At its core, strategic foresight is about managing uncertainty. Our step-by-step Crisis Foresight Sprint helps you regain control and take definitive action in moments of acute uncertainty.
COVID-19. War in Ukraine. Climate crises. These are shocks to the system. Suddenly the question is no longer “what would we do, then?” but rather, “what should we do, now?!”
Foresight methodologies, while designed to address long-term future uncertainty, can also be deployed at moments of acute crisis. Decisive, high-impact events leave one feeling overwhelmed and uncertain what to do, despite the fact that these moments of acute uncertainty require taking definitive action.
Gain clarity amidst the mess with the support of our step-by-step guide.
Step 1: Understand the external environment – Clarify uncertainties about what the (near) future might look like to support decision-making
Step 2: Plan internal moves – Identify and decide upon effective, strategic responses that your organization needs to deploy, immediately
Times of acute uncertainty require taking definitive action. Gain clarity amidst the mess with the support of our step-by-step guide.
Download our free Crisis Foresight Sprint, a step-by-step guide for when crisis strikes, inspired by strategic foresight:
In the next 10 years or so, emerging technologies such as quantum computing, AI, and ever-more sophisticated sensors are poised to transform the healthcare sector. From the promise of treating disease via virtual reality, to the perils of medical data gone astray, disruptive drivers of change are just around the corner, waiting to break through.
What will the future of digital healthcare look like in 2030? From our research in the field, our Rohrbeck Heger foresight analyst team has selected the top 7 disruptive trends that will define the healthcare sector in the next decade. These trends will fundamentally change many aspects of medical care, whether it’s how we diagnose and treat illness, research and develop drugs, or understand our own bodies and how best to live a long and healthy life.
New Year, exiting news from the team at Rohrbeck Heger: as of late December 2021, we’ve joined the Creative Dock Group.
Becoming a part of Creative Dock unlocks thrilling prospects for our company and clients: first and foremost, we’ll now be able to not only identify new markets and innovation opportunities via strategic foresight methodology, but also build new products, seeing our future-proof strategies implemented and brought to life. As co-founder René Rohrbeck said recently, “Our job is only done once analytics are followed by action from the client – investing into new growth fields (and) building new businesses.” Merging forces with Creative Dock will enable us to empower our clients do exactly that.
Founded 9 years ago in Prague, Creative Dock is Europe’s largest independent corporate venture/company builder. With a mission to make Europe a global digital leader, the company has already built and scaled ventures for more than 50 multinational companies, including businesses and products for its European clients in Asia, the US, and Australia.
Rohrbeck Heger joining forces with Creative Dock Group means that the group will be able to expand and enrich its service offerings. Our expertise in Strategic Foresight will further strengthen Creative Dock’s established success in building new businesses. Together, we will engage with clients in long-term, strategic dialogues to build businesses that will last, taking the opportunities we uncover from foresight work all the way to market.
Rohrbeck Heger’s mission has always been to turn future uncertainties into opportunities for our clients. Up until now, our services stopped once we’d identified said opportunities with clients. Now we will take our work a step further, turning visions to reality.
As the post-acquisition integration process between Rohrbeck Heger and Creative Dock progresses, we’ll be sure to keep you up-to-date on its biggest developments. One thing’s for sure, now, though: the future’s looking very bright from where we’re standing! Thank you for being a part of our journey so far.
General consensus states that this decade is our last chance to turn the collective ship around and avert climate catastrophe. What’s top-of-mind for corporate sustainability leaders as they head into 2022?
by Tobias Heger
Rising ocean levels are driving a corporate sustainability sea-change: an emphasis on integrating sustainability measures into company strategy is stronger than ever before – in fact, it’s become more of an imperative. The pressure to implement change to mitigate the effects of a growing climate crisis is mounting and coming from multiple directions: from scientific reports and government regulations, of course, but also from investors’ assessments and employees’ and consumers’ concerns. How amenable are deeply ingrained business-as-usual practices, especially in large companies, when it comes to integrating sustainability initiatives? Will the private sector be able to implement meaningful, impactful change before time runs out?
These and other questions were the topics of discussion at our Foresight & Sustainability Summit earlier this year. With representatives from the energy, mobility, food, construction, tech, financial industries and academia, the three expert panels explored everything from post-growth sustainability scenarios to meeting green consumers’ demands. Despite the variety of companies on stage, there were clear undercurrents that connected everyone, from European cheese manufacturer Hochland to global semiconductor giant Intel. Here are seven key takeaways from this melding of minds:
1. With sustainability front and center, there’s no longer a need to make a distinction between building a “sustainability strategy” and a general business strategy – they’re increasingly one and the same.
Once a concept relegated exclusively to subject experts, sustainability has gone from waiting in the wings to taking center stage as companies seek to future-proof their business models in an increasingly volatile world. Now, more than ever, the looming climate crisis is front-of-mind for many, from classrooms of schoolchildren to boardrooms full of company executives. Sustainability is “front and center, hitting the highest levels of the company as an important imperative that’s going to reshape our industry,” stated John Miranda, Director at the Data Center and AI Strategy Office at Intel Corporation. From tech and food to energy, mobility and finance: many voices at our summit echoed this, confirming an underlying cross-industry paradigm shift wherein sustainability plays an increasingly essential role.
In a welcome contrast to recent decades, the topic of sustainability is being taken seriously, so much so that often there is no longer a distinction to be made between a “sustainability strategy” and a business strategy in and of itself. “I think most companies know that they have to change their business strategy so they don’t even start with separate strategies at this point…a few years ago, the answer would have been completely different,” observed Leonie Gros, Corporate Strategist at Berlin Hyp, the German real estate and mortgage bank. The 2020s are often described as the defining decade for mitigating climate catastrophe, but a pressing question remains: though sustainability’s importance has become a given, will organizations be able to move quickly enough to implement meaningful changes?
2. For infrastructure-heavy industries, what’s built today will still be there in 30 years’ time. That requires systemic change, now.
The need for speed and a herculean to-do list before time runs out:committing to sustainability goals for 2050 implies that there are still 30 years to make needed changes, but it’s not that simple for infrastructure-heavy industries such as energy and construction. A decades-long timeline essentially disappears when it comes to building tomorrow’s sustainable energy infrastructure and spaces: “Practically everything that we build today will be around in 2050,” explained Thomas Boermans, Head of Foresight at German energy company E.ON, highlighting infrastructure hardware’s average lifespan of 30 to 40 years. “So we’ll need to be more or less ready today – how can we achieve that?” he asked, underscoring the immediacy of the challenge at hand.
When framed in this way, E.ON’s timeline, as well those of other, similar companies, suddenly shrinks from “over the next 30 years” to, well, now. Add to this the need to incorporate as yet still-emerging sustainable technologies, and the immensity of the task comes into sharper focus: not only do companies such as E.ON need do things in new and innovative ways, but also within an increasingly tight time frame. “We need all hands on deck because we basically have this decade left to act,” stated Stephanie Hubold, head of ESG (Environmental, Social, and Corporate Governance) at Altor Equity Partners, the Swedish investment fund. Her statement was repeated again and again over the course of the day: time is running out to make the necessary changes that will keep the planet from warming more than 1.5 degrees Celsius.
But the pressure on companies to enact sustainability initiatives isn’t only coming from ever-more dire scientific reports. These very reports and the models themselves are making inroads in the financial and investment sectors and are increasingly playing a decisive role in risk assessment.
