Facts and Opinions
Uncertainty and volatility are part of life, COVID or not. Frameworks:
DEF: VUCA = Volatility, Uncertainty, Complexity and Ambiguity
DEF: TUNA = Turbulent, Uncertain, Novel and Ambiguous.
(so many cool English words)
Knee-jerk reaction of managers: stick to the predictable short term, sacrifice innovation (and billions of unearned dollars) for efficiency
[MK: I would LOVE to look in the eye of a calm person in those circumstances]
The tyranny of the present: survive the immediate threats for the sake of the status quo. Buy the future by slightly strangling the present.
However, strategic foresight is not about planning the future. It’s about how to think about the future and have many possible outcomes in mind (and the means to get to them).
Yes, ye olde scenario planning to the rescue:
Identifying forces that will shape future market and operating conditions;
Exploring how these drivers may interact;
Imagining a variety of plausible futures;
Revising mental models of the present based on the possible futures;
Using the new models for strategic planning.
Most companies do it once and don’t set up a process of continuous exploration – impact analysis of the present actions on the future.
The outcome? Strategic foresight.
The limits of experience
Uncertainty stems from our inability to compare the present to anything we’ve previously experienced.
Uncertainty == you can’t put a probability on an event; even the range of possible outcomes is not clear.
Managers use judgement in uncertainty, but the judgement is based on past experiences —> avoid looking back at the past.
Uncertainty precludes prediction but demands anticipation.
Strange aids to thought – developing multiple imagined futures via simulations.
Scenario-planning exercises must be institutionalized.
Strategic execution is different from strategic foresight.
Paradox: strategic foresight requires different skills, resources and org structures than just relying on existing competencies.
Going back from the imagined future to the present while creating a storyline of how the future came to be; and prepare for it.
Time is a loop, not a line, and taking action in the present requires thinking about the future.
Invite the right people to participate. Need a diversity of opinions, experiences and roles. Those with the powers to: perceive, think and act.
Identify assumptions, drivers and uncertainties. Disaggregate transactional actors (which you can control) from environmental forces (which you can’t).
Imagine plausible, but dramatically different, futures. Takes creativity as the futures shouldn’t be based on extrapolations. [MK: that’s where consultants come in]
Inhabit those futures. Immerse, try to create fictional artefacts. Works best at offsite sessions.
Identify and isolate possibly useful futures. They may feed back into the existing strategies.
Implement the strategies. (Obvious, but many firms fall short here).
Scenario exercises are helpful:
o Provide the participants with common language to talk about the future
o Build support for new ideas faster
o Enables participants to act on a unit level, even if the firm is slow.
Ingrain the process. Has to be an interactive cycle. The current crisis requires this feedback loop to speed up.