What should everyone know about strategic foresight
Greenstep Podcast was happy to sit down with René Rohrbeck, an academic and practitioner of corporate foresight for more than 20 years. We discussed the fascinating topic of corporate foresight.
René Rohrbeck is best known for his pioneering work on the future preparedness of organizations. Rohrbeck has developed the Future FITness model, which measures the ability of organizations to use foresight to drive innovation and transformation. He is also a professor of strategy at universities in France and Denmark, and director of the Chair for foresight, innovation and transformation at EDHEC.
Greenstep Podcast was happy to receive questions from our listeners that we addressed to René. Big thanks to everyone who submitted their questions! It comes as no surprise, René provided us with interesting answers and practical insights.
What is the difference between strategic foresight and strategic forecasting?
Basically, forecasting is the logic of predicting. For example, car companies can predict very well which models will sell well in the future.
Foresight on the other hand is acknowledging that there are so many uncertainties you cannot predict. Therefore, you need to prepare for future actions by allowing different scenarios and using them to determine what you want to do today and in the future.
"Foresight is the art of making different planes of thought connect to create desirable futures." What does this quote from you mean?
For one, it means that the desirable futures are desirable for the organization we typically work with and desirable at large for the planet, for the societies & at the end for peace and how we live together. On the other hand, foresight always takes an active stand towards the future so foresighters don’t believe in faith. They believe we can shape the world in the way that we want it. One individual company or rule-giving regulatory body cannot necessarily solve all the problems. The solution should be created together, and René and his colleagues aim to facilitate it.
What are some of the most usual challenges companies are facing right now?
Challenges come on different levels. The challenge of how to proactively work with the information-overloaded future is something most of us will face on a personal level.
These days you make decisions constantly and if you don’t reserve every year at least 3 – 5 % of your time to think about the 2-to-3-to-5-year horizon you don’t have enough attention to the future. Therefore, you would be missing the threats but also the opportunities. Many firms today have operating business models that are stabilized by market forces. In the next 20 years, it will be much harder to rely on market forces because we see more and more state interventions and heavy disruptions. We need to have the means of dealing with them and therefore companies must build or rebuild their mechanisms.
Does finance play a role in strategic foresight?
Finance is already preparing reports of all kinds of risks and therefore plays an important role in feeding the foresight system with signals.
Secondly, the role of the finance function in quantifying those risks is very remarkable. A company cannot prepare for all kinds of risks, but you need to make sure you have assessed, what would be the impact of the most severe risks coming to reality.
Thirdly, the finance function of an organization is typically the one that is in a gatekeeper role. Finance needs to embrace a new role, on one hand monitoring the business model and on the other hand helping to make the needed decisions for saving the company if something goes wrong.
How to become a digital company?
According to René, the first step is to make a foresight project where you and your internal colleagues think about what your digital offering would be and apply foresight tools to it.
The other step is the need to simplify. Digitalizing for example services is often very complex and it is very expensive to build an algorithm which tries to deal with everything. It should be built for the mainstream and deal with the special cases first on the site. That allows you gradually train your customer to go for the simpler digital version of service.
The third step is that you need to separate it from the rest of your business because you will be thinking very differently. Digital units must show the value of putting different data sources together.
What are the key areas to focus on when preparing for the future? How to know if you possess the right skills and decision-making processes?
We are exiting the era dominated by large companies with slow markets into a world where we see much faster movement from smaller companies with more state interventions. It means, we need to build companies which are much more responsive to such changes in the external environment.
Companies need to build this future consciousness which means that you have a team to look at trends and change drives around you. In the next 20 years building a nervous system to recognize opportunities and go after them as well as make people responsible for going after those opportunities makes a break in organizations. A certain need for mindset changes and process change is created, and it makes the company agile when using the foresight René summarizes.
One can use this set of questions to assess if the right skills and decision-making processes are at hand:
- Is there somebody here in my organization who keeps track of the drives for change?
- Do we have someone who can help me with how my industry might look in 5 years’ time?
- Do I have teams which have the budget and time to probe into a new market?
- Could someone in the organization ask for extra money to help build a new product offering or pilot something with the customer?
How do you know corporate foresight is good enough and what is its role in driving performance in the future?
René says that you know the quality of foresight when you have some systematic biases on seeing our world as somewhat distorted. Additionally, there is somebody who is preparing or looking for new options. Finally, you should have a good system of engaging the creativity of your employees to help you prepare for the future.
The role of corporate foresight is a slowly developing key skill. Only 1/5 of companies are really future-prepared. Many companies are starting to build foresight units, and in the future, we need a part of our organization to safeguard us and prepare us for some of the unexpected René summarizes.
We warmly thank you René Rohrbeck for the interview.
Want to learn more?
Listen to this episode of Greenstep Podcast, where Greenstep’s Heli Häyrynen and René Rohrbeck cut into the topic in more detail.
You can find all the previous episodes of Greenstep Podcast on Spotify, too.