Foresight: Hype or Benefit?

In a rapidly changing world, the ability to identify and understand future developments and prepare for them is becoming increasingly important. An organization that systematically applies foresight methods and increases its understanding of the future also has the potential to influence it. In the following paragraphs, I will share my observations and experiences accumulated over several years on the benefits that an organization can gain from systematically implementing foresight tailored to its own needs.

Please find below my collection of seven good reasons that generate benefits for organizations by developing and utilizing foresight capabilities:

• Strategic decision-making: Foresight supports organizational leaders in making evidence-based, future-oriented strategic choices. The strategic time horizon may vary greatly among different organizations; for example, in the energy industry, the profitability of investments is examined over decades, while in rapidly changing consumer goods or fashion retail, it is more appropriate to anticipate consumer behavior trends over a considerably shorter time horizon. By anticipating potential future phenomena, scenarios, and assessing their impacts, decision-makers can develop more effective plans and make more accurate decisions.

• Tactical and operational decision-making and data-driven management: The acceleration of environmental change and the increasing intensity of its effects require organizations to expand their horizon of foresight beyond long-term strategic needs to encompass the anticipation and consideration of medium- and short-term phenomena. An organization that does not confine its future thinking solely to annual strategy workshops and examination of megatrends can gain new agility and competitive advantage in making short-term business decisions. My ongoing research strongly focuses on the importance of this shorter-term foresight and I will elaborate on this perspective more extensively in future articles and blog posts.

• Building resilience: Foresight helps organizations understand and mitigate future risks, enabling proactive adaptation and increasing resilience. Many foresight methods also offer strong support in identifying future threats, allowing organizations to avoid costly disruptions and maintain continuity.

• Innovation and increasing competitive advantage: Foresight helps organizations identify future opportunities and, if desired, position themselves as first movers in the market. By staying at the forefront of development and leveraging new trends and technologies, organizations can gain a competitive advantage and ensure long-term success. Particularly in the context of modern platform-based business models, being the first to establish a strong position in the ecosystem often puts an organization in a much stronger position, making it more challenging for followers to enter the market.

• Learning and Development: An interesting and not-so-widely recognized benefit of future-oriented activities is their ability to enhance organizational learning. When foresight activities are integrated into an organization's daily operations and culture, they automatically increase employees' knowledge and understanding of industry dynamics, thus promoting skills and expertise that provide a competitive advantage. Through foresight capabilities, organizations can also accelerate a culture of innovation and agility.

• Thought Leadership and Branding: Finally, well-executed foresight activities help organizations generate new, innovative perspectives on their industry and society. This visionary thinking supports thought leadership development and, at best, can attract the attention of decision-makers, media, and the wider public. Through this, organizations can strengthen their influence and reputation, and build their brand.

• Economic Benefits: The economic benefits of foresight activities have been studied in research such as Rohrbeck’s and Kum’s study (link). This extensive study, which focused on large corporations, found that foresight has a significant impact on a company's profitability and value creation. Foresight maturity was compared to each company's situation and foresight needs in relation to the strength of the changing operating environment. According to the study, companies that conducted foresight activities appropriately to their needs performed 33% better than their peers, and their value growth was as much as 200% higher than the average company.

In summary, integrating future-oriented activities into an organization's operations and management system can offer many kinds of benefits to all types of organizations. By investing in developing foresight capabilities and integrating them into everyday practices, organizations can position themselves for success in an uncertain future.