Corporate foresight

Implementation

The five practice dimensions

Based on case study research in 20 multinational companies, René Rohrbeck proposes a "Maturity Model for the Future Orientation of a Firm". Its five dimensions are:

• information usage describes the information which is collected
• method sophistication describes methods used to interpret the information
• people & networks describes characteristics of individual employees and networks used by the organization to acquire and disseminate information on change
• organization describes how information is gathered, interpreted and used in the organization
• culture describes the extent to which the corporate culture is supportive to the organizational future orientation

The model is operationalised through 20 elements which have four maturity levels each. These maturity levels are defined and described qualitatively, i.e. by short descriptions that are either true or not true for a given organization.

The three process steps

Organisations need to build foresight through three core process steps, which build on specific practices:

• Perceiving: Practices that firm use to identify the factors that drive environmental change. Firm aim to identify (weak) signals ahead of competition to gain a lead-time advantage
• Prospecting: Practices through which firms engage in sensemaking and strategizing. Practices include working with analogies, scenario analysis, systems-dynamics mapping, and backcasting
• Probing: Probing practices are exercise in dedicated accelerator units and in units/projects that receive the mandate to act. This may include prototyping, R&D projects, consumer tests, internal venturing, strategic initiatives or external venturing. Probing practices aim at legitimizing and starting a new course of action and ultimately at gaining a competitive advantage.

Corporate foresight can be expected to be a determinant of the quality of strategic conversation. It will also, in line with digitalisation of other organisational processes, be driven by online platforms that allow broadening the scope of the people who can get involved in defining new courses of action.

Innovation management

Through an empirical investigation Rohrbeck identified three roles that corporate foresight can play to enhance the innovation management of a firm:

• In the Initiator role Corporate Foresight supports the identification of new customer needs and emerging technologies. In addition it might also support the monitoring of competitors. To identify emerging technologies methods such as Technology Scouting can be used. Its particular appeal is the use of expert networks, that can also be used to later source the technologies.
• In the Strategist role Corporate Foresight supports the identification of emerging business fields and supports the internal renewal and re-positioning efforts of the firm.
• In the Opponent role Corporate Foresight uses the insights from the environmental scanning to challenge ongoing R&D projects. The aim is to ensure that innovation initiatives are continuously benchmarked against emerging technologies and confronted with current customer needs.

The study also showed that only a small number of firms have implemented the third role. In the majority of firms the aims of an innovation development project that have been defined are not challenged after the initial decision has been taken. This carries the risk that changing environmental conditions threaten the success of the innovation in development.

Additionally, von der Gracht and Vennemann have developed a portfolio-approach, the so-called 'Future-Fitness-Portfolio', which enables companies to qualitatively compare amongst others and identify organizational improvement potential. The authors base their framework on both, corporate foresight and innovation management.

Foresight and external search

External search, understood as all organisational activities that involve the creation and recombination of knowledge from a wide range of external sources outside the boundaries of the firm, has recently been suggested as one of the key research frontiers for corporate foresight. Corporate foresight utilising external search for knowledge entails the usage of novel methods to monitor external development. Among these novel methods, Social Media Analytics for external search for knowledge and open foresight that enable firms to tune in to weak signals and scan the periphery has been shown to hold particular potential.

Benefits

Firms that have applied corporate foresight have received a number of benefits:

• Identify changes ahead of competition
• Trigger innovation initiatives
• Challenge innovation projects to make them more successful
• Overcoming dominant mental models that stand in the way of necessary organisational response
• Moderate strategic discussions
• Breaking away from path dependency
• Support the search, development, and acquisition of strategic resources

On a higher level it has been documented that firms will be able to

• Enhance their perception on the external environment
• Trigger strategic organisational responses
• Trigger new innovation initiatives
• Contribute to organisational learning
• Shaping the future (by influencing other players to act)

More recently a longitudinal study, that tracked 83 companies over a period of 7 years, has found that firms that have the right maturity level of corporate foresight practices (high future preparedness) can expect an on average 33% higher profitability and a 200% higher market capitalisation growth, when compared to the average.

Case studies

In recent years corporate foresight has become more professional and widespread. Documented examples of organizations applying corporate foresight practices include:

• Automobile: Audi, Daimler,
• Chemical: BASF,
• Consumer goods: Pepsi,
• Engineering and Electronics: General Electric, Siemens,
• Financial service industry: Deutsche Bank,
• Information and communication technology industry: Cisco, Deutsche Telekom, EIT Digital, France Telecom,
• Oil and gas industry: Shell
• Professional services: KPMG
• Transport industry: SNCF

Such organizations typically use corporate foresight to support strategic management, identify new business fields and increase their innovation capacity.

Scientific Journals

• Technological Forecasting and Social Change
• Futures
• Futures & Foresight Science
• Foresight
• Journal of Futures Studies