Many business leaders feel like we are reeling from the magnitude of challenges that have arisen in the last few years. These challenges have created more complexity and uncertainty than we normally see in the operating environment, and the exponential pace of technology development has only added to the turmoil. It has become obvious that long-term survival and success will require a high level of corporate foresight, which we define as the careful interpretation of the potential consequences of any course of leadership action.
Wile E. Coyote, a Looney Tunes cartoon character from the 1980s, was a classic example of the result of lack of foresight. The constantly hungry Coyote was always attempting to catch and eat the Road Runner – but Road Runner always got away. It was Coyote’s style to build and utilize absurdly complex contraptions to catch his prey; however, his plans consistently backfired, resulting in slapstick-type injuries. Coyote never seemed to look beyond the immediate goal of catching Road Runner to consider what might happen if the plan didn’t work.
What is – and is not – corporate foresight?
Corporate and organizational foresight requires perceiving and making sense of external changes and then integrating this knowledge into the organization’s innovation and transformation processes. Corporate foresight fosters the ability of the business to fulfill its purpose and to achieve whatever it defines as success.
BlueSmart luggage was one of the first designs that enabled travelers to charge USB devices, weigh luggage, and track suitcases with an app and GPS. A brilliant idea, it seemed. Unfortunately, BlueSmart was seemingly blindsided by regulations against lithium batteries being embedded in luggage for airline travel. In 2017, just its second year in business, BlueSmart achieved $10 million in revenue. In 2018, BlueSmart had to sell off most of its tangible assets.
BlueSmart began with great product innovation and good knowledge of what customers want, but they did not anticipate and were not prepared for the regulations that eliminated the market for their products. In the meantime, competitors already had developed products with the ability for the battery to be removed, allowing consumers to comply with the regulations. With corporate foresight, BlueSmart might have adjusted their strategy and operations, including diversification of their product offerings, and might have remained an industry leader.
Foresight is essential in developing corporate strategies
Corporate foresight is identifying, observing, and interpreting factors that may induce change, and then determining possible organization-specific implications to address these factors. Strategy, of course, is about answering the questions of where to play and how to win. According to Dr. Joseph Voros, expert of Strategic Foresight at Australia’s Swinburne Business School, corporate foresight informs strategy creation by enhancing “the context within which strategy is developed, planned, and executed.”
How to use corporate foresight to drive organization transformation
Corporate foresight should involve multiple stakeholders, should trigger appropriate organizational responses, and should be integrated into organization transformation processes. Corporate foresight provides the information necessary to plan and implement a lasting organization transformation. Your corporate foresight will help clarify strategy, align organizational choices, guide in building the right capabilities, and provide impetus for managing change.
The primary elements of corporate foresight include the following:
- Gathering information and strategic intelligence
- Analyzing forecasts and trends
- Interpreting the information for deeper structure and possible alternatives
- Developing outputs that include options and insights
- Understanding the risk and implications to the business
- Considering options for strategic actions to address the implications
Your corporate foresight will enable your organization to prepare for and execute your transformation process. Your corporate foresight, along with the following steps from our approach to transformational change, can be used to guide your business through the transformation journey:
- Diagnosis: Identify the problem, challenge, or root cause of the issue. This includes understanding the gap between current and desired results and determining if the issue is systemic (rooted in the organizational systems) or non-systemic (caused by factors that do not affect the organization as a whole).
- Strategy: Determine how your organization will win in the marketplace, identify choices that need to be redirected to deliver the strategy and build capabilities to address these deficiencies.
- Macro Alignment: Group your organization’s work and resources to best deliver your strategy. Determine your business model and identify and support the blending of capabilities that help create sustainable differentiation.
- Micro Alignment: Ensure that your organization’s processes, structure, metrics, practices, talent, and resources are in alignment with your chosen strategy to deliver differentiation.
- Implementation & Sustainability: Implement the design choices across your organization. This may mean that work processes will change, reporting lines will shift and new technology may be introduced. Embed the changes into your organization’s routines and operating rhythms to make sure the transformation is sustained.
By employing corporate foresight, you can create value for the organization by providing access to critical resources ahead of the competition, preparing the organization for change, and permitting the organization to steer proactively toward the desired future.