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Electronic copy available at: http://ssrn.com/abstract=1843278
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Exploring value creation from corporate-foresight
activities
RENE ROHRBECK
Department of Management, Aarhus School of Business, Aarhus University
Haslegårdsvej 10, 8210 Aarhus V, Denmark
Email: rrohr@asb.dk
Telephone: +45 871 64929
Abstract: this paper looks at value creation from corporate futures research. Through a literature
review, potential value creation is identified. This serves as guidance for an empirical investigation in
which value creation is observed and linked to methods and practices. Using data from 20 case studies,
three examples of value creation are discussed in detail. In addition, cross-case analysis allowed me to
identify four success criteria for corporate foresight activities: (1) foresighters committed to creating
value, (2) participation of internal stakeholders, (3) analysis that follows a systemic logic, and (4)
methods and processes that are tailored to companies’ needs. The paper concludes with the
recommendation to take a dynamic-capabilities perspective on future research into corporate foresight.
Exploring value creation from corporate-foresight activities
Rohrbeck, R.
Futures, Volume 44, Issue 5, 440-452.
This is a preprint. The final article can be found here: http://dx.doi.org/10.1016/j.futures.2012.03.006
Electronic copy available at: http://ssrn.com/abstract=1843278
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1 Introduction
When critically reviewing the success of futures research, the guiding question usually is: “Have
the predictions been accurate?” Even though there is no doubt that answering this question is
important and can be expected to help in improving methods and practices, I argue that another
question has so far been largely ignored. That question is: “Did our futures research create any value?”
This question is particularly pressing in a corporate context where futures research often
remains on the sideline, not integrated with operational and strategic management [1, 2]. One reason
for that is the lack of understanding what the purpose of futures research should be in a corporate
context [3]. Another reason is that value contribution is difficult to measure and often only measurable
in the long run [4].
It has been argued in the past that, when aiming to assess value creation from futures research,
we have to consider various kinds of return on investment, including knowledge creation, diffusion
and absorption [4] to enhance decision making [5], producing adequate responses to change [6] such
as creating new products or product categories [7, 8], enhancing strategic planning [9, 10], facilitating
the acquisition of strategic resources [11], and triggering and moderating strategic discussions [12–
14]. In addition, corporate foresight activities may also contribute value in initially unintended ways
such as using the created future outlook for communication with investors [15].
This article aims to contribute to the understanding of value creation from corporate foresight
activities and link it to methods and practices. This will be pursued first by a literature analysis that
establishes potential value creation. In addition to corporate foresight literature, the focus will be on
strategic- and innovation-management literature. One focus in strategic-management literature is on
dynamic capabilities and the knowledge-based view. In the second part, empirical data from 20 case
studies will be used to assess whether potential value contributions can be found in practice and link
observed value contribution to methods and practices of corporate foresight.
Electronic copy available at: http://ssrn.com/abstract=1843278
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2 Literature review: the potential value contribution of corporate foresight
It has been argued before that research into foresight can profit from linkage to other
management-research streams to draw on a much larger pool of knowledge [16]. For that purpose,
studying strategic- and innovation-management literature is particularly insightful.
2.1 The strategic-management perspective
In the literature on strategic management, the resource-based view contributes to understanding
how firms achieve and maintain a competitive advantage [17–19]. This view assumes that firms can be
seen as systems of resources (human, processes, practices, etc.) that are unique to the firm and may, in
comparison to the systems of resources of other firms, translate into a competitive advantage [20–22].
The knowledge-based view assumes that the most important resource of a firm is the knowledge
that it can access and utilize to gain a competitive advantage [23]. In that respect, the firm functions as
an integrator of knowledge [24] that resides within its employees [25] or that the firm can acquire and
integrate. Acquisition of knowledge can be done through collaborating with other firms [24, 26] or
through boundary-spanning employees who channel knowledge into the company [27, 28]. Corporate
foresight activities can be expected to play a dual role by identifying the critical knowledge that is
needed and laying the foundation for knowledge integration [11].
More recently, it has been suggested that in fast-changing environments, firms need to be able
to renew their portfolio of strategic resources when faced with external change [29]. This ability to
adapt has been referred to as dynamic capability. It is expected that this ability can be build to a large
extent on current processes such as alliancing, product development, and strategic decision-making
[30].
Figure 1 shows the process logic of dynamic capabilities that has been proposed by Helfert et al.
[31]. They argue that the adaptation of firms to a changing environment can be described in four
phases: (1) search and selection of new resources, (2) decision-making based on their adoption, (3)
their configuration and deployment, and (4) their implementation (i.e., when the new resources are put
to use to attain a competitive advantage) [31:7–17]. This could then result in value creation in terms of
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resilience against disruptive change and the ability to sustain a competitive advantage. More
specifically, Helfert et al. propose five value-creation categories: (1) survival of the firm that is faced
by disruptive change, (2) firm growth, (3) generation of additional revenue, (4) a competitive and
sustained advantage, and (5) increased profit.
