How Companies Use Foresight as Input for Business Decisions

CXO THOUGHTS
AHL9787_WEB_Large How Companies Use Foresight as Input for Business Decisions
Panu Kause, CEO, FIBRES Online Ltd

We live in times where information is readily available and change happen fast. A new trend emerges and it may soon fade out as a fad. Or it may become something that disrupts entire industries.

Just to passively follow what is going around is not enough. Active foresight needs to continuously be built and be used as input for business decisions. Understanding changes in your business environment – futures thinking– is something we believe all management teams and boards should have in their skill set.

Early understanding of – and action on – the changes in your business landscape offer immense opportunities. Agility is the new normal, and we believe it is ability connected with visionary strategies that is the combination for future winners.

This leads us to a set of questions: how are companies really looking out for future-related information, how do they use such information, and how is such work organized? This how our survey “Foresight as Part of Strategic Management” came to be. Here we want to share some of the key findings of our survey.

On Future Preparedness

So, how are companies preparing for their futures and what are the information sources for keeping up to date?

First, not surprisingly, customer feedback was one of the future-related information sources mentioned with 83% by our respondents.

Nearly 80% of respondents said they continuously follow external market changes in their business environment also on a broader scale. However, only 55% continuously really analyse trends and feed that into their strategic decision-making.

Our in-depth results also show that the ones still with no systematic procedure are now seeking a way towards a new, continuous mode of working on their futures.

Using Future-Related Information

The very purpose of future-related work varies heavily dependant on the horizon of such work to begin with. Systematic scenario building tends to be something that is connected to long-time strategic horizon building. Quicker-paced finding of potential innovation is somewhat different by nature.

Of our survey respondents, 70% say the future-related information is used as direct input for their strategic planning, and 60% argue the use for innovation programs and ideation.

By contrast, only 50% mention using such information for building of long-term scenarios. This percentage is higher in the case of the largest organizations, whereas the more direct and short-term uses are favored by the smaller organizations. Obviously larger organizations may have more resources to do so, and most likely more reason to as well – at least when it comes to disruptive risks from outside their current business domains.

Organizing the Work

Who participates in the future-related work?

Of our respondents, 75% claim to be sourcing for weak signals and trend reports internally. However, less than 50% say that everyone in their organization has an opportunity to participate in the future-related discussion. More than 25% say they don’t even use future-related information to explain their strategic decisions. And less than 25% use a collaborative digital tool for their foresight and strategy work.

During this era of digitalization, transparency, and opening up of corporate cultures for innovation – honestly – we find those figures a bit disturbing.

How to get people involved then? While sharing these – and then some – results on a Futures Day breakfast session on March 1 here in Finland, we heard some good examples even outside of our own survey.

Take the Finnish tax administration (Verohallinto) for example. They have started to move forward with open collaboration and discussion sessions – and this is related to selected phenomena and trends of taxation! Also, the Association of Finnish Local and Regional Authorities (Kuntaliitto) does a lot of work for spotting of weak signals and working towards a common understanding of trends impacting the Finnish society as a whole.

In Closing

Finally, here’s a few quick tips on what to consider when working with your foresight:

  • Find a way of working that fits your organization; namely the tools, the team, the responsibilities. Not everyone is interested in working with something that is not so concrete and right-way actionable.
  • Keep it easy and always offer a connection from futures work to everyday work. Make sure people realize what time horizon is being addressed by different levels of such work.
  • Really works and focus on the level of your ambitions! Are you set out to change or disrupt your environment? Do you just want to keep pace with someone else?
  • Always remember that every giant was once small! The current size of your business does not stop you from becoming something else. And not from impacting the future.

This article was written by FIBRES Online Ltd, based on the results of their survey “Foresight as Part of Strategic Management”. The survey was an online, open questionnaire open during  January – February 2019. Total number of respondents was 53, altogether from nine different countries and several b2b and b2c industries. One-third of the respondents’ company size was over 1000 employees, one third below 50 employees, and one-third something in between.