Corporate Foresight
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In order to understand the importance of corporate foresight as a tool and assess its potential, we are to consider Rohrbeck and Gemünden's study on the roles of corporate foresight. Further on, we are to note briefly the results of a study made on a Turkish company regarding the use of corporate foresight as a project, with its typical phases.
Corporate foresight: Its three roles in enhancing the innovation capacity of a firm
The study aims to explore the ability of corporate foresight to increase the innovation capacity of a firm, whether it’s about incremental (i.e. enhanced or new products and services within current business field) or radical innovation (i.e. creating products and services in new business fields often using new technologies.) Unfortunately, many companies, including those from Fortune 500, don’t manage to adapt to external change in due time and in an efficient manner. There are three reasons why this happens (Rohrbeck, Gemünden, 2010, 232):
a) A high rate of change - product life cycles are shortening, there is an increased technological change, an increased innovation speed coupled with an increased speed of the diffusion of innovations;
b) Ignorance - that could be caused by short time frames that don’t correspond to corporate strategic-planning cycles, which are still coupled with the fiscal year cycle, or by corporate sensors that don’t detect signals outside their search area, or by an over-flow of information that overwhelms top management or by middle managing filtering the information to protect their interests;
c) Inertia – is an effect of internal complexity (regional reach and product range) and external complexity (the extreme network with other companies).
The objective of this research was to help increase the implementation of corporate foresight in companies and, more specifically, to broaden knowledge of the impact and value creation of corporate foresight and its role in enhancing the innovation capacity of a firm. The conclusions and recommendations draw on rich empirical evidence from 19 case studies and 107 interviews. The companies analyzed were from five distinct industries and with different positions in the value chain. Three major instruments for data collection were used: interviews, internal documents, and external academic publications by the foresight manager, together with interview templates. The study avoided the bias of the foresighters (i.e., an employee whose job is to scan the environment for weak signals on change) by using three informant perspectives: that of the internal customer, that of the corporate foresight activity manager, and that of the corporate foresight activity team.
The study reveals three roles that corporate foresight should play to maximize the innovation capacity of a firm (Rohrbeck, Gemünden, 2010, 237):
(1) the initiator role, which increases the number of innovation concepts and ideas;
(2) the strategist role, which explores new business fields;
(3) the opponent role, which challenges innovation projects to increase the quality of their output.
Each of the roles is further on detailed:
(1) The initiator role - Corporate foresight triggers innovation initiatives by:
•identifying new customer needs through analyzing cultural shifts and collecting the needs of lead customers;
•identifying emerging technologies by scanning the science and technology environment;
•identifying new competitor concepts by monitoring R & D projects, patenting activities, and the new-product launch announcements of the competitors.
(2) The strategist role - corporate foresight directs innovation activities by:
•creating a vision - sharing a vague, broad picture of the future;
•providing strategic guidance - future insights are used to define strategic directions;
•consolidating opinions by simply triggering cross-regional discussions;
•assessing and repositioning innovation portfolios by providing the future insights to change innovation portfolios;
•identifying the new business models and alternative business logic (ex: Deutsche Bank Research explored possible changes in value creation in the German economy in the next 15 years. The most probable of them showed a market in which 15% of all value is created through networks or consortia of firms, so the company made steps towards that model.)
(3) The opponent role - corporate foresight challenges the innovators to create better and more successful innovations by:
•challenging basic assumptions - These assumptions are typically built on worldviews that are undisputed within the company, but which are the subject of more controversy outside the corporate environment;
•challenging the state-of-the-art of current R & D projects - challenging current activities with what they have observed in the environment or what is already available in lead markets and thus increase the probability that the R & D projects will produce state-of-the-art innovations;
•scanning for disruptions (technologies, products, or changes in the consumer needs) that could endanger current and future innovations.
