Agenda and Outline

I. Essentials of Strategic Planning: What Works, What Doesn’t, and How Can I use my Plan to Drive

II. Case Analysis: Strategic Thinking and Execution—Porter Airlines

III. Competition and Growth in 3 Circles: Building a Growth Strategy

IV. Innovation—Innovating Without an R&D BudgetV. So Many Options, So Little Time, What’s Next—

Frameworks for Project SelectionVI. Strategic Foresight—Getting Future Ready Through 

Scenario DevelopmentVII. Application Breakout: Developing Your Future Scenarios

Member Introduction

Find a partner not from your organizationVisit for 15 minutesYou will be responsible for introducing your partner to the groupYour Partner’s:NameOrganizationGreatest AccomplishmentBiggest Professional ChallengeOne thing in Common with you and partnerWrite it down, not all introductions will take place now.

Strategic Foresight—Getting Future Ready Through Scenario Development

ForesightThe ability to anticipate future change and devise resilient organizational plans to minimize risk and capitalize on cognitively distant opportunities

Consider…Why do market leaders so often get caught off guard? 

#18 in 2013:

How did Kodak so underestimate the potential of digital photography…?

Can you guess who invented the world’s first digital camera in 1975?

Bonus Question:

How did GM not foresee the emerging demand for fuel efficiency…?

Launched: 1996

Withdrawn: 1999

Launched 2002

Launched 1999

60% Market share, 1994

Symbian Platform:

40% maret share, 9000 stores

34% Market share, 1998

47% Market share, 2008<1% Market share, 2014

Bankruptcy 2010

Nonprofits can fail and/or lose their relevance 

https://cihe.neasc.org/information‐public/merged‐closed‐or‐previously‐accredited‐institutions

Three Roles of Strategic Leaders“The Opportunity Box”

Capturing Cognitively Distant Strategic Positions

1. Spotting: low‐hanging fruits plucked quickly;—superiority requires news lens & mental processes.

2. Acting: combat inertia and guide firm to toward opportunity—particularly difficult if it alters firm’s identity.

3. Legitimizing: persuading external stakeholders that new perspective is viable. 

Scanning the Environment for Change

Scanning

Scanning Gather signals of change from “Experts” Assess the reliability of the signal source Interpret the meaning of the signal Recognize that change often comes from the periphery

Weak Signals of change can be Diamonds in the Rough

It needs to be relevantBut if it is TOO relevant,it is not a WEAK signal

Scan all the categories…

Demographic

Societal

Governmental

Technological

Environmental

Economic

Synergies,Contradictions, 

Questions

Guard Your Blind Spots: Cognitive Constraints

Educated Incapacity: the more expertise one has in a given field, the less likely that person will be to see a solution outside of the framework within which that person was taught to think.

Selective Perception: The more focused we are on a challenge, the more likely we are to overlook obvious information.

Anchoring: “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain'tso.”

Mark Twain

Gartner Group—Hype Cycle

The tendency to overestimate the amount of change in the short‐run (3 years) and underestimate the amount of change in the long‐run (10 years)

Jumping to a New S‐CurveDisruptive Change

Time

Thinking About The Future

Forces of Change 

Issues (emerging): Ongoing Controversies/debates to be resolved but once resolved could pose major change. Compared to trends, emerging issues have trajectories that are much less defined.

Trends: Some patterns of change over time often with a predictable momentum.

Events (Wildcards/ Black Swans): One‐off Low‐probability, high‐impact events that create sudden change to a system. 

New U.N. ProjectionsTrends/Demography

October 2010Source:

Trends/Demography

Trends/Governmental

BA 30310  ‐ Class 2

Pressure For Austerity (?)

Trend/ Economic Inequality

Trend/ Technology

Issue/ Governmental & Society

Emerging Issue: Generational Value Shift

Source: zipcar.com

Emerging Issue: Privacy & Cybersecurity

Wildcards/Black SwansFinancial Collapse social unrest panic in the streets

Source: flickr user/how will I ever know

Wildcards/ Black Swanspandemic and quarantines

Volatility Uncertainty Complexity Ambiguity

VUCA

VUCA is frustrating but does not absolve leaders from Strategic Planning

How do you plan in VUCA world? Strategic Planning

With the amount of changethings can get a little crazy out there!

Scenarios

“…are stories about the way the world might turn out tomorrow, stories that can help us recognize and adapt to changing aspects of our present environment.”

