How to connect innovation with foresight

Many organizations struggle connecting innovation with their overall strategy and are caught in a cycle of incremental innovation. But why is it so hard to unlock an organization’s innovative potential?

That question sits at the heart of ‘traditional’ innovation projects and relates to how so many innovators take a design-thinking stance – a product-focused and user-driven exploration centred mostly on the present and immediate past, with a view to creating outputs for use today and in the immediate future.

That is as opposed to the foresight-driven innovation approach developed by the Copenhagen Institute for Futures Studies (CIFS), which focuses on the nexus between foresight and innovation and is intended to be a catalyst that inspires growth.

This method steers the exploration and ideation of organizational innovation via an approach that seeks potential future outcomes, with research that includes leveraging current knowledge, in order to enable more ‘change-ready’ resilience.

Instead of taking a design-thinking approach that will typically work well in a relatively stable environment, organizations can utilize a foresight-driven innovation (FDI) methodology appropriate for an era defined by high complexity, high uncertainty and rapid change.

Immediate examples include the game-changing impact of artificial intelligence (AI) across areas as varied as product development to service provision, smart cities to connected homes, and future jobs to next-generation education, with the effects being deeply felt across society and business worldwide.

Practically, this means looking beyond product development trends associated with marketing, which may be easily found by reading any of the numerous reports created by trend agencies and are often published to coincide with high-profile trend events or promoted as the ‘next big thing’.

Instead, and to be change-ready from an actionable foresight-driven innovation perspective, organizations should consider wider-time horizons, strategic interlinkage and the contextual environment. This helps uncover unmet needs and existing adjacent markets with growth potential, all of which go towards helping an organization to prepare for change.

Under such conditions, a futures-oriented mindset, which can be utilized for FDI, is becoming increasingly important.

Seeking to understand and illuminate a world of volatility, uncertainty, complexity and ambiguity, alongside one that is brittle, anxious, non-linear and incomprehensible, can assist in enabling organizational awareness and identifying changes that may be required, with the existential issue of the climate emergency being a prime example.

End results are intended to be an understanding of strategic consequences, development of appropriate responses, and mobilization of resources to create change towards a ‘desired future’.

As ever, innovation is a new way of doing things that add value. However, a more humanistic and interdisciplinary approach to the subject is needed– one promoting environmentalism, diversity, social progression and individual well-being as key elements to consider when creating new concepts, products, services and experiences.

Of course, innovation isn’t limited to a purely branding context, but should instead be seen as including areas such as policy, business model, sustainability, and technological and social innovation.

Leveraging foresight is of obvious relevance for challenges requiring near and mid-term action, meaning that innovation must be closely linked to strategy and an analysis of the future(s) to ensure continued success.

That’s why taking a ‘foresight-driven innovation approach’ focuses on exploring potential future outcomes by analyzing trends and drivers to steer the exploration and ideation of innovation. It does so by taking a multi-sector/cross-cultural perspective at the start of a project.

By doing so, organizations can aim to understand the dynamics of change by taking a wide-angled view of the situation. Crucially, this also involves a broadening of the actionable timeframes associated with the immediacy of desired immediate project outcomes.

As Financial Times journalist and Anthro Vision author Gillian Tett says, “If we are going to navigate an increasingly complex world, it is crucial that we try to listen, widen the lens, see the world differently and learn from as many different professions as we can.” Her book shows how a new generation of anthropologists are using their methods to illuminate the behaviour of businesses and consumers around the globe.

We then continue by considering future need states – those being the underlying drivers of what motivates a consumer to make a purchase. In the health and wellness market, for example, the amount of innovation linked to need states that is taking place is staggering, with many areas undergoing transformational change reflected by an increasingly holistic and multi-sector approach to mental and physical health.

Organizations should then carry out a pattern recognition exercise aimed at joining the dots between the various issues highlighted, with a deliberate intention of focusing on ‘probable’ outcomes that may link to trend forecasting, with ‘plausible’ scenarios being the realm of strategic foresight.

Considering the links – strong or weak – between them can lead to a ‘multiplier-effect’ where traditional notions of health products, services and organizations may be leveraged by individual and collaborative activity across sectors such as beauty, fashion, hospitality, sports, food, architecture and retail. In addition, this dynamic situation is being continuously impacted by catalytic start-ups, alongside progressive action from legacy brands.

It’s crucial that this approach isn’t treated as an isolated ‘one-off’ futures exercise. Instead, organizations that wish to boost their innovation efforts in a disruptive context should maintain an always-on culture aimed at identifying potential opportunities – or threats – as they arise.

The issue of disruption links to the views of the renowned futurist Peter Schwarz, who believes that “we can’t stop disruptions from happening, but we can cope with them far better than we have in the past, if we watch and listen constantly”.

These disruptions may include issues such as social tensions linked to populism and immigration, multipolar disorder, continued turmoil in the Middle East, the next pandemic, energy risks, cybersecurity, etc.

Unfortunately, in business terms, even if we do ‘watch and listen constantly’, a harsh reality is that innovation itself is usually linked with failure, with a Massachusetts Institute of Technology report highlighting that 95% of new product launches fail.

So, how does an organization aim to ensure that its project can be part of the 5% that succeed? Not viewing innovation in isolation is vital, and instead ensure that a collaborative approach is taken.

Essentially, it’s not something that relies on a ‘star striker’. This holistic approach is far easier to comprehend than to practice, but nonetheless it is a necessity if you want to evolve and stay relevant in a changing environment.

Innovation is also far too important to (only) leave to an innovation department that may ‘only’ be tasked with delivering incremental changes to existing products or services. This ‘silo mentality’ can fail to link strategy with R&D in any meaningful sense. Instead, innovation must happen everywhere, including becoming a larger part of the leader’s daily job.

That’s why the issues of uncertainty and risk management are such a key element of foresight-driven innovation activity, where we ‘expect the unexpected’.

It is vital that FDI is closely linked to those working in strategy and strategic foresight, whose work with uncertainty and the creation of stress-tested strategies recognizes the importance of managing uncertainty.

The scenarios they create give rise to multiple options to adjust future products and services in response to perceived market changes, and feed into innovation, alongside business model adaptation, resource allocation and organizational change.

This approach sees FDI being utilized across tasks ranging from leveraging ‘actionable emerging trends’ to noting disruptive changes to operational environment and strategy development, and anticipating future competition.

Hence the need for a holistic approach. The resulting ideas, intended to be actioned within short-to-medium term time horizons, can then being tested and developed as part of a dynamic ‘anticipatory organization’.

Many leaders view the increasing uncertainty and complexity of their surroundings with a sense of resignation, even fear. A result can be stagnation, which can lead to preventing opportunities from being taken or threats from being avoided.

Instead, the corporate horizon is something that should be looked forward to with a positive mindset and a progressive attitude.

The renowned futurist Philip Kotler stated that “companies must be market-driven and customer-driven. In the best cases, they are market driving, by innovation”. Implementing foresight-driven innovation serves as the means to do just that.

Meanwhile, so much of innovation is essentially just mimicking the actions and outputs of competitors, leaving product and service users of all types dissatisfied and disappointed.

That’s why FDI is such a dynamic way of developing innovation with impact, and which sees innovation positioned where it should be: as a dynamic force for positive and meaningful change.