UM scenarios what now 2014

Robust decisions in uncertain times

SAMI Consulting

1

Have scenarios – so what now?

Gill Ringland

University of ManchesterJuly 2014

(c) SAMI 2014


Strategy cycle

• The hard bit starts here!

• Horizon scanning, interviews, research, leading to a list of drivers of change

• Consultation, , communication, strategy and wind tunnel workshops, detailed planning, stakeholder engagement, Board meetings

• Taking the drivers of change and creating mental models (scenarios) which expose the big questions

Sense Making Setting Prioriites

ImplementationStrategic Intelligence

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Crossing from scenarios into “so what?”


Agenda

• Communicating scenarios– Natural England scenarios to 2060– Grant Thornton scenarios to 2028

• Scenarios to drive strategy– Romania scenarios for Higher Education to 2025– Angel Trains scenarios to 2030

• Scenarios to engage with stakeholders– EU -OSHA (European Health & Safety Agency) scenarios to

2020– Allen & Overy scenarios to 2020

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Communicating scenarios (1)

• “Natural England is the government’s advisor on the natural environment. We provide practical advice, grounded in science, on how best to safeguard England’s natural wealth for the benefit of everyone. Our remit is to ensure sustainable stewardship of the land and sea so that people and nature can thrive. It is our responsibility to see that England’s rich natural environment can adapt and survive intact for future generations to enjoy”

• Needed to communicate scenarios with– Staff (engineers, HQ, regional)– External stakeholders– Public

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Staff - engineers

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growth of 2% pa average since 2010.

Population 61 million in 2010 plus 10 million due to increased age plus 10 million immigrants.

Regional factors Continuing trends towards London & SE.Offset by trends towards SW sun-belt.

Urban growth & change Urban areas continue trends of segmentation and exclusion.

Rural growth & change Rural areas lose population as services decline:balanced by new incomers who bring privatized services.

Transport demand & supply Continuing growth trends produce congestion & gridlock.Public transport declines.

Urban & rural policy Continuing trends of stasis & indecision.

Rural & environmental economy Continuing trends – mixed picture with pockets of decline & growth.

Institutional & governance factors

Free for all in land markets, with little transparency.

Leisure & tourism Tourist hotspots are under increasing pressure with little management.

Land use & landscape Landscape declines due to farming pressures / post reform etc.

Energy mix & renewables Continued fossil / nuclear mix, fewer renewables.

Climate change adaptation Little effort on forward adaptation.

Water management Current stalemate continues.

Agriculture & forestry Continued trends of zoned intensive / extensive farming.

Ecosystems management No regard.Environment as resource.Poorly maintained.Resources traded.

Governance still has a parliament but it is largely ceremonial and decisions are mostly taken by the EU.

Role of family Marriage no longer the norm for raising children.

State of the environment Excellent where protected, otherwise dire.

What do people eat Industrially created food.

What technologies are in use? IT is ubiquitous and no longer a technology.

Are people mobile? How do they travel?

Leisure travel traded with carbon credits. Hydrogen cars replacing petrol & diesel, but no change in use.

Nature of education Divided into socialisation education and e-learning, throughout life.

Dominant cultural norm (art, philosophy, religion)

No resurgence of religion.

England in 2060


Staff - headquarters

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Key features of So Far So Good: Driven by momentum of innovation; Paradigm acknowledges core link between productivity and sustainability:

innovate for conservation within free markets; Unique: we couple transformational high technology with an appreciation

of limits.

How we define ourselves: First loyalties: to survival of business and sustainable economic growth Value: innovation and entrepreneurial invention Political paradigm: efficient partnerships - national/local, public/private,

etc. Economic paradigm: waste = cost. Productivity and sustainability are a

virtuous feedback (market model) Environmental paradigm: environment helps leverage innovation (but not

valued for itself)


Staff - regional

• New uses for uplands– Government was looking for a Techno-Fix to energy and resource

sustainability.– Uplands were managed for services, instead of farming, and became

covered with wind farms and hydro-electric schemes Though after the first Fusion power station opened, wind farms become obsolete.)

– Increased demand for water led to more reservoirs and a national grid for water. And as community hydroponics expanded, uplands were used as holding areas for water

• Wildlife loses out– Early on, measures were taken to preserve wildlife, but Biodiversity is

nowadays valued only if functional. Even the RSPB says that birds don’t matter.

