Explaining their motivation they emphasize that foresight research has been focused to a large extent on proposing methods and processes to identify and interpret trends (what they call reducing “state uncertainty”). More research is needed to understand how firms can create insights into the implications of trends for their own business (what they call “reducing effect uncertainty”) and help to trigger adequate responses (“reducing response uncertainty).
For their empirical research they build on case studies that provide successful examples. They chose four firms that were able to identify and interpret trends and produce adequate responses to enhance their competitive position. Their sample includes Kodak, Nokia, Luxottica and Starbucks.
They show that for understanding the impact of change companies can follow two approaches:
- analysing first the current industry structure and then assessing the impact of a trend or
- analysing first the trend, deducing what kind of industry such a trend might create and then deriving their need to change.
Concluding the authors suggest that the second approach is superior, because it helps decision makers to break out of their mental models. They expect that managers will only be able to decide on measures that are decisive enough, after they have been challenged to change their mental models.
To produce responses Vecchiato and Roveda see to options:
- betting on the trend, for example developing a new business field that emerges around the possibility to handle digital images or
- developing strategic options, for example through corporate venturing activities, where the firm invest money in multiple business concepts that would profit from the emerging trend and waits to see which one will be successful
The authors conclude that both are valid approaches and that in some cases betting the future of the company on one completely new business field might be the only option to ensure long-term survival of the company. (See also our discussion about value creation from corporate foresight)
Full reference and link to the article: Vecchiato, R., & Roveda, C. 2010. Strategic foresight in corporate organizations: Handling the effect and response uncertainty of technology and social drivers of change. Technological Forecasting and Social Change, 77(9), p. 1527-1539.