Content uploaded by René Rohrbeck
Author content
All content in this area was uploaded by René Rohrbeck on Sep 22, 2014
Content may be subject to copyright.
Global Compact International Yearbook 2012 Global Compact International Yearbook 2012184 185
Agenda
By Prof. Dr. René Rohrbeck and Pernille Kallehave
In this article we want to give our answer to the question about if and how corporate
foresight can increase the likelihood that we move toward sustainability – both on a
company and a societal level. Before entering into the discussion of what corporate foresight
can do, let us highlight some of our observations on what is holding us back from engaging
in sustainability actions, and thus creating sustainability of the necessary trajectory, scale,
and velocity to actually meet the societal challenges.
ISO 26000Agenda Corporate Foresight
From a humanistic point of view, it seems surprising that
we continue behaving – individually and collectively – in
ways that will endanger the life of future generations. But the
world is slowly moving in the right direction, supported by
a broad group of stakeholders. In its latest report, the United
Nations Secretary-General’s High-level Panel on Global Sus-
tainability seems to shift its focus from governmental initia-
tives toward action by companies and individuals. Overall,
the expectation seems to be that while governments nd it
difcult to commit to new sustainable measures, companies
and individuals could lead the way toward a resilient planet
(United Nations Secretary-General’s High-level Panel on Global
Sustainability, 2012).
Companies’ ambivalent role toward sustainability
In a recent study, KPMG argues that rms will need to work
harder to become greener in order to prepare for rising en-
vironmental cost. However, many rms still nd it difcult
to engage in meaningful and lasting sustainability programs.
When asked about the reason, some suggest that many rms
follow the logic put forward by Milton Friedman that “the
social responsibility of business is to increase its prots.” Using
that credo, rms – it is suggested – will only nd interest
in sustainability if an impact on prot can be expected. Many
sustainability innovations, however, have a mid- or long-term
payback horizon. Using traditional management metrics –
such as calculating the return on investment, on the basis of
discounted cash ows – would force executives to make nega-
tive investment decisions. Firms are also bound by dominant
mental models, basic assumptions that have been developed
in the past, as well as by the current business environment.
Firms nd it difcult to perceive and act upon new trends and
changes regarding developing trajectories.
Another issue is the systemic nature of many sustainability
innovations. Mark Johnson and Josh Suskewicz argue in a
Harvard Business Review article that a clean-tech economy
requires “shifting from developing individual technologies to
creating whole new [value creation] systems.” Such shifts have
happened in the past, for example the shift from candles to
electricity as the dominant form of lighting. Such a shift makes
old value networks (candle producers, candle-holder manufac-
turer, candle vendors, etc.) obsolete and new value networks
need to be formed (energy producers, wire manufacturers,
light bulb manufacturers, etc.). Thus, such shifts only come
about when multiple actors – often governments as well as
rms, consumers, and investors – pull in the same direction
and work toward a common goal.
To ensure innovation toward sustainability, three things are
needed: (1) decision-making tools that identify future value
networks / systems; (2) common visions that identify the value-
creation potential to mobilize sufcient resources; and (3) frame-
works in which the actors can organize and build condence
that the new value network will be created.
There is, however, a much less debated barrier, which is also
much more operational and much easier to overcome, in theory.
That is the lack of joint planning and, thus, the lack of shared
understanding about what actions need to be taken and in
which sequence the different actors need to take them. This
is a result of the ways that rms organize. They are complex,
with responsibility being shared across many hierarchical levels
and often distributed across regions and/or product categories.
In addition, they are structured to ensure efcient operations
in the current business logic, not in a new (for example, more
sustainable) way. Both the complexity and the focus on current
business methods create a powerful inertia that is difcult to
THE ROLE OF CORPORATE
FORESIGHT IN PROMOTING
SUSTAINABILITY
Global Compact International Yearbook 2012 Global Compact International Yearbook 2012186 187
Agenda ISO 26000Agenda Corporate Foresight
For example, through scenario planning, Shell identied in
the 1970s that, in a possible future scenario, the oil-producing
countries could jointly decide to reduce the production capacity
to exercise political pressure and increase the oil price. This
resulted in Shell’s anticipation of the oil crisis that has hit its
competitors and the world at large, taking them by surprise.