3. A silent revolution is brewing in the banks – companies must increasingly answer to pressure from investors.
“Carbon pricing can affect (a company’s) solvency, (its) ability to pay its debts and shareholders,” explained Gianfranco Gianfrate, Professor of Finance at EDHEC Business School, located in Lille, France. If realistic carbon prices were implemented today, “many companies would go bankrupt,” he predicted, citing the woefully low carbon pricing estimates currently embraced by many companies. Adjusting for a more accurate carbon price at 400-800 US dollars per ton, Gianfrate described a dire situation of bankruptcies en masse, something that creditors would want to avoid at all costs – hence the increasing incorporation of climate risk into financial institutions’ assessments.
It’s a “silent revolution” Gianfrate went on, citing banks’ relative political independence: they don’t have to worry about securing electoral votes, so “central banks are seriously looking into the issue…pushing the financial system to integrate exposure to climate risk” in their lending policies. The Professor of Finance also highlighted the increasing precision and granularity with which rating agencies, banks, and other financial players can measure a company’s climate risk exposure – these metrics are now part and parcel to calculating risk assessments.
Any organization whose plans include undergoing a sustainability transformation is going to need money to finance it: “it’s the bank’s role to work with customers and reorientate money to…sustainable companies and business models” said Leonie Gros from Berlin Hyp. But a willing adoption on the clients’ side depends in part on the angle from which you pitch the process: “it’s a lot easier to address customers by making them sensible to risks concerning their business model, than talking about a transformation plan.” With more stringent regulatory initiatives on the horizon and models that are better at predicting climate change vulnerabilities, increasingly companies have no other choice but to secure better financing conditions by doing what it takes to improve their sustainability credentials.
Of course, risk has not only downsides but also upsides: sustainability strategy isn’t all gloom and doom – quite the contrary. With this shift in priorities and perspective come new and lucrative opportunities.
4. Sustainability makes sound business sense and corporations are catching on.
The transition to sustainability, while certainly requiring significant changes and re-orientation for many established business models, can drive business growth: “When you look at…the investments that are needed to transform our society, we are speaking of tens of trillions of dollars in new equipment, new technologies that have to be deployed very quickly in order to avoid climate catastrophe. So there are opportunities for companies,” explained Gianfrate. “Undoing (damage) can be a big business. How cool is that?” asked Boermans from E.ON, citing new grids, appliances, and emerging capabilities for removing CO2 in the form of carbon capture and storage as promising business playgrounds. Reframing this crisis as an impetus for developing solutions that help to solve the problem – a compelling idea and an emerging driver of innovation.
“I think it’s really about understanding ESG as a new innovation playbook and thinking about “what’s in it for us?” explained Altor Equity Partners’ Hubold. “The one red thread throughout my career is that you can actually reconcile economic and environmental objectives,” she explained. Companies can lower costs by increasing energy and resource efficiency, viewing ESG as an opportunity to tap into new markets or experiment with business model innovation. Take for example Intel, an industry leader that is itself engaging in these same conversations. From John Miranda: “When you design a server, are you thinking about circular economy principles? Can it be more modular? Can it be more upgradable? Can it be more repairable?…Introducing these concepts will be incredibly important. I do see the (tech) industry moving in the direction of an increasing focus on circularity.”
5. The onus is on industry to make sustainability sexy for the consumer.
Many consumers want to do the right thing. They try to make sustainable choices that are good for their health and the health of the planet, but it’s not easy. Consider all the variables that make something sustainable: How far did it travel to get here? What does this stamp of eco-approval on the label even mean? Why does it feel like you have to have a PhD in Environmental Science to understand the impact of your daily choices? It’s all just too complicated. Josef Mair, Professor of Packaging Technology at the University of Applied Science in Stuttgart, put it this way: “I visited the “unpackaged store” (a supermarket where you bring your own reusable jars and bags rather than buy pre-packaged goods) and I bought a chocolate bar and some shampoo. I paid more than 10 Euros and I felt like a superhero – I’m saving the world! But then yesterday I traveled to Berlin by train, emitting 19 kilograms of carbon dioxide.” So how does this all add up? What’s a consumer to do?
One way forward to make it easier for consumers to navigate this complexity is that the industry can take the reins and make sustainable products the compelling choice for consumers. “We know that people want to be more environmentally friendly, but we (the industry) need to do the work,” explained Dorothy Shaver, Global Marketing Sustainability Lead at Unilever. It’s imperative that industry players make the necessary changes so that sustainable products are the best choice: in the case of a food manufacturer, affordable, healthy, and delicious. “It’s up to us to grow the demand,” continued Shaver, “and the way we grow the demand is by making it easy, accessible and desirable to use these products that are better for the planet.”
Of course, making sustainable products the obvious choice for consumers requires a base level of trust in a company and its products, that the company does what it says and that it’s truly committed to making its fair share of changes. Consider the frustrated and confused shopper: as their questions narrated above show, the devil is in the details.
6. The transparency imperative: consumers are calling companies’ bluffs
It’s one thing for companies to committed to “becoming more sustainable,” but quite another for organizations to prove that they are walking the walk, not just talking the talk. Who is holding companies accountable for their claims? And what would incentivize organizations to invest in transformative changes? An increasingly popular route is committing to so-called science-based targets and attaching real numbers to measure milestones and assess progress on committed values. “We need to just look at facts, numbers (and) we need to act. (Bouygues Construction) announced that we will reduce our carbon footprint by 40 percent over the next ten years…by having targets and naming commitments (we show that) we are serious. At some point people are calling your bluff and rightly so. This is why we decided to name numbers and have full transparency,” explained François Pitti, VP Strategic Marketing & Foresight at the French construction company.
BMW Group also hopes that by committing to transparent climate change mitigation milestones, it too will earn and maintain that most precious of commodities: consumers’ trust. “We committed to the ambition to keep global temperature rise below one point five degrees, we are partnering with the United Nations Race to Zero, and we have submitted the targets across our lifecycle to the Science-Based Targets initiative,” shared Alexander Nick, Lead Climate Strategy and ESG Standards at the automotive and mobility giant. With an emphasis on setting goals anchored in sound scientific study and joining forces with other global industry players, in partnership with established institutions, companies are positioning themselves as trustworthy and truly committed to making changes for a better future. But will this market-led approach be enough? Gianfrate is skeptical: “Nowadays all companies are doing something that…looks sustainable. The problem is: how much of their value chain is (truly) clean production and consumption? My personal take is that unless there is strong, clear regulation, companies alone will not fully and quickly switch.”
7. A new battleground in the war for talent
Informed, connected, and empowered, Gen Z (born between 1995 and 2012, approximately) is not only keenly aware of the climate crisis and the need for sustainable practices, but is proving to be passionate and uncompromising to such as degree as strikes potential employers as unprecedented and surprising. They are committed to holding their employers to account, factoring in the ways in which their job impacts the health of the planet. Pitti at Bouygues Construction told a story of interviewing a young graduate: “There is an awareness, you can feel it. I had an interview and (it felt like) I was being interviewed: What are your values? What do you stand for? What are your goals? Are you greenwashing?” Meanwhile at Intel, Miranda characterized new hires as more concerned about issues than pure profit motives, signaling a new front in the battle to attract talent: “they think more deeply about the issues…(one candidate) would only join Intel after she understood our environmental commitment. I’ve never experienced that in 20 plus years of hiring.”
Whether or not this growing pressure from a younger generation has enough power to push organizations to adopt sustainable initiatives and truly deliver remains to be seen – here we’ve named just two data points. But with the combined pressures from employees, consumers, governments, NGOs, plus the increasing volatility of essential operations such as supply chains, the collective surge in demands for accountability will hopefully result in real changes for the better.
Sustainability: from senseless buzzword to strategic bedrock
Common challenges call for collective solutions – this was a unifying sentiment shared again and again by summit participants. The stage is set for adopting new ways of thinking and favoring an approach that recognizes that siloed structures (within companies as well as between industries) no longer serves us as we endeavor to address challenges that are both global in breadth and complex in depth.
