(FORTUNE Magazine) – For I dipt into the future, far as human eye could see, Saw the Vision of the world, and all the wonder that would be; Saw the heavens fill with commerce, argosies of magic sails, Pilots of the purple twilight, dropping down with costly bales; Heard the heavens fill with shouting, and there rain'd a ghastly dew From the nations' airy navies grappling in the central blue. -- Alfred, Lord Tennyson, ''Locksley Hall''

WHEN THOSE LINES first appeared in print in 1842, despite the marvels of the Industrial Revolution readers no doubt presumed that what Lord Alfred was dipping into was the opium. Travel by air? Transport of goods through the sky? Warfare in the heavens? Clearly only a wild-eyed poet could stare into the future and imagine such absurdities. Tennyson's reputation in his own lifetime as a gifted lunatic placed him squarely in a tradition that is as old as recorded history. He was what the World Future Society, an organization in Bethesda, Maryland, that collects and analyzes predictions about the future, would call an ''outlier'' -- an unfettered explorer of the outlying provinces of human possibility. When any society is undergoing rapid change, and especially when the upheaval is caused by unfamiliar forces, says a World Future Society study published last fall, ''there is a powerful role for the outlier: the deviant thinker, the unusual, and the radical.'' In corporations today, the outlier is in. Consider, for instance, the folks who sponsored that World Future Society study, a collection of essays by 17 eminent forward-thinkers, including Daniel Bell, Peter Drucker, and Arthur C. Clarke. The project was funded by Arco, Bell Communications Research, Du Pont, Dow Chemical, United Technologies, and Raytheon, among others -- one sign that American corporations have lately embarked on the distinctly Tennysonian task of trying to see into the 21st century. And what did the sponsors learn? Among many other things, that the countries now thought of as Third World will catch up with the developed nations, forming a single global economy in the 21st century. Another forecast: New technologies, and advances on old ones, could allow human beings to become immortal. Firms that specialize in long-range planning report a stampede of new clients. Thomas Mandel, a consultant in the Business Futures Program at SRI International in Menlo Park, California, estimates that demand for such advice is rising about 20% a year. The main reason for this sudden urge to explore | the years beyond 2000 is the current wave of change that is sweeping aside old assumptions everywhere in the world. Says Mandel: ''In such an unstable environment, people get anxious.'' Anxiety's antidote is long-term planning, requiring the cultivation of what one futurist calls ''the art of conjecture.'' But can the art become a science? Do systematic efforts to predict the future ever really work -- and if not, can they at least provide some useful insights? Most companies still prefer to rely on conventional forecasting tools like the discounted cash flow model, and to look no further out than ten years. Others who've gambled on blue-sky thinking may have to wait a decade or more to see whether their visions will pay off. For the past 20 years, few U.S. companies have made much effort to plan beyond a three- to five-year time span, and with good reason. So-called blue- sky planning committees, given free rein to speculate about the decades ahead, flourished in the optimistic Sixties -- only to have their credibility demolished by subsequent oil shocks and recessions, embarrassingly unforeseen. Du Pont's experience was typical. The company formed a blue-sky group 20 years ago to ponder the future of the chemical industry, but it was short-lived. After much deliberation about the long term, the head of the group was asked: ''What has been the benefit of your work to the company?'' The answer, recalls an executive who was there, was ''a long silence.'' The Eighties brought added disincentives to futuristic thinking. With the specter of an unwanted takeover never far from view, or an ever heavier load of leverage to carry, managers at some companies found themselves under too much pressure in the short term to worry much about the year 2030. The unimpressive history of long-range planning in the U.S. would be less vexing if Japanese companies were floundering too. Alas, it seems many of them are succeeding. A remarkable example is Matsushita, parent of Panasonic, whose eponymous founder in 1932 announced a 250-year plan for his infant enterprise. The full details of this vision have never been disclosed, even to high- ranking company executives, and Konosuke Matsushita died last year. However, according to Richard Kraft, president and CEO of Matsushita Electric Corp. of America, the founder did believe nearly 60 years ago that his company would be selling and manufacturing a great