By Younas Chaudhary
What is foresight? World-renowned futurist Richard Slaughter says it is “the ability to create and maintain a high-quality, coherent and functional forward view and to use the insights arising in useful organizational ways.”
I have been blessed with foresight; I feel that it is a God-given intuitive gift that allows me to make fairly accurate predictions of the future.
Scouting for oil in Kansas in the late seventies and early eighties, I used foresight to pivot my business model and move to Texas. I was able to tell ahead of time that in Texas oilfields, there were multiple productive formations and more stacked pay in the same wells and thus more untapped reserves, leading to lower investment costs. Texas was an energy hub, and Houston played center-stage, as it still does in the global oil and gas business.
My own personal preference would have been to live in California, but with tighter environmental regulations and greater bureaucracy in California, I knew I had to look for a better future elsewhere. By early 1985, I had sold my high value producing oilfield called Kern River Unit in Kern County, California, as it was quite expensive to operate, so I could focus more on Texas and nearby states.
In business you need to constantly scan your environment, look for both perceived and actual concerns and think long-term. The present can give you clues to foresee multiple future scenarios.
Foresight requires time, study, travel, thinking outside your comfort zone, and exploring different ways of accumulating knowledge. Ultimately, such a broad approach will help you discern what is good and what is bad for your business and personal lives in the future.
Maintaining an inquisitive mind, spending time on your passion, and keenly perceiving your surroundings will sharpen your foresight. For instance, predicting an oil boom in Texas, I purchased several operated and non-operated oilfields in the Permian and shale production areas in eighties and nineties. This later turned out to be a good decision.
Similarly, when oil prices plunged in the mid-eighties, I used my foresight to find an alternative more stable source of income and started buying real estate here in the United States and later in Canada, to balance my income stream.
And when the pandemic hit and oil prices fell through the floor, we predicted an extended period of low prices and shut down all production except those that were necessary.
In predicting the future, one must be consistent, hardworking, and open to thinking through multiple “What if?” scenarios. In doing such thinking, entrepreneurs must focus on their strengths and stay away from their weaknesses.
When I was against the wall in a deal in Kansas, and investors started blaming me for low oil prices, I settled the issue by working with a bank and buying them out. Using foresight, I kind of knew that in a few months, oil prices would recover—and indeed, I did end up making good money from the move.
Recently, we closed an oil deal as follows: the seller sent us its sale package summary, and within an hour, I reviewed it, my foresight instantly told me to pursue the deal, and I told my team to secure it. By that afternoon, my team negotiated the deal, and by the next day, they closed it. We found out a day later that other buyers wanted to pay significantly more for the same deal, but fortunately, we had already secured it.
In short, it is very important to use your instincts wisely and act upon them promptly—it creates great benefits in life.
But to build foresight, you must be passionate and invest lots of your time, as this is necessary for thinking through multiple scenarios. While trend monitoring and trend projection are extremely difficult in a volatile energy market, having foresight will help you make quick decisions when you see early warnings.
Many people think that having foresight comes from only luck, but I do not agree with that. Foresight comes from intellectual curiosity, confident decision-making, prudent risk-taking, timing, patience, and structure.
Here are some tips for developing foresight:
- Gain knowledge: Be well-versed in your subject matter and invest your time, and you will find common themes and patterns to help you make predictions.
- Begin with small predictions: Train your mind by experimenting with small predictions after undertaking a deep analysis of the current situation. Remember that foresight requires common sense as well.
- Play devil’s advocate: A contrarian, out of the box opinion will get you thinking about divergent views and will help you understand an issue thoroughly.
- Ask “What if?” and think through different scenarios.
- Environmental scan: Be curious and probe what’s happening in the environment around you. Will the home life and work patterns change in 10 to 20 years from because of the pandemic? If so, what adjustments should you make to your business and home practices in anticipation of that?
- Understand demographics: Will millennials prefer urban centers or suburbs 10 to 20 years from now? Have a clear understanding of your audience and your product.
- Be a trend watcher: Watch trends in business and in life closely, as they will help you take quick business and personal decisions, spot early warnings, and gain knowledge and build confidence.
The views, thoughts, and opinions expressed in this article are my own and do not represent the opinions of any entity with which I have been, am now, or will be affiliated. Further, I make no warranty regarding the accuracy or effectiveness of my recommendations, and readers are advised to consult other advisors as well as their own judgments in making business decisions.