Figure 1: process model of dynamic capabilities
In this framework, it can be expected that corporate foresight activities contribute in multiple
ways:
• Identifying relevant external change [32] (potential value creation 1 = VC 1)
• Helping in the search for new resources [9, 15, and 33] (VC 2)
• Enhancing decision-making by helping the interpretation task [34], providing strategic guidance
[8, 32, and 35] (VC 3)
• Challenging dominant mental models [36, 37] that may restrict the view of decision-makers
[38–40] (VC 4)
Managerial and organizational processes
Configuration &
deployment
Decision
making
Search &
selection Implementation
Performance yardstick
Technical Fitness
Measures the performance of a dynamic capability as “quality per unit
cost” (e.g. how many relevant trends are being identified and assessed and at
what cost)
Evolutionary fitness
! Survival
! Growth
! Additional revenue
! Competitive and
sustained
advantage
! Profit
Val ue
creation
Dynamic capabilities
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• Moderating strategic discussions [12–14] that allow the different parties within an organization
to agree on future directions (VC 5)
• Supporting configuration, deployment, and implementation by ensuring sufficient participation
[41–43] and thus pre-empt resistance to change [40, 44], supporting a learning process for both
top management and the organization as a whole [45, 46] (VC 6)
Corporate foresight or futures research in firms could therefore create value by supporting
strategic renewal as well as strengthening resilience against and responsiveness towards external
change.
2.2 The innovation-management perspective
Scholars taking a dynamic view on firms—thus following the paradigm that a firm can adapt to
changes in the environment—imply that firms are able to repeatedly create innovations [47, 48]. This
allows them to maintain a product portfolio that is competitive in the market. To that end, the firm
uses resources that are at its disposal, either internal resources, newly acquired resources [49], or
complementary resources that it develops and pools with other firms to jointly create innovations [50–
52].
The innovation-management literature also emphasizes the importance of individual actors, who
can be inventors with a technical background or managers who drive innovation. These individuals
overcome internal boundaries [53], interpret the environment, and develop and create an integrated
understanding of the opportunity attached to and realization potential of new innovations [54]. By
building on their human capital [55, 56], they are able to create new innovations and generate rent for
the firm [54, 57].
From a foresight point of view, the research on disruptive innovations [58] is of particular
interest. The challenge with disruptive innovations comes from their systemic nature; i.e., they unfold
their disruptive power only through interaction of different factors which, assessed individually, would
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not seem threatening [59]. That means that corporate foresight should utilize methods—such as the
scenario technique—that can observe and interpret systemic effects [60–62].
Radical innovations have been shown to be able to break away from path dependency and
change the power distribution in existing markets [63] or create new markets [64]. It has been noted
that creating radical innovations is particularly challenging for incumbent firms [65, 66]. They need to
break away from a particularly strong path dependency [67] and overcome internal inertia [68]. This is
difficult but in successful cases, this ability was often built by creating two different organizations: one
that is good at developing incremental innovations and maintaining their competitiveness in existing
markets and one that develops radical innovations to enter and create new markets [68–70].
When linking innovation management with corporate foresight, three roles can be identified [8]:
• The initiator role: corporate foresight could identify innovation potential and thus
trigger and contribute to the renewal of product portfolios (VC 7)
• The strategist role: corporate foresight could help break away from path dependency by
challenging dominant mental models and providing a systematic view on emerging
markets and help create radical innovations (VC 8)
• The opponent role: corporate foresight could continuously monitor the external
environment, inform about relevant changes—for example, the emergence of disruptive
technology—and thus ensure that new product-development projects produce state-of-
the-art products and are not overtaken by technological change, etc. (VC 9)
Corporate foresight could therefore create value by enhancing the ability of a firm to create
superior incremental and radical innovations that allow the firm to gain and maintain a competitive
advantage.
2.3 Summary: the potential value contribution of strategic foresight
From the review of the literature on strategic and innovation management, we identified nine potential
value creations that can be structured in three groups (see Table 1). In the first group, value
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contributions have been clustered that contribute to the firm’s ability to respond to external changes
with concrete actions. They prevent negative consequences from threatening external changes and
allow the company to grasp arising opportunities, for example by developing new products that
respond to new customer needs.
The second group consists of value creations that start and facilitate strategic discussions that
enable the company to respond to external change by inducing strategic corporate change such as
IBM’s change from being a vendor of information-technology hardware to becoming a service
company [71]. In order to achieve such discontinuous changes, it is crucial to involve all key internal
stakeholders with a particular focus on middle managers. They are often an important source of inertia,
particularly if the change involves cannibalization of old business segments that middle managers try
to protect [72, 73].
Group
Code
Potential value contribution
Description
Trigger responses
VC 1
• Identify relevant external
change
Based on a continuous scanning of the
environment, the corporate foresight
activity ensures that the firm responds
adequately to meet threats and grasp
opportunities.
VC 7
• Trigger new innovation
initiatives
VC 9
• Challenge innovation
development to ensure
state-of-the-art
Start and facilitate
strategic discussions to
enable strategic change
VC 4
• Challenge and change
existing mental models
The corporate foresight activity
motivates, orchestrates, and drives
strategic discussions that—through
active participation of relevant internal
stakeholders—lay the foundation for
strategic corporate change.
