The relationship between environmental uncertainty and foresight processes was evidenced in the literature and validated by case study research. The foresight experts did not put emphasis on the application of strong signals in a foresight process. However, research has now shown that wildcards and strong signals are necessary, not as a key contributor for signals management and draft scenario building, but to enrich conversations and scenarios (based on weak signals) in the scenario/future workshops.
The scanning of the environment (or environmental or strategic surveillance) is the starting point because it is the source of knowledge about future developments, and this knowledge allows an organisation to decrease uncertainty in order to protect itself against threats and take advantage of opportunities. Organisations should scan the environment for competitive or entrepreneurial sources of information, combined with political, economic, ecological, social and technological influences, changes in industry structure and the flux of competition and customer, business partner and employee behaviour. This is essentially a fact finding exercise.
Issues identified through environmental scanning will differ in the amount of information available. Some issues, called trends or strong signals, will be sufficiently visible to allow the organisation to define and implement a strategic response. Other issues will come to the organisation’s attention by way of weak signals, which are difficult to capture and understand, requiring specific qualitative methodologies to aid comprehension. Foresight experts confirm that weak signals management is the core component of the foresight methodology. Wildcards, critical events or strategic surprises are events which are, in many cases, outside of existing mental models and ways of managing, but will influence the course of the business. As mentioned above, research highlighted that successful foresight organisations have a strong focus on the collection (and interpretation) of weak signals. When all of these sources and scanning methods are understood and utilised by the organisation, signals can be identified and described. Foresight experts support an emphasis on weak signals as they are a key ingredient for the successful generation of foresight insights.
Strong signals (or emerging/mega trends) are easier to capture and therefore, in most cases, traditional methods are sufficient. Research shows that some organisations do not include strong signals in their foresight process as these signals are already known. It is even expected that individual profit centres can anticipate trends in the market represented by strong signals without the existence of a foresight framework, especially for issues three to four years in the future. This is seen as the “daily business” of ongoing strategic analysis, rather than a specific foresight objective. In the best practice framework, strong signals and wildcards will be added later in the process to enrich scenario conversations or enable stress tests or scenario games.
No industry can escape the impact of a subset of these drivers of environmental change; these signals are changing and creating new industries and ventures and can, depending on the context of the organisation, include both opportunities and threats. They will develop over time and are difficult to see and interpret, but can be vital to the success or survival of an organisation. Once identified and processed, they will allow the creation of knowledge that can help to set a new direction for future growth. Overall, the scanning of the external (and internal) environment allows an organisation to capture weak signals, strong signals (or trends) and potential wildcards, sometimes limited by the fact that not all signals are visible, or by the adverse impact of cultural norms and blind spots on the efficiency of the corporate surveillance radar.
Practice Implications Derived through the Research
The necessary openness, communication and cultural acceptance of the concept of strategic surprises being able to influence the course of an organisation’s direction, must be demonstrated particularly by senior management. In order for an organisation to understand market dynamics in the long-run, it needs to scan both the internal and external environment for signals, accessing different sources. It is essential that organisations realise the necessity of weighing weak and strong signals equally and harnessing the information to positively influence their own future. The extent to which a company chooses to invest its resources in these activities reflects the organisation’s commitment to strategy foresight and its ensuing success. A best practice foresight framework will have the ability to deliver knowledge about future change and generate imperatives which will help to draft response strategies, which in turn will prepare the organisation to address changes in the environment through industry and market reconfigurations.