The types of connections made and conversations fostered at the summit were opportunities to connect the dots and share experiences, giving rise to hope for real change: “You run into people and need to think for three or four seconds; then you find things that you should do together in the future,” remarked E.ON’s Boermans, reflecting on the fact that no matter the industry, the coming years will require a united front and allied forces to pursue transformational change for good.
Emily Phillips contributed research and writing.
Learn how leadings firms are leveraging foresight to create breakthrough innovations. René Rohrbeck and Tobias Heger explain how to leverage foresight to foster innovation with three key recommendations to start today.
That companies like Apple, with 50% of the global market for smartwatches, or Vorwerk, with the Thermomix, have established their product categories is no coincidence. The ability to create new markets and systematically develop innovations in new product categories is rare, but it can be learned.
Put simply, it’s like surfing. Those who want to be successful have to be able to anticipate waves, need to develop the necessary skills to ride the wave, be ready to seize the right moment, and emphatically claim the window of opportunity as soon as it opens.
As with surfing, linking strategic foresight (anticipating waves) to innovation management (riding the wave at the right time) is not easy to learn. But the companies that do it can expect above-average returns. For example, in a longitudinal study stretched over seven years, we observed that future-prepared companies beat their less well-prepared competitors with around 200% higher growth and 33% higher profitability (Rohrbeck & Kum, 2018).
But how does one build such future preparedness?
Actively draw attention to what’s new
First, we have to realize that it is difficult for everyone to imagine something completely new. In addition, success does not only depend on recognition but ultimately on the necessary investment decisions being made and implementation being pursued with sufficient vigor. In practice, this ultimately means that profits have to be diverted from established business units to new ones – profits that the established business unit would also like to use itself to defend its traditional business.
From foresight to market success
To systematically translate foresight into innovations, we have developed a model that structures how to prepare for the future and can be integrated with existing innovation processes (see Fig. 2).
In the first phase, which is characterized by foresight methods, the first task is to identify the drivers of change, to recognize the waves of change, and to understand possible development paths. Our company has to deal with what may have an impact on its future ecosystem. This goes far beyond classic, often technology-driven factors in the automotive industry such as downsizing, hybrid technology, and the regulation of combustion engines. It includes, for example, artificial intelligence, 5G, alternative battery technologies, new players and competitors, as well as mobility behavior and preferences of potential users.
Through scenario analysis, the space of plausible developments can be mapped and made plannable through concrete images of the future. In this way, companies can proactively prepare for alternative market environments, identify preferred positions and plan target images.
After high-potential business fields and opportunities have been identified, the second phase focuses on the problem-solution fit. Many methods of innovation management, including newer ones such as user-driven innovation, design thinking, and design sprints, address this particular aspect. In contrast to the usual application of these methods, a company has to learn to plan without observable and measurable customer needs. In order to provide a planning basis nonetheless, our company works with the lead user approach. Through cooperation with particularly progressive customers, needs are specified, e.g. thermal management when charging the vehicle, when the vehicle is stationary, in various traffic situations, etc. With the classic customer dialogs, the needs analysis would not have been sufficiently specified and investment funds would not have been approved. In some promising opportunity areas, it is not even clear who will take on the customer role in the future. Future Experience Groups, which determine future needs based on scenarios, can provide a remedy here.
Three recommendations to take a start: radar sprint, scenario sprint, innovation sprint
Anyone who builds the ability to foresight in their organization needs quick success in order to establish the new methods and tools. However, success in innovation and the development of new markets rarely comes overnight. Here are our three recommendations to quickly learn and establish the effectiveness of Foresight.
The radar sprint: In radar sprints, often only for a week, organizations can map the known drivers of change. This not only creates a trend radar but also shows the channels through which future-related information reaches the company and where ‘sensors’ may need to be added.
The scenario sprint: Innovating in new markets requires a willingness to understand uncertainty as an opportunity and to use it systematically. These not only serve as a context for defining product and service ideas but also promote the company’s ability to proactively deal with uncertainty and potential.
The innovation sprint: If scenarios or drivers of change have already been identified at the company level, innovation sprints or hackathons are ideal to derive innovation potentials or specific product approaches. In the end, not only do new product and service ideas emerge but also teams are often already formed for implementation.
Foresight is becoming increasingly important because innovation life cycles are getting shorter, because it is becoming easier and easier to copy successful products and even business models, and because digitization is eroding the traditional technological lead of many corporates. Therefore, today it is important not only to face competition at the technology and product level but also to systematically increase the level of organizational skills, innovative strength, and strategic agility.
The future may be uncertain, but your strategy needn’t be. Strategic Foresight teaches us that when you envision different future outcomes, your strategy is more robust.
by Sebastian Knab, Rohrbeck Heger with Emily Phillips
So, you’re working on your strategy and sustainability is supposed to play a major role. If you’re not sure where to start, you’re not alone. One way to begin is by envisioning possible futures by means of scenario-building. Here we’ll introduce our methodology for scenario-building and present four sustainability scenarios we’ve developed and used in several workshops. This will give you a jumping-off point and help to kick-start your process, so you can build a robust and resilient sustainability strategy that will support you in reaching your business objectives.
It seems as if “sustainability” is on everyone’s mind, especially when it comes to avoiding climate catastrophe. Scientific consensus from the past decades is coming home to roost, what with an unending litany of fires, drought, flooding, and storms filling the headlines. From boardrooms to breakrooms, the sense of urgency is growing: we have to do something.
While topics such as achieving net-zero CO2 emissions and preserving biodiversity were once the purview of dedicated experts, these questions are now front of mind for those tasked with leading innovation initiatives and business strategy. And with good reason: we find ourselves at what feels like a tipping point. Pressure is mounting: new regulations such as the EU Green Deal are on the horizon while existing commitments such as the Paris Agreement will soon come into effect.
In addition to pressure from governing bodies, many in the private sector are eager to convert their goodwill and desire for a sustainable, healthy future into actual practice, but are uncertain as to how best to approach the enormous task at hand. What could a sustainability strategy look like in practice? And how should it be developed?
We’re in the business of managing uncertainty
One of the more challenging aspects of first forming and then applying a sustainability strategy is its inherent uncertainty: what will the future hold, and how can we do our best to ensure that we’ll not only survive but thrive in it? Well, we’ve got both good news and bad: the bad news is that no one really knows what the future will hold. But the good news is it is possible to implement a deliberate, systematic, and rigorous assessment of possible futures, assess their likelihood, and then identify the risks and opportunities inherent in each of the possible outcomes.
At Rohrbeck Heger, one of the many exercises we conduct with our clients in this process is scenario-building. The process starts by exploring key drivers of change, including technological and regulatory trends, customer preferences, and stakeholder/ecosystem behavior. The next step seeks to understand the different ways each change driver’s behavior could unfold, ultimately crafting (a) comprehensive, coherent picture(s) of the future.
Whereas traditional strategy development treats uncertainty in a sensitivity analysis at best, we put it where it belongs: center stage. Working with scenarios requires that you acknowledge uncertainty and work constructively with it. By building different futures, you’re able to better prepare for what actually comes. You can identify safe bets and calculated risks, develop contingency plans, and become adaptive and agile if things unfold differently than expected – in short, build up strategic resilience.
A sustainable future? Presenting our four scenarios
At our recent Future Atelier on Sustainability in the Supply Chain and Logistics industry, we plotted four possible scenarios for the world in 2030, represented in quadrants. When selecting the variables represented by the axes, we sought out two that we assume would have the biggest impact on the future of sustainability, but also – and this is an essential point – these variables are in themselves highly uncertain. Each quadrant in the image below represents a possible combination of the impactful and uncertain variables we selected:
The x-axis – Environmental regulations: Would governments come together to effectively enforce binding and comprehensive regulations to regulate carbon emissions?