VC 5
• Moderate strategic
discussions
VC 6
• Promote participation
VC 8
• Support breaking away
from path dependency
Identify and support
acquisition of needed
strategic resources
VC 2
• Search resources
The corporate foresight activity
identifies resources that are needed to
generate a competitive advantage in
changed environments and support
their acquisition
VC 3
• Decide on development or
acquisition of resources
Table 1: potential value creation from corporate foresight
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The third group directly reflects the dynamic-capability perspective, where we would expect
corporate foresight to add value by identifying the need for new strategic resources. At the same time,
the foresight activity may be able to play a role in the acquisition of needed strategic resources.
3 Methodology
To assess if potential value creations can be found empirically, I use empirical data from 20 case
studies. From 2006 to 2010, 120 interviews were conducted with corporate foresighters and internal
stakeholders such as CEOs and executives in charge of corporate development, innovation
management, corporate strategy, and strategic controlling. This allowed for collecting of detailed
information on how corporate foresight activities are conducted (from the foresighters) and reliable
testimonies on the value created from these activities (from internal stakeholders).
To increase reliability, several data-collection instruments were used. The central data-
collection instrument was semi-structured interviews. Interviews are particularly useful when we want
to investigate strategic phenomena with informants needing to reflect on their everyday practices [74].
In comparison to other instruments, interviews are also more flexible and particularly semi-structured
interviews can be adapted to the context and knowledge of the respondent. The interviews lasted from
one to two hours. In each interview, the research objective, research framework, and key concepts
were described in order to avoid misunderstanding.
In addition, interview templates were used to increase validity when capturing complex
practices. The respondent filled in these templates, which sometimes included drawings of process
models or internal and external networks.
The case-study partners also made available internal documents that described processes or
gave more information on results from foresight activities. Multiple companies also shared internal
documents that described what kind of innovations or new business fields had been created on the
basis of corporate foresight activities. These documents were collected and crosschecked with the
interviews of other respondents to reduce the risk that results were presented overly positive.
In some cases, companies also provided academic publications on their practices and impact
thereof. These were primarily used for clarification and understanding the logic behind their practices.
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A particular methodological emphasis was put on reducing the single-informant bias that needs
to be expected if only foresighters are interviewed. The strategy to overcome this was to use three
informant perspectives: the internal stakeholder (CEO or manager of a functional of business unit), the
corporate foresight-activity manager (who is responsible for the foresight activity), and the foresighter
(who is conducting the foresight activity).
The large amount of data gathered in the case studies posed a particular challenge. Overall,
interview transcripts accounted for more than 1,600 pages and additional data from internal
presentations, publications, and templates added another 500 pages. To allow analyzing the activity
and linking it to value contribution, the data had to be processed. For that purpose, NVIVO 8
electronic text-analysis software was used. This software makes it possible to store any kind of
document and organize it by information source and content.
To prepare the data for analysis, it was coded; i.e., text sections were marked with keywords
derived from the literature analysis (with a code representing each value contribution) and keywords
were defined while going through the data. This coding allowed for navigating through the data from
different cases studies that had been coded with the same keyword. This made it easy to compare
practices, methods, and value creation across cases.
In the process of interpreting the data and linking the practices to value contribution, the first
step was to check the relevance of value contribution. In order to be judged as relevant, the value
contribution had to be found in more than one case. In the next step, it was identified which practice or
method led to a particular value contribution. It was then assessed whether the internal stakeholder
also judged the contribution as valuable. In the next step, a deeper analysis was made of all cases in
which these requirements were met. The most relevant and representative of these cases will be
discussed in the next section.
4 Results
4.1 Trigger responses
In the first group, we aimed to identify practices that scan the external environment and trigger
responses. The motivation for scanning the environment was confirmed by all participating
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companies. The executive in charge of corporate innovation management of one firm emphasized that
being a large company means that you are exposed to any number of threats:
An issue is that, as a large tanker [tanker being a metaphor emphasizing the size
and reaction speed of large companies], you offer a large surface for attacks.
[Therefore,] generating knowledge about threats is an objective. What you do with
this knowledge is a different issue.
In this quote, he also pointed to the challenge to succeed in triggering adequate responses. This
firm has corporate foresight activities that continuously scan for changes in customer behavior and
needs as well as in the technological and competitive environment. The results of these activities are
disseminated as reports and through workshops. Responses are not triggered by a process link, but
through the individual initiative of readers of these reports who work in units such as innovation
management, risk management, or corporate development.
In another case study, the product-strategy manager of an automobile manufacturer pointed at
the importance of spotting trends that create new markets:
[One task of foresight is] the identification of relevant trends. For example, the
issue LOHAS (lifestyle of health and sustainability) and to start not with a concrete
question, such as “How do we change our products?” But rather, “How big is the
trend? How long will it last? How will it evolve? How do other industries respond?
