How to develop future scenarios and your strategy

How do you plan for a world that is in constant flux? We are getting that question a lot. Should you plan at all? What timeframe do you plan for? And how do you make an organisation fluid enough to respond to constant change and volatility? BIG questions. No easy answers.

Do you have a plan?

A lot of companies have a plan. Sometimes it is a strategic plan. What is scary, is that some and it is particularly endemic in small companies, do not have a plan at all. Which means that the company is rudderless, without any sense of direction. Which, in a perverse way, in a world of chaos, makes some sense. You go where the wind blows you.

Based on what?

If it is a strategic plan, it is very likely to be internally driven (SWOT, growth, market definition and focus, segmentation, etc.). There is a competitive analysis (invariably it is weak and does not take into consideration the ones that will come from left field) and there is trend analysis. Sometimes only internal trend analysis, which is scary. Figures are no prediction of the future. Quantitative forecasting is based on the past.

Future babble?

In fact, you can’t predict the future at all. You can spot the trends, but you can’t predict. Every futurologist has been wrong. It is all “future babble”. What you can do, is develop a range of scenarios based on these trends. These scenarios are then the basis of the strategic planning. This means that there is not just one strategy, but a number of strategies based on the scenarios. That exercise makes the business more fluid and capable of dealing with change a lot better. Win-win-win. A better strategy, better people, better business.

Futurevision

“Future vision”, by Richard Watson and Oliver Freeman, dealt with how to plan scenarios. Richard Watson is one of my favourite futurologists. He wrote “Future files” and “Future minds”, books we still use with our clients, when we do a session on innovation, change management and strategy.

Tomorrow not yesterday

“Most organisations create strategies that deal with yesterday’s problems”. The same argument that Clayton Christensen uses in “Disruptive innovation”. You can’t afford that any more, particularly now, when we are moving from “disruptive innovation” to “big bang disruption”. The faster things move, the further you need to look ahead. The further you travel the more you will see.

Scenarios and strategic options

And this is not just about scenario planning the future, it gets brought back to today and the current strategy and explore the strategic options in the here and now. A wonderful exercise not only from a strategy perspective but also as an exercise in competitive analysis, innovation, technology, and future business models.

4 basic scenarios

To help you do that, Futurevision gives you 4 basic scenarios of the world as a whole:

1. A world of intelligence
2. A world of greed
3. A world of temperance
4. A world of fear

Fantastic scenarios on how the world could look like in 2040. From utopia(ish) to a living nightmare. The real one is likely to be a combination of all. It doesn’t matter. It is about the place of your business in that world. Any or all of them.

Some concepts:

It would take too long to describe all of them. I will just highlight some of the concepts:

• Smart dust
• Time of day or user mood filters
• Lifestream and self-tracking (recording every second of your life, useful for finding back things)
• Elderburbia (seniors living inside schools) or company retirees living on company compounds as a catalyst for innovation
• Biohacking
• Checkout (suicide boots)
• Nano solar
• Reverse colonisation of Europe
• Animal voice implants
• Synthetic biology
• People miles (miles quota for travel)
• A ban on bottled water
• Virtual water or embedded water (volume of water absorbed by-product of service during its creation)
• Precision agriculture
• Slow media
• Claytronics

From what we have read about technology, none seem to be far fetched.

Become a trend watcher

To develop your scenarios, Futurevision suggests you become a trend watcher yourself and seek the unusual, to boldly go where no one has gone before. In this, it does not differ much from “The science of serendipity” and “The moment of clarity”.

To give it focus you need some framing questions:

1. The big picture
2. Will cards (the unexpected events)
3. If you could ask the Delphi Oracle
4. What keeps you awake at night?
5. Unusual fellowships and alliances
6. Missing links
7. Major constraints
8. Now or never, what critical decision needs to be made soon
9. What are the core values
10. What lasting contributions would you like to have made

It is then about what you are not seeing, following your feelings and understanding the emotional undercurrents. It is about what others are seeing. It is about looking backward to understand how we got there. Map a series of events and timelines, showing key inventions and “extinction events”. What is tacit and explicit knowledge in the business? What stories are being told?

Examine ideas, nature, society, politics, economics, culture and technology (INSPECT is the new PEST(Political, Economic, Social and Technological analysis)).

Develop the scenarios

Then you cluster influences and starting with “This is a world in which….. you paint a picture to the broad future. You then pick the strategic domains you can influence and brainstorm the implications. The final part is to define the preconditions that are needed to unfold the scenarios and the precursors or warning signals. Rather then looking for the weak signals, you define them, making it easier to pick them up.

Scanning

Then start scanning:

• Small signs of change
• Look to your customers customers
• Look to your suppliers’ suppliers
• Your competition
• Changes in industry
• Policial situation
• Changes in attitudes and values
• Economic policy
• Anomalies (fast failures, fast successes, oddities, things that don’t make sense)

The wild cards

To keep it fresh and teach the unexpected, you throw in the unexpected:

• A second American civil war
• Children born today need never die
• Oil hits $500 a barrel
• Bird flue pandemic kills 500 million worldwide
• The internet collapses
• Louis XX crowned king of France
• Energy becomes free
• Water is the new oil

And that is why we like this book. The unexpected. If you combine this with another book Richard Watson wrote “The future, 50 ideas you really need to know”and you have a blueprint for developing some real strategic options, a way to engage staff in thinking about the future and make your business more fluid and capable of dealing with volatility.