The y-axis – Sustainable behavior: How sustainable would the collective behavior of individuals and organizations be?
Here’s what that looked like:
In the following text, we dig deeper into these four quadrants, illustrating four visions of what the world might look like in 2030. While some of these scenarios might seem more likely than others, this exercise asks you to consider all four possibilities. We’ve put these scenarios to use clients and event participants from various companies; this exercise is ultimately industry agnostic and relevant to anyone building a strategy, no matter your business. While the specifics of how a scenario might play out in banking vs. healthcare will vary, the overarching “imagined world” acts as a constant.
Without any further ado, here are our four sustainability scenarios:
Scenario 1: “Self-healing” – Making the Green Economy Work
Waking up and pulling back the blinds, the early morning sun heralds yet another scorching summer day. Above your head, the solar panels that cover the roof have been hard at work for a few hours already, generating the energy that powers your home. Checking your phone for the morning’s news, the headlines are abuzz with the latest long-awaited report from the IPCC: “2 DEGREES AVERTED” they read – a glimmer of hope after the dramatic coastal flooding, prolonged droughts, and month-long wildfires of these last 10 years.
Sleepily you make your way through the house and check on the 3D printer’s latest work before the kids get to it first: a sheet of model airplane pieces for them to painstakingly assemble, printed with the same polymer that once built their stackable baby rings, then LEGOs, and now, magically transformed overnight into a new pastime. Your voice assistant chirps and reminds you that the electrically-powered autonomous delivery vehicle made its drop-off 15 minutes ago – there are groceries waiting by the door. Thanks to new local greenhouses, fresh produce is grown within a 25km radius, and available even in winter. You open the door, and the day begins.
In this scenario, which we’ve christened “Self-Healing,” technological progress will enable solutions that manage to successfully decouple continued economic growth from ecological harm. Consumers, fearful of ecological collapse and determined to contribute to a solution, undergo a strong shift in mindset and change their purchasing behavior in favor of sustainable consumption, forcing companies to adapt. Government regulation remains conservative, but thanks to breakthroughs in cleantech, companies embrace green technologies and can keep the growth paradigm in place while still achieving net-zero CO2 emissions. Not to be underestimated is the pressure from new green players, whose entrance into the market and leveraging of technological innovations puts the onus on incumbents to react or collaborate.
This possible future, where individual choice and market solutions manage to halt the planet’s warming in its tracks, posits that powerful new efficiencies, unlocked by technological innovation, would transform today’s “business as usual” into a green economy, securing continued economic growth and avoiding ecological catastrophe, and this all within enough time. The “Self-Healing” scenario assumes that ethical business practices and individual consumer choices would ensure a verdant, affluent future, successfully “liberating the environment from the economy.”
This vision of green growth is one we’re well familiar with and many of us hope for, a narrative and goal that has been adopted by corporate entities and government leaders alike. But what if it’s simply a pipe dream, so-called “greenwishing”? Let’s take a look at another possible future, “Deliberate Slow-Down.”
Scenario 2: “Deliberate Slow-Down” – Shifting to Post-Growth
It’s shortly before 8am: time to get to work and send the kids off to school. With backpacks, lunch sacks, and helmets you hustle out the door and squeeze the youngest into their now too-small bike seat, making a mental note to post an advert for it on the local kids’ equipment digital sharing marketplace.
As you cycle to the school bus stop, you reflect on the changed world your children will inherit. After dire scientific predictions about rising temperatures and sea levels started coming true in the early 2020s, worldwide governments stepped up and set binding, comprehensive regulations in order to reduce CO2 emissions and avert climate catastrophe and ecological ruin.
A decade later, a new way of life has firmly taken root and begun to blossom. What was known earlier as “the sharing economy” is simply the economy now, with renting and repairing taking the place of ownership and thoughtless disposal. And there are plenty of jobs, especially in care work: healthcare, minding children, and supporting the elderly, not to mention the boom in public infrastructure. The upkeep of public transportation systems, retrofitting buildings for energy efficiency, and maintaining renewable energy sources require many helping hands.
You blow kisses to the kids as the electrically powered bus takes them to school and you head onwards to the park and ride station. Locking your bike next to the carsharing parking lot, the train shuttles you and other commuters into the city to start your workday.
In this scenario, the gospel of efficiency has been replaced with that of sufficiency: creating more value with less in what can be called a post-growth society. Dreams for achieving so-called “green growth” were simply that – dreams – and it was thanks to rigorous regulation, combined with consumers’ sustainable behavior, that managed to stabilize global temperatures and avoid the grim projections that shook the world awake just a decade ago.
When tough regulations came into effect, they were based in part on a new consensus that given climate change’s imminent threat and wily, accelerating timeline, a decoupling of continued economic growth and maintenance of a habitable world were simply at odds with one another, largely due to insurmountable rebound effects. As a result, things are slower, now, but the air is cleaner and a precipitous drop in biodiversity, rising sea levels, and full thawing of the arctic tundra were averted.
By the early 2020s, the world was simply reaching the limits of growth, just as the famed 1972 paper posited, and in 2030 “a period of great transition: from growth to equilibrium” is well underway. For example, global shipping now relies on wind-powered sails in favor of air freight. Platforms that sell second-hand goods and companies specializing in repairing-as-a-service proliferate. In addition, “servitization” – replacing products such as cars with services such as mobility – is the name of the game in many industries.
A global post-growth economic restructuring sounds too far-fetched? How about a scenario that many of us can imagine, and some would say we’re currently experiencing: good intentions that simply don’t do enough to mitigate destructive change.
Scenario 3: “Boiling the frog“ – just not getting there
Snagging a coveted seat for your train commute, your eye catches a clever new advert from a fast-fashion retailer as the train pulls away from the platform. The new limited edition eco collaboration is with one of your favorite designers; maybe you’ll find 20 minutes at lunch to pop by the shop around the corner from your office building and get a piece before it sells out.
Leaving the center city station, you nearly trip over the latest installment from pro-eco activists, who, dressed in red from head-to-toe, lie motionless, covering the vast plaza beyond the revolving doors. Some passers-by hurl insults at those lying on the ground, accusing them of naïveté and rabble-rousing; after all, the government has recently issued yet another new measure to curb CO2 levels after the latest mass exodus of climate refugees from coastal cities.
Later, taking the elevator up to your floor, you check the day’s calendar: as a Senior Analyst for Climate Change Adaptation, you’ve got a day full of meetings with your team as you prepare an upcoming workshop for the Global Supply Chain Director from a major international coffee brand. With severe droughts in 30% of their grower regions, plus the new pressure to comply with resolutions from the COP26 Glasgow Summit now coming into effect, they have their hands full as they struggle to secure the supply chain and keep the world caffeinated. Which reminds you as the elevator doors slide open: time for your second cup.
In this scenario, comprehensive, binding regulation on the part of international government agreements pushes companies to adapt their models to encourage Green Growth, but this is not matched by corresponding sustainable behavior on the part of people and other organizations. While steps to mitigate climate change have been taken (and good intentions reign among many), humans are the proverbial clueless amphibians, and the Earth is a great big pot, getting hotter and hotter as it starts to boil.
As climate regulations become increasingly strict, any gains in efficiency are made redundant by ever-increasing consumption; strong rebound effects persist even among self-professed green advocates who, unwittingly or not, suffer from an attitude-behavior gap.
In part due to cleantech breakthroughs’ failure to materialize, companies’ foci are split in two: on the one hand, trying to adjust to an ever-evolving regulatory environment, while on the other, building resilience practices so as to weather the increasingly disruptive effects of droughts, floods, fires, and storms.