How do culture, politics, architecture, or the gaming industry respond to the trend?
He emphasized that, particularly for large companies, it is crucial to focus on high-impact trends
because producing a response in a large company with a large internal structure will rapidly consume
much effort and accumulate cost. One of such long-term trends could be the trend towards health and
sustainability, which has an impact on almost all aspects of life from food to buildings, home
appliances, and individual mobility.
4.1.1 Practice example: consumer scouting in the US market
To explore such trends, the company is running large scouting projects. For these projects, a
team is recruited internally from various divisions and its members are assigned full-time to the
project. In the case-study example, a group of 23 employees moved for 18 months to a house in
Malibu, California, United States. The aim of the scouting project was to immerse them in the US
market and scan for changes in consumer behavior and needs.
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The team used a number of methods to capture and interpret trends including interviews and
ethnographical methods such as home stays. In these home stays, one employee would live for 24 to
48 hours as a member of the family. He would register insights into consumer needs in a diary by
making audio and video recordings. This made it possible to not only collect rich data, but also deliver
first-hand evidence to decision-makers within the company.
Foresight insights were disseminated in the company through multiple channels (see Table 2).
Firstly, all data was made available on the intranet. This included diaries of the foresighters, reports,
and audio and video clips. This information broadcasting was complemented by monthly presentations
at the company’s main office which attracted up to 1,500 employees. To open a direct channel to top
management, they were invited to become members of the steering committee and get personal
briefings. They were also invited to the United States to hold board meetings on the scouting premises.
Mechanism
Example
Integrate
functional units
into project team
A company-wide selection process is used to form a project team that includes 23
employees who represent all major functional units.
Internal customers
gather real-life
evidence
Internal customers and stakeholders of foresight results are involved in the gathering of
information and thus obtain real customer testimonials and firsthand evidence.
Making
information as
tangible as
possible
To ensure that the future-related information is as tangible as possible, lead users,
prototypes, and interviews with lifestyle visionaries were captured and communicated
through blogs, pictures, short videos, and audio recordings.
Representations of
future customers
To communicate customer preferences and profiles, real-world representations were
composed of 200 personal items that were typical of the consumer group.
Physical future
living spaces
In the project, future living spaces of the year 2020 were jointly built with 40 other
companies from various industries. These living spaces were used for corporate board
meetings in order to transfer insights about the future and make future scenarios
perceivable.
Encourage word-
of-mouth
communication
During the 18-month project, various company groups were invited to obtain firsthand
insight from lead users and thought leaders. This encouraged the sharing of information
within the whole company by word-of-mouth.
Using virtual
communication
channels
The gathered insights were documented using videos, audio recordings, pictures, and
written reports. All information was made available through the intranet and updated
regularly. The daily blog had 6,000 readers a month.
Table 2: mechanisms for facilitating communication and participation
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These mechanisms for participation of internal stakeholders and dissemination of foresight
insights created high visibility of the foresight activity and were believed to have been one key success
factor.
4.1.2 Value creation from consumer scouting in the US market
The primary goal of the project was to review and enhance the product portfolio and increase
future sales in the US market. By questioning the internal customers of the project, five results from
the foresight project were identified:
• Better understanding of the brand image in the market. For example, the project found out that
the brand was perceived to be female in the United States.
• Restructured product-portfolio. For example, the analysis indicated that the current models
were outside the so-called sweet spots (i.e., market positions with a particularly high demand).
• Introduction of three new car models that addressed emerging customer needs
• New engine strategy to address specific market needs
• Decision on local manufacturing site
Overall, these five results show that the foresight project had created value for the company.
Although the project was associated with high costs, it contributed value in multiple ways, including
in ways which were outside the expectation scope. Given the size of the market, already a small
increase in sales (to which the foresight activity would have contributed by providing valuable insights
into emerging customer needs) would overcompensate the project costs and thus add value to the
company.
The insight into the brand image has also contributed to a change in the dominant mindset of top
management. Previously, they would follow the logic that a successful car in the German market
should have the potential to become successful in other markets as well. The foresight activity
challenged and changed this mental model by showing that the brand had attributes (e.g.,
homosexuality) that were different to the attributes in the home market.
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Other firms run regular road-mapping exercises to identify and assess emerging trends from the
market and technology perspectives and start new product-development projects. An internal customer
of such a project explained that:
We have worked extremely hard to identify white spaces. We have not identified
disruptions, but we have started many (R and D projects) and identified gaps.
In one example, a scenario analysis was used to identify the future of a certain product category
in the year 2020. One of the consistent scenarios was then used to identify the required technological
capabilities, and roadmapping was used to plan how to build the required capabilities.
There are two ways how innovation activities are triggered: (1) the direct way, with foresight
results directly feeding into the innovation process, or (2) the indirect way, in which information about
the market opportunity and technological realization potential is communicated to internal
stakeholders without forcing them to start a new project.
One manager responsible for a foresight project that had a direct process link, explained:
We first did an extrapolation to the year 2015. We then planned backwards and
concluded: dear operational unit, in that [technological] field, you have nothing. And
this led to the initiation of new R and D projects to bridge this gap.
