Letâs say youâd like to retire a millionaire, but you live paycheck-to-paycheck. Meeting your goal someday will require critically examining your current financial state. Likely, youâll find you need to save more, spend less, and invest. Then, you can determine how to move to a future state of wealth.
Interestingly, businesses can also benefit from this type of practice. They must examine their current behaviors and make systemic changes to reach future goals. A future reality tree can help.
What is a future reality tree?Â
A future reality tree lets you examine what could happen if you change your current reality. It allows you to visualize cause-and-effect relationships that link potential changes to desired effects without the risk of actually implementing the changes. A future reality tree, or FRT, is commonly used in business to plot causal relationships from A to B, but it can also be used in science or healthcare.Â
For instance, letâs say you want to increase patient satisfaction ratings at your clinic. You may assume that the problems are outdated technology and long waiting times. But you shouldnât invest time and money into making those changes without first mapping out their intermediate effects. When you do, you may find those factors have little to do with your overall success, and your time and money would be better spent elsewhere.
The future reality tree is part of the theory of constraints, which supports identifying and mitigating one significant issue at a time instead of trying to address all the potential problems at once. This scientific approach to improving a system assumes that each action within a system is linked and that the root of those links is the real constraining factor.
How to problem-solve with a future reality tree
- Define the central issue or goal: Define the main issue or objective you want to address. Put this at the top of your future reality tree.
- Identify core assumptions: List the core assumptions or beliefs that underlie the central issue. These assumptions will form the basis of your future reality tree. These are important for determining what to change.
- Create a future event: Imagine a specific event or milestone if all the core assumptions were valid. This event should directly relate to the central issue and represent a significant outcome.
- Identify positive and negative branches: Analyze the consequences of the future event and identify the positive and negative outcomes that could result.
- Identify cause-and-effect relationships: For each positive or negative outcome identified in the previous step, trace the cause-and-effect relationships that led to those outcomes. These relationships can be expressed as âif-thenâ statements. For instance, âIf you pay your employees more, then they will be incentivized to stay with the company longer.â
- Analyze conflicts and uncertainties: Look for conflicts or uncertainties in the cause-and-effect relationships. Conflicts arise from contradicting outcomes, while uncertainties occur when information is missing.
- Identify necessary actions: Based on the analysis of cause-and-effect relationships, conflicts, and uncertainties, identify the actions that must be taken to achieve the desired outcomes or mitigate the potential problems.Â
- Create the future reality tree diagram: Visualize the FRT by representing the central issue as the main trunk, the core assumptions as the roots, the future event as the base of the trunk, positive outcomes as branches going upward, negative outcomes as branches going downward, and cause-and-effect relationships as connecting lines.Â
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