future building

Future Building in BusinessStrategy in times of uncertainty

Wednesday, 2 March 2011

Dr Norman ChornEconomist

Future Builder

Organisation architect

Thought Leaders Mentor

Why are we here?

Because our planning doesn’t work well in uncertainty

Because we need more planning in uncertainty

Because we need to create our own future

TodayThe “new normal” - why

conventional planning won’t work

for you anymore

Strategy vs Planning in your

business

Key principles of FutureBuilding

DIY FutureBuilding

ResourcesPre-readingKeynote deckInteractive workbookFutureBuilding plannerThe networkMe (if you’re really desperate!)

The new normal

Have you noticed?New economics✓ more regulation✓ lower growth✓ savvy consumers✓ zeroing transaction costs✓ low cost competitors✓ BRIC taking lead

New social✓ fluid families✓ ageing population✓ suspicion of politics✓ suspicion of big biz✓ more conservatism✓ anti-globalisation✓ social justice✓ protectionism

New environment✓ climate change✓ emissions legislation✓ degradation of soil, air, water✓ cost of energy✓ new forms of energy

New technology✓ online impacts everything - rapid paradigm changes✓ global online services industry✓ technology enabled new work modalities✓ democratisation of media✓ rapid innovation and obsolescence

Jeff Brenman

Assumptions are key

...but the environment keeps changing

If only we’d seen this coming!Wednesday, 2 March 2011

Is planning different to strategy?

A simple distinction

Planning = setting objectives and actions to achieve a goal

Strategy = positioning and equipping the organisation for the future

Planning (Jomini) Strategy (Napoleon)

Approach

1. Establish your base of ops

2. Determine objective point

3. Choose lines of ops to move your army forward

1. Learn from history and your experience

2. Clear your mind - immerse yourself in battle

3. Wait for flash of insight as elements combine in unique way

4. Act with resolution

SuccessBy having greater force than enemy at objective point

By identifying the “decisive point” in the battle

Objective Chosen before - then move to achieve it

Not chosen before - emerges as you learn and adapt

Key Objective point Decisive point

7 Key principles of FutureBuilding

The future does not exista priori

The future is a set of possibilities that can be influenced by purposeful behaviour

discovery

choice action

No monarchy has fomented its own overthrow

Embrace uncertainty

FutureBuilding does not attempt to predict the future

Alternative futures are possible

FutureBuilding focuses on developing the capabilities needed for alternative futures

It is better to be vaguely right than completely wrong

Clem Sunter7

Examples of future worlds

Negotiating the future

Current negotiations in 1980s

Is settlement negotiated?

Transition rapid and decisive?

Policies sustainable?

Lo concern by public for health

Lo social engineering

Hi social engineering

Hi concern and public

mobilisation

Public health in Australia

Progressive society and

policies

Lo cost of energy

Hi cost of energy

Defensive society and

policies

No option Sydney

The lucky city

Not our problem

Batten down the hatches

Sydney property development

Your own clients?

External focus on markets and

customers

Values and self direction

Process and controls

Internal focus on organisation

and people

What are scenarios?

Good scenarios

Coherent stories about alternative futures

They have a series of plot lines that intersect and produce an internally consistent story

Based on the key drivers and uncertainties from the environmental scan

Can be external or internal

Scenarios created by..

Right brain creative process - it’s ok to have fun!

Social interaction

Learn by doing

Pathfinders are key

Current mental models Novelty

Scenarios should balance...

DIY FutureBuildingWednesday, 2 March 2011

Pre build - get the foundations right

What is the business of your organisation - the business definition:

• product / services?

• customer groups?

• value proposition to each customer group?

What are your KSFs?

What are your clients’ major concerns?

WHAT IS THE FOCAL QUESTION?

7 steps to Build your Future

3. Skeleton scenarios

2. Deductive or inductive scenarios?

1. Trends, drivers and uncertainties

4. Flesh out scenarios

5. Winning strategies

6. Key capabilities

7. Plan for capabilities

Deductivedefine the broad structure of the alternative futures first...

...then identify the story within each scenario

Inductiveidentify the story line first

...then define different scenarios to complete the range of alternative futures

In your “environment”, identify:✓ key trends✓ important drivers of change✓ most significant uncertainties

*Remember to use Pathfinders

Select the dimensions / plot lines that explain the most DIFFERENCE in the data. Then construct a set of skeleton scenarios --> alternative futures

3Wednesday, 2 March 2011

Make the stories (scenarios) as complete as possible - describe what life is like in that future world

Flesh out the skeletons into stories for each of the alternative futures4

Develop the “winning” strategy for you to win in each of these alternative futures5

Consider all aspects of the strategy✓ product / service✓ market / customer✓ value proposition✓ how you will differentiate yourself✓ relationship architecture✓ how you will make a return

Identify the key capabilities you will need to develop to execute the winning strategies6

Several classes of capability✓ knowledge of techniques, processes, issues✓ understanding of industries, types of clients✓ key skills and competencies✓ relationship architecture✓ reputation, track record, credibility✓ assets, tools, infrastructure✓ qualifications, licenses, permits

67 And now for your action planning

Future capabilities

Action plan to develop future capabilities

Some 50 - 70% of these capabilities

are likely to overlap

Back-casting

FutureWednesday, 2 March 2011

Building your future1. Choose between deductive or inductive scenarios

2. Identify key trends, drivers and uncertainties

3. Construct your skeleton scenarios by choosing orthogonal dimensions or the most significant plot lines

4. Flesh out alternative stories of the future

5. Build “winning strategies” for each alternative future

6. Identify the key capabilities required for each strategy

7. Action plan to develop common capabilities

“You can’t just ask customers what they want and then try to give that to them. By the time you’ve got it built, they’ll want something new.

There’s an old Wayne Gretsky quote that I love. ‘I skate where the puck is going to be, not where it has been..’”

“The complexity for minimum component costs has increased at roughly a factor of two per year”

Extract from Moore's original paper in 1965

Gordon Moore - co-founder of Intel

Thanks to Craig Rispin

“Don’t let the future just happen to you - go and create you own ideal future!”

Craig Rispin - Futurist

The future is not what it used to be...

The world has changed - conventional approaches no longer work

Don’t attempt to predict the future

The future can be influenced

Pathfinders are necessary to envisage alternative futures

Focus on building strategies and capabilities for alternative futures

Skate to where the puck is going to be

future building

key objective

future building

future alternative futures

key capabilities

new economics

business strategy

key drivers

objective point

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