Winning combinations when executing strategic foresight within an organization

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, Theresa Schropp, Research Assistant, Bavarian Foresight Institute, Technische Hochschule Ingolstadt

• Strategic foresight can enable organizations to anticipate potential opportunities and challenges, and better prepare for the future.
• But what is the ideal set-up of who works on foresight, what activities are performed and what it is used for in an organization?
• Based on our findings of more than 400 major companies, here are the winning combinations when it comes to strategic foresight.

Strategic foresight can be an invaluable tool for organizations to anticipate potential challenges and opportunities and challenges, and better prepare for the future. But what is the ideal set-up to achieve specific outcomes?

The Bavarian Foresight-Institute and the Nuremberg Institute of Market Decisions (NIM) collaborated on what is probably the most ambitious survey on strategic foresight practices, capturing 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, on these practices.

From our survey we learned, and we have written here about preliminary results, that a majority of large corporates have strategic foresight activities. Furthermore, we have assessed that by utilizing strategic foresight, leaders stay focused on opportunities in dynamic and uncertain business environments.

However, questions remain about the how organizations can best utilize strategic foresight to achieve specific outcomes. What are winning combinations of who works on foresight in an organization, what strategic foresight activities are performed and what is foresight used for in an organization?

Based on our empirical investigation, here we seek to provide some answers to those very questions.

Key elements for successful strategic foresight

When we talk about strategic foresight and elements that can be combined in an organization, we refer to three elements: deliverer, activities and usage.

What do these elements refer to? First of all, deliverer refers to the person doing the strategic foresight work in an organization. It can be an internal function with dedicated staff or teams or outsourced to consultants.

Meanwhile, strategic foresight activities or approaches to developing foresight are trend scanning, trend analysis and interpretation, scenario planning, strategic road mapping, foresight reports, technology road mapping future workshops, and simulations or forecasts.

Finally, corporate activities that strategic foresight has been used for, refers to diverse fields where strategic foresight has contributed value to an organization. These include:

1. Day-to-day operation regarding existing products, services, and programmes

2. Research and development activities or innovation in creating new products, services, and initiatives

3. Exploratory events for emerging practices and trends in 5-10 years on the horizon

4. Goal setting and performance management

5. Annual planning event during which corporate leaders determine long-term strategies

6. Build contingencies and adaptive activities in response to short-term crises or challenges

7. Organizational or corporate management at the director- and C-level

8. Horizon scanning and threat and opportunity identification

Winning combination for strategic foresight

In our analysis, we looked for combinations of deliverer, activities and used for elements that were mentioned most frequently in our survey.

In the following we describe these combinations, for now limited to internal foresight teams (deliverer). From previous work, we know that building internal capabilities is core to also developing an organizational culture that supports foresight.

If we consider the top 5 winning combinations, see below, we can state the following: in the organizations we surveyed, strategic foresight is primarily used for setting goals and measuring the performance of a firm on strategic level.

This underlines the relevance of strategic foresight for the future strategic orientation of an organization.

What this analysis also tells us, is that the following strategic foresight activities are central for developing foresight in organizations: working with trends, technology road mapping and scenario planning.

This list of combinations not only sheds light on common practice among the surveyed companies, but it also provides suggestions on how to get started with strategic foresight in an organization.

Given the many approaches to strategic foresight and and fields of application, we believe that following suggestions may be helpful.

How to successfully implement strategic foresight

We’ve identified the following ways of successfully implementing strategic foresight:

• Build internal strategic foresight capabilities. This does necessarily mean to build up entire teams or hire a foresight professional but to build foresight into staff training, begin with some activities, such as trend scanning, and link these to the goals of your organization.
• Be clear what you want to use strategic foresight for. Consider, who are the ‘customers’ of the insights derived from a strategic foresight activity? What is their use case?
  This means really understanding how foresight will be used, i.e. in decision-making, and what is required so that foresight insights create an impact in organization, e.g. in terms of input for workshops.
• Understand what the differences are between approaches in strategic foresight and what it takes to implement these. While working with trends might be less complex, technology road mapping and, in particular, scenario planning are more sophisticated approaches.

An overview of developing foresight is provided in Strategic Foresight: An Introductory Guide to Practice.