the cost of such a wasted effort is big in terms of both budget and impact on perceived CX quality.

Consider how technology can inspire CX innovation.

Creating a deep understanding of your customer’s pain-points along their journey is a strong place to start looking for potential ways to improve CX in your business. Applying design thinking methodologies, informed by user research and deep business expertise, leads to winning product and service innovation and enhancements that ultimately contribute to greater CX.
This also means knowing what matters most to your customers. Otherwise, so-called CX ‘improvements’ fail to translate into impact. As the standards for a given experience are raised, customer expectations evolve, and experiences can even become commoditized. In this way, timing is everything. Being willing to drive change in your business, market or entire industry—rather than simply respond to it—can help keep your business at the forefront of CX innovation. At frog, we partner with clients to identify the right risks and experiment in the most lucrative domains to create lasting impact through innovative experiences.

Look for unmet customer needs and points of friction.

At the heart of making memories that lead to positive associations are understanding emotional drivers along the way. At frog, we believe ‘form follows emotion.’ This means rather than servicing just functional or technical requirements, we believe in designing experiences around customers and what they love. This will not be the same for every business. Instead, it is necessary to center on your own customer’s journey in a strategic, precise way.
So, when looking across your customer’s journey to uncover key business opportunities, also consider the emotional weight of these interactions. Each will leave an imprint on customers’ memories that they will associate with your brand long-term. This is all core to deepening the relationship between your customer and your brand. Only by considering how an experience can make your customers feel, will it be possible to understand what they value.

Let emotions be your guide.

Identifying CX opportunities in your business 

<h6>On measuring the impact of CX</h6>
Now that we’ve outlined what comprises a quality customer experience for your business and ways to go about thinking of CX opportunities, it’s time to start looking forward at how to measure the impact of your initiatives.
For even more information on measuring results, sign up to get <a href="https://go.frog.co/en/business-return-customer-experience-report" target="_blank" rel="noopener">The Business Value of CX</a>, a new, free report that includes the four key effects of exceptional customer experience, as well as more detail on frog’s approach to customer-centered innovation.

How ready is your company to compete on customer experience?


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Without the right metrics, initiatives for improving customer experience can be met with internal skepticism. To change minds, communicate the business value of CX. 

United Around CX: Measuring and Communicating Impact 

Great customer experience (CX) has become the main—and in some cases, the only—driver of differentiation. According to <a href="https://www.forbes.com/sites/shephyken/2018/07/15/customer-experience-is-the-new-brand/#ef06afd7f528" target="_blank" rel="noopener">Forbes</a>, 89 percent of companies say CX is the basis for competition within their industry.
Yet it’s one thing to say great experiences matter and another thing entirely to demonstrate precisely where and how this focus manifests as customer experience programs. Because superior CX leads to more satisfied, engaged and loyal customers, all organizations should be united around the need to design and implement successful CX-focused initiatives. Too often, however, the difficulties found in demonstrating evidence of tangible business impact from these efforts can make for skepticism that becomes a significant roadblock to progress.
Only by translating the potential benefits of <a href="https://www.frog.co/services/customer-experience-design" target="_blank" rel="noopener">customer experience design</a> into explicit outcomes does it become clear how superior experiences can be a key business value driver, and only then is it possible to get the buy-in (and budget) needed within organizations to ultimately unleash its full financial impact.
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Through demonstrating results, such as pointing to metrics that show how customer experience drives growth and improves customer loyalty, it’s possible to change perspectives from seeing CX initiatives as “leaps of faith” to directly connecting these efforts to evidence of competitive advantage.
&nbsp;
<h4>Customer experience in action: BT</h4>
In any business, the definition of what is considered quality CX will only evolve over time. For example, over-the top media services (OTT) have transformed how we consume video content. Years ago, most customers would have been delighted with the prospect of a multi-screen viewing experience, one that made it possible to begin watching something on one device and pick up precisely where they left off on another. Now, this is considered the baseline. Consumers have evolved to expect this feature, and any service that cannot offer it is seen as outdated. Once a standard for experience is raised, any business that wants to stay competitive will soon see there’s no turning back—it’s time to adapt and up the ante on quality.
Thankfully, there are clear connections between CX initiatives and business impact both short- and long-term. For example, when <a href="https://www.frog.co/work/bt-tv-next-generation-experience" target="_blank" rel="noopener">frog partnered with BT to redesign their complete ecosystem of BT TV products</a>, the team was committed to offering a digital-first experience that was just as intuitive as traditional TV offerings. Following the launch of the redesigned service, measures of customer satisfaction improved dramatically. Net Promoter Score (NPS), a key customer loyalty metric, improved by seven points. BT also experienced an 11 percent drop in dissatisfied customers and a seven percent drop in customers likely to leave BT TV. Not only did BT win awards for the experience-driven design strategy, they made measurable progress toward building sustainable customer loyalty in the process.

So, how can business leaders make the case for aligning around the objective of improving CX? The answer lies in understanding how to communicate its value. To drive alignment organization-wide, here are some ways to establish a metrics model that connects business impact, customer data and operational indicators.

Success will not be measured the same way for a transaction-based company as a subscription-based one. The strategies for improving experience as a telecom operator (e.g., long-term customer retention) will be different than that of a retailer (e.g., more frequent purchases). Still, each improvement will have an impact. As the expert of your own business, you already have a sense of metrics matter most to you. By tying this knowledge to how customer experience manifests in your business, it is possible to more directly measure the impact of improving CX.
How do you measure success already? Is it by creating more customers? Encouraging more frequent or varied purchases? Reducing costs? Revenue growth? The ability to expand into new markets? To launch new services? This will vary from business to business. However, across all industries, customer experience can be correlated with these tangible effects.

Identify metrics linked to business impact and economic value.

<a href="https://www.invespcro.com/blog/customer-acquisition-retention/" target="_blank" rel="noopener">It costs five times more to attract a new customer than to retain one</a>, so keeping customers happy is a vital strategy for lasting business success. Retention rate is a critical driver of profitability, making a huge impact on the customer lifecycle value.
At a time when social media has shifted the power from companies to consumers, building a base of loyal customers is a key path to creating advocates on your behalf. Establishing this advocacy has all sorts of benefits, from expanding your customer base to saving costs through word-of-mouth marketing. In the upcoming report The Business Value of CX, we go deep into the value created through advocacy over time.

Associate business goals to customer and marketing-related metrics.

To leverage the long-term value creation opportunities that superior CX can provide, its impact should not only be assessed once. It should be carefully tracked as it evolves over time. This would make it possible to then check if such efforts are maintaining the intended result, or if it is necessary to focus on a new aspect of experience differentiation.

Establish a continuous monitoring system to track impact on an ongoing basis. 

Communicating the success of your CX efforts

<h4>Measuring the business value of CX</h4>
What steps are you taking to deliver exceptional CX? What business impact can you expect? How will you unify your teams to pursue better experiences that lead to increased customer loyalty and sustainable business value? These are all questions to consider in order to drive growth, build loyalty and stand out ahead of the competition.
To manage expectations of CX results, read about how to understand what quality CX looks like specifically for your business in <a href="https://www.frog.co/designmind/business-cx-defining-quality-unlocking-potential" target="_blank" rel="noopener">Your Business, Your CX: Defining Quality</a>.
For more information on measuring results, sign up to get <a href="https://go.frog.co/en/business-return-customer-experience-report" target="_blank" rel="noopener">Business Value of CX</a> , a new, free report that includes the four key effects of exceptional customer experience, as well as more detail on frog’s approach to customer-centered innovation.

Octavio Egea

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