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1 Scenarios Tool for Strategy Stuart Henshall October 5, 2001.

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Presentation on theme: "1 Scenarios Tool for Strategy Stuart Henshall October 5, 2001."— Presentation transcript:

1 1 Scenarios Tool for Strategy Stuart Henshall October 5, 2001

2 2 “Scenarios represent a revolutionary idea — not getting the future right, but changing the minds (thinking) of management” Pierre Wack, GBN, 1993

3 3 What is the emerging context for business over the next 10 years? What skills and competencies will the future require? How do you devise a clear innovation strategy? Is your approach to market research failing new product - service breakthroughs? Are you effective at thinking forward, beyond competitors - collaboratively? What questions should you really be asking? In the knowledge economy learning faster may be the only competitive advantage! How do you speed up succcessful strategy generation for your clients? Can we predict the future?

4 4 What are Scenarios? Scenarios are devices for ordering one’s perceptions about alternative environments in which one’s decisions might be played out. Their power comes from being focused. Effective scenarios are always “customized to context”

5 5 Scenarios and Strategy Great Scenarios Planning Strategy Forecasting Portfolio Conversation Adaptive, no business model works forever. Migration paths that survive and thrive Broad applicability Understand and analyse industry dynamics From positioning, to value, process and design Simple to apply

6 6 “When new technologies disrupt entire industries, the worst thing you can do is stay close to your customers” Clayton Christensen Not just technology but the power of: disruptive ideas “Are you a spec- driven prototype culture or a prototype-spec driven culture?” Michael Schrage

7 7 STEEP & outside-in thinking Technology Environmental Economic Social Political The Business in its Environment

8 8 Systemic Thinking: Events - Patterns - Structure

9 9 One-day to extended programs Environmental analysis to robust strategies Entry point for Scenarios as a tool Safeguard the future. longer term risk assessment Cross functions / disciplines New perspectives / innovation BENEFITS: Learn new techniques Create new options Add to top line $ Explore unconventional ideas in a safe setting. Facing-up to uncertainty New avenues for learning / better questions

10 10 Developing Scenarios  Focal issue  Key factors  Environmental forces  Critical uncertainties  Scenarios  Implications and options  Early indicators  Scenario logics

11 The Driving Forces (In original order, with number of votes in parentheses for degree of importance and uncertainty.) Top ten items shown in bold 1. Regional growth and timing (12) 2. Information superhighway (20) 3. Adaptive, flexible, and symbiotic organization (12) 4. Isolation vs. globalization (16) 5. Impact of technology on globalization (2) 6. Pervasive, accessible technology (0) 7. Scope and speed of change (7) 8. Retention and attraction of people (32) 9. Entrepreneurs within the organization (7) 10. Tribalism vs. globalism (2) 11. Ethics around biotech (social contract) (0) 12. Company definition (dilemma between innovative materials and market opportunities) (0) 13. Serving customers with others involved (9) 14. New sources of value creation (12) 15. The continued relevance of "the American way" (3) 16. Will "best of" teams work? (13) 17. Where will ideas come from? (7) 18. Reconstituting old ideas (0) 19. Changing demographics and attitudes (population aging and new generations) (12) 20. Social/business dynamic tension (0) 21. Could something like mini-mills revolutionize Me2? (4) 22. Energy discontinuity (7) 23. Work vs. leisure balance (8) 24. Telecommuting and working from home (2) 25. Relevance / dominance of silicones (11) 26. General Electric model (materials, capital, services, infotech) (4) 27. Changing rules for competitive advantage / One billion people in China (13) 28. External threats and compliance (politics, regulations, environment, activists) (3) 29. New forms of protest (0) 30. Markets vs. customers (2) 31. Materialism and individualism vs. social concerns, communitarian values (0) 32. Technology and the mobility of people (0) 33. Feeling good about where you work (5) 34. Selling solutions and speed (1) 35. Wider range of competitors (9) 36. Getting from plans and ideas to actions and results (0) 37. Access to capital / equity markets (27) 38. Global regulations (6) 39. Getting more cash out of old businesses (7) 40. "Generation Next" (26) 41. Commoditization of materials (6) 42. "Born to Flip" technology companies (0) 43. Shorter shelf life of competitive and strategic advantages (5) 44. Trend towards immediate gratification (5) 45. Impact of bio-digital technologies (28) 46. Financial markets re-defining criteria for "value" (4) 47. Tightening cost structure (12) 48. "Greening" of the environment (7) 49. What if speed isn't the issue? (0) 50. AIDS in Africa (1) 51. Challenges to intellectual property (0) 52. Future of China / democratic or not? (19) 53. What sources of competitive advantage have the longest shelf life? (5) 54. Population trends: slow growth in developed world, rapid growth in developing world (0) 55. Future of Russia (0) 56. Future of education (6) 57. Intergenerational transfer of wealth to Baby Boomers in U.S. (0) 58. Haves and have-nots (7) 59. Future of global religion (4) 60. Integration of multiple business models at the same time (22) 61. Improvements in life sciences, medical care, longevity (11) 62. Ye Olde Lemonade Stand (the "four-Ps" strategy at an early age) (0) 63. Attractiveness of enterprise for people, customers, and communities (balancing work, relationships, self, and community) (3) 64. Most successful companies influence outer circles; shifting age of customers (create early loyalty) (3) 65. Everything is free on the Internet (17) 66. Business model design more modular, adaptive (5) 67. People learning about technology in unconventional ways (e.g., gaming) (0) 68. How do we harness all of this interest in technology that is so fragmented in its use and development at the consumer level? (3) 69. Individual spirituality/create your own future (0) 70. Open source code / Linux movement (5) 71. Online privacy protection (e.g., for kids) (0) 72. War / national defense / space exploration (0) 73. "Always in touch" workers (wireless technology and the disruption of leisure) (5) 74. The computer that does everything (e.g., doubles as a toaster) / digital appliances (5) 75. The pioneering spirit (4) 76. Increasing stress (0) 77. The power of the network (e.g., Napster) (11) 78. How will 10-year-olds compete? (0) 79. Individual marketing (1) 80. Alternative medicine "natural-natural?" (1) 81. How will global warming affect the creation and use of silicons? (8) 82. Rate of competitive attack, esp. e-based (9) 83. Combinatorial chemistry: "Doing it nature's way" (large-scale trial-and-error) (0) 84. Worldwide education trends (0) 85. Large and growing Latino population, with low education levels (0) 86. Online education (0) 87. Global activism: "Big business is bad" (Ralph Nader for President) (15) 88. "Generation Next" interest in technology (3) 89. Mass customization / targeting of "micro- segments" (3)