In another company that uses the indirect approach, the responsible manager argued:
It is important to create images in the mind of the participants [the participants in
the foresight project from the divisional innovation-management units]. Not a clear,
predefined picture, but an image with intended fuzziness to inspire them to create
new, innovative activities.
In the case studies, both ways proved to be able to successfully trigger new innovation
activities. Which way is the more successful will depend on the firm, its corporate culture, and how it
uses processes to drive its business.
For example, one firm—its main office is in the United States and it has a corporate culture that
emphasizes individual initiative—expects its business owners to use information from many sources,
including foresight. But it would not accept that a foresight project defined a response strategy. In that
company, the outcome from foresight are reports that support decision-making and plan possible
scenarios, but it is ultimately the business owner who has to prove his strategy right by delivering on
results.
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As opposed to this example, many firms in our sample with their main office in Germany
worked with the assumption that the best foresight methods will develop the best response strategy.
The results from the foresight activities in these companies are translated directly into follow-up
activities such as R and D and corporate-development projects.
4.2 Start and facilitate strategic discussions to enable strategic change
The primary differentiation between the value creations “trigger responses” and “start and
facilitate strategic discussions to enable strategic change” is the need of the latter for a broad
discussion to ensure that all actors within the firm support the strategic change. While, for example,
innovation-management projects can be started by middle managers, strategic change requires top
management, middle management, and other relevant stakeholders to work together.
In the interviews, we found that there is a general awareness that disruptive external change
leads to a situation in which the firm’s existence is in danger. This quote from a foresight manager in a
large multinational company was characteristic, particularly for industries that had seen major
disruptions in the past:
Naturally, we don’t want to experience such dire surprises as those faced by
Grundig and Agfa (both companies filed for bankruptcy following discontinuous
change). It is important to learn from others to keep yourself from making the same
mistakes.
The example of IBM’s strategic change from a hardware manufacturer to a service company
was an often-quoted example used by respondents to underline the strategic role of corporate foresight.
There were various companies running foresight activities to enter a new market that was either
adjacent to their current business or in a totally new field. This is particularly important when the
current market of the company is threatened. One manager of a business unit explained the importance
of constantly monitoring critical external factors:
I need to continuously monitor my basic assumptions. For instance, I recognize
that (1) oil might be gone forever and (2), we are doing nothing else; and then I can
deduct that (3), I should extend my business along the value chain or move into
totally new business fields.
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At the same time, disruptive change can also yield benefits to enter or even create new markets,
such as in the case of a global energy-equipment company. The business-unit manager further
explained that it is not uncommon for large companies to fail to recognize an emerging and potentially
attractive new business field:
Because of our structure along market segments, emerging new markets may be
overlooked. Because for me, it (the market for CO2-capture and -storage) is not an
oil and gas upstream topic, but it is also not a downstream topic, it is also not a
midstream topic, and it is also not a topic of industrial gas. And these are all our
business segments. Therefore, some markets may be overlooked and, in
consequence, an organizational unit is needed that can take care of markets that
are not dealt with today.
4.2.1 Practice example: exploring and developing new business fields
One firm used an external foresight company to propose and investigate new promising
business fields. That project was divided into three steps (see Figure 2).
Figure 2: example of a strategic-foresight project that led to the creation of a new business unit
The starting point of the exercise was the initiative of the executive board that was aimed at
looking into new and promising business fields. An external foresight consultancy was hired and
asked to gather and provide information about potential new business areas. This intelligence
Intelligence
development
Workshop on future
topic Post processing
Studies
Own research
Leading experts
Workshop on
future topic
Check
internal
feasibility
New
business
concept
Executive
board
External
foresight
consultancy
Board members
Consultants Additional
studies:
Scenario
analysis
Roadmapping
…
New
business
unit
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development was executed by gathering and using studies, internal field research, and interviews with
leading experts.
Secondly, the consultants presented the results of the analysis, using as many visual presentation
techniques as possible. The visualization of the insights was judged to be success-critical and allowed
the executive board to intellectually immerse themselves in the new business field. In the workshop,
much room was left for discussion among the board members. The consultants moderated the
discussion. The board members were asked to judge which internal assets could add to the success if
the company chose to enter the new business field. The workshop resulted in an agreement that one of
the business fields was promising enough to be pursued further.
In the post-processing of the workshop, the consultancy developed an initial business concept
that contained both the market data and required internal assets.
Thirdly, the consultancy continued to work on studies that explored the new business field. The
scenario analysis was used to understand possible developments in the field and identify drivers and
barriers. Building on the insights from the scenario analysis, a roadmap was drawn up to plan
milestones and critical developments that needed to be monitored or influenced.
4.2.2 Value creation from exploring and developing new business fields
The outcome of the workshop served as basis for an internal project that included a feasibility
study and planned initial steps. The final outcome was the founding of a new business unit that is
contributing over 10 billion USD in revenue.
