Contributions to Management Science
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1 Contributions to Management Science For further volumes: http.//
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3 René Rohrbeck Corporate Foresight Towards a Maturity Model for the Future Orientation of a Firm
4 Dr. René Rohrbeck TU Berlin Department for Innovation and Technology Management Straße des 17. Juni Berlin Germany Dissertation Technische Universität Berlin 2010, D83 ISSN ISBN e-isbn DOI / Springer Heidelberg Dordrecht London New York # Springer-Verlag Berlin Heidelberg 2011 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg, Germany Printed on acid-free paper Physica Verlag is a brand of Springer Verlag Berlin Heidelberg Springer Verlag is a part of Springer Science+Business Media (
5 Preface Deutsche Telekom Laboratories internal organization is designed to stimulate a maximum flow of ideas and develop those that the company deems most relevant. Two main components identify the right topics and deal with them: First, the organizational structure, which is the result of the university industry partnership, helps bring the best of the academic and business worlds together in a permanent situation of mutual intellectual exchange. Second, a set of non-formal and formal instruments used for corporate foresighting have been adapted to the requirements of practical innovation management. Instruments of corporate foresight now include the Deutsche Telekom Technology Radar, a tool that utilizes a global scouting network, the Product & Service Radar and various other tools for customer behavior and needs. Deutsche Telekom Laboratories (T-Labs) has thus served both as an environment for the prototypical deployment of new methods and as the object of research providing data and indications for new hypotheses. Rene Rohrbeck s research has been instrumental in developing T-Labs scouting and foresighting capabilities and exemplifies the value of close cooperation between industry and university. Information and communication technology is currently radically changing and therefore challenges companies to continuously identify changes in the environment and act accordingly. Technological shifts can exceed the realm of R&D and it is not unusual for them to upset entire industries. René Rohrbeck cites Kodak as an example to highlight how a globally dominant company can lose its competitive advantage due to technology shift. (In Kodak s case this was the result of the development of digital photography). Other examples demonstrate how some companies are able to repeatedly reinvent their business. Nokia, for example, has undergone multiple transitions. Though they started as a pulp & paper industry, they successfully shifted to rubber boot and tire production and only later did they become the dominant manufacturer of mobile devices which we know today. Currently Nokia is undergoing another transition as it shifts its emphasis toward Internet-based services. v
6 vi Preface The work of René Rohrbeck benchmarks innovation techniques. In the second part of this book, René Rohrbeck describes the best practices that he has collected from 19 multinational companies and discusses their connection with corporate foresight ability. Both the model and practice examples contained within make the book a worthwhile reference for companies seeking to enhance their ability to succeed in a changing environment. We are proud to have supported the effort and successful completion of this work. Berlin, Germany Peter Möckel, Heinrich Arnold
7 Foreword 1 In strategic management, it is expected that the competitive advantage of companies is based on distinctive strategic resources. The competitive relevance of these resources is dependent on environmental factors and decreases over time. Teece, therefore, proposes in his dynamic capabilities theory that a company needs to develop the ability to transform its portfolio of strategic resources over time and in response to changes in the environment. Following this line of thought, other scholars have hypothesized about the nature of these dynamic capabilities. Some argue that they consist of certain routines, such as new product development processes and strategic planning. Teece proposed that dynamic capabilities consist of three process steps: sensing, seizing, and transforming. In this book, René Rohrbeck uses an extensive set of empirical data to further explore the building blocks of dynamic capabilities. His concept of the Corporate Foresight ability deals primarily with the first two process steps of Teece s theory. He shows that the overall ability to respond to change in the technological, economical, societal, and political environment can be broken down into 20 building blocks, which he clustered into five capability dimensions. René Rohrbeck was able to interview 42 users of the foresight information, allowing him to capture an objective account about the real value contribution of the Corporate Foresight ability. He also extended the understanding of Corporate Foresight from being perceived as a process with dedicated methods to being defined as an ability which can be built on processes but can also be achieved without them. His maturity model and the identified best practices contribute to both strategic management and innovation management theory and will help pave the way toward a better understanding of how companies can build dynamic capabilities. Hans Georg Gemünden vii
