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Future Building outlines the key principles and process for developing strategy under conditions of uncertainty and change.

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  • 1.Future Building in Business Strategy in times of uncertainty Wednesday, 2 March 2011

2. Dr Norman Chorn Economist Future Builder Organisation architect Thought Leaders Mentor Wednesday, 2 March 2011 3. Why are we here? Because our planning doesnt work well in uncertainty Because we need more planning in uncertainty Because we need to create our own future Wednesday, 2 March 2011 4. Today The new normal - why conventional planning wont work for you anymore Strategy vs Planning in your business Key principles of FutureBuilding DIY FutureBuilding Wednesday, 2 March 2011 5. Resources Pre-reading Keynote deck Interactive workbook FutureBuilding planner The network Me (if youre really desperate!) Wednesday, 2 March 2011 6. The new normal Wednesday, 2 March 2011 7. Have you noticed? New economics more regulation lower growth savvy consumers zeroing transaction costs low cost competitors BRIC taking lead New social uid 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 Wednesday, 2 March 2011 8. Jeff Brenman Wednesday, 2 March 2011 9. Assumptions are key ...but the environment keeps changing Wednesday, 2 March 2011 10. If only wed seen this coming! Wednesday, 2 March 2011 11. Is planning different to strategy? Wednesday, 2 March 2011 12. A simple distinction Planning = setting objectives and actions to achieve a goal Strategy = positioning and equipping the organisation for the future Wednesday, 2 March 2011 13. 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 ash of insight as elements combine in unique way 4. Act with resolution Success By 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 Wednesday, 2 March 2011 14. 7 Key principles of FutureBuilding Wednesday, 2 March 2011 15. The future does not exist a priori 1 Wednesday, 2 March 2011 16. The future is a set of possibilities that can be inuenced by purposeful behaviour discovery choiceaction 2 Wednesday, 2 March 2011 17. No monarchy has fomented its own overthrow 3 Wednesday, 2 March 2011 18. Embrace uncertainty 4 Wednesday, 2 March 2011 19. FutureBuilding does not attempt to predict the future Alternative futures are possible 5 Wednesday, 2 March 2011 20. FutureBuilding focuses on developing the capabilities needed for alternative futures 6 Wednesday, 2 March 2011 21. It is better to be vaguely right than completely wrong Clem Sunter7 Wednesday, 2 March 2011 22. Examples of future worlds Wednesday, 2 March 2011 23. Negotiating the future Yes Yes Yes Current negotiations in 1980s Is settlement negotiated? Transition rapid and decisive? Policies sustainable? No No No Wednesday, 2 March 2011 24. Lo concern by public for health Lo social engineering Hi social engineering Hi concern and public mobilisation Public health in Australia Wednesday, 2 March 2011 25. 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 Wednesday, 2 March 2011 26. Your own clients? External focus on markets and customers Values and self direction Process and controls Internal focus on organisation and people Wednesday, 2 March 2011 27. What are scenarios? Wednesday, 2 March 2011 28. 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 Wednesday, 2 March 2011 29. Scenarios created by.. Right brain creative process - its ok to have fun! Social interaction Learn by doing Pathnders are key Wednesday, 2 March 2011 30. Current mental models Novelty Scenarios should balance... Wednesday, 2 March 2011 31. DIY FutureBuilding Wednesday, 2 March 2011 32. Pre build - get the foundations right What is the business of your organisation - the business denition: 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? Wednesday, 2 March 2011 33. 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 Wednesday, 2 March 2011 34. Deductive dene the broad structure of the alternative futures rst... ...then identify the story within each scenario Inductive identify the story line rst ...then dene different scenarios to complete the range of alternative futures 1 Wednesday, 2 March 2011 35. In your environment, identify: key trends important drivers of change most signicant uncertainties *Remember to use Pathnders 2 Wednesday, 2 March 2011 36. Select the dimensions / plot lines that explain the most DIFFERENCE in the data. Then construct a set of skeleton scenarios --> alternative futures 3 Wednesday, 2 March 2011 37. 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 Wednesday, 2 March 2011 38. 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 Wednesday, 2 March 2011 39. 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 qualications, licenses, permits Wednesday, 2 March 2011 40. 67 And now for your action planning Wednesday, 2 March 2011 41. Future capabilities Future capabilities Future capabilities Future capabilities Action plan to develop future capabilities Now Some 50 - 70% of these capabilities are likely to overlap Back-casting Future Wednesday, 2 March 2011 42. Building your future 1. 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 signicant 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 Wednesday, 2 March 2011 43. Wednesday, 2 March 2011 44. You cant just ask customers what they want and then try to give that to them. By the time youve got it built, theyll want something new. Theres an old Wayne Gretsky quote that I love. I skate where the puck is going to be, not where it has been.. Wednesday, 2 March 2011 45. 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 Wednesday, 2 March 2011 46. Dont let the future just happen to you - go and create you own ideal future! Craig Rispin - Futurist Wednesday, 2 March 2011 47. The future is not what it used to be... The world has changed - conventional approaches no longer work Dont attempt to predict the future The future can be inuenced Pathnders are necessary to envisage alternative futures Focus on building strategies and capabilities for alternative futures Skate to where the puck is going to be Wednesday, 2 March 2011 48. Wednesday, 2 March 2011