Van de toekomst kun je leren - Scenario Thinking

Learning from the Future Agility and the Next-Generation Organisation

Paul Louis Iske Professor Open Innovation & Business Venturing, Maastricht University Chief Dialogues Officer ABN AMRO Bank

Learning from the Future Amsterdam, May 22, 2012 2

The world is complex

Learning from the Future Amsterdam, May 22, 2012 3

The Innovator’s Dilemma Perf

orm

ance

Time

Established technology

Mainstream customer needs

Niche customer needs

Invasive Technology

Clayton Christensen: The Innovator’s Dilemma

!CRISIS !

Learning from the Future Amsterdam, May 22, 2012 4

Learning from the Future Amsterdam, May 22, 2012 5

Learning from the Future Amsterdam, May 22, 2012 6

Learning from the Future Amsterdam, May 22, 2012 7

Agile or Trapped in Patterns?

Learning from the Future Amsterdam, May 22, 2012 8

Learning from the Future Amsterdam, May 22, 2012 9

Creativity

Being multiparadigmatic: flexibly moving between, combining and integrating diverse ideas, perspectives, intelligences and paradigms

PO

= Provocative Operation

Learning from the Future Amsterdam, May 22, 2012 10

Increasing the Creativity Score

Learning from the Future Amsterdam, May 22, 2012 11

Perspectives

Learning from the Future Amsterdam, May 22, 2012 12

Paradigm Shifts

A Paradigm shift is a change in the basic assumptions within the ruling theory of science Thomas Kuhn (1962)

Learning from the Future Amsterdam, May 22, 2012 13 13

images by JAM

customer

segments

key

partners

cost

structure

revenue

streams channels

customer

relationships

key

activities

key

resources

value

proposition

Learning from the Future Amsterdam, May 22, 2012 14

• Client = Employee Co-creation (Key Resources, Channels) • Competitor = Colleague Open Innovation • Stranger = Strategic Partner Combinatoric Innovation • Crisis = Opportunity Restructuring • Succes = Danger Disruptive Innovation • Change = Fun Fashion • Knowledge = Commodity Rising Knowledge Economies • Valuable = Free Free Content (Revenu Streams) • Client = Account Manager Qiy (Customer Relationships) • Authority = Powerless Publishers (Knowledge Resources) • Best Practices = Worst Practices Land Lines • Money & Sustainability = Good pair Green Energy • IP = Outdated Open Source • Diversity = Asset Ideo • Certainties = Fake Portfolio Management • Risk = Attractive Insurances • Poor = Rich Bottom of Pyramid (Customer Segment, Cost Structure) • Small = Big Crowfunding (Cost Structure) • Play = Serious LEGO Serious Play (Customer Segment) • Failure = Blessing Brilliant Failures

Learning from the Future Amsterdam, May 22, 2012 15

“WHAT IF?”

AN INTRODUCTION TO

SCENARIO THINKING

Navigating in a complex world

Learning from the Future Amsterdam, May 22, 2012 16

• Scenarios are possible views of the world, described in narrative form (stories) that provide a context in which managers can make decisions.

• By seeing a range of possible worlds, decisions will be better informed, and a strategy based on this knowledge and insight will be more likely to succeed.

• Scenarios do not predict the future, but they do illuminate the drivers of change: understanding them can only help managers to take greater control of their situation.

Gill Ringland

What are Scenarios?

Learning from the Future Amsterdam, May 22, 2012 17

Scenario Planning - History

• Use in strategic planning has evolved from military applications

• Theoretical foundations developed in the 1970s and early 80s – complex theoretical models seen as expensive and impractical beyond academic use

• Royal Dutch Shell popularized scenario planning - petroleum crisis in 1973.

Learning from the Future Amsterdam, May 22, 2012 18

Guidelines

• Long View – day-to-day work is usually driven by near-term concerns and urgent needs – scenario thinking requires looking beyond immediate demands and peering far enough into the future to see new possibilities – asking “what if……”

Learning from the Future Amsterdam, May 22, 2012 19

• Outside-In Thinking – most think from the inside, the things they control, out to the world they would like to shape. Conversely, thinking from the outside-in begins with pondering external changes that might, over time, profoundly affect your work.

Guidelines

Learning from the Future Amsterdam, May 22, 2012 20

• Multiple Perspectives – the introduction of multiple perspectives, different from managing multiple stakeholders – is based on diverse voices that shed new light on strategic challenges, helps to better understand one’s own assumptions, and exposes new ideas that inform perspective and help to see the big picture of an issue or idea. Global Business Network

Guidelines

Learning from the Future Amsterdam, May 22, 2012 21

• Possible - “might” happen (future knowledge)

• Plausible – “could” happen (current knowledge)

• Probable - “likely to” happen (current trends)

• Preferable - “want to” happen (value judgements)

Types of Futures

Learning from the Future Amsterdam, May 22, 2012 22

Types of Futures

Time

Today

Possible

Plausible

Probable

Preferable

Scenario

“Wildcard”

Learning from the Future Amsterdam, May 22, 2012 23

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 24

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 25

• Identify a focal area or issue – such as a decision or question that is critical to the future of your organisation now.

• Useful foci often emerge from major challenges of today”

• Choose a “horizon year” as the distance into the future that the scenarios will extend (beyond the typical time scale of your organisation):

– allows suspension of disbelief (the “that won’t happen” reaction);

– will you be in the same position you are in today in 10 years?

