Talk:Corporate Foresight

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Contributors: Adriana Postovaru, Bianca Dragomir, Alexandru Paun
Contributors: Adriana Postovaru, Bianca Dragomir, Alexandru Paun
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'''Corporate foresight: Its three roles in enhancing the innovation capacity of a firm'''
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'''What is corporate foresight?'''
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'''
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Corporate Foresight''' does not predict or forecast the future just permit to see beyond the close environment of organizations.
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Companies have to take into consideration future developments and include them in their daily decisions and actions. Because of the complex and uncertain business environment, organizations need long-term orientation.
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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.)
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Corporations work with foresight studies in order to:
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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):
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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;
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• reduce uncertainty by identifying new and relevant trends;
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• prepare strategic decisions;
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• support innovation processes;
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• develop new and future business fields/markets;
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• create orientation on future developments;
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• build a knowledge base (Neef and Daheim, 2005).
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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;
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Some companies (Aventis, BASF, British Telecom) use foresight information for decision-making process and for the corporate strategy development, others (Philips, Decathlon, Ericsson) use foresight for better understanding the structural changes in science and society (Öner,Atilla M, Göl, Beșer Senem, (2011)).
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c) Inertia – is an effect of internal complexity (regional reach and product range) and external complexity (the extreme network with other companies).
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Rene Rohrbeck – defines Corporate Foresight as “an ability that includes any structural or cultural element that enables the company to detect discontinuous change early, interpret the consequences for the company, and formulate effective responses to ensure the long-term survival and success of the company” (Rene Rohrbeck,2010 - Corporate Foresight:
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Towards a Maturity Model for the Future Orientation of a Firm, p.11)
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In order  for a company to  adapt to discontinuous change has to have '''“dynamic capabilities”.'''
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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.
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'''“Dynamic capabilities”''' is the ability to renew the portfolio of strategic resources when the company is facing discontinuous change.
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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.
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For out-competing their rivals, organizations use some strategic resources with the following characteristics: (1) appropriable– i.e., difficult to imitate, substitute, or transfer; (2) scarce; and (3) in demand.
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Of course these resources lose their competitiveness in time and the companies need to develop new resources. However it’s quite difficult for companies to adapt quickly and to renew their resources need  in times of discontinuous change.
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The study reveals three roles that corporate foresight should play to maximize the innovation capacity of a firm (Rohrbeck, Gemünden, 2010, 237):
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Why is difficult for the companies to renew their products and organizations is detailed explained in the other article. The major reasons are: High rate of change, Ignorance and Inertia.
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(1) the initiator role, which increases the number of innovation concepts and ideas;
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'''How the discontinuous change can be managed?'''
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(2) the strategist role, which explores new business fields;
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How organizations can successfully managed discontinuous change has been approached from three major research perspectives:
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(3) the opponent role, which challenges innovation projects to increase the quality of their output.
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'''1. Strategic management
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2. Innovation management
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3. Managing the future
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'''
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'''1.Strategic management''' – in time of change the companies need to have the ability to adapt incrementally and the ability to adapt radically (exercising both capabilities is used the term organizations ambidexterity).  
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Environmental scanning is also needed to find up to date information regarding the direction and magnitude of emerging external change
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Each of the roles is further on detailed:
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'''2. Innovation management''' – companies can gain competitive advantage by: acquiring new technologies, linking emerging technologies to the customer needs, building separate organizations for developing radical and incremental innovations, initiating new R&D projects.
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(1) '''The initiator role''' - Corporate foresight triggers innovation initiatives by:
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'''3. Managing the future''' – identifying methods to systematic explore the future.
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In the past the change occurred slowly enough and the companies were able to prepare themselves and respond adequately.
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Today the future research aims more to discover undetected currents that will influence the future.
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Future orientations are achieved by exploring possible futures rather than predicting future developments.
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•''identifying new customer needs'' through analyzing cultural shifts and collecting the needs of lead customers;
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The objective of this article is to show that corporate foresight can contribute through its three roles (initiator role, strategist role and opponent role) to the innovation management process.
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•''identifying emerging technologies'' by scanning the science and technology environment;
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The research goal of this study is to define a maturity model that can be applied to any organization. For this reason, this study uses information gathered from different companies from different : industry, position in the value chain and business driver (either technology or the market).
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•''identifying new competitor concepts'' by monitoring R & D projects, patenting activities, and the new-product launch announcements of the competitors.  
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For more detailed explanations regarding the three roles of the corporate foresight in maximizing the innovation capacity of the firm, please refer to the other article from forwiki.
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(2) '''The strategist role''' -  corporate foresight directs innovation activities by:
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'''Conclusions:'''
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•''creating a vision'' - sharing a vague, broad picture of the future;
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The conclusion of the article is – there is value from corporate foresight and corporate foresight can contribute through its  three roles to exploit the opportunity that arise from disruptive change.
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•''providing strategic guidance'' -  future insights are used to define strategic directions;
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- The cross case analysis revealed eleven impacts of corporate foresight on the innovation capacity of the organizations
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- Through clustering the impacts corporate foresight efforts can be classified in three roles and these roles are effective in maximizing the innovation capacity of the firms
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- This research  showed to be important and different from other researches  because applying the resource based view and dynamic-capabilities theory to the field of corporation foresight a theoretical base was built.
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- The research has brought contributions on the importance of dedicated management systems  to allow firms to move into new business fields and produce radical innovation (organizational ambidexterity)
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- Corporate foresight and innovation management contribute to organizational ambidexterity: corporate foresight performing the strategist role allowed the company to explore and develop new business fields and performing the initiator  role increases the ability of the company to have incremental innovation
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•''consolidating opinions'' by simply triggering cross-regional discussions;
 
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•''assessing and repositioning innovation portfolios'' by providing the future insights to change innovation portfolios;
 
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•''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.)
 
