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Fierce Foresight tm

Creating Tomorrow Out of the Changing of Today

WorldFuture 2013

Dr. Michael PettyNorth Star Partners

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Fierce Foresight tm

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Fierce Foresight tm

Failed to foresee

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Fierce Foresight tm

Failed to foresee

Failed to foresee

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Fierce Foresight tm

Failed to foresee

Failed to foresee

Failed to foresee

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Fierce Foresight

“What everybody knows is what has already happened or become obvious.

What the aware individual knows is what has not yet taken shape, what has not yet occurred”

Sun TzuThe Art of War

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Objectives

Develop the ability to “fiercely” confront today’s reality

Introduce tools to initiate the creation of insight of today and foresight of the future

Recommend an ongoing foresight system to “fiercely” pursue the opportunities and risks of today’s reality and its changing environments

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Fierce Foresight tm

Foresight (noun):1. care or provision for the future

2. the act or power of foreseeing

3. an act of looking forward

4. knowledge or insight gained by or as by looking forward; a view of the future.

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Fierce Foresight tm

Fierce (adjective): menacing, cruel,barbarous, threatening

Synonyms (Roget’s Thesaurus): robust, intense,strong, powerful, passionate, unbridled, bold, relentless

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Fierce Foresight tm

Gaining a view(s) of the future

by robust, intense, passionate, bold and

relentless pursuit.

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Fierce Foresight tm

Interrogating Reality

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“the present is the future

in its most creative state”

T. Irene SandersStrategic Thinking and the New Science

Fierce Foresight tm

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Interrogating Reality

The objective of interrogating reality is to answer three critical questions:

What are the current influences on the business?

What influences are changing?

What influences could change?

Interrogating Reality–Part I

Insight of the present is

the foundation of foresight

of the future(s)14

Interrogating Reality–Part I

Asking the tough questions about today’s operations:

Do we really understand our business model?

If not, Business Model Canvas is a great tool!

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Interrogating Reality–Part I

As we know it today

The Business Model Building Blocks

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Interrogating Reality–Part I

An example: Starbucks Exercise

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Interrogating Reality–Part I

Asking the “fierce” questions about today’s operations/business model:

What’s working?

What’s not working?

What’s working that’s in jeopardy?

Interrogation Matrix: Current Influence

Component Socio/Demo

Tech Economic

Environ

Legal/Pol

Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure

Revenue Stream20

Interrogation Matrix: Current InfluenceStarbucks Exercise

Component Socio/Demo

Tech Economic

Environ

Legal/Pol

Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure

Revenue Stream21

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Interrogating Reality–Part II

Asking the “fierce” questions about tomorrow’s operations:

What’s working today that may not tomorrow?

What business environmental factors are changing?

What known critical future issues are not being discussed?

Interrogating Reality–Part II

Asking the “fierce” questions about tomorrow’s operations:

The Business Model Canvas on steroids

What are the underlying assumptions of each component of the Business Model?

Which assumptions are in jeopardy?23

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Interrogating Reality–Part II

What are the critical assumptions underlying

each building block?

What assumptions are in jeopardy?

Interrogation Matrix: “Changing” InfluenceStarbucks Exercise (cont.)

Component Socio/Demo

Tech Economic

Environ

Legal/Pol

Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure

Revenue Stream25

Interrogation Matrix: “Changing” Influence

Component Socio/Demo

Tech Economic

Environ

Legal/Pol

Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure

Revenue Stream26

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Interrogating Reality–Part II

Asking the “fierce” $64 billion question:

What STEEP factor could change?

What underlying assumption could be in jeopardy?

Interrogation Matrix: “Changing” Influence

Component Socio/Demo

Tech Economic

Environ

Legal/Pol

Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure

Revenue Stream28

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Interrogating Reality–Part III

Asking the “fierce” questions about today’s reality:

Is the business model understood and are the underlying assumptions identified?

Are ongoing changes in the environment being actively and “fiercely” assessed?

Are future (but yet unknown) changes in environment factors being actively assessed?

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The Three “Fierce” Questions

1) What general (tectonic) factors influence our business today?

2) What general factors are changing?

3) What general factors could change?

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Fierce Foresight tm

The Black Swan

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The Black Swan

The Black Swan: The Impact of the Highly Improbable (2007)

Nassim NicholasTaleb : “we do not live in a probabilistic

world”

One of most influential books of the first decade of the 21st Century

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The Black Swan Defined

A Black Swan is an event that is:

Happens unexpectedly

Devastating in its consequences

Subsequently rationalized

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The Black Swan Stress Test

What event (or related series of events)

could make your business irrelevant or worthless

in six months or less?