Unfortunately, the management systems of rms reinforce
dominant mental models and emphasize shared assumptions,
making it much more difcult to think about other possible
trajectories. Thus, corporate planning will always tend to
strengthen the current path and limit the strategic agility of
rms. In that respect, it is important to move from individual
trend- and emerging-issue analysis to joint exercises with
other companies, for example those from other industries or
that have other positions in the value network so as to avoid
competitive conicts.
To break away from such path-dependency, rms are starting
to use integrated corporate foresight approaches. These often
start with the identication of inuencing factors that might be
trend-like (with a high likelihood of continuity along its current
trajectory) or uncertain (where the future trajectory cannot be
predicted at all). The inuencing factors are used as the basis
for the development of scenarios that are assessed concerning
their impact on the rm’s current strategies.
In addition, the scenarios can be used for strategic planning.
For this purpose, the scenarios are classied into two categories:
favorable (where the rm can maintain its competitiveness)
and unfavorable (where the rm would lose ground against
its competitors). After analyzing the scenarios in depth, the
planning can commence from the future toward the present.
This technique, known as backcasting, consist of planning
actions that need to be taken – starting from the future and
working step-by-step to present time. These steps are dened
to move toward the favorable scenarios and away from the
unfavorable ones.
This approach builds on a high level of participation from the
various hierarchical levels as well as different business units
to create a shared future vision. To create the understanding
of what should be done and how to act, the planning is further
detailed using roadmapping, which takes into account the spe-
cic perspective of each unit. The participation is essential to
ensure the creation of common knowledge about the planned
actions, and thus reduces the likelihood of adverse behavior
from involved actors.
The wide scope of possible futures identied by scenario analysis
motivates rms to take a more long-term view. It enables top
management to shift its discussion from “What should we do
now?” toward “Who are we and who do we want to be in the
future?” Judging from a recent study by Stadler, the focus on
core values and having a clear vision about the role of the rm
increases its life expectancy. In conclusion, it can be said that
corporate foresight provides rms with:
• the possibility to systematically challenge dominant mental
models and basic assumptions;
• means to reduce ignorance toward external change;
• methods to recognize the systematic nature of new market
development;
• an interpretation and response system;
• a systematic approach to discover alternative strategic options
and create shared visions;
• means to counterbalance inertia induced by the management
systems;
• tools to break away from path-dependency;
• a method to create a sustainable organizational design for
the rm of the future.
Corporate foresight to reach global sustainability goals
When talking about global sustainability questions, we know
that we need to get many actors and stakeholders involved.
These have complex and often divergent objectives. However,
the same is true for most large rms, which are faced with
conicting goals of stakeholders and shareholders, different
regulatory frameworks in the countries in which they oper-
ate, as well as long-term contracts with buyers and suppliers.
To move such complex systems from one state into another
requires, in both cases, visions that are shared and strong
enough to mobilize the required resources.
To create strong visions, scenario analysis should be the tool
of choice. The challenge here is to ensure a sufcient level of
participation by the individuals who have the required decision-
making powers to commit their organizations to the common
vision. In that respect, the World Economic Forum is using a
very successful, lightweight version of scenario analysis that
can be run as a workshop. Inuencing factors are described
on cards, whereby stable trends are represented by one card
and uncertain developments by multiple cards, and both of-
fer possible trajectories. Sub-groups select cards and create
scenarios. All generated scenarios are presented and discussed
by the whole group.
For the transition to planning, we have had good experiences in
our own projects with collaborative business modeling. In one
project, we moderated a group composed of energy producers,
energy vendors, ICT service, and ICT manufacturer rms. We
organized a series of three workshops, which started with the
identication of business model elements and ended with a
set of viable business models. The business modeling approach
produces more detailed understanding of future value-creation
and value-capture systems. This allows for identifying the roles
that are needed in the future value network and planning of
overcome and systematically prevents planning of alternative
trajectories
.
Thus, enabling corporate sustainability will also require review-
ing organizational design to a certain extent. This includes
adapting reward and recognition systems, human resource
management, and organizational structures. In addition, the
usage of information and communication systems can increase
participation in strategy formation and help track the imple-
mentation of the strategy.