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9 Foreword 2 In his thesis, René Rohrbeck analyzes the ways in which companies can develop routines to systematically respond to external change. Through a literature review, he identifies three barriers that need to be overcome: high rate of change, ignorance, and inertia. He then continues to explore the literature on strategic management, innovation management, and future research, from which he draws 12 conclusions that guided his research and which can also serve as a basis for future research. From his empirical data, René Rohrbeck draws the conclusion that the Corporate Foresight ability can be built on structural (processes, methods, formal communication) and cultural (informal communication, promoting awareness toward the environment) elements. This is an interesting extension of the currently dominant view of Corporate Foresight as a process and a set of methods. Another contribution of this book is the identification of value contributions or the impact of Corporate Foresight. Previous research has relied primarily on evidence given by the employees who executed the foresight activities, which resulted in an informant bias and a systematic overestimation of the true impact of Corporate Foresight. By interviewing the internal users of the Corporate Foresight results, René Rohrbeck identified 12 distinct value contributions, which he clustered into reduction of uncertainty, triggering internal action, influencing others to act, and secondary benefits. The thesis of René Rohrbeck on Corporate Foresight will help managers create an understanding about its breadth and depth; they will learn to know what to expect from their investments and to judge the effectiveness of their Corporate Foresight practices. For academics, the findings in this book will prove useful for defining measurement systems that can be used for theory testing. Martin G. Moehrle ix
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11 Foreword 3 In recent years, interest in Corporate Foresight has greatly increased. Companies are searching for strategic orientation in fast-moving environments, and many feel they need to support more future insights to win the innovation race and maintain their competitiveness. In the current financial crisis, companies need methods to identify emerging change, while at the same time they remain skeptical about the ability of corporate foresight to generate reliable forecasts. In the light of this ambivalent opinion about Corporate Foresight, René Rohrbeck has engaged in research that is of high relevance to both theory and practice. For the first time, the author regards Corporate Foresight as an... ability to create and maintain a high-quality, coherent and functional forward view. He identifies needed interfaces between Corporate Foresight and strategic management, corporate development/marketing, innovation management, and strategic controlling. His work contributes to all of these domains and to both theory development and management practice. This book is a very important contribution to our understanding of foresight in the corporate context. While past research on the topic focused mostly on the enhancement of processes and methods, René Rohrbeck takes corporate foresight research an important step further. He develops a sophisticated Maturity Model of Corporate Foresight and thus creates for the first time a holistic understanding of the future orientation of a firm. In addition, he gives on the basis of high-quality empirical data a highly relevant and highly interesting account of best practices in large multinational enterprises. With this book, the author opens new perspectives, contributes valuable empirical evidence, and generates important new insights, which will take research and management practice in Corporate Foresight to a new level. I have no doubt that this thesis will earn recognition from both scholars and corporate practitioners, and I would like to thank René Rohrbeck for this excellent research. Ulrich Krystek xi
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13 Acknowledgments There have been a number of organizations and individuals who have made this academic work possible and who have contributed to this book. I am deeply thankful for all the support I have received. In particular, I would like to express my gratitude to... l The Deutsche Telekom Laboratories, for not only funding my research but also for sharing their experience and providing access to their methods and tools l Prof. Dr. Hans Georg Gemünden, for his continuous encouragement to increase the depth and breadth of my research and for creating a great environment for research l Prof. Dr. Martin Möhrle, for not only serving as my second adviser but also for giving valuable advice that has broadened my perspective and strengthened my research l Prof. Dr. Ulrich Krystek, for his enthusiasm about my research and for sharing his deep insights into strategic foresight theory and practice l Dr. Heinrich Arnold, for sharing his extensive knowledge of innovation management and for guiding my research to practical and academic relevance l My parents, for opening up so many opportunities and for supporting me in every phase of my education Above all, I want to dedicate this book to my wife, Josefine, who has carried me through the hard and unrewarding times with her love, her constant encouragement, and her never-failing trust in my ability to successfully complete my research. Berlin, Germany René Rohrbeck xiii
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15 Contents 1 Introduction Motivation and Background Objectives and Research Questions Relevance of Research Structure of Thesis Literature Review Strategic Management Perspective Environmental Scanning Corporate Change and Ambidexterity Decision Making Innovation Management Perspective Radical Innovations Disruptions Future Research Perspective A Brief Overview of Definitions and Relevant Terminology National Economy Perspective (Macro) Corporate Perspective (Micro) Management Theories Contingency Theory Resource-Based View Dynamic Capabilities Implications from Past Research for Corporate Foresight Research Design Research Aims Research Strategy Sample and Case Selection Data Collection Instruments Key Informants xv