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The Black Swan Stress Test

What event (or related series of events) could make your business irrelevant or worthless in six months or less?

Example: The US auto industry

U. S. Automotive Business Model

Design

Cars

Assemble Cars

Sell Cars

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Underlying Assumptions•Proper Needs Assessment•Necessary Demand•Acceptable Styling•Appropriate Technology

•Available Resources•Cost Efficient Operations•Appropriate Quality

•Competitive Price•Available inventory•Available consumer credit

U. S. Automotive Business Model

Design

Cars

Assemble Cars

Sell Cars

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Underlying Assumptions•Proper Needs Assessment•Necessary Demand•Acceptable Style•Appropriate Technology

•Available Resources•Cost Efficient Operations•Appropriate Quality

•Competitive Price•Available inventory•Available consumer credit

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The Black Swan Stress Test

What event (or related series of events) could make your business irrelevant or worthless in six months or less?

Example: The US auto industry Sixty year old business model Key element – providing retail customers

loans or leases to transact new car purchases Made irrelevant in less than six months in

2008 Impact of banking industry credit crisis

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Stress Test Rules(Table Exercise)

What event (Black Swan) or series of events could render the current business model irrelevant/worthless in six months or less

Identify ten “Black Swan”

Improbability of likelihood is irrelevant(What probability of total loss is acceptable to

you?)

The Black Swan Matrix

Black Swan Socio/Demo

Tech Economic

Environ

Legal/Pol

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Black Swan Assessment

Black Swan

Description Industry (In or Out)

Environ. Factor

(Existing or New)

Strategy(Yes or

No)

1 AAA In Existing Yes2 BBB Out Existing No3 CCC OUT New No4 DDD In New No5 EEE Out Existing No6 FFF In New No7 GGG In Existing Yes8 HHH Out New No9 III Out Existing No10 JJJ In New No

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Is Your Business Model at Risk?

Sony Walkman – market leader for 20+ years

MP3 technology - alternative (albeit illegal) music delivery system (Napster)

Apple via iTunes/ iPod - capitalized on the change in technology and change in music contracting

The Walkman - officially retired for lack of market demand.

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Is Your Business Model at Risk?

Sony Trinitron Television – the premium TV product for three decades

Sony Walkman – market leader for 20+ years

Sony eBook reader – on market

almost four years before the iPad.

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Fierce Foresight tm

The Flip-Side: The Golden Goose

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The Golden Goose Defined

The Golden Goose is an event that is:

Happens unexpectedly

Creates extraordinary opportunities as a consequence

Subsequently rationalized

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The Golden Goose “Euphoria” Test Rules

Identify the event (Golden Goose) or series of events that would render your current business model extraordinarily successful in “6” months

Identify ten “Golden Geese”

Improbability of likelihood is irrelevant(What probability of extraordinary success

would you pass up?)

The Golden Goose Matrix

Golden Goose Socio/Demo

Tech Economic

Environ

Legal/Pol

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Golden Goose Assessment

Black Swan

Description Industry (In or Out)

Environ. Factor

(Existing or New)

Strategy(Yes or

No)

1 AAA In Existing Yes2 BBB Out Existing No3 CCC OUT New No4 DDD In New No5 EEE Out Existing No6 FFF In New No7 GGG In Existing Yes8 HHH Out New No9 III Out Existing No10 JJJ In New No

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Three More “Fierce” Questions

1) Are you aggressively hunting the Black Swan?

2) Are you aggressively hunting the Golden Goose?

3) If not, why not?

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Fierce Foresight tm

Fiercely Creating Tomorrow

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We Have Seen the Future(s)

Three Fierce Questions

Black Swan

Golden Geese

Now, what do we do about it?

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The Three “Fierce” Questions

1) What general factors influence our business today?

2) What general factors are changing?

3) What general factors could change?

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Fierce Actions

Priority “A” – High potential impact or “indeterminable” impact – immediate action

Priority “B” – Moderate impact or probability – regular and recurring monitoring

Priority “C” - periodic review

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Fierce Accountability Assign each potential Fierce Action to a

senior executive for immediate analysis and action

Immediate identification of trigger event for follow-up action

Monthly update to senior management team

( evolving impact assessment)

Contingency plan at trigger event

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Fierce Contingency Plans

What must be done now?

