Backcasting - forget forecasting for sustainability

Sustainability is different from the rest of our business in that there are well-defined goals that we need to achieve.

"Begin with the end in mind (but not in-hand)" (Steve Covey)

Executive Summary

Sustainability is different from the rest of our business in that there are well-defined goals that we need to achieve. The challenge comes in setting performance targets that will truly make a difference. For the rest of our business it makes sense to take our current performance and forecast what we could do in the future.

For sustainability merely achieving improvements over our current performance is not good enough. Forecasting will not give us the order-of-magnitude improvements that we need, nor enable the creativity it will take to get there.

A better approach is to vision the long-term goals... "What performance is necessary so that our business in no way undermines – and ideally increases – the possibility that humans and other life will flourish on Earth forever."

Once we figure out where we need to go, we can "roll back the future", or "backcast" to today...answering "What do we need to to today in aid of achieving that long-term goal?"

Forecasting

The typical approach for planning is taking the current performance, set direction based on strategy, and then forecast performance based in investments based on the current position and strategic direction.

Our scorecards compare actual performance to that near-term future target.

Scorecarding

In scorecarding, we often add in multiple other comparatives...We call this a "Navigational" tool... like navigating a ship... The organization needs to compare itself to multiple points (stars, for a ship) to figure out position, direction and speed.

Typical comparatives are Best-In-Class, Competitor XYZ, Industry Targets, etc.

Each comparative is useful to answer different questions - or for different stakeholders.

There is an extra comparative these days is... regulatory requirements. Organizations are under ever-increasing scrutiny from external regulatory bodies.

The regulator comparative is different in that it is often one of compliance as opposed to navigation.

All of these live withing the "normal" world of forecasting. Taking the current performance and projecting a way forward based on strategy (desired direction) investments (projects/initiatives) and current position.

Backcasting

What is the "Required Baseline State" - Targets for performance that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Backasting is different from forecasting. Forecasting has been for many years the most used tool in project planning for organisations. Forecasting works with the organisation's current situation and plans accordingly given those circumstances for an “expected” future.

Backasting works the opposite way. We need to place our organisation in the future by visioning the reality that super-long-term target of what true sustainability looks like... where the organization does no harm.

We are facing the most challenging times ever faced, as social, economic and environmental problems are putting at risk our existence and of future generations. Therefore, planning with a forecasting approach, looking for marginal/incremental improvements over the current-world, makes no sense. The problems we are facing are complex and demand innovation and creative solutions. This is why a backasting is essential as it helps to face complex problems that demand major changes when dominant trends are troubles in itself.

The concept of “backcasting” is central to a strategic approach for sustainable development. It is a way of planning in which a successful outcome is imagined in the future, followed by the question: “what do we need to do today to reach that successful outcome?” This is more effective than relying too much on forecasting, which tends to have the effect of presenting a more limited range of options, hence stifling creativity, and more important, it projects the problems of today into the future. (Note 2)

ABCD

The A-B-C-D method to applying the Framework for Strategic Sustainable Development consists of four steps which are repeated as an organisation progresses toward sustainability.

This method as others used by The Natural Step practitioners is based on backcasting from sustainability principles. You can lean more from The Natural Step's site. (also Note 2)

The Sustainability Scorecard

The Sustainability Scorecard pulls in the "Required Baseline State" as the long-term comparative...the ultimate north star to navigate your organization towards. The "creative solutions" and their outcomes become the quarterly OKRs(Objectives and Key Results) for your sustainability journey...and the nearer-term targets for your Sustainability Scorecard.

The idea is to give the reader multiple comparatives...and never loosing sight of the Required Baseline State.



Notes

Note 1: This image is based on “A new approach: the Future-Fit Business Benchmark” figure at futurefitbusiness.org/what-is-a-future-fit-business/

Note 2 - From the The Nature Step, Backcasting

Brett Knowles

Brett Knowles is a thought leader in the Strategy Execution space for high-tech organizations. His client work has been published in Harvard Business Review, Forbes, Fortune, and many other business publications.

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