Determinants of organizational vigilance: Leadership, foresight, and adaptation in three sectors

Abstract

Why are vigilant organizations better at developing foresight than their rivals and acting faster on the insights and alerts? Four attributes were hypothesized to explain the difference between vigilant and vulnerable organizations: (a) a leadership commitment to sensing and acting early on signals of change, (b) strategic investments in foresight abilities, (c) a flexible approach to incorporating uncertainty in their strategy processes, and (d) clear accountability and coordination for sharing information and acting on weak signals. This conceptual model was tested with survey responses from 345 organizational leaders representing three sectors of the economy: international companies, US credit unions, and American foundations. The survey assessed key components of the above constructs and our regression models explained close to half of the variance in organizational vigilance scores relative to competitors. The most important of the four factors above was investment in foresight (for each sector), followed by leadership commitment. The relative importance of strategy and accountability factors varied by sector as well as organizational size.

Corporate foresight as a microfoundation of dynamic capabilities

“…Such behavioral bounds are at the center of the skepticism about the ability of firms to adapt to changing environments (Gavetti et al, ). It gives rise to the hope that investment in CF practices can indeed help organizations become more adaptive to environmental changes, as suggested by Schoemaker and Day () and Vecchiato et al (). The findings also give support to the assumption that organizations may be able to proactively shape the future, as Hamel and Prahalad () called for already in 1994.…”

“…Anticipatory practices in firms, also referred to as corporate foresight (CF), are expected to contribute to a firm's ability to adopt new courses of action that are markedly different from the status quo and potentially capable of changing the game in entire industries (Gavetti & Menon, ; Rohrbeck & Kum, ). Investment in such practices has been shown to have a significant positive effect on the ability of a firm to see external changes sooner and act on them faster (Schoemaker & Day, ). It has also been argued that companies that adopt longer time horizons are, first, able to counteract managerial myopia and second, able to enhance value (Flammer & Bansal, ).…”

“…Investment in such practices has been shown to have a significant positive effect on the ability of a firm to see external changes sooner and act on them faster (Schoemaker & Day, 2019). It has also been argued that companies that adopt longer time horizons are, first, able to counteract managerial myopia and second, able to enhance value (Flammer & Bansal, 2017).…”

Evaluating the relationship between entrepreneurial marketing, competitive advantage, and Islamic banks performance

“…Vigilant leadership manages an environment that is constantly changing in response to these changes through entrepreneurial marketing. Schoemaker and Day ( 2020 ) examined the determinants of organizational vigilance and found that vigilant leadership was the second strongest factor influencing organizational awareness after investing in environmental scanning. In line with this, vigilant leadership has consequences on organizational performance (Day and Schoemaker 2019 ) by integrating organizational networks in scenario planning through strategic radars that can detect weak signals from turbulent environments (Schoemaker et al 2013 ).…”

Preparing Organizations for Greater Turbulence

“…7 We then hypothesized that four main drivers of organizational vigilance would best distinguish vigilant from vulnerable organizations. These hypotheses were tested with a survey 8 of senior leaders of 118 companies from around the world (see Appendix A). The four drivers, 9 in order of their relative influence in our study, are:…”