12 2. Napster legal woes turn file- sharing to new tools 5. China declares free Internet access for all citizens 4. New net privacy systems proliferate 1. Untaxed Internet revenue major concern million people rally globally against government control of Internet access 7. Implanted smart vaccines gain acceptance 9. Open Source bounties return intellectual property to originators 10. Euro court says people to rule Internet 8. Apple launches BG-15 with bio- materials casing 11. Nano-monitors combine with “Digi-Docs” to solve health problems 12. HSC, DCC, Intel, IBM & Dell form “for profit” virtual community 13. Developing word profits from new material banks 14. Breakthrough to produce key materials by low-cost biological routes 15. New simulations consolidate play and learning 19. Governments no longer deemed useful 16. Computers go biological 17. Hacker invades the brain! 6. Open Source movement active in solving intellectual property issue 18. CyberNotes replace national currencies 20. Affinity tribes cluster to dominate global trading 21. The cyber- self emerges Global Industry Personal Middle Bio-digital technology emerges in limited applications; Open Source provides the new operating code of conduct. Beginning New ways of harnessing the Internet proliferate while new forms of file-sharing change rules for users and dataminers. End Real-time community clusters begin to manage and frame programs for future; governments become powerless. Scenario “A Stretch Beyond” Story Map / Timeline Example

13 Commoditization of materials sharply reduces costs Populations demand access; efficient net mobilization Data aggregators form real-time communities interested in managing change Summary Description The burgeoning bio-digital revolution evolves new “virtual communities” as material costs plummet and IP rules are radically changed. New forms of networking enable consumer choice to tip whole systems. They use their new-found info-power in real-time clusters that constantly redefine boundaries, access, and technology. Individual wants are invisibly mimicked and negotiated by cyber-bodies. Government becomes irrelevant. End State: 2010 Global consumers find new power and freedom in directing their choices. However, having everything is now cooperative in execution. A willingness to share your data is part of an individual’s social contract with their affinity tribes and mentors. In this world, highly complex systems integration enables real- time response to these communities of consumers, who use their information-sharing capacity and financial resources to continue pushing the frontiers of technology and knowledge. There is a whole new connotation to the word “markets.” Scenario “A Stretch Beyond” Structural Underpinnings / Overview Tension grows between government control & personal choice Social betterment increasingly desirable outcome Push technology frontiers & curiosity

