“I was frequently reminded of an Arabic saying: 'Those who claim to foresee the future are lying, even if by chance they are later proved right'” – Vince Cable
A short post today with an early Christmas present for anyone interested in strategy.
At the very start of the year, I posted about scenario planning and how it can and should be used to evaluate your strategy. If you have a set of scenarios, you can use them to test how successful that strategy would be if each of the scenarios devised actually came to pass. Accordingly, this will allow you to remove blind spots and alert the organisation to potential future threats that may not have been considered. It is important to realise that scenarios are not predictions, forecasts or model runs – they are simply alternate, equally plausible, views of the future (Ramírez, 2020). Neither are they contingency plans, although they can help to inform contingency planning.
As described in the first volume of my book, scenarios can’t be developed for general use because they must challenge your organisation’s existing map of the future, the one that is currently being used, and that existing map tends to be specific to a given organisation. So, they need to be created in such a way that they present possible futures that the recipient will not have considered. As Kees van der Heijden (2005) wrote in his book “Scenarios”, your strategy must uniquely belong to you and cannot be based on a standard formula or model.
Now, having said all that, it might surprise you that I am going to direct you to a recent HBR article I read that describes a standard set of globalisation scenarios created by EY for 2027.
Please don’t be tempted to simply plug these in and use them to develop or test your own strategy. As noted above, the scenarios you use must be specific to your organisation and its unique circumstances. And 2027 is relatively near term when considering how scenarios will impact the business. Nonetheless, I think the HBR article is helpful in that it presents plausible possible globalisation outcomes that you should consider when scenario planning. It is a good illustration of the deductive technique for scenario building, described by Ramírez and Wilkinson (2016), choosing two key external influences – economic and diplomatic policy, both of which are outside the control of most organisations – and imagining different futures based on how those influences develop. And it underlines the importance of testing strategy against contrasting assumptions.
Want to Know More?
I wrote more about scenarios and how they can be used to test and future-proof strategy in the first volume of my book: Strategy and Innovation for a Changing World – Part 1: Sustainability Through Value Creation, and specifically in Chapter 6: “Uncertain Futures”.
References and Further Reading
Ramírez, R. (2020). Introduction to the Oxford Scenario Planning Approach. Oxford Scenarios Programme course notes.
Ramírez, R., & Wilkinson, A. (2016). Strategic Reframing. Oxford: Oxford University Press.
Wray, J.; Jones, O.; McCaffrey, C. R., & Krumbmüller, F. (2022, November 29). 4 Plausible Geopolitical Scenarios CEOs Should Consider When Setting Strategy. Harvard Business Review. https://hbr.org/sponsored/2022/11/4-plausible-geopolitical-scenarios-ceos-should-consider-when-setting-strategy.
van der Heijden, K. (2005). Scenarios: The Art of Strategic Conversation. Chichester: John Wiley & Sons.
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