16 xvi Contents 3.3 Research Sequence Data Reduction and Coding Drawing Conclusions and Verifying Data Developing the Maturity Model of Corporate Foresight Identification and Discussion of Best Practices Measures Taken to Ensure Research Quality The Maturity Model of Corporate Foresight The Elements Context Capabilities Impact/Value Creation Maturity Levels Information Usage Method Sophistication People and Networks Organization Culture Usage Logic The Trade-Off Between Structure and Culture Process Dimension Usage Procedure Conclusion on Usage of the Maturity Model Best-Practices in Corporate Foresight Networks of Scouts (Information Usage) Context and Motivation Description of Practice Evaluation Data Mining (Information Usage) Context and Motivation Description of Practice Evaluation Combining Scenario Analysis with Roadmapping (Method Sophistication) Context and Motivation Description of Practice Evaluation IT Collaboration Tools (People and Networks) Context and Motivation Description of Practice Evaluation Communicating Insights Through Participation (People and Networks)
17 Contents xvii Context and Motivation Description of Practice Evaluation Linking Foresight to Strategy (Organization) Short-Term (1 Year) Medium Term (3 5 Years) Long Term (15 25 Years) Evaluation Linking Foresight to Innovation Management (Organization) The Initiator Role The Strategist Role The Opponent Role Evaluation Involving Every Employee to Manage Discontinuous Change (Culture) Context and Motivation Description of Practice Evaluation Discussion and Conclusion Managerial Contributions Theoretical Contributions Limitations and Future Research Directions Appendix Interview Guideline Context Questionnaire Interview Templates Informants Internal Documents Public Information Sources Academic Publications by Informants Coding Tree References
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19 List of Tables Table 2.1 Evolution of the strategic management systems Table 2.2 Research on environmental scanning Table 2.3 Research on corporate change and ambidexterity Table 2.4 Research on decision making Table 2.5 Research on radical innovations Table 2.6 Research on disruptions Table 2.7 Overview of terminology Table 2.8 Research from national economy perspective (macro) Table 2.9 Generations of innovation management and futures research.. 43 Table 2.10 Research from corporate perspective (micro) Table 2.11 Overview of conclusions from the literature review Table 3.1 Case study sample Table 3.2 Data structured by case and collection instrument Table 3.3 Interviews structured by case and informant position Table 3.4 Category system and coding Table 3.5 Tactics to ensure reliability Table 3.6 Tactics to ensure construct validity Table 3.7 Tactics to ensure external validity (generalizability) Table 4.1 Elements of context Table 4.2 Elements of the capability information usage Table 4.3 Elements of the capability method sophistication Table 4.4 Elements of the capability people and networks Table 4.5 Elements of the capability organization Table 4.6 Elements of the capability culture Table 4.7 Impact/value creation categories Table 4.8 Impact category reduction of uncertainty Table 4.9 Impact category triggering actions Table 4.10 Impact category influencing others to act Table 4.11 impact category secondary benefits Table 4.12 Maturity levels of the capability dimension information usage.. 96 xix
20 xx List of Tables Table 4.13 Information sources and application areas Table 4.14 Maturity levels of the capability dimension method sophistication Table 4.15 Maturity levels of the capability dimension people and networks Table 4.16 Desired characteristics of foresighters Table 4.17 Maturity levels of the capability dimension organization Table 4.18 Maturity levels of the capability dimension culture Table 4.19 Design guide for the overall maturity level Table 4.20 Design guide for choosing between cultural and structural Table 4.21 approach Design guide for choosing maturity levels for individual capabilities Table 5.1 Motivation sources in scouting networks Table 5.2 IT collaboration tools used for foresight activities Table 5.3 Mechanisms for facilitating communication and participation Table 5.4 Linking foresight to innovation management (initiator role) Table 5.5 Linking foresight to innovation management (strategist role) Table 5.6 Linking foresight to innovation management (opponent role) Table 5.7 Five personal growth traits that foster foresight ability Table 5.8 Matching growth traits and the desired characteristics of foresighters
21 List of Figures Fig. 1.1 Structure of thesis... 8 Fig. 2.1 Definition of corporate foresight Fig. 2.2 Research perspectives and major authors of works on corporate foresight Fig. 3.1 Research sequence Fig. 4.1 Maturity model framework Fig. 4.2 Reach and scope of information usage Fig. 4.3 Maturity model levels Fig. 4.4 Elements of the structural and cultural approach Fig. 4.5 Theoretical types of foresight practices Fig. 4.6 Procedural barriers and capabilities of corporate foresight Fig. 5.1 Structure of best practices Fig. 5.2 Generic scout network Fig. 5.3 Global reach of scouting networks Fig. 5.4 Collaborative scouting platforms Fig. 5.5 Information gathering in data mining Fig. 5.6 Visual exploration in data mining Fig. 5.7 Project organization Fig. 5.8 Generic process Fig. 5.9 Integration of regional expert knowledge Fig IT collaborations tools and implementation effort Fig Linking short-term foresight to strategic planning Fig Linking medium-term foresight to strategic planning Fig Linking long-term foresight to strategic planning Fig The three roles of foresight in innovation management xxi
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23 Abbreviations CF CMM CO 2 CTO DMS EP Et al. EU FTE ICT IM IR IT M and A NPD OEM PDMA PLC PR R and D RSS SBU SF SME Corporate foresight Capability Maturity Model for software development Carbon dioxide Chief technology officer Document management system European Parliament Et alli (and others) European Union Full-time equivalents Information and telecommunication technology Instant messaging Investor relations Information technology Mergers and acquisitions New product development Original equipment manufacturer Product Development Management Association Product life cycle Public relations Research and development Really simple syndication Strategic business unit Strategic foresight Small and medium-size enterprises xxiii
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