Companies are increasingly focusing on using strategic foresight to identify new opportunities and industry trends. Image: REUTERS/Steve Crisp/Files (UNITED ARAB EMIRATES - Tags: BUSINESS CITYSCAPE SOCIETY ENVIRONMENT) - RTXSU4Z
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:
Listen to the article
- Strategic foresight cannot predict the future, but it can help firms prepare for a variety of outcomes and identify new opportunities.
- A survey of hundreds of top executives has revealed how they're using strategic foresight in their business.
- They're using it — but how much and for what is a complex question, and industry-dependent.
Strategic foresight is an organization’s efforts to detect weak signals and trends as soon as possible, to make sense of environmental changes and to assess how these changes can play out in the future, for instance by developing scenarios.
Strategic foresight rests on two assumptions: that changes do not emerge without warning and that the future is not predictable. The best we can do, therefore, is to understand the range of possible futures.
The strategic foresight survey
Although strategic foresight has been around for some 50 years, it may be even more relevant today, not because of its capacity to predict future crises, but to prepare organizations to handle disruptions and uncertainty.
The Bavarian Foresight Institute and Nuremberg Institute of Market Decisions (NIM) collaborated on one of the most ambitious surveys ever on strategic foresight practices, capturing insights from C-level executives or their direct reports from 400 companies with 10,000 or more employees across the US and Europe. It surveyed over 80 businesses each of finance and insurance, automobiles, retail and food and agriculture, asking: In the past 12 months, how often did your company produce or have service providers produce strategic foresight deliverables?
Strategic foresight is widespread, but unevenly so
The survey sought to understand if companies apply strategic foresight continuously and if or how far strategic foresight deliverables, like trend or scenario reports, are integrated across organizations. It also exmained whether strategic foresight deliverables are produced annually to feed into projects or the strategic planning cycle, or only as needed.
A key rationale for favouring the continuous application of strategic foresight lies in the effects of improving a firm’s strategic foresight capabilities and thereby fostering its dynamic capabilities to deal with disruptions and uncertainty concerning the future.
Overall, 39% of surveyed companies have applied continuous foresight activities in the past 12 months. If we consider the four industries in the sample, we arrive at a different conclusion.
It is noteworthy that 56% of the respondents from the automobile industry report on having a continuous approach to strategic foresight.
This may be because the automobiles industry is witnessing and trying to get to grips with rapid and dynamic changes in the business environment, or that planning cycles are very long, given the product-life cycle of cars and the R&D lead time.
In stark contrast to this are finance and insurance. Only 22% report having a continuous approach, while respondents are nearly equally split between having a scheduled or an irregular approach. Does this mean that the industry is ill prepared or less dynamic?
Why use strategic foresight?
To understand the perceived benefits of strategic foresight activities, we asked the following questions:
How have strategic foresight activities helped managers in your company in the past 12 months?
What value did strategic foresight activities generate for decision-makers?
Respondents were provided 14 answer choices; the top five are given below. The responses, rather than focusing on risk mitigation and the need to manage global crises, in fact focused on the opportunities of strategic foresight. Anticipating global risks and disruptions was not even in the top ten.
The top five answers bring an intriguing perspective to the perceived value of strategic foresight for decision-makers.
Leaders' views are less about anticipating the next crisis, which one might have expected given today’s polycrisis. Instead, they are focused on identifying new competitors or collaborators, turning their attention to changes in their own industry, but with an eye to the competitive environment. Further, the focus on long-term thinking in strategic planning emphasizes that, despite all the talk about everything becoming faster and the need for agility, the relevance of the long-term view remains. The responses also highlight the relevance of strategic foresight for innovation and new market opportunities, moving the emphasis of foresight away from risk mitigation and towards the identification of new opportunities.
Competitive advantage, long-term opportunities
This survey’s findings make it explicit: Strategic foresight is integrated into large corporations, but in some industries more than others.
Decision makers see the value of foresight less in anticipating global risks and disruption and more in securing their long-term competitive position. This speaks to applying approaches such as business wargaming, a future-oriented competitive simulation, to anticipate future dynamics in an industry. It also calls for attention to opportunities in regard to innovations and new markets which may be derived from strategic foresight deliverables.
Don't miss any update on this topic
Create a free account and access your personalized content collection with our latest publications and analyses.
License and Republishing
The views expressed in this article are those of the author alone and not the World Economic Forum.
More on BusinessSee all
February 26, 2024
February 19, 2024
Rahel Ali and Fareeza Ibrahim
February 5, 2024
February 1, 2024
Henrik Hvid Jensen
February 1, 2024
Huw van Steenis
January 23, 2024