In another firm, a strategic-foresight project was conducted much more as an internal exercise
relying mostly on internal staff (see Figure 3). It can be seen that this global firm used internal experts
from different business units and workshops to obtain a global perspective by integrating experts from
the regions. In addition, external experts from various backgrounds and perspectives were brought in
to complement the market view.
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Figure 3: internal and external experts contributing to the foresight project
To facilitate a strategic discussion, this company used a combination of scenario analysis and
roadmapping that allowed them to collect expert opinions in a structured fashion and interpret the data,
taking into account interdependencies between the influencing factors.
An additional benefit was that the internal experts that participated in the foresight activity
became acquainted with the reasoning behind the strategic change. One respondent—who served as an
expert—noted that through his active participation in the process, he felt a certain ownership of the
results and would commit to helping with its implementation. Through such participation, the
company laid the basis for a successful implementation.
4.3 Identify and support acquisition of required strategic resources
In the third group, value contributions were combined that contributed to the adaptation process
of a company towards changes in the environment. In comparison to “triggering responses,” the
“identification and acquisition of strategic resources” is not directed at any concrete project or
management objective, but concerns the renewal of the portfolio of strategic resources. In comparison
to “starting and facilitating a strategic discussion to enable strategic change,” it is concerned with the
direct mechanism that permits a company to find and acquire strategic resources rather than with
enabling the strategic change.
Project core team
(at group head quarter)
Europe Africa & Middle East Asia North America
Regional expert workshops
Internal experts on
demand
(from various business units
and regions)
90 interviews with
external experts
(Academics, customers,
venture capitalists, and
consultants)
Interviews,
meetings,
workshops
Interviews
(telephone,
face to face)
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4.3.1 Practice example: technology scouting and acquisition
The example for renewal of strategic resources was observed in the information- and
communication-technology industry. Three different case-study companies had independently created
a foresight activity that was built on a network of scouts. Through the scouting network, the
companies collected information about technological change and supported the acquisition of
technologies to renew their technology portfolio (see Figure 4).
In technology scouting, four groups can be differentiated: (1) the internal stakeholders who are,
directly or indirectly, sponsors and customers of the activity, (2) the technology foresight team that
runs the network of scouts and serves as an interface between the company and the scouts, (3) the
scouts that can be internal employees or external consultants, and (4) the external experts who are the
source of information and also potentially the source of technologies.
Figure 4: collecting information and acquiring technologies through scouting networks
Through the scouting network, the firm seeks to obtain early information about emerging
technologies, particularly disruptive technologies that may enable big innovative leaps. These
technologies might represent a threat to the firm or an opportunity to enhance its competitiveness.
Scouting networks have been described as having multiple advantages, including: (1) being able
to collect rich (i.e., contextual) data, (2) being able to gather information in technological domains
where the terminology is not stable (where a keyword-based search in databases would produce
Tech nolog y
foresight team
Experts
(Information sources)
Internal
stakeholders
Tech nolog y
scouts
Technology transfer (licensing, acquisition, joint venture)
Payment of licensing fees, acquisition price or investment in joint venture
Transfer of information about emerging technologies
Transfer of information about the market
19
inconclusive and incomplete results), and (3) being able to create a channel that can be used for
acquiring technologies.
4.3.2 Value contribution from technology scouting and acquisition
In all three case studies in which technology-scouting networks were operational, the firms
could provide examples where insights into technological change had produced early warnings about
disruptive change. All firms also provided examples of successful technology-sourcing activities. A
corporate-strategy manager explained the role of the scouting network (run by the foresight unit) in
projects that assessed the need for new strategic resources:
In projects in which we look at specific topics and the start-ups and companies in
that field, we are closely collaborating with the foresight unit.
Social proximity—which many of the scouts have to be external experts—is also expected by
the respondents to increase the probability of success of the technology acquisition. One informant
added that it occasionally also led to more favorable contractual conditions with the technology owner,
resulting in cost-saving for licensing fees and in lower cost of ownership of joint ventures (i.e., less
coordination effort because the business partners already knew each other well).
5 Conclusion
5.1 From a practitioner’s point of view
Overall, these examples show that running corporate foresight activities can be a good
investment. But it was also frequently commented that the return on investment often only happens in
the long run, when the managers that originally agreed to the budget may have already moved on in
their career and will not be there anymore to enjoy the fruit of their investment. This was also part of
the reason that led to the closing of three foresight activities during the time of this study. This also
means that, from the perspective of a budget owner, running and investing in foresight activities is
more risky for one’s own career than investing in business development or marketing campaigns. This
dilemma can be expected to persist, but can be reduced by defining the expected value contribution
up-front, identifying committed individuals (foresighters that want to create value for the company,
20
rather than be content after creating future insights), and as intensive as possible participation of
internal stakeholders in the foresight activity.
