Corporate Foresight in Europe: Ready for the Next Step?

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Corporate Foresight in Europe: Ready for the Next Step? Cornelia Daheim 2nd Int. Seville Seminar on Future-Oriented Technology Analysis (FTA): Impacts on policy and decision making, 28th- 29th September 2006

Issues CF in Europe - results from a recent survey Foresight Experience and Aims Activities / Methods Organizational Forms Understanding and Relevance Success Factors & Barriers CF - The Next Phase Conclusions

Defining Corporate Foresight Our understanding of CF: Foresight for and in corporations is a multi-layered communication process a systematic, continuous approach based on a tested range of methods centres around medium to long-term oriented work on strategies, innovation and vision a participatory process that makes businesses capable of making strategic decisions early When we talk about CF, we need to develop a clear view of the conceptual scope for these activities. But very often such a scope lacks in reality. For that we propose to refer to a conceptual framework, when starting to build Die wichtigste Punkt, auf den ich sie hinweisen möchte ist: CF ist mehr als Future Research. CF ist vielmehr als ein komplexer Kommunikationsprozess zu verstehen, der das Ziel verfolgen sollte, das Unternehmen systematisch und kontinuierlich mit der möglichen Zukunftsentwicklungen zu konfrontieren. Hier können Sie erkennen, dass CF sich auf drei Ebenen realisiert. Level 1 ist Zukunftsforschung im eigentlichen Sinne, die Anwendung der Methoden und Tools vom Monitoring von Trends über Key Factor Analysen bis hin zur Szenarioentwicklung. Diese Ebene ist die Domäne der Zukunftsforscher, sei es innerhalb des Unternehmens oder in externen Think Tanks. Auf der zweiten Ebene geht es um die Übersetzung der Research-Ergebnisse und Insights in die strategische Fragestellungen des Unternehmens. Die erste und wichtigste Frage des Managements ist stets: „So what?“. Was folgt aus euren Scenarios für unser Geschäft? Hier ist in jedem Fall der interne Foresight-Spezialst, bzw. das Foresight Team gefordert. Diese haben auch an die Anbindung an Strategie- und Innovationsprozesse zu kümmern. Die dritte Ebene schließlich betrifft die konkrete Anwendung der Strategischen Ableitungen und Empfehlungen in den Business Units. Auch hier muss CF einen aktiven Beitrag leisten. Die schönsten Analysen sind wertlos, wenn sie im Unternehmen nicht ankommen. CF hat daher auch die Aufgabe ,parallel zur Projektarbeit eine Kultur der Zukunftsoffenheit mit zu gestalten. Möglichst viele Mitarbeiter sollten sensibilisiert und auf den Weg in die Zukunft mitgenommen werden.

CF in Europe - The Survey The study: „Strategic Foresight in Companies“, 2005 to 2006 Adrian Müller, University of St. Gallen (strategicforesight.ch) in cooperation with Z_punkt Results to be published this year Key Questions: How are Foresight processes designed and implemented? What is the best approach to integrating them into corporate strategic decision-making processes? What are the critical factors of success? What is currently considered state of the art?

CF Survey - Background Data 3 criteria for selecting respondents: Large businesses with a turnover of at least 150 ml EUR annually Headquarters in Europe Have corporate strategic foresight process Respondents: 152 contacted, 40 countable replies 9 countries (Germany, Sweden, Norway, Italy, Finland, Denmark, Netherlands, UK, Switzerland, Liechtenstein) 13 different industries (Automotive, Chemicals, Construction; Consumer goods; Electronics; Engineering; Financial Services; Appliances; Oil / gas; Pharma; Commerce; IT / Telecom.; Power Supply; Others = includes media, tourism, consulting, precision engineering, logistics)

CF Survey - Foresight Experience + Aims CF is mostly continuous: 8%: Foresight process running for more than 30 years 50%: 10 years or more (median 10 years) 25%: 3 or less years Aims: Strategy, Innovation, Early Warning 88%: Support for strategic decision-making in general 77%: Improving long-term planning 65%: Enabling early warning / issue management 58%: Improvement of innovation process Less important: “soft objectives” 43%: Fostering future-oriented thinking and culture 30%: Generation of visions and normative empowerment

CF – 4 Types of Organ. Forms The Think Tank many addressees + tasks wide internal + external network wider perspective separate units, full-time staff generating new own outputs The Observatory specialised task f.e. forecasting future traffic single addressee well networked internally The Outsourcer changing project team, but high continuity Experts in drawing info inside Internal interpretation High visibility Size The Collecting Post „on the side“ individuals collecting existing information low visibility Survey: 52% work with foresight department / unit 10% individual person Level of Connectedness + Scope of Tasks Typology from Becker 2002, with additions by Z_punkt

