Corporate Foresight

From FORwiki

Revision as of 19:07, 25 March 2012

Project Visions and Visioning
	This article is developed within the scope of the Project Visions and Visioning, an effort to enhance Foresight learning through collaborative work.

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

The conclusion of the article restates the general idea of the article that corporate foresight has to make use of the three roles presented above and focus on opportunities that arise from disruptive change:

• the opponent role proved to be effective mechanism to challenge innovation

• the initiator role, it is not clear if a formal link or constant broadcast of information is more effective; however, in companies that rely exclusively on broadcasted foresight information internal stakeholders are reached => 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;

• 11 impacts of corporate foresight were found through cross-case analysis => results showing that corporate foresight efforts can be classified into three roles;

• moving the field of corporate foresight toward using common and acknowledged theoretical foundations => cross-fertilization with other research fields is possible;

• importance of organizational ambidexterity sustained by dedicated management systems => enables exploration and planning the development of new business fields; also interplay of corporate foresight and innovation management activities can contribute to organizational ambidexterity.

References: 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.