It couldn’t get much worse than a slow death by boiling, right? Not so fast – there’s one final scenario to explore.
Scenario 4: “Deliberate ignorance” – pushing nature around
The lights in the office flicker once, and then with a great, heaving whine, the electricity shuts off. A collective sigh and exclamations reverberate among your colleagues. Another blackout, and the last one was only two months ago. At least it’s the end of the workday and you can hitch a ride home to the suburbs.
The thought of an unknown number of days ahead without air conditioning has you worried. Your aging parents have moved in with you and your family since they lost their home in the fires last April. The heat index has been so high that the greater metropolitan area doesn’t manage to cool down at night, and more and more elderly people have been succumbing to heat stroke and other complications. “I’ll set an alarm to check on them during the night,” you think, reassuring yourself. Gathering your equipment and hoisting your bag onto your shoulder, you change into your tennis shoes: no electricity means no elevator, and no elevator requires a climb down 43 flights of stairs. It’s a drill that’s become more and more familiar in recent years, ever since the local power grids started to collapse in the sustained heat of summer.
Later, you and your colleague sit in bumper-to-bumper traffic, trying to get on the interstate in fits of stops and starts. You listen half-heartedly to their account of trying to get their hands on some real vanilla to make a favorite recipe for their partner’s birthday. “Hothouse strawberries could be delivered by drone, no problem,” they explain. But because of deforestation and continued droughts in Madagascar, 80% of the world’s vanilla supply has simply disappeared, making it nearly impossible to get your hands on the real deal. “It’s the least of our problems,” you think to yourself, as you lean back and close your eyes, trying to enjoy these last moments of air-conditioned cool.
This scenario assumes that all parties do nothing to mitigate global warming, and sustainability efforts on the part of governments, individuals, companies, and other actors fall entirely to the wayside. Scientists’ warnings are ignored and even lampooned as the post-factual era takes root. Growth has trumped all: unregulated economic growth and an inverse trend in game-changing green innovation breakthroughs herald a global thermometer that’s rising with no sign of stopping: the world is well on its way to warming more than 2.5 degrees Celsius. The ecological effects and their fallout are beginning to snowball: seawater rises higher, and the list of extinct species grows longer. In short: it’s an age of disruption that we can only begin to imagine but one that should not surprise us, as one catastrophe follows another.
A note on scenarios
Scenarios are meant to provoke; after all, they’re what you get when you cross two variables at their respective extremes. There may be aspects of all four scenarios that sound familiar, or even very plausible. On the flip side, some of what we’ve described may seem highly unlikely, or even preposterous. So why bother with scenarios at all? For one very simple reason: so that you and your team can align on your vision of possible futures, a prerequisite for positioning and preparing your company for success in those imagined spaces.
Assessing the four scenarios: how likely are they?
More often than not, when we do this exercise and facilitate scenario-building, teams will be split in their assessment of the likelihood of one scenario over another, and even disagree on their company’s or industry’s preparedness should any of them occur. Oftentimes, teams will even realize that they are more prepared for a scenario which they deem less likely to happen! Scenario building and assessment, then, helps a team to explore different possibilities, support strategic discussion, and ultimately work together to align on a shared vision of the future. This shared vision supports their common goal to prepare their business strategy and stress test their innovation roadmaps in order to find out if they’re robust enough to weather different outcomes.
During our Future Atelier workshop that examined these scenarios within the context of the logistics and supply chain sectors, we asked participating industry experts this very question: which is the most likely scenario?
Here’s the results:
Rated as most likely to occur we find scenario three, “Boiling the Frog,” which, in some respects, best represents “real life” in 2021. We can observe this scenario at play, today. Thus, we can rate it as fairly probable and claim that we’re somewhat prepared for it. Might this, however, lead to a bias in its likelihood rating? It may feel “comforting” (if being boiled slowly could ever be described as such), but we must remember that the future won’t necessarily look anything like the present. It can do us good to “think outside the box” and prepare for other future scenarios that look very little like what we know.
In second place comes Scenario 1: “Self-healing.” This scenario describes what many of us not only hope for, but expect to and believe will happen: “We’ll develop powerful, green tech and everything will be fine!” This scenario sells us the story that we can solve all of our problems while still remaining in our current thinking, never challenging the predominant paradigms. It’s no surprise, then, that it’s been rated as highly probable. But might there be dangers in betting on this and only this at our moment in time?
Interestingly, Scenario 2: “Deliberate slow-down” has a relatively high rating – certainly curious when you consider that overall, very few people in the private sector actually expect this to happen, don’t want this at all, nor can they really imagine how this could possibly work in practice. Could it be that the probability score is too high, reflecting a lack of understanding on the part of those who rated it? Some experts make the case that de-growth and post-growth may be the only way to actually meet the ambitious climate targets that will prevent ecological collapse. It might be worth it for businesses to consider this possibility.
The scenario with the lowest environmental regulation and lowest sustainable behavior, “Deliberate Ignorance,” was a clear “loser” according to the ratings. Comforting perhaps, yet consider this: airlines already have contingency plans for more extreme weather conditions. Agriculture must brace for less predictable rainfall. Coffee and chocolate producers are being forced to consider a world where deforestation and extreme weather threaten their supply chain.
While many would rate this scenario as least likely to occur (especially considering its extremity), we are living in a VUCA world, and uncertainty is high. It’s perhaps prudent to consider different rolls of the dice when preparing a strategic sustainability transformation. And while most businesses would dismiss this scenario as “backwards thinking” – no one is seriously debating whether change must happen – there are other voices who say that we’re not doing enough and that we must prepare for dire global warming consequences. At any rate, we will find ourselves unable to avoid these challenges in their entirety.
A call to prepare for (a) brave new world(s)
As we’ve written before, “crisis is not a cause for despair but a trigger point to make way for thoroughly new ways of operating and envisioning success.” The COVID-19 pandemic has highlighted humanity’s adaptability to difficult circumstances as well as its ability to work together, facing down a global challenge. The 2020s will be the defining decade for addressing climate change, with surging storms and raging fires only making us sense the high stakes more acutely. What we’ve done until now hasn’t been enough. Consider the fact that the private sector’s increased measuring and reporting has not translated into lower CO2 emissions, but instead coincides with the exact opposite: “It turns out that reporting is not a proxy for progress,” reported Harvard Business Review.
Given the increasing pressure from nature and resulting pressure from societies and regulators, sustainability has arrived center stage in every strategic discussion. However, the only certain thing about the future of sustainability seems to be its uncertainty. How are regulators going to take on the challenge of pushing for sustainable development? How are consumers going to adapt their consumption patterns towards sustainable lifestyles? Is technological progress enough to decouple economic growth from environmental degradation? Strategic foresight teaches us not to hone in on easy answers to these questions, but instead to explore possible future scenarios, prepare for alternative paths, and build a resilient strategy to win the future.
Emily Phillips contributed research and writing.
Headquartered in the USA, the global snacking powerhouse Mondelez is the parent company of beloved worldwide brands such as Oreo, Milka, and Cadbury, plus local favorites including Russia’s Alpen Gold chocolate and Kinh Do biscuits in Vietnam. With a strong presence on all 6 continents, this manufacturer of biscuits, chocolate, candy, and more is valued at 90 billion dollars.
Rohrbeck Heger was pleased to welcome Serhiy Kalinovsky, Senior Manager at Mondelez, who leads the strategic foresight function at the multinational snacking company. Based in Singapore, he joined our third Future Atelier, a series of digital events exploring future trends, this time in the food industry, and an opportunity for our clients to share their experience in working with Rohrbeck Heger in building their corporate foresight capabilities.