Conclusions and lessons learned
The conclusion of the article restates that corporate foresight has to make use of the three roles presented above and focus on opportunities that arise from disruptive change. Also, we need to bear in mind other findings:
• the initiator role - while it is not clear whether a formal link or constant exchange and broadcast of information is more effective, in companies that rely exclusively on broadcasted foresight information internal stakeholders are reached, which ensures higher chances that the organization will acknowledge faster the innovation opportunity;
• multi-modal dissemination strategy is recommended, establishing process links while broadcasting the foresight insights through mailing lists, the Intranet, blogs, wikis and internal document-management systems;
• moving the field of corporate foresight toward using common and acknowledged theoretical foundations. This would ensure cross-fertilization with other research fields;
• importance of organizational ambidexterity is crucial in a company that want to cope with inherent changes of the environment. A company's ambidexterity translates into its ability to adapt both incrementally, slowly tailoring its business to the market, and radically, coping efficiently with abrupt, discontinuous change. Organizational ambidexterity enables exploration and planning the development of new business fields. An interplay of corporate foresight and innovation management activities can contribute to organizational ambidexterity.
While the work of Rohrbeck and Gemünden focuses a lot on the roles of corporate foresight and the output deliveries of its (right) use, a study we will discuss below explores a bit the implementation of a corporate foresight project. The merit of this study is that it looks at the feasibility of a corporate foresight project and the difficulties that might occur in each phase of the project. Its acknowledged drawback is that is very limited, focusing on a single company in Turkey.
The objective of Assessment of corporate foresight project results: case of a multinational company in Turkey is to asses the success of a foresight project implemented in a Turkish company. While promising as a concept, corporate foresight has rendered weak results in provoking actual changes, due to a number of factors. Various authors refer to these factors of failure under different terminologies. The most comprehensive framework for corporate foresight failure is given by Öner and Göl, who list the pitfalls that occur at every stage of the project – from foundation, to planning, organizing, controlling, to execution and to the final stage of feedback&continuity of the foresight project (Öner, Göl 2011,53 apud Öner and Göl, 2007). In the particular case of the Turkish multinational company, the exploratory assessment model was designed via the use of a survey questionnaire, a case study, and interviews of managers and indicated associations among space/time perspectives of individuals in order to assess corporate foresight project results.
All stages of the foresight project had some drawbacks, in the following order: the pitfalls in the foundation phase seemed to be most problematic, followed by organizing, execution and then feedback and continuity, controlling and planning (pg. 58,59):
• Evidently, misteps in the foundation phase would cause disfunctions during the entire project;
• Assessment of the organizing phase indicated problem areas such as ‘‘distribution of responsibility’’, ‘‘availability and motivation of the key resources’’, ‘‘commitment of line managers’’, as well as ‘‘project communication’’;
• Execution phase is problematic if there is no right balance between professional competence and administrative aids;
• Lack of continuity and follow up renders the foresight project useless, since there is no positive effect on the organizational learning and knowledge base. That happens mainly because the foresight project was carried out without deep involvement of the headquarters, where the decision making power is centered;
• Regarding controlling, a more formal authority is needed to control the project which eventually will be reflected in the project’s organization;
• The planning phase was run smoothly compared to the other phases of the project, which may be due to the expertise of the foresight coordinator, who acted as both a member of the project team carrying out the foresight activity and as the coordinator of the corporate foresight and strategic planning process designated by the corporate management. Evidently, the study is limited in the sense that it only considers the foresight project of one company. The aim was to create a theoretical framework that is viable, and the authors conceptualized this „foresight process as a project” model, with all the phases of a project. However, further research is necessary in order to develop and refine the initial proposed model and its applicability.
References:
Öner,Atilla M, Göl, Beșer Senem, (2011), Assessment of corporate foresight project results: case of a multinational company in Turkey, Istanbul, Emerald Group Publishing Limited
Rohrbeck, René, Gemünden, Hans Georg (2010), Corporate foresight: Its three roles in enhancing the innovation capacity of a firm in Technological Forecasting & Social Change, Berlin.