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(3) '''The opponent role''' - corporate foresight challenges the innovators to create better and more successful innovations by:
 
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•''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;
 
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•''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;
 
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•''scanning for disruptions'' (technologies, products, or changes in the consumer needs) that could endanger current and future innovations.
 

Revision as of 02:15, 1 April 2012

Contributors: Adriana Postovaru, Bianca Dragomir, Alexandru Paun

What is corporate foresight? Corporate Foresight does not predict or forecast the future just permit to see beyond the close environment of organizations. Companies have to take into consideration future developments and include them in their daily decisions and actions. Because of the complex and uncertain business environment, organizations need long-term orientation.

Corporations work with foresight studies in order to:

• reduce uncertainty by identifying new and relevant trends; • prepare strategic decisions; • support innovation processes; • develop new and future business fields/markets; • create orientation on future developments; • build a knowledge base (Neef and Daheim, 2005).

Some companies (Aventis, BASF, British Telecom) use foresight information for decision-making process and for the corporate strategy development, others (Philips, Decathlon, Ericsson) use foresight for better understanding the structural changes in science and society (Öner,Atilla M, Göl, Beșer Senem, (2011)).

Rene Rohrbeck – defines Corporate Foresight as “an ability that includes any structural or cultural element that enables the company to detect discontinuous change early, interpret the consequences for the company, and formulate effective responses to ensure the long-term survival and success of the company” (Rene Rohrbeck,2010 - Corporate Foresight: Towards a Maturity Model for the Future Orientation of a Firm, p.11)

In order for a company to adapt to discontinuous change has to have “dynamic capabilities”.

“Dynamic capabilities” is the ability to renew the portfolio of strategic resources when the company is facing discontinuous change. For out-competing their rivals, organizations use some strategic resources with the following characteristics: (1) appropriable– i.e., difficult to imitate, substitute, or transfer; (2) scarce; and (3) in demand. Of course these resources lose their competitiveness in time and the companies need to develop new resources. However it’s quite difficult for companies to adapt quickly and to renew their resources need in times of discontinuous change.

Why is difficult for the companies to renew their products and organizations is detailed explained in the other article. The major reasons are: High rate of change, Ignorance and Inertia.

How the discontinuous change can be managed?

How organizations can successfully managed discontinuous change has been approached from three major research perspectives:

1. Strategic management 2. Innovation management 3. Managing the future 1.Strategic management – in time of change the companies need to have the ability to adapt incrementally and the ability to adapt radically (exercising both capabilities is used the term organizations ambidexterity). Environmental scanning is also needed to find up to date information regarding the direction and magnitude of emerging external change

2. Innovation management – companies can gain competitive advantage by: acquiring new technologies, linking emerging technologies to the customer needs, building separate organizations for developing radical and incremental innovations, initiating new R&D projects.

3. Managing the future – identifying methods to systematic explore the future. In the past the change occurred slowly enough and the companies were able to prepare themselves and respond adequately. Today the future research aims more to discover undetected currents that will influence the future. Future orientations are achieved by exploring possible futures rather than predicting future developments.

The objective of this article is to show that corporate foresight can contribute through its three roles (initiator role, strategist role and opponent role) to the innovation management process.

The research goal of this study is to define a maturity model that can be applied to any organization. For this reason, this study uses information gathered from different companies from different : industry, position in the value chain and business driver (either technology or the market).

For more detailed explanations regarding the three roles of the corporate foresight in maximizing the innovation capacity of the firm, please refer to the other article from forwiki.

Conclusions:

The conclusion of the article is – there is value from corporate foresight and corporate foresight can contribute through its three roles to exploit the opportunity that arise from disruptive change.

- The cross case analysis revealed eleven impacts of corporate foresight on the innovation capacity of the organizations - Through clustering the impacts corporate foresight efforts can be classified in three roles and these roles are effective in maximizing the innovation capacity of the firms - This research showed to be important and different from other researches because applying the resource based view and dynamic-capabilities theory to the field of corporation foresight a theoretical base was built. - The research has brought contributions on the importance of dedicated management systems to allow firms to move into new business fields and produce radical innovation (organizational ambidexterity) - Corporate foresight and innovation management contribute to organizational ambidexterity: corporate foresight performing the strategist role allowed the company to explore and develop new business fields and performing the initiator role increases the ability of the company to have incremental innovation




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.

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