Through the literature review, we have seen that beyond the high-level frameworks of, for
example, dynamic capabilities, little guidance is available on how to build organizations that are
resilient to disruptive external change. Strategic-management scholars suggest that firms build
dynamic capabilities largely on existing processes (alliancing, strategic decision-making, new product
development, etc.). However, firms still repeatedly fail to respond and find themselves in life-
threatening situations [46, 58, and 75]. There are multiple reasons for this, including middle managers
who hinder the appropriate actions to be taken [44] and top managers who are unable to overcome
mental models that have worked for them well in the past, but provide poor guidance [76] or are
misleading in today’s environment [40].
Through the discussion of the cases, it was established that corporate foresight can:
• Identify relevant change by scouting for trends both on the market and technology side
• Trigger innovation initiatives directly through a process or indirectly by relying on
individuals like R and D managers to use the insights into the future to start new R and
D projects
• Challenge innovation development by providing future insights such as information on
emerging technologies throughout the R and D project lifecycles
• Contribute to overcoming dominant mental models and provide date to judge whether
new mental models provide an advantage over the old ones
• Moderate strategic discussions through roadmapping workshops or through scenario
analysis in which internal stakeholders participate
• Support the breaking away from path dependency by specifying a vision for the future
and planning the road towards that future
• Support the search, development, and acquisition of strategic resources through
scouting networks, etc.
21
In addition to providing concrete examples on which value contribution can be expected from
which practice, the cross-case analysis also gives some general recommendations on how to increase
the impact of corporate foresight:
• Design the foresight activity on the basis of committed individuals, putting particular
emphasis on using mutually valuable exchange relationships such as in the scouting
network where all four actors profit from the activity
• Ensure a high level of communication and participation such as in the case of the
consumer-scouting activity
• Use methods that allow for modeling and interpreting of the system of influencing factors
(such as the scenario technique), rather than rely on methods that build on linear cause-
effect relationships
• Experiment with methods and processes until you have found a practice that works for
your company and takes into account the special requirements in your context
5.2 From a researcher’s point of view
With this paper, I want to contribute to broadening the knowledge about value contribution
through corporate foresight and create a link to methods and practices. I hope that linking the research
on corporate foresight (or futures research in organizations) to the body of knowledge of strategy and
innovation management will help advance our understanding. Particularly the integration with the
dynamic-capabilities perspective should benefit both research streams, as corporate foresight lacks a
strong theoretical basis and dynamic-capabilities theory lacks the connection to day-to-day
management.
For future research that integrates the corporate foresight and dynamic-capabilities perspective,
the framework of Helfert et al. (see Figure 1) appears to be particularly useful. For such research,
many questions remain unanswered. For example: can firms manage the renewal of their portfolio of
strategic resources through a process (or is a change of CEO and top-down management required)?
How should foresight activities be integrated with other processes such as strategic decision-making
and new product development? And there is still much room for research that aims to answer the long-
22
standing research question: how can firms become future-oriented (resilient against threats and
capable of grasping opportunities arising from change)?
6 Discussion
The aim of the empirical investigation was to find evidence for value creation. This search was
motivated by the need of large firms to respond to changes in their environment and to assess the
payoff from the cost of running foresight activities. The potential contributions to the firms’ ability to
respond were derived from strategic- and innovation-management literature. Particularly the theories
on disruptive innovations, radical innovations, and dynamic capabilities provided a detailed analytical
framework.
With data from 20 cases studies, I was able to extract multiple examples of value contribution.
Comparing the information given by at least three respondents per case (foresighter, the responsible
manager for the foresight activity, and the internal stakeholder) allowed me to validate the value
contribution. For each group of expected value contributions, one particularly representative example
was selected and discussed in detail.
The example of consumer scouting showed how the corporate foresight activity had contributed
to identifying emerging customer requirements. This led to the adaptation of the portfolio of car
models as well as an enhanced understanding of the brand image. This triggered changes in the
marketing strategy of the firm.
The second example, exploring and developing new business fields, highlighted the risk—faced
particularly by large companies—of not responding to emerging opportunities to develop a new
market. It also showed how corporate foresight activities drove the identification and development of a
new business field. Two approaches were discussed: one where the executive board together with an
external foresight consultancy identified and selected new business fields. A second example showed
how the same result could be achieved by building primarily on internal resources.
The third example, technology scouting and acquisition, described how networks of technology
scouts are used for both scanning for technological change and supporting the process of technology
23
acquisition. It was reported that these firms deliberately decided to use a people-based approach to be
able to search in environments where terminology is still changing (which is often the case in the early
phase of a trend) and where rich, i.e., contextual information is needed to convince decision-makers.
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27
8 Appendix
8.1 Quotes and their translation
Position in
Document
Original quote (German)
Translation by the author (English)
4.1 Trigger
responses
Zum einen ist natürlich so, dass man als großer
Tanker auch große Angriffsfläche bietet an
möglichen Sachen. Wissen um mögliche
Gefahren ist grundsätzlich, eine Aufgabe. Was
man mit dem Wissen macht ist was anderes.
An issue is that as a large tanker [tanker being a
metaphor emphasizing the size and reaction
speed of large companies], you offer a large
surface for attacks. [Therefore,] generating
knowledge about threats is an objective. What
you do with this knowledge is a different issue.
