Foresight as a core competenceEdward Major a, David Asch a, Martyn Cordey-Hayes

. Introduction

This paper concentrates on building a relationship between foresight and the core competence view of strategy. Core competence has been gaining popularity within the strategy literature concurrently to the growing interest in foresight.

Section 2 reviews the foresight concept and the UK Foresight programme.

Section 3 looks at the strategy literature, reviewing concepts of strategy in general and the core competence view in particular.

in Section 4 focus on Knowledge of foresight in industry was generated by a study into take-up of foresight concepts and the Foresight programme in small companies.

Section 5 shows how foresight can be viewed as a core competence.Section 6 then discusses the implications that follow for the foresight concept, the UK

Foresight programme and the concept of core competence.

The concept of foresight and the UK Foresight programme

Foresight principles are generally considered to have first gained popular use in Japan, where the Government has conducted national programmes approximately every 5 years since 1971.

The Japanese experience is considered as one reason for that country’s post-war global competitive success, and has heavily influenced national Foresight programmes in other countries.

The UK Foresight programme has been heavily influenced by foresight study. Many foresight practitioners in both academia and industry were consulted and continue to be involved. The Foresight programme has in turn contributed to the foresight field, not least by broadcasting and popularising the concept.

The concept of foresight

“Foresight” is an elusive term having different meanings to different people.

Slaughter presents a comprehensive study of the foresight principle. He considers that: Foresight is not the ability to predict the future…It is a human attribute that allows us to weigh up pros and cons, to evaluate different courses of action and to invest possible futures on every level with enough reality and meaning to use them as decision making aids.

The simplest possible definition of foresight is: opening to the future with every means at our disposal, developing views of future options, and then choosing between them .

According to Slaughter, foresight is an attribute, or a competence; it is a process that

attempts to broaden the boundaries of perception in four ways :

By assessing the implications of present actions, decisions, etc.(consequent assessment).

By detecting and avoiding problems before they occur (early warning and guidance).

By considering the present implications of possible future events (pro-active strategy formulation).By envisioning aspects of desired futures (normative scenarios)

Horton discusses the elements that should constitute a successful foresight process. Successful foresight, she argues entails three consecutive phases:

Phase one comprises the collection, collation and summarization of available information…and results in the production of foresight knowledge.

Phase two comprises the translation and interpretation of this knowledge to produce an understanding of its implications for the future from the specific point of view of a particular organization.

Phase three comprises the assimilation and evaluation of this understanding to produce a commitment to action in a particular organization.

The UK Foresight programme

The Foresight programme is a “meta-level” programme…designed to provide an overall direction to and justification for science and technology policy. It seeks to co-ordinate research and innovation agendas across public and private organizations, industrial and service sectors, and academic disciplines by developing new alliances between the producers and consumers of knowledge .

The Foresight programme aims to create sustainable competitive advantage and enhance the quality of life, by bringing together business, the science base and Government to identify and respond to emerging opportunities in markets and technologies…Foresight is about creating a culture change in the way the UK approaches the future .

. The strategy literature and the core competence view of strategy

The study of business strategy predates foresight by a long way. The concept of foresight has been studied in relative isolation. This section briefly reviews several important models, showing the development of theory, before considering the core competence view in greater depth.

Models of strategy: Teece et al, assess several of the more important and relevant models of strategy. Through the 1980s the dominant model was the competitive forces approach. In this model firms use strategy to relate to their environment. The key aspect is the industry or industries in which a firm competes. The inherent profit potential of an industry is determined by five industry level forces — barriers to entry, threat of substitution, bargaining power of buyers, bargaining power of sup- pliers and rivalry among incumbent firms.

The strategic conflict approach emphasizes one of the five forces while giving a broader view to the firm’s environment. This is a conflict-based approach; rivalry and interaction between firms is the central theme.

Hamel describes five key characteristics of core competencies. Firstly they are an integration (or a “unique mix” )of constituent skills and technologies. They are unlikely to reside in a single individual, deriving rather from the combination of individuals’ abilities and firms’ systems. Secondly they are knowledge rather than asset based; they are an activity, a result of

learning. Thirdly they have customer value; they are “the skills which enable a firm to deliver a

fundamental customer benefit”. Fourthly they are competitively unique; to be core the firm must hold a sufficiently

superior competence over its competitors (they must be hard to imitate). Finally, core competencies should provide a gateway into new markets; the firm must be

able to envision new product markets that can arise from them. The core competence view has become a popular concept

Foresight and the core competence view of strategy

The role of the individual :  The impact of managerial attitudes and attributes is central. Even in the foresighting companies their foresight knowledge was attributed to individual staff rather than to company systems or procedures. Accumulation of foresight knowledge and a company’s use of foresight concepts build primarily on the proclivity of one manager or a small management group.

Characteristics of managerial attitudes in small companies.

CORE COMPETENCE AND FORESIGHT CHARACTERISTICS

CORE COMPETENCIES FORESIGHT

Integration of skills and technologies Resides in individuals and team s Knowledge based Depends on tacit kn o w led ge Customer value Extends to future ben e fits Competitively unique Enables the building of competitive ad van tage Difficult to imitate Based on systems and tacit kn o w ledg e G a tew ay to new markets Helps to identify new o p p o rtun itie s

Conclusions

 This paper has argued that the foresight concept, and the UK’s national Foresight programme in particular, has been handicapped by its minimal interaction with the strategy literature. By reviewing foresight in conjunction with the strategy literature, it has been possible to show that foresight can be thought of as a core competence.. From this was high- lighted the critical importance of the tacit knowledge of individual managers. This study allowed foresight to be compared to the core competence view of strategy.