A strategy starts by developing a vision. This vision is shaped by ideas on the course of our business, how to unfold it and the emerging possibilities generated. Innovation management translates this vision to strategic options.
When filling in a vision, we need to estimate future conditions. How will the market develop? Which trends will influence our core business? Answering those question is hard by nature. An abundance of, sometimes contradicting, information makes it complicated getting to a well-founded answer. Making these answers implementable for strategic policy proves to be harder still.
To face these challenges INPAQT has come up with the Foresight & Visioning Tool. It will assist you in the best possible way for developing a vision.
Success due to a stroke of luck or due to deliberate actions?
‘No one can predict the future’ is an often heard quote. Nevertheless there are some companies capable of introducing the right products or services onto the market at exactly the right moment. Sometimes it is a stroke of luck but often it is based on a clear vision. This vision is lays foundation for innovation.
When innovation is connected to let’s say a new project or a new company, this process may take many years. Hence the importance of being able to anticipate on changing market conditions in the widest sense. How? By identifying trends and business drivers and by drawing up multiple market scenarios on which we can anticipate.
We shall clarify this by a practical example.
It should not come to a surprise that the sales of environmental friendly cars has increased tremendously in the past years. But have you ever wondered the fact that when these cars were introduced onto the market, this corresponded exactly with the moment the environment was one of the hottest topics? After all, it takes many years from the initial design of a car to actual production.
Its roots are to be found in examining trends and drivers. Partly because of that, car manufacturers had predicted years ago that the ‘green car’ would result in being a success. On a side note, it is interesting to see that manufacturers not producing any or insufficient green cars saw their sales plummeting.
Identified trends and drivers should be easily implementable. That is why we apply a classification on micro, meso and macro level which is also common in the field of marketing.
In the first phase of foresight & visioning we make an inventory of trends and drivers per level. When an interconnected relationship exists self reinforcing loops may occur. When we return to the automotive industry; both high oil prices and environmental concerns increase demand for economic cars. Consequently the demand for lightweight materials to be used in manufacturing those cars also increases. In turn those materials need to be ‘green’ to fit with the concept of an environmentally friendly car.
This simple example already shows the huge implication of trends and drivers when developing products or services. With it comes uncertainty. Companies increasingly need to work with new materials, technologies and methods. Entire production processes need to be altered. When the time horizon is set further away, uncertainty will increase exponentially.
We therefore have to define uncertainties as explicitly as possible and try to get a manageable grip on them. The following means are presented to us:
· Trend extrapolation
This approach is based on the assumption that the S-curve (Sigmoid function) is most suitable for describing the product or technology life cycle. Based on historic accounts this curve maps out possible future developments.
· Expert panels
In a number of sessions expert independently of each other give their opinions on certain subjects. Afterwards these experts are confronted with each other’s opinions. The primary objective is reaching more consensus. Also known as the Delphi method.
· Cross-impact analysis
Meant to evaluate to which extend changes can occur within predefined technologies. A n by n matrix is made to assess accelerating and decelerating influences on a technology.
· Simulations
Results from the cross-impact analysis are transferred to a causal diagram. One further tries to describe the interaction in mathematical terms. System dynamic software can be of assistance here.
· Scenario analysis
An efficient way of taking uncertainties into account is working with different scenarios. One can define the worst, expected and best scenario and try to draw a certain conclusion. Scenarios can be further enriched by utilizing graphs in which the level of uncertainty is scored thus putting various factors into a relative perspective.
When working with these approaches one should not only focus on the end result. The route towards this result is just as important. Discussion among employees will make them more aware of certain developments and that they might evolve in a more extreme way than previously thought. Hence we learn to widen our view and assess matters from multiple perspectives.
The next phases are an elaboration of the first. Future scenarios are made and a SWOT analysis is drafted. Results from these analysis can be further elaborated in a confrontation matrix. Well-founded strategic options can be defined which will shape your ‘vision for the future’.