What can be done now?

How fast can it be done?

What must be done at a trigger event?

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Three “Fierce” Black Swan Questions

1) Are you “fiercely” hunting your Black Swans?

2) Do you have contingencies plans in place?

3) If not, why not?

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Black Swan Hunters

Assign each potential Black Swan to a senior executive for analysis and monitoring

Identification of trigger event for action

Quarterly update to senior management team – any change in status (look for “perking” data)

Contingency plan at trigger event

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Black Swan Hunters – Contingency Plans

What must be done now?

What can be done now?

What must be done at trigger event?

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Three “Fierce” Golden Goose Questions

1) Are you “fiercely” hunting your Golden Geese?

2) Do you have aggressive action plans in place?

3) If not, why not?

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Golden Geese Hunters

Assign each potential Golden Goose to a senior executive for analysis, action and/or monitoring

Quarterly update to senior management team

Identification of trigger event for action

Aggressive action plan at trigger event

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Strategic Foresight Heads-up Screen

Issue No./Name

Fierce

Action

Black Swan

Golden Geese

Futures

Wheels

Scenario

Analysis

1. Tech Platform Smith

2. Power Shortage Jones

3. Bionic Network

Clark

4. Consumer App Burke

5. Genetic App Christopher

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Strategic Foresight Heads-up Screen: Issue Report

Issue Priority: “A”Issue Category: “Black Swan”Issue Description: Power OutageAccountable Executive: J. J. JonesDate Identified: July, 2012Potential Impact: Total loss in six monthsCritical Trigger Points (defined):Critical Trigger Points Status:Change in Status Since Last Report:Action Taken:Description of Follow-up Action & Timing:Contingency Plan Activation Date:

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Other “Fierce Foresight” Considerations

Create a budget fund for opportunities and defensive expenditures

Simplify justification for strategic opportunities

Create of periodic reporting system – parallel to operational reporting – and accountability

Include a “foresight” performance component to performance evaluation at both executive and management level

Board level reporting and accountability function

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You have just developed the foundation for a robust strategic issues identification and action system.

You now have the ability to modify and enhance this system and empower your team to think, analyze and act strategically!

You now have the ability to significantly influence the future – to create your own preferred, fierce future!

Create Your “Fierce” Future

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Interrogate reality by understanding your business model

Interrogate reality by identifying the critical underlying assumptions

Interrogate reality by using the BMC/Environment (tectonic) Factor Matrix

Aggressively hunt the Black Swan and Golden Goose

Actively manage all identified potential strategic risks and opportunities

Creating Tomorrow

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Fierce Foresight tm

Dr. Michael PettyNorth Star Partners, LLC6166 Hidden Canyon Rd.Centreville, VA, 20120703.401.2623Mike.Petty@north-star-

partners.comTwitter @DrMikePettyLinkedIn @ mpettyiii

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Fierce ForesightReferences:

T. Irene Sanders, (1998), Strategic Thinking and the New Science

Nassim N. Taleb, (2007), The Black Swan: The Impact of the Highly Improbable

Alexander Osterwalder, (2010), Business Model Generation

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Fierce Foresight

Be Fierce!

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Black Swan Assessment

Black Swan

Description Industry (In or Out)

Environ. Factor

(Existing or New)

Strategy(Yes or

No)

1 2345678910

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Golden Goose Assessment

Golden Goose

Description Industry (In or Out)

Environ. Factor

(Existing or New)

Strategy(Yes or

No)

1 2345678910

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Strategic Foresight Heads-up Screen

Priority “A” Issues /Exec.

Fierce

Action

Black Swan

Golden Geese

Futures

Wheel

Scenario

Analysis

Issue:Executive: Issue:Executive:

Issue:Executive:

Issue:Executive:

Issue:Executive:

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Strategic Foresight Heads-up Screen

Issue No./Name

Fierce

Action

Black Swan

Golden Geese

Futures

Wheels

Scenario

Analysis

1. Tech Platform Smith

2. Power Shortage Jones

3. Bionic Network

Clark

4. Consumer App Burke

5. Genetic App Christopher

The Black Swan Matrix

Black Swan Socio/Demo

Tech Economic

Environ

Legal/Pol

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The Golden Goose Matrix

Golden Goose Socio/Demo

Tech Economic

Environ

Legal/Pol

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