'Fortune favors a prepared mind.' Louis Pasteur is said to have coined this phrase in response to colleagues who were mocking his discovery of pasteurization as pure luck.

The company equivalent of a prepared mind is market foresight. Fortune favors forward-looking companies that scan their environment for emerging trends and use their expanding awareness for proactive management. Specifically market foresight relies on identifying changing customer values and needs, monitoring the evolving competitive field, and anticipating which capabilities within the entire supply chain may become the basis for improved competitive advantage. A company with the capability of 'Market Foresight' establishes practices for gathering and making sense of such information on a regular basis. Fortune will favor such efforts with breakthrough innovations and superior results.

The identification of changing customer values and needs requires instruments and programs that combine quantitative measures with qualitative insights. Customer surveys and focus groups are the current quantitative and qualitative methods respectively for determining what customers say they want. Both approaches have their limitations, especially in anticipating customer needs or wants ahead of customer awareness of these desires.

The survey literature currently uses several narrow interpretations of 'customer values and needs' in assessment procedures. Customer satisfaction measures concentrate primarily on attributes of a particular product or service provided by a company. Customer value analysis frequently reduces value to a quality/price ratio. A broader approach would be to capture the customers' satisfaction with the entire range of experiences with the company, asking them to evaluate the company as a whole, via rating those company practices with which they are familiar. Product quality, service focus, and price would be part of this kind of holistic assessment. Surveys that include open-ended questions provide supplementary information in the customers' own words contributing to insight into customer values.

Market research firms promote focus groups as the method for gaining qualitative insights about customer values and needs. Focus groups depend upon the frame of reference, skill and objectivity of the moderator to focus the thinking of participants on the topic of inquiry. The strength of focus group methodology lies in its ability to explore in depth the perspectives of the participants. Its weakness lies in its inability to generalize from these responses, its inability to present the distribution of these responses within the larger customer population.

Ideally, customer needs and values can best be identified by the company having intimate, one to one relationships with all its customers. Even then the messengers filter the feedback to the company, a feedback that is influenced by the subjectivity of the sales rep, engineer, or others who have contact with the customer. These channels should be complemented by direct opinion-gathering by outside agents.

In practical terms, the best approach lies in survey research with open-ended questions based upon stratified, purposive sampling. Stratified sampling segments the customer population into niche markets and even into relatively homogeneous subgroups within each niche. Purposive sampling chooses groups and subgroups based upon some particular purposes for the survey as for example the choice of groups representing high, medium and low volumes of sales. Individual participants within these groups and subgroups are chosen at random. The result allows for comparison of perspectives among these groups and subgroups.

The obvious competitors are only part of the competitive field. Some competitors suddenly arise from a different industry, as is the current case of competition among banks, insurance companies, and brokerage houses. Some competitors may offer products and services that are tangential to the company's products and services, but nevertheless become competitors as they provide something unique to the same set of customers. For example, companies that sell desktop publishing and database comparisons may cut into the business of traditional publishers of books and magazines. In addition the globalization of the economy leads to the threat of entry of new competition from outside the familiar territory.  

Companies with market foresight look for early warnings of these evolving competitive trends. A good way of getting this information is to ask their customers to identify the competition and to describe what the competition is doing that they should be doing. The worst way to get this information takes place when their sales rep reports that the company has lost an account.

Companies require a methodology for competitive intelligence that enables them to compare their capabilities with the capabilities of competitors named by customers. The best comparisons are made from the customers' perspective. For example, a customer may rate Competitor 'X' higher for 'on-time delivery' and Competitor 'Y' higher for 'after-sale service'. The company that aims to be the supplier of choice uses such a method to create knowledge for action, such as the knowledge of whom it is competing against and what it has to do to prevent a defection and to stay ahead of the competition.

Supply chain design is a frequently overlooked area for market foresight. Supply chain design involves looking at the entire range of capabilities from companies upstream toward the sources of raw materials and companies downstream toward end-users. Companies in rapidly evolving industries can no longer rely solely on their internal capabilities for competitive advantage. A key strategic decision entails deciding which capabilities to keep in-house and which capabilities within the supply chain ought to be outsourced upstream or downstream.

Companies require a common language for discussing capabilities with their entire supply and distribution network. Companies need a methodology for comparing capabilities, determining relative strengths and weaknesses. Companies need a framework for analyzing all these capabilities in terms of emerging trends within the industry and the economy. Discussion, comparison and analysis are all required in order to anticipate which capabilities within the entire supply chain may become the new basis for competitive advantage.

Market foresight is too important to be assigned to one person or even to one department. Market foresight will flourish within a company that enlists the cooperation of all of its employees. The key message to the entire workforce should be "help the company steadily improve, don't simply adjust to the status quo". Companies may not realize that some of their messages are counter productive, messages such as "don't argue with success" or "if it ain't broke, don't fix it". Employees quickly recognize how open management really is to hearing about current problems and how willing management is to encourage anticipating future trends.

Consciously building a capability of market foresight takes foresight out of the 'once-in-a-while' category. Management can support the building of this capability by using hindsight, learning from mistakes, to develop foresight. The enemy of foresight is shortsightedness, short-term thinking. The friend of foresight is ideal striving, envisioning desired futures and proactively seeking to progress toward them.

Market foresight will flourish within a company that builds the value of organization inquiry into its culture. The capability of market foresight should be embedded within the challenge to the organization of realizing innovation opportunities. Everyone should strive toward the ideal of being an agile company.