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Enterprise risk management and strategic foresight: A toolset for identifying and managing emerging risks

Strategic foresight has been used across large corporations and different governments to support strategic planning, manage emerging risks and remain competitive.

Given the growing use of foresight in our government and its presence in a recent Office of Management and Budget directive, the Partnership for Public Service and Deloitte & Touche LLP held a virtual working session on Feb. 26, 2024, that explored the potential benefits and use cases of strategic foresight as a risk management tool within federal enterprise risk management (ERM) programs.

The session featured panelists Chris Mihm, former managing director of strategic issues at the Government Accountability Office, Eric Popiel, group manager of the Future of Work Group at the Office of Personnel Management, and Anna Rinick, senior program manager at the Department of Agriculture’s Animal and Plant Health Inspection Service. Amy Zalman, Deloitte’s transactions and business analytics strategic foresight specialist leader, delivered opening remarks, while Cynthia Vitters, Deloitte’s managing director and government and public services enterprise risk management practice leader, moderated the conversation.

This session built on other working sessions in a series of programs organized by the Partnership and Deloitte, including how enterprise risk management can help manage AI risks and meet recent AI policy and guidance.

Why strategic foresight?

Strategic foresight, as defined by Zalman, uses historical trends and information to visualize and “anticipate a future that may be unlike the present” and to plan for “emerging phenomena that may coalesce into risks later.”

Federal agencies use strategic foresight to equip their organizations and enterprise risk management, or ERM, programs with practical insights to better define possible future scenarios and understand emerging risks (e.g., artificial intelligence and climate change). A clearly identified set of emerging risks can provide a strategic advantage to agency decision makers as they consider long-term planning and budgetary needs.

Together, ERM and strategic foresight proactively identify emerging risks and elevate them to the necessary stakeholders for risk-informed strategic decision making.

Using strategic foresight as a risk management tool

Panelists shared methods for—and examples of—employing strategic foresight within government, offering practical solutions for ERM practitioners to connect foresight methodologies to their ERM activities.

For instance, Mihm identified one place where ERM and foresight are coming together is in agencies’ evidence-based policy work. Starting “within the learning agendas of the agency,” the combination of these two tools can offer leaders a framework to “think about what is unknown that could cause big, operational, policy, or management challenges,” which in turn provides insights to help inform programmatic decisions.

Key takeaways for aligning ERM and strategic foresight

Federal agencies should consider the following when aligning ERM and strategic foresight capabilities:

1. Identify and understand emerging risks

By nature, emerging risks are difficult to monitor due to the volatility and underlying uncertainties associated with them. Strategic foresight can help leaders catalog these risks and understand their future impact through various tools, such as horizon scanning, trend analysis and scenario planning. Popiel highlighted how scenario planning “is not only fun and creative” but enables practitioners to “identify interesting ideas that often uncover lots of blind spots, which is critical when talking about pure ERM.”

2. Demonstrate the value to senior leadership

Like other tools and technologies, foresight requires support from senior leadership. Agencies must demonstrate foresight’s ability to aid in the achievement of agency objectives and mitigate unwanted risk. Mihm noted that ERM and foresight practitioners should “talk about what’s on [senior leaders’] agenda” to explicitly illustrate how the application of foresight helps accomplish their priorities.

3. Integrate and follow through

Well-integrated, strategic foresight and ERM can help agencies enact broader organizational change. Rinick shared that to create a sustainable program, agencies should view strategic foresight as a “cultural change management effort” instead of a mere “set of activities.” Integrating foresight into the DNA “can be as simple as asking in a routine meeting what people think is a critical trend that may impact their program beyond the next five years” which shifts “an operating environment toward the future rather than sticking to past patterns.” In turn, this provides senior leaders and chief risk officers with additional information for strategic decision-making across programmatic areas (e.g., budgeting, planning and performance). Strategic foresight can amplify the benefits of ERM by maintaining proactive risk management, enhancing government resiliencies and helping agencies solve complex problems.

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