Thinking

Getting real value from foresight

By Rob Anderson

How to leverage foresight for growth and innovation

If the words ‘foresight’ and ‘futurology’ conjure up images of crystal balls and tarot readers, then think again. Futurology has expanded significantly over the last decade and many well-respected universities are now offering top degrees in foresight development and futurology. This is also reflected in an increasing number of companies employing foresight specialists and systematically monitoring trends and developing scenarios. We have certainly noticed this at Edengene. An increasing number of our clients have been asking us to consider their growth and innovation challenges and opportunities in the context of future – ten, twenty or more years into the future.

 

However, it is clear that many businesses are still missing a trick by not making the most of what good foresight can offer. Foresight has most commonly been applied to business strategy, and it appears that this is still often the case. For good reason you could argue – it can have significant bottom line impact when used systematically to stress-test strategies and investment decisions. Challenging assumptions about the future can uncover completely new perspectives and enable leaders to make better decisions going forward.

 

One of the more traditional ways to apply foresight to business strategy is through scenario planning, something that energy and petrochemicals company Shell does very well. Scenario planning involves considering mitigation actions for plausible scenarios instead of only monitoring lead indicators or trigger events. Rather than just anticipating risks, it is all about understanding the implications of a trigger event occurring and preparing different strategies for alternate futures. Shell credits its scenario programme for making its strategy planning more robust and being the reason why it leads its peers on some moves to new energy sources. 

 

However, as the diagram overleaf indicates, scenarios and foresight have much broader applications that are often overlooked. The simple fact is that most businesses aren’t getting half the value they could from foresight.

 

What we often find is that the foresight developed stays within the confines of the strategy team. However, Innovation and Marketing teams can make great use of foresight to model future customer needs and make better decisions today. The key here is using foresight to look at the customer. Too often it is internally focussed on big investment and strategy decisions whilst forgetting to ask – ‘how will my customer and their world change?’ This is why the Edengene definition of foresight makes the customer a central tenet:


“Foresight is the development of plausible futures using the systematic analysis of trends and discontinuities to deliver superior commercial returns through better customer understanding today.

Looking at the customer through a foresight lens can unlock a whole new sphere of understanding. It allows you to anticipate how customer needs and new segments might evolve and, therefore, develop products, services and customer experiences today that will remain relevant. Good foresight allows you to design a stress-tested customer journey and propositions roadmap, with alternate strategies for key uncertainties. Businesses that systematically deploy foresight in earnest are better positioned to be ahead of the curve and win more market share from their competitors in the future.

 

 

 

 

It is also worth noting that the types of customer needs often do not change drastically - feeling safe, feeling special, value for money, durability, etc. However, to what degree and how these needs manifest themselves does change. Foresight allows us to better understand how they may manifest themselves and how we can develop our services and propositions in order to meet the key needs now and in the future.

 

One company that has been doing this for many years to great effect is Phillips. Its trend-monitoring programme and team continuously look at foresight and consumer behaviour to anticipate how consumers will change and how their relationship with lighting and technology will evolve. As such they were at the forefront of the ambient lighting trend, and they continue to not only lead the market, but also often shape the market for lighting.

 

IBM is another company that, through its Home and Office of the Future programme, is actively working to understand how its customers’ lives and behaviours will change. Whilst it is admittedly also a very useful PR tool, its programme to look at how cutting edge technology can change our behaviour and interaction in our homes is leading to new and more relevant products and services being developed for its customers.

 

What both Philips and IBM have demonstrated is that genuine use of foresight goes beyond just planning and strategy. It enables them to shape a desired future, re-define markets and influence their customers’ future behaviour.

 

“Tomorrow belongs to the people who prepare for it today” 

 

African Proverb

 

Ultimately, the value you get from foresight is only as good as the investment and sponsorship that you put into it. To really become valuable foresight needs to be embedded into the strategic planning process at corporate and departmental levels. This implies going wider than just scenario development and the strategy team. On an on-going basis, views on trends and discontinuities and lead indicators (trigger events) should be kept up to date, and new scenarios developed to stretch thinking, update your view of the world and enable a more thorough understanding of how your market and customers will change.

 

Get it right though, and you could be making major advances over your competitors in the medium to long term.

 

Rob Anderson

Rob was a founding director of Edengene in 2000, having previously been head of the business growth practice at PA Consulting Group. A chartered accountant with strong finance skills, he has 20+ years’ consulting experience working with blue chip companies, designing and directing multi-year growth and innovation programmes. Rob is the author of Edengene's customer-led innovation methodology, which provides a structured approach to innovation to deliver revenue growth.