• Floods prompt migration– The 2050 Floods triggered a mass migration to avoid lowland floods. The

population of the SE moved North(c) SAMI 2014 7


Stakeholders

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Narrator: Carer Nivedita, dob 1960. age 100An interview for a school project by her great great grandson Ahmed: What changes have you seen in your lifetime? Nivedita: For the first 50 years, until 2010, I was a carer and saw very little of the world outside . You would be amazed how much technology has advanced over my life time, driven by the momentum of innovation When I was young people dug stuff out of the ground and burned it to give them the energy to move around. How primitive! Nobody knew how to harness the power of the sun, wind, waves, tides and fusion. And we used to dig the soil, plant, water and ‘fertilise’ seeds, wait for them to grow, cut down the plants, move them to factories, turn them into food, move the food to ‘shops’, where people went to get it and then go all the way back home to ‘cook’ it. Ahmed: you must be making this up!Nivedita: No I am not! Anyway when my mother died in 2010, I had a chance to travel and to get a degree. I saw the effect of the hot summer of 2020 in and , with food riots and your great uncle Ganaraj taking over the government in . He had to bring in high taxes to train more scientists and develop new foods, artificial land and replacements for oil, with the big companies against him and his allies, the new technology entrepreneurs who shared his values of innovation. He had to convince people of the link between productivity and sustainability, and the need to innovate to conserve our resources. So he formed a range of partnerships – global, local, public, private – to get innovation adopted.Ganaraj went on to UNECO, the United Nations Forum for the Environment, but was frustrated there until China co-operated with America to agree on a joint energy project with Brazil and Europe, including turning the Sahara Desert into a solar power factory, and the UN was able to set prices for all natural resources. Back home, we have turned into a green place, with a million trees and hydroponics farms. We watched with horror the flooding of 2050, and voted more money to nuclear power, to make sure that businesses survived and we kept economic growth. Now, as I VR around the world, much of what I see saddens me. Families often no longer live together, so people have to depend on neighbours. They share what they have, but in many cities there is still not enough food. The seas are dying and the coastlines flooding – much worse in many places than the floods of 2050 – can you remember those? Maybe the way has cleaned up its environment through government enforcement is the only way people will start to act responsibly. Because although technology has transformed our lives, we are very conscious of its limits. Without a healthy environment we cannot support innovation.Ahmed: What do you talk to your friends in about?Nivedita: We talk about our families, like your mother’s important job in perfecting the water purification control system in the . They are having problems with technology, so I linked to your mother. I hope she doesn’t have to charge them! And we talk about food and the taste of real mango – this EcoPack stuff is all very well, organic, vitamin enriched, with added anti-ageing and cognition enhancement it may be -----Ahmed: why did you learn to play hockey last year? Nivedita: I didn’t want to get old! I have had a chip to fix my memory as well as replacements for most of my body, so I can play the games I could not as a girl!


Public

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SAMI ConsultingSt Andrews Management Institute Future proofing www.samiconsulting.co.uk


What NE learnt

• Engineers like to see “the data”• HQ expect ppt but need a facilitated session to

work through the “so what’s”• Regional staff reacted emotionally to the

scenarios – and not in the way that the scenario developers expected

• Stakeholders reacted well to the videos• The public reacted emotionally to the videos –

both positively and negatively

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Communicating scenarios (2)

• “Grant Thornton is one of the world's leading organisations of independent assurance, tax and advisory firms”

• Wanted to communicate with– Staff – Partners conference– Potential recruits

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“My grandfather was a wood-turner with a reputation for ornate elegance – now we’re competing with the 3D print-shop off the High Street that makes gorgeous custom-designed pieces for anyone – in a fraction of the time and a fraction of the price.”third-generation

family business owner

“…getting clobbered; just too big to flex as nimbly as the endless parade of hyper-innovative, virtual micro enterprises, yet too small to compete with the deep pockets of the big boys. I know the world is changing, but how do you fight ten fires with one hose?”medium-sized

enterprise director

“…ecstatic! This is awesome! No staff - but world class skillsets are just a mobile app away… creating a semi-autonomous micro-licensing service of personal data: it will BLOW the doors off the industry!”

inventor / first-time entrepreneur

“Never have I dreaded coming to work so much. In fact, I never really leave work because it follows me. What others call democratisation I call crowd-sourced harassment by the public!”

public agency senior manager

“Traffic is down somewhat, but our real issue is transitioning to a partly autonomous truck fleet while deploying more automated loading and unloading lines at shipyards and depots.”

CEO, freight company

“Our biggest and most sensitive current initiative is dealing with how to track – and tax – the explosion of micro and small businesses that use a bewildering array of alternative currencies that don’t flow through bank accounts or appear on company filings. We like entrepreneurship – but not evasion.” HMRC tax

regulator

Kickstarter Capitalist


Staff – Partners Conference

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FUTUREFINAL.wmv


Potential recruits

• Used a role play to engage audience– Audience take part as characters– Imagine career in each scenario

• Names of scenarios but not much further description

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What GT learnt

• Clients and potential recruits reacted well to being consulted on their views of the future during interviews

• Staff needed a briefing pack in addition to the scenario video to talk about the scenarios

• The Partners Conference successfully got Future Perspectives on the agenda

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Scenarios to drive strategy (1)

• Romania wanted to rethink their Higher Education system– Still structured as in communist times

• Developed scenarios for HE to 2025, needed to communicate to– Vice chancellors and academics– Politicians– EC and World Bank

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Vice chancellors & academics

• Training in futures thinking• Workshops to explore implications of the

scenarios for different sectors• Wiki for open discussion• Leading to Green Paper & then White

Paper

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Politicians

• Problem – short time horizon• Describe specific investments in their area

under each scenario• Ask for help in getting funding

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EC & World Bank

• EC responsive to scenario thinking– Some investment in capacity building

• World Bank focused on infrastructure– Scenarios described which institutions should

be expanded– But lost in White Paper!