14 14 Recent Rise in Uncertainty: Challenge or opportunity over the next 10 years? Terrorism Global television Tele-imersion Neuroscience Genetic disposition Psychoactive drugs Spiritual connectivity Business and doing good. Corporatization of the commons - water to patents China Global liquidity - long boom? Rapid climate change Global connectivity - real-time Singularity - the spike

15 15 Wild Cards: global, disruptive, beyond control and rapid Energy revolution Global epidemic Water scarcity Nanotechnology Artifical intelligence ET contact scale of potentially transformative events is greater than ever explore, assess, novel approaches - solutions remarkable people

16 16 Determined the Key Factors and Environmental forces The critical forces; most important, most uncertain determined our matrix. The scenario matrix was generated after discussion from a long list of uncertainties. Reviewed in the context of the focal issue “revolutionary meal products” Individual Liberty Self Expression Entrepreneuralism Less Regulation American Attitudes Individualization Economic collapse bust of some sort Recession or Deflation? Welfare of Society Government Tolerance Sustainable Development Suspicion of Science European Massification Continuation of a strong Long Boom Economy IndividualisticSocially Oriented Values Axis Prosperity Hard Times Economic Axis The Scenario Matrix Silicon SuperMeals Success of biotechnology and gene mapping lead customization to individual extremes Biotech-provoked biological disasters stimulate consumer responsibility promoting environmental care Napa Cuisine Federal Food Events shape new government involvement and protectionism leading to new community networks Freeway Fuel Food is seen as fuel in a deflationary economy as a result of faster-is-better and a lowest cost mentality Long recession Income stratification Community economy Relationships / trust Regulatory / Reactive Deflationary Environment Price driven Internet auctions Faster-is-better Food is fuel Sustainable economy Biotech backlash Natural Alternatives Spiritual Advocacy Co-creation with consumer Boom capitalism Demand side bio-tech Technology prevails “My way” Interchange Standards

17 17 In a Freeway Fuel world we consume to keep going, lowest price is king. This is a world in …. Hard Times Individualistic Deflationary Environment Price driven Internet auctions Faster-is-better Food is fuel Values Axis Economic Axis Industry Structure Fragments Networks BiotechEconomic efficiencies pursued Biotech supply driven BrandsPersonal Agents Price Brands meta- mediaries Meal timesFuel stop Skipped Performance E-Commerce / Internet Auctions Priceline e-bay.com Networks Health and Nutrition Keep you going / moving Functional Health Food is Fuel “Smart” Consumers Rule Trad. Retail Disappears Forces at Work Implications Convenience & price rule Lowest cost networks rule Functional food benefits keep you going

18 18 Summary Forces at Work Freeway FuelFederal FoodsNapa CuisineSilicon SuperMeals S FG N Industry Structure Fragments Networks BiotechEconomic efficiencies pursued Biotech supply driven BrandsPersonal Agents Price Brands meta- mediaries Meal timesFuel stop Skipped Performance E-Commerce / Internet meta- mediators auctions priceline.com e-bay.com Health and Nutrition Keep you going / moving Functional Health Fragments Decentralizes Regulations and standards control biotech Necessity Driven Local / trusted Info Brands Safe Nutrition Simple Foods Fragmented Portal driven ISP Yahoo etc. Functional health Minimum Daily requirements Consolidates Networks No Ag Biotech Consumers block developments Bio-ethics slows implementatio n Corporate Brands Policy Brands Natural Solutions Wellness spiritual Trusted amazon.com drugstore.com peapod.com Natural in- tune with nature Balanced Nutrition Fragments Networks Genomic driven Prevention and Life Extension drive biotech's grand plan Personal Brands One to One Personalized Individual Once a day Co-creation accumins.com geocities.com tripod.com Personalized maintain me repair me enhancement me

19 19 Lessons for shaping the future Policies Ingredient Supplies Public Voice Associations Nutrition & Goodness Individual Relationships Size of Database Share of Consumer Intelligence Genomic property Cost Efficiency Price Transparency Share of Network Product Efficacy Regulations Standards Locally and Direct Capability to own and distribute information Consumers determine technical agenda Profit from someone else's standards Produce without inventory? What elements will the customer control

20 20 Regulations Standards Locally and Direct Capability to own and distribute information Virtuous Circle - Robust Strategies Policies Ingredient Supplies Public Voice Associations Nutrition & Goodness Individual Relationships Size of Database Share of Consumer Intelligence Genomic property Cost Efficiency Price Transparency Share of Network Product Efficacy What elements will the customer control Produce without inventory? Profit from someone else's standards Consumers determine technical agenda