This interview has been edited and condensed for clarity and brevity.
How did foresight at Mondelez get its start?
Mondelez’s CEO, Dirk Van de Put, is very vocal about promoting the idea of leading from the future. This idea is supported by strategic foresight: in order to be successful in the future, you need to first envision and understand what the future might be. Then, you need to pass the vision of the future to your team so that together you can create a strategy for the company that will lead to future success. And that’s exactly what we would like to support. Our strategic foresight ambitions, the department that I’m leading, is there to promote long-term thinking and spearhead a forward-looking culture in our company.
In 2018, Dirk Van de Put unveiled a new Mondelez global strategy and a new company mission. The short version is “snacking made right.” The longer version is that we would like to “lead the future of snacking” around the world by offering “the right snack for the right moment and made the right way.” As you might have noticed, the very word “future” is already in the company mission!
To act on that promise, we need to understand what the future of snacking is likely to be. And we’re not just interested in what it would look like in a couple of years from now. We want to understand the future of snacking in the longer termso we can be a successful company in that version of the future.
How did you build your foresight unit at Mondelez?
When we were planning to launch strategic foresight, we had a question: what kind of foresight unit are we trying build? We identified two models of deploying strategic foresight in an organization. We call the first model Oracle, a reference towards the Oracle in ancient Greek mythology. An Oracle is a person who predicts the future. Kings and heroes would come to the Oracle and the Oracle would enlighten them, tell them what kinds of events would be in the future. The Oracle model is especially popular with governments because they have vast resources and it’s beneficial for them to create a specific department staffed with experts and analysts that work on strategic planning.
What are the advantages of this model? You can get a ready answer to your questions or interests pretty quickly, and with a great deal of expertise. But there are downsides. The rest of the company is detached from strategic foresight practices. And you need to deploy significant resources to build such a large strategic foresight unit.
The second engagement model is what we call Prometheus. And Prometheus, also a figure from ancient Greek mythology, was a people’s champion. He stole the fire from Mount Olympus and brought it back to humanity, empowering them, right? Because fire is a powerful tool, it’s the enabler. So, in this model our foresight unit is small and leverages the knowledge, expertise, passion, and curiosity of the entire company to champion the strategic foresight approach. And that’s exactly the model that we’ve deployed at Mondelez International.
Read further below
What does leveraging the entire company’s power look like in practice?
We have a small unit, basically just two people, me and my teammate. But we are currently building a strategic foresight community that is already thirty people and counting. We will be bigger in the future, a team that is trained, empowered, and has strategic foresight tools. They act as local strategic foresight champions in their business units and in their functions.
We operate with a so-called impact-oriented trend management process. Strategic foresight has three phases: perceiving, prospecting and probing. Perceiving is about detecting change: horizon scanning and trend management. The second stage is understanding what this change means, which changes matter for our use case and for our company. Then we work with those trends that might significantly impact the future of our business. And finally, probing is acting upon the changes that we’ve prioritized from the trends at the previous stage. Essentially embedding trend management into the company’s strategic activities.
Do you use specific tools or practices within the company to execute on foresight?
In order to build a strategic foresight community, we have a tool that we call FTR. This is our own interactive trend management platform where we host the Mondelez trend framework. It is a holistic description of all the change that happens around us. And the platform has trend evaluation and trend prioritization modules, as well as the module that helps us to derive opportunities and threats directly from said trends.
We can deploy scenario planning to understand the future state of the questions that are very, very important for our company. These trends, opportunities, and threats get either put directly into strategic activities, into different levels of company strategy, or they become part of the situational assessment of strategy formulation and the strategy revision process. In both cases, they have a direct impact on how we formulate strategies. And remember, all this strategic foresight machinery is managed by the foresight unit, but truly powered by the strategic foresight community. It is really instrumental in driving this process.
What would you say are the greatest challenges to actually make strategic foresight create an impact within the organization?
I wouldn’t say that we have challenges yet, because at the moment our company is just starting to build foresight capacity. We started by talking to various stakeholders around the entire company and overall the company is very receptive towards the idea. Leading from the future is endorsed by company leadership, as I mentioned, and there is a lot of enthusiasm and support in the entire company, and an understanding that we need to become more future-oriented.
Something I can advise to take into consideration as you build your foresight unit in your organization is to remember the importance of communication with various stakeholder groups. Frequent, consistent communication, plus alignment is important. It’s a big, big thing at Mondelez because we have about 80,000 employees, and numerous stakeholders. And while we are technically a part of insights and analytics, we have stakeholders in basically all the departments throughout the company. We’re talking about hundreds of different stakeholders. It’s absolutely critical to maintain good, clear, and transparent 2-way communication with all of them for the success of the project.
What does Mondelez think about agility, using trial-and-error-based exploration of future markets?
This is something that Mondelez has thought about for a while already, and that’s why we have a “startup” within our company, called Snack Futures. It’s a small team that essentially has a blank cheque to explore the future of snacking. They experiment a lot with formats, with brands, with approaches, and put a lot of ideas to the test. Snack Futures is one of our biggest stakeholders within Mondelez for the foresight, because they are so future-oriented.
Mondelez is truly global. Let’s say you want to gather foresight for a specific region, how do you do that?
This is the exact question that we are being asked inside Mondelez by our business units and local teams. We have multiple ways of incorporating the geographical dimension when it comes to trends in our platform. First of all, when we do trend evaluation, we can see evaluation coming from our colleagues in different geographies, sharing the perspective of their geography. This is the first way of understanding regional differences when it comes to the same trend. The same trends may manifest themselves differently and may have different dynamics in various parts of the world.
The second dimension is that the tool we have allows us to create regional or even local country-specific trends. So, if this is warranted – because today I would say a vast majority of trends are either global or have a propensity to become global – but if it is warranted to create a specific local trend that is unique for a certain country, we can certainly do it.
The third dimension is that for each trend we have a so-called “signals module” inside the platform that delivers fresh news and a fresh perspective about a trend. This tool is driven by artificial intelligence and has a geographical stamp. So, you can easily filter out what’s relevant for trends that are coming from China or Russia, for example.
What specific current trends stand out to you? What is super important for Mondelez, but also in general, when working towards the future?
I would say the usual suspects, so trends that are very big and impactful and that would define the trajectory of the future of food. First of all: sustainability. This is a huge trend. Of course, it’s not only relevant to the food industry. Second are a number of trends around the changing nature of well-being. What does well-being mean for people? What does it mean for our consumers? And another usual suspect is digitization and everything associated with it, like advanced technology, precision agriculture, autonomous logistics, etc. And what we call “retail 4.0” – the changing landscape of retail, including but not limited to the rise of e-commerce.
Thank you, Serhiy!
Our Rohrbeck Heger Future Atelier event series gathers innovation and strategy professionals to discuss future-forward foresight practice. This installment: the future of food.
Our third Rohrbeck Heger Future Atelier focussed on a tantalizing topic: the future of food. Industry experts, representing global companies such as Danone and ABInBev, as well as regional players including REWE Group and Picard, gathered from around the world for a digital discussion on major trends that will define the food industry as it heads towards 2030. Participants also learned more about what it means to implement corporate foresight practice from the perspective of global snacking powerhouse Mondelez.
Future focus from the top: Mondelez’s leadership keen on foresight
We were delighted to welcome Serhiy Kalinovsky, Senior Manager, Strategic Foresight at Mondelez, who shared how the parent company of beloved brands such as Oreo and Cadbury’s Dairy Milk has adopted a future-forward mindset. How does his lean unit leverage the power of Mondelez’s 80,000 global employees to stay relevant in a shifting world and prepare for the future?
