The forward looking agent forecasts trends in consumer demand, spots market opportunities and readies his organization for a great leap forward.  But any decision is plagued with unforeseen contingencies.  By necessity, any agent must also be backward looking, putting our fires as they appear. This sucks attention from looking forward and the organization may atrophy and lose its edge.

These two extremes manifest themselves in different ways at different points in an organization’s history.  A firm that is just starting out will be forward looking by definition.   There is no history, no fires to put out.  Either the young firm dies – its products are unpopular – or it succeeds.  That’s when the trouble starts.  Success also breeds emergencies and crises large and small.  Now attention is diverted.  A young organization that reaches middle age it may not survive into old age.  If optimization of extant decisions is the main activity, there is no time left to prepare for the next wave of technology, consumer demand…etc.

If the organization reaches old age, it is because it has learned to deal with unforeseen contingencies.  It has set up frameworks, codes of practice and procedures that can simply be activated when a fire appears.  This creates room for forward looking strategy analysis.

To summarize, a young organization is more forward-looking than a middle-aged organization.  An old organization may also be more innovative than a middle-aged organization. We do not have a way to rank young and old organization with this bare-bones theory.  There are, of course, many other theories.  The “replacement effect” is one obvious alternative.