21 21 Regulations Standards Locally and Direct Capability to own and distribute information Leverage IC and Info resources Policies Ingredient Supplies Public Voice Associations Nutrition & Goodness Individual Relationships Size of Database Share of Consumer Intelligence Genomic property Cost Efficiency Price Transparency Share of Network Product Efficacy What elements will the customer control Profit from someone else's standards Consumers determine technical agenda

22 22 Regulations Standards Locally and Direct Capability to own and distribute information Build Consumer Trust Policies Ingredient Supplies Public Voice Associations Nutrition & Goodness Individual Relationships Size of Database Share of Consumer Intelligence Genomic property Cost Efficiency Price Transparency Share of Network Product Efficacy What elements will the customer control Consumers determine technical agenda

23 23 Regulations Standards Locally and Direct Capability to own and distribute information Proliferate Personal Networks Policies Ingredient Supplies Public Voice Associations Nutrition & Goodness Individual Relationships Size of Database Share of Consumer Intelligence Genomic property Cost Efficiency Price Transparency Share of Network Product Efficacy What elements will the customer control

24 24 Scanning from the future! Little signs of big changes Think upstream Parking lots, subscriptions, events Vectors of change

25 We cannot bet on any one business model Must be flexible enough to succeed in multiple/changing environment Implications Sufficiently addressing geo/political impact? Will business model sufficiently incorporate social impacts/scenario thinking? Need robust business model & strategy—most likely future is a blend of the 3 scenarios. Need to be able to respond There are no bad scenarios, just opportunities to adjust & move ahead. NEED TO GET OUT OF OUR HISTORICAL PARAGDIGMS INTERNET MAIN DRIVER THE GREEN MOVEMENT IS A THREAT OLD Future will be faster trip down similar road. PRETTY SIMPLE AND EXTENSION OF THE PAST ONE RECIPE FOR SUCCESS OLD Markets defined by SIC codes Less pressing need & importance of geopolitical terms Future (with boundaries) is Predictable SOCIETAL REACTION TO TECHNOLOGICAL STRESSES Look for key inflections points: “Internet China” “Biotech/Digital” “Leaders of the Green Movement” REGULATIONS & TECHNOLOGY BACKLASH- TECKNOLOGY SOLUTIONS VS. TECHNOLOGY THREAT Monitor China & Eastern Europe as proxies for geo-expansion Monitor Green W.R.T. chemicals all materials Global trade openness Internet impact on “Have-Have Not” Materials trends/ disruptive technologies Monitor Recurring Scenarios Planning for predicting trends Internet penetration Strategic monitoring of geo-political trends (especially Asia) Understand more about Bio & Digital Markets “FUEL CELLS” “Ethics of the Bio Revolution” “Government & Political Trends” Open/Close Green/Black Tech/No Tech Research The Convergence of Bio-tech & Digital-tech GEO-POLITICAL MONITORING NEEDS TO INCREASE BE PRO-ACTIVE VS. REACTIVE PEOPLE BEHAVIOR & CULTURE MAIN DRIVER SEVERAL FUTURES ARE POSSIBLE AND PIECES CAN HAPPEN SIMULTANEOUSLY MUST BE MORE THOUGHTFUL ABOUT THE “UNDEVELOPED WORLD” SEVERAL “REAL” POSSIBLITIES SOLUTIONS- PROBABLY A MIXTURE OF ALL OF THEM NEW Business Potential of “Markets of 1” Generation Next’s broad implications Heightened appreciation of geo-political trends Future is multiple vectors off past road, several of which we may want to take quickly NEW BELIEF Speed of Change plus complexity of inter-relationships of factors taking place in environment THERE IS NO “BAD” AND IT IS A LOT MORE COMPLICATED THAN WE THOUGHT Old Assumptions New Beliefs Research/ Monitoring Implications of the Scenarios for the Focal Issue Research Mini Basic vs. E.O.S. Basic Bio - W.R.T. si Learning loop

26 26 Prototyping: Speed, Intuition & Community

27 27 What scenarios opportunities may exist for you? Benefits?

28 28 What can we offer? One-day collaborative program Executive development programs 3 to 5 days. Templated facilitation tools Scenario - Innovation development programs Large-scale corporate change workshops Learning journey design Ideas connecting networks

29 29 Scenarios Tool for Strategy Stuart Henshall October 5, 2001


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