The Focal Question

Learning from the Future Amsterdam, May 22, 2012 26

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 27

• Social

• Technological

• Economic

• Environmental

• Political

Major Drivers of Change

Learning from the Future Amsterdam, May 22, 2012 33

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 34

• “Low” means we are reasonably certain that it will play out or continue in ways that are fairly well understood

– eg. population

• “High” means that we have no clear idea which of a number of plausible ways it might go

– eg. government legislation and policy

• “Mod” means “somewhere in between”

What is “Uncertainty”?

Learning from the Future Amsterdam, May 22, 2012 35

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 36

Impact-Uncertainty Classification

Impact

Uncertainty

Low Moderate High

Low

Mod

High

Critical Scenario Drivers

Important Scenario Drivers

Critical Planning Issues

Important Planning Issues

Important Planning Issues

Important Scenario Drivers

Monitor & re-assess

Monitor Monitor

Learning from the Future Amsterdam, May 22, 2012 37

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 38

• In this step, we ‘flesh out’ each world. The requirements for this step are to suspend disbelief, trust your intuition, look for plausibility, surprises and novel elements.

• Scenarios must be internally consistent and plausible – they have to make sense to the people creating them, and to the people in the organisation who will read them.

Developing & Presenting the Scenarios

Learning from the Future Amsterdam, May 22, 2012 39

Example Scenario Visualization

Learning from the Future Amsterdam, May 22, 2012 40

Example Scenario Visualization

Learning from the Future Amsterdam, May 22, 2012 41

Example Scenario Visualization

Learning from the Future Amsterdam, May 22, 2012 42

A Bank with ideas

Learning from the Future Amsterdam, May 22, 2012 43

Scenario’s for a country

Learning from the Future Amsterdam, May 22, 2012 44

Developments in Healthcare system

Learning from the Future Amsterdam, May 22, 2012 45

Learning from the Future Amsterdam, May 22, 2012 46

Scenario’s in Education

Learning from the Future Amsterdam, May 22, 2012 47

Flesh out of a Scenario

Learning from the Future Amsterdam, May 22, 2012 48

Three hard truths

An era of fundamental transitions:

• Rising global energy demand

• Supply will struggle to keep pace

• Unsustainable CO2 levels in atmosphere

CO2 SUPPLY DEMAND

Learning from the Future Amsterdam, May 22, 2012 49

Will society act reactive or proactive?

Shell choose only one uncertainty driver

Critical Uncertainty

Reactive Proactive

Learning from the Future Amsterdam, May 22, 2012 50

Two energy scenarios Scramble

• A more reactive approach:

– Events outpace action

– CO2 emissions not

addressed until major

climate events experienced

at local levels

Blueprints

• A proactive approach:

– Action outpacing events

– Global policy framework

and price on CO2 emissions

SCRAMBLE

BLUEPRINTS

Learning from the Future Amsterdam, May 22, 2012 51

• Identify the focal question

• Environmental scanning – internal and external

• Selecting drivers of change and ranking

• Building the scenario matrix

• Developing the scenarios

• Presenting the scenarios

• Considering the strategic implications

The Scenario Planning Process

Learning from the Future Amsterdam, May 22, 2012 52

• The Scenarios are not the only purpose of the exercise!

– the resulting “freeing up” of thinking while creating them is!

• Expanding understanding of what options might be available in the long term:

– shifts frame of reference 10-20 years out.

– examining implications for the services provided by your organisation in each of the scenario worlds

– looking to see what your organisation would need to do to stay viable

From Scenarios to Strategy

Learning from the Future Amsterdam, May 22, 2012 53

• Does your organisation’s existing strategy stand up to all of the future worlds presented in these scenarios?

• What rationale would you have for pursuing various strategic options in each scenario? What can you influence?

• What early indicators will we monitor?

• After considering the strategic implications of the scenarios, what actions might we recommend?

• Deciding on an implementation plan.

Using Scenario Outputs

Learning from the Future Amsterdam, May 22, 2012 54

Manifest Next Generation Bank: inspiratie tot nadenken

Zorgt voor schaalbare menselijkheid Eerst vertrouwen én verantwoordelijkheid delen met klanten en medewerkers, daarna pas vertrouwen en verantwoordelijkheid oogsten.

Faciliteert een customer-managed relationship Van een klantgerichte naar een klantgestuurde organisatie.

Matcht technologische met sociale innovatie Slimmer gebruik maken van intellectueel kapitaal: uit onderzoek van de Erasmus Universiteit blijkt dat het succes van innovatie slechts voor 25% wordt bepaald door investeringen in R&D; voor de overige 75% is innovatie afhankelijk van factoren op het gebied van mens en organisatie.

Is een ethisch bedrijf Ze weet dat mensen en organisaties elkaar uitkiezen omdat hun relatie waarde creëert door aan te sluiten bij wat die mensen zoeken.

Learning from the Future Amsterdam, May 22, 2012 55

• Identify a key issue for ABN AMRO and the most important but uncertain drivers of change.

• Plot them on your impact-uncertainty matrix.

• Pick two from the upper right hand corner

Your turn…

Learning from the Future Amsterdam, May 22, 2012 56

Choose two drivers that are most

uncertain and most critical in terms of

impact on the chosen ABN AMRO key issue.

Critical Uncertainty 1

Critical Uncertainty 2

Example Building the Scenario Matrix

Learning from the Future Amsterdam, May 22, 2012 57

World 2 World 1

World 3 World 4

Critical Uncertainty 1

Critical Uncertainty 2

Building the Scenario Matrix

Learning from the Future Amsterdam, May 22, 2012 58

Thank you!