Corporate Foresight | The Vaccines for Companies and Organizations
Companies and organizations often suffer from the lack of a framework to encounter future economic conditions as well as assuring all relevant external changes and responses properly. Therefore, all corporates need to develop the capabilities of foresight. For example, if electric cars will dominate transportation in the future, why so many car manufacturers are procrastinating in investing in them? Oftentimes, companies neglect the high diversity of foresight activities inside the companies and only focus on foresight development projects.
Corporate foresight involves multiple stakeholders and leads to value generation through access to critical resources for superiority in competition, prepares for changes, and to step forward desired future. It is mainly seen as the process of external environmental information collection, interpretation, the future scenarios gathering process to combat unexpected events, and the attempts to cover the weaknesses of a company and proposed a framework that combines corporate foresight and strategic planning approaches.
For many companies, predicting the future is extremely hard. But, it is can facilitate the analysis of future scenarios if companies propose a framework for the study and develop a strategy by incorporating foresight methodologies. Just like our immune system protects our bodies from outside invaders such as germs such as bacteria and viruses. The immune system is made up of different organs, cells, and proteins that work together. Moreover, strategic planning also yields to decrease the uncertainty. On the corporate level, success is mainly measured by such criteria as market share increase, productivity growth, and profitability. However, there are multiple barriers to the execution of the foresight models such as future inaccessibility, changes in forecasts, contribution increases, data collection, and cost reduction. Companies must employ foresight capacities to reduce existing uncertainties, evaluating the condition to enter foreign markets. Awareness of existing opportunities and affecting factors are the practical steps for long-term success.
Similar to research on an economics event, recognizing the affecting factors on these events is one of the top priorities. So, to enhance corporate foresight performance, it is crucial to recognize affecting factors on corporate foresight and to design a specially structured framework to develop corporate foresight capabilities. Foresight is a vital issue for both public and private companies. Foresight is a structured process that gathers insight-making information on the long-term future continuous progressive actions. It also arises from strategic planning and future study.
The Remarkable Foresight | Tesla
Nickel is an essential component for the batteries of Tesla's products. When the mass production of electric vehicles has become a global trend, nickel was already experiencing a rise in cost. However, as global nickel supply is reported a big issue, the American electric vehicle pioneer Tesla has shown some remarkable foresight as it reportedly secured an undisclosed nickel supply deal with Brazilian mining firm Vale.
Tesla has spent a considerable amount of its resources over the years to push its battery tech further and even built a Gigafactory for its battery production. This step was to ensure that it is not as affected by the rising costs of battery components as other automakers. Tesla urged nickel miners two years ago to mine more of the component and promised nickel suppliers a great deal to inspire the miner to efficiently produce more materials. How can you confidently promise such a big deal and sign a contract? It is the power of foresight.
Developing Corporate Foresight | PDLA
Among so many methods and models, I noticed that the top priority is to identify the issue first. You cannot actually resolve an issue if you have a wrong understanding of the issue. For example, as an automaker, should you invest in the innovation of electric vehicles? Even though we all know the answer is clear. Back in the early stage of EV development, it was harder than we think. First, there is more than one energy option such as Hydrogen, Natural gas, and even solar. Before Tesla decided to develop its own battery and EV, I think it had already done an analysis of its own on these possible options. Secondly, I suggest that companies can follow a development cycle to try and test these possible options, the PDLA(Plan, Do, Learn, Action).
i. Plan
Set a SMART(Specific, Measurable, Achievable, Realistic, and Time-bound) goal and make a detailed investment plan including financial, human resources, budgeting, teams, consumer analysis, and stakeholder research).
ii. Do
After the plan has been made, the next step is to execute and do the experiment within the budget and calculated risks.
iii. Learn
Learn from experiment and execution. Report the pros and cons of each option and learn from them. This is a great opportunity for companies to grow and innovate even more.
iv. Action
This step is like a reflection after you get the result of your exam. Now, you know the possible answers to each question, how to achieve the goal, and determine whether the goal is believed to be the future or not.
And, there is one more thing. I think corporate foresight should be somewhat connected to the overall mission and vision since it is the core value and the future of a company. The benefit is companies can now actually "think about the future" during their daily operations. This is important because we should not only prize the past but also we must inspire future imagination within an oganization.
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References
Alvarez, S. (2022, March 30). Tesla shows foresight with undisclosed nickel supply deal with vale: Report. TESLARATI. Retrieved July 9, 2022, from https://www.teslarati.com/tesla-secret-nickel-deal-vale-report/
Dadkhah, S., Bayat, R., Fazli, S., Tork, E. K., & Ebrahimi, A. (2018, October 3). Corporate foresight: Developing a process model - european journal of futures research. SpringerOpen. Retrieved July 8, 2022, from https://eujournalfuturesresearch.springeropen.com/articles/10.1186/s40309-018-0147-7
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