many small appliances in the U.S. by now. Sure enough, sales here reached $4.7 billion in 1989 and about 25% came from U.S. plants, a proportion the company expects to double well before the year 2000. Matsushita's foresight is by no means typical of all Japanese companies. That the founder was able to imagine the company's far-flung economic might, at a time when Japan was a barely industrialized nation with a tiny GNP, qualifies him for wild-eyed visionary status, right up there with Tennyson. Still, Japanese companies without 250-year plans also excel in thinking about the long term. Partly it's a mind-set. In making capital spending decisions, for example, they focus on one concept: long-term strategy. Pundits have offered elaborate theories about this propensity, tracing its origins to cultural traditions ranging from the cosmic (Zen Buddhism) to the mundane (rice farming, which supposedly cultivates the long view because rice takes years of preparation before it starts to produce). Even so, the real source of the Japanese advantage is widely acknowledged to be economic. Japan's high savings rate, coupled with individuals' willingness to accept interest rates of only 2% or 3%, makes an abundance of low-cost capital available to corporate borrowers. Hence Japanese managers' much vaunted patience. With the cost of capital at roughly half what their American counterparts pay, they can afford to wait longer to recoup their investments. AMERICAN COMPANIES intent on planning for the long haul would do well not to wait for money to get cheaper. Westinghouse realized this in the early Eighties and tried several long-term planning methods before settling on a scheme called value-based strategic management. This is fundamentally the same kind of cash flow analysis planners at other companies do, estimating what cash flow is likely to be for each line of business in three, five, and ten years, and then discounting those numbers to reflect an appropriate cost of capital. The difference is that Westinghouse uses cash flow analysis as its main planning tool and adjusts its strategy accordingly. Unimpressed with long-term prospects for cash flow, Westinghouse has sold off units, like its elevator and lamp businesses, even when profits were strong at the time. Over the past ten years the company reported an average annual return to investors of 27.5%. With results like that from a strategy based purely on the numbers, who needs ''the art of conjecture''? Score one for the bah-humbug contingent. Occasionally, a vision of the future impels a company to put itself through a massive overhaul. One such was Monsanto, which during the 1980s sold off or shut down profitable businesses in oil, chemicals, and plastics with $4 billion in assets. Chairman Richard Mahoney had formed a strategic planning committee to ponder how best to respond to the dwindling profitability of Monsanto's commodity chemicals businesses. Foreseeing no likelihood of an upturn in the fortunes of those businesses beyond 2000, the planners reached a bold conclusion: Get out altogether. As a result only 3% of Monsanto's assets are now in commodity petrochemical businesses, down from 26% in 1980. The company is charging instead into pharmaceuticals and biotechnology, and spending on research and development has more than doubled from 3% to 7% of sales. So far, the shakeup has done nothing dramatic for Monsanto's financial results -- the drug unit is just breaking even, biotech still loses money -- and the turmoil has been rough on employee morale. But it's too early to judge this as a 21st-century strategy. In 20 years' time Mahoney could well be remembered as either the CEO who sank the company or the one who saved it. Corporate deep thinkers looking toward the next millennium are well aware of a phenomenon that the late Herman Kahn, the dean of American futurists, dubbed ''educated incapacity.'' Kahn observed that experts so often turn out to be mistaken because they are experts: They know the past and present in such detail, and have formed such ironclad assumptions, that their knowledge prevents them from anticipating surprises. Kahn might have appreciated a recent audacious attempt to rise above inbred thinking conducted by Jack Rivkin, who directs equity research at Shearson Lehman Hutton. For a report called A View From the Year 2000, Rivkin asked his security analysts to picture a world in which their present certainties were turned upside down and then to reconstruct the series of events that would have led up to such radical change. ''Our health care analysts assured me that there will never be national health insurance in the U.S.,'' says Rivkin. ''So I said, 'Okay, you may be right. But imagine it is now the year 2000, and we have national health insurance. What has had to occur for that to be the result?' '' Some staffers initially regarded the assignment as frivolous. But after giving their imaginations