Strategic foresight: why who does it matters

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Jan Oliver Schwarz, Professor of Strategic Foresight & Trend Analysis, Head of Institute, Bavarian Foresight Institute, Technische Hochschule Ingolstadt, Bernhard Wach, Professor of Entrepreneurship and Business Administration, Munich University of Applied Sciences

Strategic foresight is predominately about detecting trends in the business environment and developing alternative pictures of the future, known as scenarios. Doing this work can lead to change and transformation.

As a practice, it’s widespread among large corporations with different implementations in different industries. But how is strategic foresight done and who does it in an organization?Are external consultants used or is it done in house?

The Bavarian Foresight-Institute and Nuremberg Institute of Market Decisions (NIM) have produced probably the most ambitious survey on strategic foresight practices to date. It captures insights from C-level executives or their direct reports from 400 companies with 10,000 or more employees from the US and Europe, including the United Kingdom and Switzerland.

For this research we focused on scanning for trends and analysis and interpretation of trends and developing scenarios. We were interested in gaining a deeper understanding of how corporations truly engage in these activities, while distinguishing between the use of three approaches:

• External agencies, such as consulting firms, thinktanks and individual experts.
• Ad hoc with individuals or teams whose responsibility does not include strategic foresight.
• Individual employees or teams responsible for strategic foresight.

More trend-than-scenario work

What we learn from our data is that the ad hoc approach, where individuals randomly work on strategic foresight, is the least common. This shows how strategic foresight endeavours have become increasingly professionalized.

However, we see differences between the external and individual approaches. A slight majority conducts trend-scanning activities externally. This makes sense in terms of opening a corporation up to external sources and the expertise of trend scouts, for instance.

More obvious is that the work of trend analysis and interpretation, deriving specific implications for an organization, is done by individual employees, given their specific knowledge on the organization or the industry. However, we were surprised to see that many companies still report on giving the analysis and interpretation to external consultants.

Overall, we were not surprised to see lower numbers for scenario planning. Scenario planning is a rather complicated activity that requires skills and training. But we were surprised to see an even split between individual and external. This would indicate that several companies in our sample have built their own capacities to create scenarios.

Reports still dominate dissemination

A central issue in foresight is the question of how foresight insights are disseminated in an organization. In our survey, we asked about two central elements: reports and workshops.

What the results suggest is that reports are used more often than future workshops (workshops looking at trends or scenarios). This is a critical finding: much has been argued that for the dissemination of foresight insights the active engagement of decision makers is critical, respective research on scenario planning stresses this point.

While reports are more commonly the domain of external consultants, we see an almost even split between the three approaches when it comes to future workshops.

Professionalization vs internal capacity building?

What does this tell us? Firstly, work with trends still dominates foresight work. This might not be surprising: as we have previously argued, working with trends is probably less demanding and, from a methodological perspective, less challenging.

Secondly, it raises questions about the involvement of external consultants. One of the main challenges in trend research is to challenge the mental models of the organization and to extend the scope of scanning. Here external consultants or trend scouts might be extremely helpful in providing new perspectives and insights.

But one question needs to be asked: are external consultants also contributing sufficiently to internal capability building? Paul Schoemaker from the Wharton School has urged organizations and leaders to develop peripheral vision in detecting trends in their business environment, asking for capability to be built internally.

https://open.spotify.com/embed/episode/6bWsTxJM7v1n4MXHOjkXyC

The involvement of external consultants in future workshops also leads to the assumption that value is seen in external facilitation. However, the involvement of internal individuals, be it on an ad hoc or regular basis, demonstrates the increasing usage of future workshops. It also signifies that these formats are employed consistently.

What you should do

Advancing strategic foresight in an organization is about moving beyond merely discussing trends. Great value is created through bringing trends together and exploring through scenarios how they could further develop in the future.

Organizations need to find the right balance between increasing their peripheral vision through external consultants and building their capabilities to explore trends and scenarios.

Foresight reports are a way to communicate foresight insights, but do they move decision-makers? Do they engage leaders into foresight thinking, i.e. challenging their assumptions about the future? Probably not. They are more a way of saying, ‘Hey, we have done some work’. Creating engaging workshop formats is vital. Engaging leaders and critical stakeholders in foresight is critical if foresight insights are to have an impact.