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What Romanian Govt learnt

• Scenarios did engage academic community– Some consensus emerged

• Not so successful with politicians– Different timescales– So not highest priority on agenda

• EC is more able to understand capacity building than World Bank

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Scenarios to drive strategy (2)

• “Angel trains is one of the UKs leading train leasing specialists, UK new trains, rolling stock, rolling stock asset management, operating lessor.”

• Needed new business plan for funding round as original investors retired

• Developed scenarios for rail industry• Worked through implications for each scenario

with individual businesses• Wind tunnel strategy against the scenarios

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Four scenarios

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Open market

Sustainable environment

Long haul recovery

UK global irrelevance

Unfavourable Private Rail Investment Favourable

UK GDP low growth

UK GDP high growth


For each scenario

• Table of indicators for 2025• Events for each five year period• GDP, inflation, employment, oil price, ---• Implications for each of the businesses• Risk and opportunities• Existing and potential new businesses

– Focus and potential

• List of options

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Wind tunnelling

Option 1

Option 2

ScenariosYes No ResearchYes No

Research

Yes No Research

Yes No Research

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The “aha”

• Wind-tunneling workshop for Senior Management Team plus engineering experts

• Test the options against the scenarios• Discussion, which scenario is best for Angel?• “Aha” –

– The “favourable for investment and high GDP growth” scenario was not the best for their business

– They were in the risk business not the train business– Other scenarios were better for Angel

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What Angel Trains learnt

• They thought they were in the train business

• They realised that they were in the risk business– So good times for the rail industry were not

the best for Angel Trains

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Engage with stakeholders (1)

• “The European Agency for Safety and Health at Work (EU-OSHA) is committed to making Europe a safer, healthier and more productive place to work. We promote a culture of risk prevention to improve working conditions in Europe”

• They wanted to explore the health risks from “Green” jobs

• Developed scenarios– Tested in workshops with stakeholders across Europe– Wrote a report of over 200 pages– Importance of illustrations

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Gre

en V

alu

es

Economic Growth

Deep GreenStrongly green

culture and values

Bonus WorldStrong Growth

Global and European

Win - WinHigh innovation in Green Technology

Ve

ry S

tron

g

Low Growth High Growth

We

ak

Three Scenarios

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“I guess every smart grid needs a call centre but it’s still

pretty stressful”

“We scored 8 out of 10 in the last

green audit…

how can we do even better next

time?”

“every day we continue to re-

design the human-machine

interface...”

“welcome to the L.Z.C. Safety & Health @

Work training module.

Today we look at everyday hazards...”

Win-Win Human systems

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Win-Win Manufacturing

now that robots or “co-bots” do

most of the work.... What’s there to worry

about ???

Boredom ... insecurity ... Keeping

up with innovation ... And, what if they do not

keep out of our way...

+++ THIS HUMAN HAS A

POOR TRAINING

RECORD+++ KEEP HER

UNDER ACTIVE SURVEILLANCE

+++

30(c) SAMI 2014


What EU-OSHA learnt

• The scenarios provided a a neutral and safe environment for important discussions between different groups of stakeholders – Many current assumptions were challenged (including targets

that are unlikely to be met)– Some organisations realised that their plans were not robust

• The scenarios could be used for the analysis of a broader range of technologies and policies

• The scenarios were a robust tool for the anticipation and analysis of future challenges; and developing more robust ‘future proofed’ strategies and policies

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Engage with stakeholders (2)

• “Allen & Overy is an international law firm providing legal services for global business and industry.”

• Chairman wanted to test and develop strategy• Scenarios developed with extensive involvement

of Partners• Led to

– acquisitions to cover capability gaps– new conversations with clients

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High growth in demand for high end work

Low growth in demand for high end work

Fragmented international

world

Global reach local depth

Integrated global world

Trends

– Growing pensionable population

– ‘Digital natives’ (different employment aspirations/ social norms)

– Growing demand for resources, outstripping supply

Disruptive events

– Major switch to Muslim values

– Africa becomes main source of growth

– Euro collapses

– RMB as the world’s reserve currency

– Step change in energy crisis (crisis avoided)

Examples

Strategic tool


Communication tool

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What Allen & Overy learnt

• The scenarios drove several strategic decisions

• Even more benefit was the confidence that Partners had to engage with clients at a different level– CEO level conversations about shared views

of the future– Fold out format book to support

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Thank you!

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• Questions and comments??

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UM scenarios what now 2014

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