The three elements of change
Michel Godet and Philippe Durance turn to the Greek philoso-
phers to make their point: To engage rms – and indeed the
society – into making change, the three elements of the Greek
triangle are needed (Godet and Durance, 2011):
Logos: thought, rationality, discourse
Epithumia: desire in all its noble and not-so-noble aspects
Ergo: action or realization
We use Figure 1 to illustrate how these three elements guide cor-
porate foresight in overcoming the barriers to a sustainable future.
What corporate foresight can do for rms
Firms are employing corporate foresight for different purposes
that reach from identifying emerging issues to enhancing
strategic decision-making. Corporate foresight is built on the
principles that:
• we cannot predict the future, but we can explore possible
futures;
• the future is determined by many inuencing factors, includ-
ing own action;
• the generation of insight into the future needs to be integrated
with the conceptualizing and planning of responses;
• exploring the future calls for tools that go beyond linear
reasoning toward systemic observations and modeling;
• approaches should be participative and challenge dominant
mental models and basic assumptions.
However, in many firms the full potential of corporate
foresight remains unexplored. The majority of rms use
foresight techniques as early warning systems for emerging
issues, rather than as platforms to facilitate strategic con-
versations, create common visions, and plan jointly for how
to reach them. This is where corporate foresight methods
work best, such as scenario analysis, backcasting, and road-
mapping.
Lack of perception of long-term
trajectories of change
Lack of decision-making tools that
integrate systemic effects
Lack of shared understanding what ac-
tions need to taken
Lackof confidence that new value
networks will be created
Lack of visions to mobilize needes
resources
Logos
Thought, rationality, discourse
Ergo
Action, realization
Epithumia
Desire in all its noble and not so
noble causes
Joint trend and emerging
issues analysis
Business modeling to identify future
value creation networks
Backcasting and Roadmapping for
planning and controlling progress
Collaborative Business modeling to
identify value creation logic
Scenario to create common shared
future outlook
Barriers Creating change Corporate Foresight
THE GREEK TRIANGLE GUIDES CORPORATE FORESIGHT AND HELPS TO
OVERCOME THE BARRIERS TO A SUSTAINABLE FUTURE
Figure 1
Global Compact International Yearbook 2012 Global Compact International Yearbook 2012188 189
STRATEGIC FORESIGHT:
EFFECTIVE DECISION-
SUPPORT SYSTEMS
More than ever, strategic decision-makers are expected to develop
sustainable long-term strategies for their public or private
organizations. Strategic foresight systems support decision-makers
in systematically improving the quality of their future assumptions,
strategic decisions, and plans. This article summarizes the most
important mechanisms of support, presents three distinctive types of
foresight systems and widely used methods, and explains how strategic
foresight is anchored in actual day-to-day practice.
Agenda Corporate Foresight
Dr. René Rohrbeck is
Associate Professor for
Strategy, Department of
Business Administration,
Business and Social
Science, Aarhus University.
Pernille Kallehave is
Head of Development
and Sustainability, MA
(Law), Interdisciplinary
Center for Organizational
Architecture (ICOA),
Business and Social
Science, Aarhus University.
actions to create the future market. The description of the value
creation is also a rst strong indicator for the attractiveness of
the market, and thus creates the motivation necessary to ensure
a sufcient commitment by the participating organizations.
In this exercise, we also discovered that the idea of including
sustainability goals into the business model was not met with
any resistance from the participating rms; in fact the rms were
glad to integrate societal impact into the overall business model
design. Many rms have indeed embraced the idea of creating
societal and nancial prot simultaneously, and should thus
not be overlooked as partners in creating sustainable solutions
for a resilient planet. To nalize the planning, roadmapping
is a good tool because it also recognizes the interdependence
of, for example, regulatory actions from governments and ac-
tions from rms, and thus builds on the same systemic logic
as scenarios.
We hope that this article is successful in highlighting some
merits of corporate foresight methods and approaches, and
that it will thereby result in increased usage for bringing
about visions, concepts, and plans for venturing together on
the journey toward greater sustainability.
Read the full article with additional information on:
foresight.csr-manager.org