Mondelez is committed to “looking ahead in the longer term to stay successful in the future,“ explained Kalinovsky, who credits the Fortune 500 company’s CEO Dirk Van de Put as a driving force behind this initiative. As someone who is convinced of the importance of “leading from the future,” Van de Put has pushed for an internal company culture that is focused on answering the question, “what is the future of snacking going to be?”
In order to implement this top-down vision, Mondelez focuses on nurturing a bottom-up movement. Kalinovsky explains: you’ve got to “leverage the knowledge, the passion, of the whole team… by empowering, and educating, and giving employees tools so they can act as local foresight champions.“ By keeping its foresight team lean and building a larger foresight community within the organization, Mondelez seeks to unlock the power of its global workforce and channel this knowledge to maintain its competitive edge.
➔ Stay tuned for our full interview with Mondelez Senior Manager, Strategic Foresight, Serhiy Kalinovsky.
Rating trends: which are most impactful and predictable?
Impact: What impact do you expect this trend to have on the food industry? Select from no impact (“very low”) to disruptive (“very high”).
Predictability: How confident are you that the impact and timing of this trend can be predicted? (If the trend is difficult to predict, select “very low;” if you sense strong evidence for its trajectory, select “very high.”)
Once rated, the results were mapped onto a chart (Figure 1). For a crowdsourced activity such as this to be successful, there can never be too many cooks in the kitchen: by bringing different vantage points from a diverse group of experts you gain a better overall view of trends’ relevance from differing perspectives. So how did participants rate our 9 trends in terms of impact and predictability?
The most impactful trend was Carbon Pricing: although its predictability was rated as neither particularly high nor low, the consensus among those present was that the trend to make emitters pay for greenhouse gas emissions would have a very high impact on the food industry in the next decade.
With a similarly high impact but coming in with the highest predictability rating was the trend Animal Product Alternatives—this shift to plant-based and cultivated meat products will not only be impactful, but experts are also confident that this trend’s trajectory is easier to predict.
Not far behind in both impact and predictability was Precision Farming, a trend that refers to the collective consequences of the agricultural sector’s implementation of the 4th industrial revolution. With automation, AI, and other tech advancements, this new approach to farming will mean ever-more optimized operations. Experts agreed that this trend’s strong effects and predictable evolution will undoubtedly influence the food supply chain towards 2030.
Figure 1: Rating Food Trends on Impact and Predictability
Some food industry trends require closer examination
While those gathered were generally unanimous in their assessments of The Obesity Pandemic (medium-high impact, medium-high predictability), Flash-in-the-pan Fandom, and 3D Printing (each squarely in the middle for both predictability and impact), three trends stood out for their variability, with a noticeable range in assessment among participants. Experts disagreed on the impact and predictability of the trends Food and your mood (the emerging practice of nutritional psychiatry) and Blockchain (its effects on transparency and provenance), perhaps signaling a lack of familiarity and/or understanding about these two topics. Might this be an impetus for further examination of the potential impact of these two trends on the food industry?
The third of these trends was, perhaps unsurprisingly, our “black horse”: AI for food. Despite its clear ranking as having both the lowest impact and predictability, there was a wide range of assessments on the part of participants. From our research on the topic, we at Rohrbeck Heger would caution against writing off this powerful player and its exponential development: with increased data gathering (whether from rows of crops or supermarket aisles), the power of AI to parse and assess troves of information about products and consumers could really shift the landscape by 2030. AI is something to keep on your radar and monitor in the coming years.
From increasing demand to meat alternatives to the as-yet untapped power of AI: the food industry will be faced with increasing complexity and will need to navigate a shape-shifting landscape as we head towards the 2030s. Trend analysis and its integration into corporate strategy is one essential way that we at Rohrbeck Heger support our clients such as Mondelez in their quest to stay competitive. To learn more about our work in the food industry and how we can help support your team become more future-oriented, get in touch!
The food sector will face numerous challenges in the coming decade. From the race to develop plant-based meat substitutes to the power of AI-enabled personalized nutrition, disruptive drivers of change are just around the corner, waiting to break through.
What will the future of food look like in 2030? From our research in the field, our Rohrbeck Heger foresight analyst team has picked its favorite 9 drivers of change for the food sector to watch over the next 10 years. Whether they will all come to be remains to be seen, but quite a few of them will fundamentally change the way we eat and how food businesses operate. This report outlines nine trends in total, divided into 3 parts:
Our 5 most surprising trends to watch
3 “Question Marks”– something’s brewing, but it’s unclear how these will play out
1 “Dark Horse” – although less likely to break out in the next decade, this trend will have a tremendous impact once it does.
For our second RH FutureAtelier focusing on financial services, we identified top trends for 2021 and beyond, outlined the practice of corporate foresight, and explored what it will mean for the sector.
Financial services are a pillar of society. As such, their foundations have not changed for centuries: payments, lending, insurance, accounts—financial service providers offer individuals and organizations the opportunity to pursue their aspirations and ambitions, while managing risk and safeguarding rewards.
However, like the societies they serve, the financial service industry cannot stand still. From the untapped power of AI to the emergence of white-label banking, the industry must continue to innovate and optimize, not only to meet evolving customer needs and expectations, but to also increase resilience and ensure regulatory compliance.
In the latest installment of our virtual event series, RH FutureAtelier, we ventured into the exciting world of the future of financial services and insurance. Joined by Maren Kottler, Head of Corporate Foresight at die Mobiliar, Switzerland’s oldest insurance company, as well as industry experts from banking, insurance, and consulting, we enjoyed an engaging and collaborative session. Participants learned how foresight is a tool and capability instrumental for future-proofing the financial services and insurance industries against the tides of change.
The top trends to watch in financial services and insurance
The event began with an overview of our corporate foresight methodology and identified nine current and future trends that will define financial services in the years (and decades) to come. The top rising trends for financial services and insurance include:
Increasing (private) data ownership regulations– Data may be the “new currency,” but what does increasing government oversight mean for banks?
AI in banking– The potential to save on operational costs is tremendous, but what are its unforeseen implications, such as bias?
Rise of decentralized finance– Could banks offer a more secure way to engage new consumer behaviors such as cryptocurrency exchanges and peer-to-peer lending, mitigating the risks of hacks and scams?
Embedded finance– With financial services embedded into a wide variety of software and services, ownership of the customer experience shifts elsewhere. What will this mean for traditional industry gatekeepers?
Retail investments replacing retail savings– Low-interest environments mean retail investment is replacing retail savings, but do consumers need more guidance?
Rise of asset tokenization– New ways of monetizing and tracking the ownership of assets create investment opportunities and ways to securitize, but how will this be regulated?
Consumer-centric banking– As new consumer groups mature and earn more money, and older generations live longer, what new services and products might they want and need?
Women in finance– The changing face of the banking industry means space to grow: how will a new diversity alter product offerings and operational practices?
Green finance / Eco-investing– Climate change is one of the biggest risks out there. Will the financial services industry meet the challenge with green initiatives and sustainable investments?
Identifying trends: how is it done?
Foresight is, in its essence, a discipline to anticipate and act upon change.While many companies have adopted a mature practice when it comes to planning technology roadmaps, supporting innovation teams, and venturing and accelerating new ideas, these activities account for only one part of corporate foresight practice.
At Rohrbeck Heger we’ve identified three stages that cover the whole span of foresight and innovation management: perceiving, prospecting, and probing (Fig. 1).
Figure 1: Perceiving, Prospecting, Probing
● Perceiving: the anticipation of change and identifying trends. Seeing what’s out there, what could happen, and what is happening. ● Prospecting: understanding what these trends mean for us as an organization or an industry. ● Probing: executing on these insights to gain a competitive advantage: innovation, venturing, accelerating, and roadmapping.