Peter Schwartz“The Art of the Long View”

Possibilities… …(Not Predictions)

“The payoff is better decisions, not better predictions”

Scenarios

“The person who writes scenarios must be a good story teller”                    (Charles Roxbourgh, McKinsey & Co.)

• Built on a Firm Foundation• Clear Sequence of Events Narrative• Meaningful Theme & Creative Name• Immersive & Distinctive Outcome

http://www.youtube.com/watch?v=jQ2uIPeiEYQShell Oil Energy Scenarios

Cone of Plausibility

Three simple questionsWhat is going to happen? –

Expected ScenarioWhat might happen instead? –

Alternative ScenariosWhat do you want to happen? –

Preferred Scenario(s)

Three simple questionsWhat is going to happen? –

Expected ScenarioWhat might happen instead? –

Alternative ScenariosWhat do you want to happen? –

Preferred Scenario(s)

AlternativeScenario

Preferred Scenario

Expected Scenario

Past

Present

AlternativeScenario

AlternativeScenario

Disruption

Adapted From:  “Framework Forecasting”, Peter Bishopand the Army War College

The Power of Scenarios Scenarios Process Expands Your Thinking 

Provides a Method for “Thinking the Unthinkable” Challenge Conventional Wisdom & Cognitive Proximity

Scenarios create “Memories of the Future” To “experience” the disruption in advance  – “flight simulator”

Enable Companies to “Wind Tunnel Test” Strategies Vulnerability Analysis, Gap Analysis “Strategy Testbeds” to Create Resilience

Identify “Signposts” as early indicators Minimize Surprises

Scenario Development

“Double Uncertainty Matrix”[Global Business Network]

“Alt Futures” [Institute For The Future]

Deductive Method Inductive Methods

Scenario Development – Deductive MethodDouble Uncertainty Matrix

Best when two key uncertainties will drive future outcomes

1. Identify top 5 uncertainties (from a broader list)2. Prioritize top 2 uncertainties to create a matrix3. Define the conditions within each quadrant of the matrix4. Develop Stories

•Narrative/Sequence of Events•Branding/Theme• Immersive Outcome

5. Identify Signposts

Scenario Matrices – An Example

Scenario Matrices – An Example

• Global Trade Dynamics and Resource Demand• Climate Change Severity• Governance of Marine Use in Arctic Ocean• Global Oil Prices• Safety of Other Trade Routes (Suez and Panama Canals)• Possibility of a Major Arctic Shipping Disaster

Prioritizing Uncertainties

Scenario Matrices – An Example

Source:  Arctic Marine Shipping Assessment, Source: Global Business Network

Scenario DevelopmentAlt Futures 

Steps for Inductive Scenario Development1. Identify key forces of change2. Explore disruptions in each force3. Map forces / disruptions into 4 scenario

archetypes• i.e. create comparative matrix

4. Develop “Stories”• Narrative/Sequence of Events• Branding/Theme• Immersive Outcome

5. Identify Signposts

Institute For the Future http://iftf.org/home/

http://prezi.com/kq40dt6r2ibs/foresight‐california‐dreaming/

Best when major technological or societal transitions are likely

Scenario Development Application• Identify Forces of Change impacting your organization

• Choose one of the Methods for Scenario Development

• Develop four scenarios– Narrative & story– Create thematic names– Develop Signposts—early indicator that one scenario is unfolding as opposed to another.

– Create one “Future Headline” for your organization for one of the scenarios that is unexpected, novel, non obvious.

Major Uncertainties1.  Identify Top 5 Major Uncertainties 1)

2.  Select Two Primary Uncertainties as      Matrix Axes

2)

3.  Describe Conditions for Each Quadrant 3)

4.  Develop "Stories" 4)

5.  Define Signposts 5)

Primary Uncertainty #1Primary Uncertainty #2

Deductive Method for Scenario Development Double Uncertainty Scenarios Matrix

1. Identify Key Forces of Change. (from Impact of Change Assessment)2. Explore Disruptions in Each Force3. Map Forces and Disruptions into Four Scenarios.

Force of ChangeExpected Scenario Alt.  Scenario #1 Alt. Scenario #2 Alt. Scenario #3(Trends/Baseline) (Disruptions) (Disruptions) (Disruptions)

Alternative Futures Scenario Framework 

Growth Constraint Transformation Collapse

Inductive Methods for Scenario DevelopmentComparative Matrix Model

4. Develop "Stories" for Each Scenario ‐ Separate from this worksheet, tell each story      (How did it get this way? How have conditions changed? What are the implications?) 5. Identify Signposts.

Forecasts  (Trends and Disruptions)