10 Jun 10 The danger of thinking in straight lines

Unfortunately, the world never moves in straight lines.  That’s why predicting the future, especially when making business plans, is so difficult.

A recent review of one long-term projection, Britain in 2010[1], a study prepared in in 1990 looking at the features of the UK in 2010, emphasizes this point.   If we compare the projections made in 1990 with the world that we live in today we can notice:

• An absence of the internet (and therefore social media)
• No mobile technology
• Peace – with the UK enjoying the fruits of a new-found global stability and …
• A buoyant economy.

To maintain balance, the 1990 work got a lot of things right but the major point made by the reviewers is:

… that non-linear or disruptive change was underestimated or completely missed. For example, the 1990 report predicted two decades of ‘important incremental progress’ in technology. They considered the internet (which, like climate change, was waiting in the wings in 1990, preparing to jump centre-stage) but didn’t anticipate its startling, planet-wide impacts …

Which is why scenario planning is so important.  A well constructed process encourages:

• Pluralistic thinking looking at more than one future world.
• The consideration of uncertainties as opposed to certainties and
• The exploration of extremes – especially when considering what might happen as opposed to what will.

After all, the future of your business is too important to bet it on just one view of the future isn’t it?

Reference
[1] Goodman, J. Britain in 2010. The Forum for the Future. May 21, 2010.

Tags: business plans, future world, predicting the future, scenario planning

20 Oct 09 Looking at futures: The role of shaping events

One of the most powerful tools to help make your organization more resilient in uncertain times is to think about not just one future, but multiple futures, a process called scenario planning which I introduce here.

This helps you develop a new monitoring system.  We’re all used to internal performance measurement and management systems like the balanced scorecard, but what organizations now need is an external monitoring system to help managers predict, before the competition, which way the global business world is going.

To create this approach, you need to identify what I call “shaping events”.  Shaping events are, as the name suggests, events that we think will occur.  And when they do occur we can judge the world’s reaction.  The reaction will help to tell us in which direction the global business world is going.

Well, here is a potential shaping event.  Some commentators have called for the advanced economies (notably the US and UK) to move from a consumer “spend, spend, spend” basis to a more traditional export led structure.  This, very broadly, is at the heart of Ben Bernanke’s (The Chairman of the US Federal Reserve) call [1] to resolve “global imbalances”.  Basically it is a call to the emerging (or we should say “emerged”) economies to let us, the advanced economies who are in a bit of a mess, to export more whilst you export less and spend more on our goods.

It will be interesting to watch the reaction to this call.

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Reference
[1] Guha, K. (2009) Bernanke warns on imbalance risks. Financial Times. October 19

Tags: scenario planning