Why companies must change their approach to corporate foresight

In an era defined by volatility and complexity, strategic foresight has emerged as a critical capability for corporate leaders aiming to navigate uncertainty and future-proof their organizations.

But are global corporations fully harnessing the potential of foresight to transform leadership and strategy?

A global study by the Bavarian Foresight-Institute and the Nuremberg Institute for Market Decisions (NIM), surveying 400 senior executives from Forbes Global 2000 companies, reveals the recent state and future potential of corporate foresight.

The results of that survey reveal a significant gap between insight and action. While a vast majority of companies use foresight for operational purposes like goal setting (81%), many struggle to embed it into their strategic core. This is reflected in how foresight is structured: while 42% of firms maintain dedicated foresight units with their own budgets and staff, 36% embed it within existing business functions, where it competes with other tasks. This can tie foresight more closely to optimizing current operations than to shaping future strategy. Consequently, fewer companies apply foresight to exploratory events (40%) or adaptive, long-term strategic planning (43%).

Leadership engagement tells a mixed story. While over half of executives (54%) are reported to be highly engaged in foresight activities, a culture of risk aversion often prevails. This conservatism is reflected in how strategy is made: 41% of organizations follow a traditional, top-down, leadership-defined approach and 43% show a strong preference for established strategies over new, exploratory paths.

In contrast, only 52% of firms foster a more participative and open strategy process with a culture more conducive to leveraging foresight's disruptive potential. This inclination towards control is further highlighted by a strong reliance on internally generated foresight, with 66% of firms rating its integration highly, suggesting leaders may be more comfortable with familiar perspectives.

Time horizons starkly illustrate this cautious mindset. The study’s primary data shows that, while around 64% of companies plan within a three-to-ten-year window, a mere 1.2% extend their strategic planning beyond ten years. This reveals a critical blind spot for long-term, transformative shifts that could reshape entire industries.

Where foresight shines, however, is in its role in customer intelligence and innovation. Nearly all respondents agree that it is highly effective for understanding customer needs (98%) and identifying potential new customers (99%). This commercial focus is a key driver of its application, helping to enhance market understanding and improve business coordination. Furthermore, its value extends directly into innovation pipelines, with 91% of firms confirming its role in reducing R&D uncertainty. For leaders aiming to foster innovation and maintain market competitiveness, foresight serves as an indispensable tool for optimizing their current market position.

Yet, a crucial opportunity remains largely overlooked: external influence.

Only about one-third (32%) of surveyed organizations actively utilize foresight as a strong tool to shape wider industry narratives or influence policy decisions. This represents a significant missed opportunity.

By not leveraging their foresight externally, companies neglect the chance to establish themselves as thought leaders, set industry standards and proactively shape the regulatory and competitive landscape. While the majority of firms (97%) agree that foresight supports internal organizational learning, there is a clear disconnect in translating this internal knowledge into external impact. This inward focus prevents them from using foresight to its full potential as a tool for competitive advantage and market creation.

The study ultimately underscores foresight’s value as an integral leadership practice that prepares organizations for a variety of potential scenarios.

To move from passive analysis to active leadership, here is what leaders can do:

Actively pull foresight out of purely operational contexts. Challenge your teams to use foresight not just for meeting today's goals but for defining tomorrow's markets, following the 43% of firms that successfully apply it to long-term strategic planning.

Counteract the tendency towards risk aversion. Champion a more participative strategy process, joining the 52% of firms that already embrace a more open and disruptive approach. Encourage your teams to explore uncomfortable scenarios and challenge established assumptions.

Actively push strategic conversations beyond the standard three-to-ten-year window. Acknowledging that only 1.2% of companies plan beyond ten years highlights a clear opportunity to gain a competitive advantage by thinking further ahead.

Transform your foresight from an internal listening tool into an external microphone. Use your insights to publish influential reports, engage with policymakers and lead the narrative in your industry, capitalizing on the gap that two-thirds of companies are leaving open.

Embracing foresight in leadership builds resilience against uncertainty and equips companies to actively shape their future landscapes. As global volatility continues, strategic foresight becomes essential. Leaders who proactively embed foresight into their strategic processes stand ready to weather future disruptions and to lead their industries confidently into the future.

The full study of the Bavarian Foresight-Institute and NIM can be downloaded here.