4.1 Trigger
responses
Dann Scouting als Einsatz zur generellen
Aufnahme von relevanten Trends in der
Zukunft. Zum Bespiel das Thema Loha-Trend
(Anmerkung LOHAS is an acronym for
Lifestyles of Health and Sustainability). Und
erst einmal gar nicht mit einer konkreten
Fragestellung, wie die Übersetzung ins Produkt,
sondern erst einmal, wie groß ist der Trend?
Wie lange wird der anhalten? Wie prägt er sich
aus? Wie gehen andere Industrien damit um?
Wie geht die Kunst, die Politik, die Architektur,
wie geht die Gaming-Industrie damit um?
[One task of foresight is] the identification of
relevant trends. For example, the issue LOHAS
(lifestyle of health and sustainability) and to
start not with a concrete question, such as “How
do we change our products?” But rather, “How
big is the trend? How long will it last? How will
it evolve? How do other industries respond?
How do culture, politics, architecture, or the
gaming industry respond to the trend?
4.1 Trigger
responses
Original quote was in English
We have worked extremely hard to identify
white spaces. We have not identified
disruptions, but we have started many [R and D
projects] where we have identified gaps.
4.1 Trigger
responses
Wir haben erst von heute bis in das Jahr 2015
extrapoliert. Und dann habe wir von der
Zukunft zurück geplant und festgestellt: Aha,
lieber Fachbereich, da [technologisches Feld]
habt ihr ja gar nichts. Und das hat dazu geführt,
dass wir neue F&E Projekte aufgesetzt haben
um diese Lücken zu füllen.
We first did an extrapolation to the year 2015.
We then planned backwards and concluded:
Dear operational unit, in that [technological]
field you have nothing. And this led to the
initiation of new R and D projects to bridge this
gap.
4.1 Trigger
responses
Wichtig ist dass die unterschiedlichen
Teilnehmer (Anmerkung: Teilnehmer des
Frühaufklärungsprojekts, die internen
Stakeholdern) ein Bild im Kopf haben. Aber
nicht ein klar definiertes, vorgegebenes
Zukunftsbild, sondern absichtliche Unschärfe
um zur Initiierung von neuen
Innovationsaktivitäten zu ermuntern
It is important to create images in the mind of
the participants [the participants of the foresight
project, who are from the divisional innovation
management units]. Not a clear, predefined
picture, but an image with intended fuzziness to
inspire them to create new innovation activities.
4.2
Strategic
change
Wir wollen natürlich nicht, wie Grundig oder
Agfa (Kommentar: Zwei Unternehmen, die
durch externe Umbrüche insolvent geworden
sind) solche bösen Überraschungen erleben.
Man lernt ja von dem anderen, was man falsch
gemacht hat, damit man das halt nicht
wiederholt.
Naturally we don’t want to experience such dire
surprises as those faced by Grundig and Agfa
[both companies filed for bankruptcy following
discontinuous change]. It is important to learn
from others to keep yourself from making the
same mistakes.
28
4.2
Strategic
change
Ich muss immer meine Grundannahmen prüfen.
Also zum Beispiel wenn, 1. Das Öl vielleicht
irgendwann ganz weg ist und 2. Wir im
Moment nichts anderes machen, dann folgt
natürlich 3. Ich muss mal sehen, dass ich mich
entweder entlang meiner Wertschöpfungskette
weiterentwickle oder in komplett andere
Geschäftsfelder reingehe.
I need to continuously monitor my basic
assumptions. For instance, I recognize that (1)
the oil might be gone forever and (2) we are
doing nothing else; and then I can deduct that
(3) I should extend my business along the value
chain or move into totally new business fields
4.2
Strategic
change
Durch unsere Strukturierung nach
Marktsegmenten, wird dann so ein neuer Markt
vergessen. Weil für mich ist das kein Öl und
Gas Upstream Thema, es ist aber auch kein
Downstream Thema, es ist auch kein
Midstream Thema und das sind alle unsere
Geschäftsfelder. Es ist auch kein Thema der
industriellen Gase. Also dann vergisst man
vielleicht mal einen Markt und deshalb braucht
man auch Organisationen, die sich mit Märkten
beschäftigen kann, die heute noch gar nicht
behandelt werden.“
Because of our structure along market segments,
emerging new markets may be overlooked.
Because for me it [the market for CO2 capture
and storage] is not an oil and gas upstream
topic, but it is also not a downstream topic, it is
also not a midstream topic, and it is also not a
topic of industrial gas. And these are all our
business segments. Therefore, some markets
may be overlooked, and in consequence an
organizational unit is needed that can take care
of markets that are not dealt with today.
4.3 renew
portfolio of
strategic
resources
In Projekten, wo wir gezielt irgendwelche
Themen anschauen, welche Start-Ups, welche
Firmen gibt es da auf der Welt, da sind wir
eben eng mit der Frühaufklärung verwoben
In projects—in which we look at specific topics
and the start-ups and companies in that field—
we are closely collaborating with the foresight
unit.
Table A-1: Quotes and their translation
