We live in a hyper-competitive world where planning cycles are getting shorter, where threats come from further a-field, and where opportunities for growth are greater than ever before. Most companies however are ill prepared to survive and prosper in this environment.
Managers need to continuously survey the environment in which they operate, understand how markets, technologies and networks are changing. They need to position themselves within currents of change to effectively compete and grow. Individual brilliance and intuition is not enough. Managers need new tools and thinking to cope with this complexity. Foresight provides many of those tools and introduces the new thinking required for the future.
Foresight employs a wide range of techniques to:
• Understand the forces shaping the context in which organizations operate
• The range of possible futures that might arise, and
• How these possible futures impact their ability to grow and prosper.
It provides strategic insights that help an organization renew its position in terms of:
• The markets it is in,
• The clients it serves and
• What it must do to grow and prosper in the future.
In particular Foresight can help an organization to clarify the kind of innovation it needs to engage in right now to be ready for the future. Innovation cannot be understood only in scientific and technological terms, or only in terms of new products and processes. Innovation should also be seen in terms of the pioneering efforts of entrepreneurial managers to extend or create new markets, to implement new business models, new management models or new organizational structures.
Foresight has evolved over the last 20 years into an effective tool to pro-actively manage, motivate and catalyze change in the organization. It is highly participative in nature and can play an important role in breaking down the internal silos that are barriers to innovation and organizational transformation. It can help to clarify the kind of innovation that the organization should engage in, as well as the need for collaboration with external partners and clients.
It has its roots in the efforts of public sector organisations to systematically optimize investment in publicly funded research. It is now no longer only applied to setting priorities for scientific and technology research investment, but to creating strategic insights into:
• Future products, services and markets
• New sources of competition
• New structures and models for organization, both internally and throughout the value chain.
Foresight is a management discipline. A Foresight initiative can take a day, a week or a year. A full-scale foresight initiative exercise typically consists of 4 distinct phases:
• A DESIGN phase where the overall goals are clarified and the methodology agreed in collaboration with the main external and internal partners or stakeholders.
• A DIVERGENT thinking phase where wide-ranging creative thinking is prioritized so as to challenge and broaden perspectives as much as possible. The goal is to introduce unexpected and unconventional views that may turn out to be significant, and that will help to change thinking about options for the future.
• A CONVERGENT thinking phase where the participants start to narrow down their options and views to what is doable and desirable. This phase will typically culminate with the publication of a vision and action plan or roadmap.
• An ADOPTION phase where the initial emphasis on communicating the broad vision and getting buy-in for the action plan, gives way to action in terms of budget allocation and organization as well as programs to re-orient business and management models or implement structural change.
We live in a hypercompetitive world
In 2008 Hal Sirkin, Jim Hemerling and Arindam Bhattacharya wrote a book entitled “Globality” in which they describe the next and currently emerging phase of globalization. In it they describe a hyper-competitive world in which businesses compete all the time with “everyone, from everywhere for everything”. There is no doubt that planning horizons for companies are getting shorter and shorter. This is true not only for highly diversified multi-national industrial groups. It is also true for the very smallest firms that supply them.
This hyper-competitive world view was illustrated by Victor K. Fung, William K. Fung, and Yoram (Jerry) Wind in 2007, when they published “Competing in a Flat World”. Victor and William K. Fung are brothers and they currently own and run a 100 year old, Hong Kong based, family business called Li & Fung. In their book they describe many examples of successful hyper-competitive companies, including their own company. Li & Fung is an example of what are known as ‘orchestrators’. Typically a US or EU client will approach them with a request for example to provide 300,000 pairs of shorts. Li & Fung will design, integrate and coordinate a global supply-chain to source the fabric, buttons, zippers and labels, do the cuts and assemblies, wrap them and pack them pre-sorted into mixed selections, complete with price tags and hangars, pre-arranged in display units, that they deliver to the client ready to be wheeled into position in specific shops in specific cities for the client. This whole process can take as little as 4 weeks! Li & Fung own no factories. They have a network of 8,500 suppliers in 40 countries. If the same order were to be placed two weeks later, most likely the configuration of the network and suppliers would be different. This is the world we live in.
This model is not confined to textiles. It is how Apple created the iPod. It is being copied and extended by other companies working in electronic products, architectural and engineering design, SW development and drug design. It is also being applied to research. The global market for contract research services is now estimated at about $20B per year and growing at the rate of 17% per year. There are thousands of CROs1 in the bio-medical sector alone. New businesses have started to appear that link-up research service providers with clients looking for complex cutting-edge research services. The founder of Assay Depot2, one of many such brokers, explains that “drug discovery research is highly inefficient. It’s too expensive, too slow and too likely to fail.” He says that he founded Assay Depot because he believed “that broad access to low cost, high quality drug discovery services can address this inefficiency … lower costs, reduce cycle times and improve clinical success rates.” A client testimonial on the home page of Assay Depot says "had I known that I can get chick embryo assays done for $2,000 in four weeks, I would not have asked a post-doc to spend a year setting it up in our lab."