CF Survey - Activities / Methods Regular application of foresight methods (“sometimes” in brackets; n=40): 26 (8): Trend analysis 26 (9): Media / Publication analysis 19 (16): Scenarios 12 (17): Roadmapping 11 (23): Participatory / Creative Methods 5 (10): Simulations 5 (5): Delphi Trend analysis dominant, also in terms of activities focus on gathering data and information! Scenarios also rather popular Less use of Delphi than in public sector

CF Survey - Success Factors & Barriers Critical success factors: High importance: quality and strategic relevance of results (ease of understanding, practicability, measurability of successes, plurality and soundness of options), participation and communication Secondary importance: Process input (data and information quality) and efficiency, methods, resources Barriers: Organizational / political Insufficient legitimation High costs

CF Survey - Understanding & Relevance Understanding of CF changing, but still more on the instrumental side: 50%: environmental information gathering process 20%: reflection and knowledge generation process 15%: normative vision-building process Relevance growing in the last 5 years 70%: in their own company 60%: in business in general but: lower increase in scope and appreciation 55%: more appreciation in their company 37,5%: more appreciated in general

CF - Challenges Legitimation problems remain Challenges: Lack of organizational “roots” Spokesperson / lobby dependence Lack of evaluation / lack of clarity about use and impacts Only a third control performance Only a third regularly overhaul and improve CF process Critical success factors - besides obvious (quality and strat. relevance of results) all “soft factors”: Participation Communication Culture Commitment Reactive perspective: focus on trend analysis, scanning etc. Lack of creative and “sense-making” approaches

Corporate Foresight Dominant Logics / Paradigms Assumption: The future can be foreseen by collecting and comparing the opinions of (numerous) experts. Assumption: The future can be calculated by appropriate computer models based on huge amounts of data and mathematical finesse. Assumption: Businesses can understand the future by anticipating the impact of trends on customers and markets. Assumption: Businesses can shape future contexts and markets by anticipating the dynamic interaction between social, techn. & economic forces. Expert-based Foresight Model-based Foresight Trend-based Foresight Context-based („Open“) Foresight 1960 2010

Characteristics Corporate Foresight Waves Dominant CF-Paradigm Expert-based Foresight Model-based Foresight Trend-based Foresight Context-based „Open“ Foresight Assumption Knowability by Expertise Calculability by Models Projectability by Developments Shapability by Interaction Key Characteristics Belief in Experts dominant, but: 70s: Turn to the qualitative and wider environment First Opening towards “soft sciences” Scenarios Quantitative and “subjective” models Extrapolation Systems Dominated by “hard science” Trends Weak Signals Early Warning Mix of qualitative and quantitative Indicators Integrating “soft” and “hard” approaches Understanding & interpreting / evaluating change Opening up: Participation, interaction & process Action- and innovation-oriented More attention on discontinuities Perspective Exploring Change Calculating Change Reacting to Change Understanding & Anticipating / Shaping Change Output Delphis, Roadmaps, Scenarios Models & Matrixes Trend-databases Monitoring Systems Scenarios; Wild Cards; Action Plans & Innovation Ideas

CF in Europe Conclusions CF in Europe by now rather widespread and established within large companies Constant high internal “justification-pressure” “Usual problems” remain unsolved Conclusions on key factors for success - meant as making an impact: Involvement of top management Explicit aims and targets, performance control Evaluation and regular overhaul of process = continuity Participation More stress on understanding change, deciding about action (= integration into decision-making, not merely its preparation!), less stress on data, content, projections etc. Proactive instead of reactive perspective Process competence: being able to deal with recurring “old logics” Attention to importance of networking, community building, marketing CF, spokespersons The Next Phase: Towards Open Foresight: More permeability of content Firmer integration into decision-making Less trend hypes, more stress on process and “sense-making”, more evaluation and differentiation (methods, aims, outcomes)

Thanks for your attention. More information + newsletter: http://www

Corporate Foresight Think Tank founded in 1997 located in Berlin, Essen and Karlsruhe staff of about 20 employees Foresight-Services for Strategic Management and Innovation: From Trend Monitoring to Scenario Processes Content Provider for Strategic Future Knowledge: Context, Consumers, Sectors, Technologies External Think Tank for Challenging Creative Processes Partner for Systematic Implementation of Corporate Foresight in Entrepreneurial Practices

Customers

International Foresight Group (IFG) Coordinator Z_punkt GmbH The Foresight Company IFG Founder and Coordinator http://www.z-punkt.de North America USA The Arlington Institute Non-profit research institute about global change John L. Petersen, President Europe Finland Finland Futures Academy Finland Futures Research Center, Dr. Juha Kaskinen, Director (University) Asia China Chinese Academy of Sciences Research Center for Eco-Environmental Sciences Prof. Ph.D Rusong Wang Nucleo de Estudos de Futuro (NEF) The Pontifícia Universidade Católica de São Paulo (PUC SP)  University and NGO Prof. Arnoldo José de Hoyos Latin America Brazil Africa South Africa Center for Scientific and Industrial Research (CSIR) Think Tank, private sector (Global Research Alliance), Pretoria Dr. Reinie Biesenbach, Centre Manager