Building richer mental models is the heart of strategy – the role of scenario planning

Strategy is an intrinsically human task. Setting successful strategies is based on our ability to think effectively, both individually and collectively, about extraordinarily complex domains.

In a recent keynote I did for clients of New Scientist magazine on Science and Leadership for the Future, I discussed how executives can think effectively about strategy.

The following video is one of a series of 7 videos that captured the entire keynote.

In the video I note:
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Report: The Future of Back-to-School

I am currently in Toronto to launch a report commissioned by Visa Canada on The Future of Back-to-School.

As noted in the announcement of the report:

In a recent survey conducted by Ipsos Reid on behalf of Visa Canada, 52 per cent of Canadian parents with children aged 5-16 found back-to-school preparations to be stressful for them and their families, second only to the Christmas or winter holiday season. With an eye on the future, Visa also explored how tomorrow’s technologies and innovations may address the challenges presented during the busy back-to-school period. Visa commissioned a report by internationally-renowned futurist Ross Dawson who identified a number of innovative technologies that may exist by 2024 to help ease the stress during this annual time period.

In his report, titled The Future of Back-to-School, Ross Dawson highlights these futuristic innovations through colourful vignettes, such as at-home scanners that measure children’s clothing sizes and systems that automatically allow for purchase and delivery in a timely fashion, or family-focused and streamlined ordering of nutritious groceries, making planning for school lunches a breeze – all purchased using authentication of unique voice patterns.

You can download the full report by clicking on the image of the report cover below.

FutureofBacktoSchool_Visa
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15 theses about the future of the Internet and how we can shape it positively

PewResearch Internet Project has just released a report on Digital Life in 2025 based on expert interviews.

One of the interesting aspects of the report is the ‘theses‘ that they have distilled from the interviews, which they have divided into ‘more-hopeful and ‘less-hopeful’, concluding with one very important piece advice. These are:
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Why predictions are dangerous and organizations must be well networked

AFR_Boss_Dec13_300wToday’s BOSS magazine in the Australian Financial Review includes a feature on my work.

The article focuses on my thoughts on the value of predictions. I’ve written before about why predictions usually have negative value, as an important way of framing how we think about the future.

I am quoted in the article:
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Exploring the future of investment management

Last week I was in Amsterdam for the International User Community Meeting of SimCorp, a leading provider of software for the investment management industry. I gave the keynote on the Future of Investment Management and ran a half-day Executive Master Class on Creating the Successful Organisation of the Future.

Prior to founding Advanced Human Technologies most of my working career had been in financial markets with Merrill Lynch and capital markets with Thomson Financial, with my final role as Global Director – Capital Markets.

My initial client base when I established my company was largely in financial services, and I began to focus on the investment management industry, for a number of reasons.

In the later 1990s my work and research was split between the fields of knowledge management and intellectual capital on the one hand, and futures methodologies such as scenario planning on the other.
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Thinking about the future: Why predictions usually (but not always) have negative value

A few days ago I spoke at the opening dinner of a strategy offsite for a professional firm, on the topic of ‘Thinking About The Future‘. It is a very common style of engagement for me, being briefed to set the broadest possible mental frame for executives before their in-depth discussions on directions for the business. The session went extremely well in provoking some very interesting conversations during the evening, and I gather driving new thinking through the rest of the offsite.

Just before I spoke the executive group had heard from a well-known economist who was giving them economic forecasts for the next 10 years.

As such, in my presentation I explained why forecasts usually have negative value. I spent a long time working in financial markets, and I have seen market and economic forecasts tremendously abused.

The most important point is that almost all forecasts will turn out to be wrong. The future is unpredictable. Giving numerical values to future economic or market data can easily shut down useful thinking about the reality of uncertainty and the range of possibilities that may transpire.
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Scenario Planning in Action: What, Why, Success Factors, and Process

Scenario planning as a management discipline has a long and rich pedigree. It is just one of a wide variety of tools and processes that have been developed to help executives and organizations build strategies and succeed in an uncertain world. However almost 15 years experience in applying a wide variety of strategic futures tools have lead me to believe that scenario planning is the single most powerful approach available.

This certainly doesn’t mean that scenario planning is always the best approach to help organizations explore the future. However I see it as the single broadest and most powerful tool to facilitate rigorous, structured decision-making about the long-term future in high levels of uncertainty.

As I have written, the greater the uncertainty, the greater the value of scenario planning, and in almost every industry today uncertainty is increasing. The many industries to which we have applied scenario planning include financial services, media, infrastructure, and many others.

In fact, engendering scenario thinking among executives is far more important than scenario planning, however scenario planning is often the best route to that outcome.

Scenario planning is a rich and varied domain, and should be implemented uniquely depending on the context and the objectives. One of the challenges is that many people talk about ‘scenario planning’, often meaning very different things, and not infrequently degrading the term by applying it to unsophisticated approaches to dealing with uncertain futures.

To help a large consumer-goods organization we worked with last year on a scenario planning project to understand the issues, I pulled together an overview of what scenario planning is and a typical process. We have summarized that in the following two page document.


Click on the image for full-size pdf
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12 Themes for 2012: what we can expect in the year ahead

Towards the end of each year I share some thoughts on what awaits in the year ahead.

It is actually a lot easier to look years into the future than just a single year, as while we can readily discern broad trends, the major events in a year are usually unforeseeable, though they may express the longer-term directions. However as the pace of change accelerates, it is becoming a little easier to see the themes, if not the specifics, of the year ahead. My Map of the Decade shows the 14 ExaTrends that are shaping this 10-year period. Today I launch my 12 Themes for 2012, in conjunction with Future Exploration Network.

Below is the text for the 12 themes, though they are better viewed in the slides above, as the images used are an intrinsic part of the themes. Alternatively download the pdf of 12 Themes for 2012 (10.6MB)
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Animated excursions into the future: the extraordinary implications of utility fog

I caught up with fellow futurist Kristin Alford last week, yet another first time face-to-face meeting after a long time interacting online. It seems most of the people I meet these days are people I know from Twitter.

Kristin pointed me to some of what her company Bridge8 is doing in creating animated videos about the future. I believe the primary intended audience is secondary school students, but they are excellent videos, well-paced, well-thought-out, educational, all in all very nicely done.

Here is their video on the implications of Utility Fog, starting with a segment on how to think about the future, introducing the idea of utility fog, and running through some of the possible implications. It’s a great study in futures thinking, and well worth watching.


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Applying scenario planning to portfolio and financial risk: 6 steps to better risk management

Back in the late 1990s I did considerable work applying scenario planning to financial risk management, using qualitative approaches to managing risk as a complement to quantitative methodologies such as Value at Risk. However financial institutions were generally very slow to acknowledge the value of anything not fully quantified, so I shifted my attention to broader strategic issues. I wonder if the finance industry is now more ready for these kinds of approaches.

Here is an article I wrote in 1998 in Corporate Treasurer magazine in the wake of the Asian financial crisis of 1997. The article has not dated, and remains completely relevant today. Just replace Asia crisis with the recent financial crisis of your choice.

Did You Forecast Asia? Scenarios In Portfolio And Risk Management

Did you forecast and respond effectively to the ongoing impact of the Asian crisis? The debate continues on whether or not the crisis was predictable, however the reality is that it was not effectively predicted. One of the major reasons is the strong bias in financial markets to making single-point forecasts. By their nature these cannot encompass anything except what is perceived as the most likely outcome, and thus blind us to the unexpected rather than help us to prepare for it.
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