Global Compact International Yearbook 2012

Agenda
Corporate Foresight
By Cornelia Daheim, Holger Glockner, Klaus Burmeister, and Andreas Neef
Business as usual is no longer an option! There is a growing
realization among more and more politicians, businesses, and
members of society that things cannot continue as they are.
The number of challenges and issues that must be tackled and
dealt with at a global level is enormous, viz.: human-induced
climate change and the search for ways to develop a low-carbon
economy; rapid population growth in developing and newlyindustrialized
countries; questions surrounding which fuels
can be used in the energy mix to meet growing demand; and
the distribution of food and raw materials. Then there are
also basic social questions about how to ensure that wealth
is fairly distributed, how to overcome the persistent poverty
in the developing world that results from the pillaging of
natural resources, and how to encourage civic participation
in political and economic decision-making.
These developments, which will increasingly come to dominate
the next decade, are linked to wholesale digital integration
within all areas of life. The virtual world is permeating more
and more aspects of real life. And human beings are looking
for ways to be able to create a “second nature” at the smallest
levels. Scientific progress has now reached the level of the very
building blocks of human life. Our understanding of atoms,
neurons, genes, and bits is growing all the time, and we are
now able to interfere with their functioning and add to the
wealth of collective knowledge. Moreover, this list also includes
the waning economic and cultural hegemony of the West. We
now find ourselves in the middle of a historical transition, with
power shifting from the West to the East; China and India are
emerging world superpowers that are now competing economically
and politically against the United States and Europe.
The 21st century will be characterized by a multitude of
global challenges that will arise simultaneously and feed
off each other. The patterns of growth and the interlinked
effects of a great number of megatrends have hitherto been
underestimated. Owing to the interplay of these forces, we
could potentially find ourselves at a crossroads, with rapid
intervention and action becoming unavoidable. The latest
Environmental Outlook to 2050 published by the Organisation
for Economic Co-operation and Development and a new study
by the World Business Council for Sustainable Development
entitled Changing Pace substantiate this prognosis.
What is corporate foresight?
It is vital for companies to develop new strategic planning tools
that, on the one hand, take into consideration the short-term
uncertainties and volatility of market developments and, on
the other, focus on long-term objectives and the consequences
of a particular course of action in order to manage the successful,
sustainable, and sound growth of the organization
and to hedge, as far as possible, current investment decisions
over the long term. Investigating the future is not something
that should be left to daydreamers or visionaries; it is a key
component of dealing with our world responsibly as part of a
complex, interlinked system with interrelated dependencies
stemming from finite resources.
As such, a growing number of the most successful businesses
recognize the need to think long-term, despite being forced
to act on a short-term basis in the current age of transformation.
In recent years, corporate foresight has become increasingly
widespread, professional, and diverse, and now stands
alongside traditional, indicator-based forecasting parameters.
As a process, corporate foresight can be defined as putting a
company in a position that enables it to deal positively with
mid- to longer-term challenges. In so doing, corporate foresight
takes a continuous and systematic approach, equipped with
a portfolio of recognized methods. Its key tasks are to pave
the way for strategic (investment) decisions, safeguard the
long-term competitiveness of the company, and enhance its
innovation capacity. At its core, corporate foresight is about
putting the findings of academic future research into practice
to help guide strategic management.
Corporate foresight owes its existence to the shortcomings
of traditional management tools and philosophies. Generally
speaking, traditional management tools that rely primarily
on an analysis of the present (e.g., a balanced scorecard) or
are more or less based on a linear extrapolation of the current
situation (as with market forecasts, for example) will fail when
faced with long-term issues, volatility, and dynamic trends.
Corporate foresight does not seek to try to predict the future
exactly. Rather, it tries to create a sound and comprehensible
basis within the company for dealing with uncertainties, which
are an inevitable component of the future. When choosing
which methods to use, corporate foresight selects pragmatically
from a toolbox drawn from economics, the sciences, the
social sciences, and technology. Its actual methodological
benefit lies in adapting the range of views and tools from
the different disciplines to suit the task in hand, integrating
them within a cross-disciplinary framework and, generally
speaking, putting them together in a discursive process. In
so doing, it is a question of thinking in terms of complex,
holistic interrelationships; it is a matter of combining the
different elements.
Thinking in terms of alternative scenarios
This is the reason the scenario method was established. The
development of scenarios is the core method used in future
research. The scenario technique takes into account trends as
well as (structural) disruptions; as such, it is a suitable tool for
dealing with both futures that are relatively certain as well
as those that are more surprising. Unlike forecasts, scenario
analysis does not culminate in a single view of the future but
rather in a whole bundle of such images known as a scenario
portfolio. Each scenario presents a closed and non-contradictory
image of the future that is precisely described and contrasts
from the other scenarios under consideration.
At the most basic level, it is possible to differentiate between
normative and explorative scenarios. Normative scenarios
are based on desires and interests. They ask: What kind of
future do we want? As a corollary, we then also look at how
this desired future can be achieved. Explorative scenarios, by
contrast, remove desires and preconceptions, and ask simply
about the possibility, the plausibility, and/or probability of
the future. In this respect, the key question is: How might
things turn out? Furthermore, depending on the objectives
of a particular approach, it is often the smaller details that
play a crucial role in practice.
Almost all the basic definitions used here can be contested.
When working with normative scenarios, it is advisable to
stay within the realm of what is achievable, since a purely
utopian view of the future is to nobody’s benefit. However,
the notion of what is realistic is often the subject of much
discussion. There are similar problems when dealing with
explorative scenarios. It is only possible to make qualitative
estimations of plausibility and probability; there is an absence
of clear criteria. That is why scenario processes are always a
matter of negotiation among the participants.
Different types of scenarios can be combined in order to arrive
at a portfolio of scenarios that can be deployed in a variety
of ways. For example, it is very common to find a reference
scenario combined with different disruptive scenarios; equally,
the combination of a “business as usual” scenario and different
politically- or technology-driven alternative scenarios is also
fairly normal. Normative and explorative scenarios are also
often bundled together to create a portfolio.
It is necessary to think in terms of scenarios in order to stabilize
rational planning processes so as to be prepared for
impending disruptions within the market and the competitive
environment.
Understanding trends and thinking in context
Change is fed by many sources. As such, it makes little sense
to assume that “everything” can change in an “infinite manner.”
Instead, corporate foresight searches for signs of future
changes that can already be observed today. It is necessary to
use a broad-based and systematic environmental scanning
process in order to identify trends, weak signals, and emerging
issues of the future. As such, there is a need to have a group
of methods, whereby trend analysis constitutes one of the
main basic processes. Trends provide the empirical base for
an analysis of the future. In so doing, it is first necessary to
look at developments that can be observed today, that is, real
and apparent phenomena. Where a trend is extrapolated into
the future, we enter the realm of (more or less well-founded)
supposition.
At first, trend analysis seeks to differentiate between relatively
certain and uncertain developments. For example, informa-
The World in 2050
• World population will be 9.5 billion
• Two out of three people will live in cities
• More than 20 percent of world population will be
60 years old or over
• We will have three times more cars than today
• 200 million people will have become homeless refugees
because of global warming
• Loss of biodiversity will cost €2.5 trillion per year
• There will be no more meltwater in European rivers
Sources: UmweltDialog; Business & Biodiversity Initiative; WHO
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