While the aforementioned “mature” steps (listed under “Probing”) are essential in order to convert strategy into practice, in this installment of our FutureAtelier we instead focused on the “Perceiving” stage, pictured on the far left of the above illustration.
An essential element—the foundation, even—for foresight is trend management and change detection. Plenty of teams are concerned with keeping abreast of trends within their industry, but often struggle to approach trend management with a structured and coherent practice. Our methodology begins by scanning widely for trends across a spectrum of issues: technology, politics, society, economy, and the environment.
“Plenty of teams are concerned with keeping abreast of trends within their industry, but often struggle to approach trend management with a structured and coherent practice.”
The signal in the noise: which trends matter?
Foresight-mature organizations, those that are really, truly future-proof, scan widely for trends and strictly manage them. To do so, they typically use a tool such as a trends radar to visualize, prioritize, and finally feed relevant trends into their strategy and innovation activities. But how to filter and prioritize identified trends in the first place? One method we use is a straightforward mapping exercise where we evaluate trends based on two parameters: impact and uncertainty. At the RH FutureAtelier we crowdsourced opinions to work with a variant of this exercise: impact and certainty:
● Impact: what impact do you expect this trend to have on your industry? ● Certainty: how certain are you about the evolution and/or trajectory of this trend towards reaching its impact?
To give participants a taste of what it’s like to put this methodology into practice, we polled all those present at the FutureAtelier event to evaluate the nine trends we identified for the financial services and insurance sector. We then mapped the results on a graph and participants split into two breakout groups to discuss the results.
An Impact-Certainty Assessment of Trends in the Financial Services Sector
To understand the map below (Fig. 2), we divide it into four quadrants. At the top left, we have the high impact/low certainty trends, which we call our “hedged risks.” These trends, potential threats and opportunities, require further research, thinking, and testing before being introduced into a strategy roadmap, for example. In contrast, those high impact/high certainty items show trends that we call “sure bets,” and should be quickly acted upon, directly incorporated into strategy. So, which were the “sure bets” and “hedged risks” among our top nine trends in the financial services and insurance sectors (Fig.3)?
Figure 2: Prioritizing trends
Figure 3: Results from our 2nd RH FutureAtelier on Financial Services
Based on what we see in Fig. 3, our crowdsourced “impact/certainty” matrix determined that AI, consumer-centric banking, more women in finance, embedded finance, e-commerce boom due to COVID, card-based transactions replaced by real-time payments, and increasing (private) data ownership regulations will be the seven trends to classify as “safe bets”—that is to say, these trends rank as both high impact and high certainty. (Participants had the option to name their own trends in addition to the nine we originally identified.) While both regulation of cryptocurrency and climate change-specific trends (climate agreements, net-zero initiatives, green finance, and eco-investing) were rated as relatively certain to happen, they fell short of convincing the group of their high impact on the financial services and insurance sectors. We at Rohrbeck Heger were surprised by this result and would challenge this assessment. Considering how deeply most financial services, especially investment, are intertwined with the availability and flow of natural resources, the massive shifts we anticipate as a result of pressures to mitigate climate change (not to mention potential natural disasters, including pandemics) will have a great effect on the industry.
Foresight: making it work for you
It’s vital to evaluate what trends mean for an organization and to filter and prioritize what happens next. Rohrbeck Heger advises on several methods to derive insights and define actions using foresight. But in general, we advise that our clients do four things in executing a foresight process:
Collaborate and co-create. Bring together dissimilar opinions to develop true insights and challenge conventions. No-one has a monopoly on understanding the future.
Structure it. The future is uncertain, but it doesn’t have to be unmanageable. Use tools like radars and decision portfolios to drive the discussion forward and keep it action-oriented.
Prioritize. Recognize that you can’t do everything all at once. Bring wisdom to bear and decide on what is a ‘“sure bet” or a “hedged risk.”
Commit to the longer-term. Ensure that key trends are addressed in your strategy processes and innovation activities. To take a long-term view, it helps to build scenarios to immerse your teams in ‘future worlds’ where they can imagine and grasp what a future world looks like.
Foresight in action: A new way of thinking at die Mobiliar
Our RH FutureAtelier event with a focus on financial services and insurance concluded with a thoughtful talk given by Maren Kottler, Head of Corporate Foresight at die Mobiliar, Switzerland’s oldest insurance provider. She shared her team’s journey in recent years as they replaced an older internal trend process with a new, more comprehensive foresight approach; one that better leverages both the breadth and depth of such a large and complex organization.
“When the forecast is showing rain, you take an umbrella with you in the morning,” explained Kottler. “But how do you prepare your company for different seasons, like economical thunderstorms or technological flooding?” As the head of die Mobiliar’s Corporate Foresight team, wrestling with big, unwieldy questions such as these are just another day at the office. “For us, thinking about the future means thinking about uncertainties…it’s a game of thoughts. It’s the introduction of new perspectives and new insights.” The company’s approach to innovation strategy was due for an update, and in 2019 Kottler’s team introduced a semi-automated platform to explore possible futures. “Everybody in our company has access to add a new inspiration,” explained Kottler, describing the platform. “We want to bring the future to everyone’s desk.”
“If you are not writing your own future stories, you’ll be living in those of others.”
In addition to introducing the platform, die Mobiliar invested in both internal colleagues and external consultants such as Rohrbeck Heger to evaluate trends, speak to C-suite executives, and consult topical experts. This project, in the form of interviews and interdisciplinary workshops, took place over the course of about five months, and resulted in die Mobiliar’s first-ever “future scenarios for the insurance industry,” envisioning life in the year 2030 and beyond. “It’s really fun,” said Kottler, “but I can only recommend continuing your work after that. It’s best to keep going after building the scenarios.” The resulting scenarios are now the basis for die Mobiliar’s internal corporate foresight efforts and have since led to workshops with end customers and business clients to identify their future needs. With help from Rohrbeck Heger, Kottler and her colleagues distilled the list of over five hundred possible client needs to its essence: down to just five high priority innovation focus fields.
Armed with the identified needs, die Mobiliar’s Corporate Foresight team presented the innovation focus fields to its C-suite and board, analyzing the “new innovation areas by applying systemic design methods to get a deeper understanding of the real leverage points of each of these new innovation clusters—the new customer needs of the future.” By advising leadership on these needs, the Corporate Foresight team made sure these insights would help mold company strategy. Kottler reports that Corporate Foresight has become an integral institution at die Mobiliar, a “central hub for horizon-free thinking.” Above all, she explains, it’s a mindset—teams now consider the future of the company in a different way. “The magic lies, I think…in that I’m thinking back from the future…it enables [you to consider] what are your values, what company would you like to be?… It helps you to realize your vision. Because if you are not writing your own future stories, you’ll be living in those of others.”
Financial services and the insurance industry, though both well-established sectors in society and commerce, could do well to introduce the practice of corporate foresight into their strategy and innovation roadmaps. A constantly changing world demands that companies keep up with and ultimately integrate solid trend analysis into their strategy; we identified nine top trends in financial services to watch in the coming decade, ranging from increased data regulations to eco-investing. Corporate foresight – the discipline of anticipating and acting upon change – keeps companies and teams nimble, sensitive to changes around them and most importantly, ready to assess these changes (trends) in a systematic, thoughtful way that translates into actionable steps for futureproofing in an uncertain world. Through working with clients such as Swiss insurance company die Mobiliar, Rohrbeck Heger equips innovation teams with a skillset and methodology to encourage a culture of collaboration and adoption of a future-forward mindset for success. To learn more about this event and our Financial Services and Insurance portfolio, download our report here.
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“Rohrbeck Heger equips innovation teams with a skillset and methodology to encourage a culture of collaboration and adoption of a future-forward mindset for success.”