a blank check, many began to notice trends in the real world that they had previously overlooked. For example, says Rivkin, ''when our economist was in the program, he began to think about how our economy is interrelated with the rest of the world. Now he talks more of an international business-economy picture.'' Recently the economist used his new perspective to predict that U.S. interest rates would not fall, despite the weak domestic economy, because of high rates abroad. Says Rivkin: ''Taking this leap into the future has changed the way several of our analysts approach their work. They no longer automatically rule out so many possibilities.'' PERHAPS the best-known method for translating blue-sky conjecture into practical business plans is scenario planning, which attempts to conjure up three or four alternative visions of the future and construct a business plan that would readily adapt to any one of them. Scenario planners examine what they refer to as ''critical uncertainties,'' which might range from possible shifts in consumer demographics to heavier government regulation to movements in currency exchange rates, and then propose ways for a company to meet its long-range goals under whichever conditions turn out to prevail. Notes Melvyn Goetz, director of corporate development at Westinghouse, where scenario planning preceded the current discounted cash flow model: ''It's kind of like investing in a hedge fund. But it still leaves you with having to choose which scenario you need to prepare for -- and what if you guess wrong?'' Still, scenario planning has produced strong results for some companies. A few, such as London-based Royal Dutch/ Shell, have trained hundreds of managers in the technique. When peering into the future, some deep thinkers caution, don't neglect to take action in the present. ''The problem in long-term planning isn't necessarily that we don't have enough information about the future,'' says Irving Leveson, a senior vice president of Hudson Strategy Group, a New York City consulting firm. ''Rather, the problem is that we don't respond adequately to what we do know.'' The U.S. auto industry is a case in point. The handwriting -- in Japanese characters -- began to show up on the wall in the early Seventies, prefiguring a new era of ferocious international competition. But Detroit took an entire decade to react, a delay that proved nearly suicidal. As the Nineties begin, demographic forecasts suggest that the hordes of baby-boomers who reach retirement age in the years 2020 to 2030 may find Social Security funds will be strained. ''We all know that, we keep hearing about it,'' says Leveson, ''but are we doing enough about it?'' A new study by the executive search firm Korn Ferry International offers disconcerting evidence to support Leveson's view. Although 68% of the American CEOs who responded to the survey agreed that global competition will be their biggest challenge in the 21st century, fewer than 20% rated training in a foreign language as very important -- vs. more than 75% of Japanese, Western European, and Latin American executives who considered it so. Even more significantly, American top managers attached much less importance to overseas experience than did their counterparts abroad. ''In a U.S. company, moving overseas is a dead end more often than not,'' observes John Harlow, a Korn Ferry managing director. ''You can lose your place in the power curve.'' To prepare for the global marketplace everyone expects in the 21st century, perhaps a whole new kind of power curve makes sense. From this perspective, the best-laid long-range plans are those that begin with less talk and more action directed at averting those perils that seem likeliest. Even then, expect surprises. In 1989, McDonnell Douglas wrapped up an exhaustive research project intended to yield a clear view of the next millennium. The defense industry has particular need to explore the far horizon. Because new aircraft take years to develop and cost billions, a single ill-considered product could send a company into bankruptcy. McDonnell Douglas's blue-sky project did yield some practical plans, including the possibility of joint ventures with Japanese and European aerospace companies and -- shades of Tennyson here -- the development, already feasible technologically, of spaceplanes that may one day transport commuters from New York to Hong Kong in two hours, or from Sydney to Hong Kong in an hour and a half. Although planners studied world politics in minute detail, with an eye toward future U.S. defense policies, they foresaw neither the fall of the Berlin Wall and its subsequent transformation of Eastern Europe, nor the current upheaval in China. The point, says Gareth Chang, McDonnell Douglas's president for Asian operations, is a paradox: ''Trying to predict the future is necessary but impossible.'' Against the odds, outliers will no doubt keep trying.