The Goal: To increase awareness about the organisation, its environment and the future.

1. The Future The Process The Organisation Business Ecosystem Overview Reflections The Goal:To increase awareness about the organisation, its environment and the future. The future Strategic options (Exploring our future possibilities) Scenarios (Imagining the future) Increasing awareness The business ecosystem The organisation Co-evolution (Discovering our place & relationships)

2. A Clear- enough future A Single forecast precise enough to determine strategy Traditional strategy toolkit A range of Future Range of possible outcomes, but no natural scenario Technology forecasting Scenario Planning Tools for Difference Future • Alternative Future • Few discreet outcome that define future • Decision Analysis • Game theory • True Ambiguity • No basis to forecast the future • Analogies and Pattern recognition

3. The Organisation Business Ecosystem The Future The Process Overview Reflections The environment Governments Standards bodies New entrants Competitors Supplier’s suppliers Customer’s customers Suppliers Customers Organisation Substitutes Stakeholders International law A Business Ecosystem

4. A way of viewing the world • A scenario is a sequence of events • Businesses and computer systems can be viewed as sequences of events / activities • Sequences interact • Life is complicated, but you need a way of finding your way through

5. 9/11 Thaksin Carbinet Asia FinancialCrisis SARS ? ? ? Asean +3 First Thai female prime minister Electric cars Moon Base ? ? ? 10 years from now it is possible that: Who would have imagined 5 years ago that: E

6. Prediction is difficult….even for experts “The horse is here to stay but the automobile is only a novelty.” President of Michigan Savings Banks, 1903 (advising Henry Ford’s lawyer not to invest in the Ford Motor Company) “Automobiles will start to decline as soon as the last show is fired in World War 22. Instead of a car in every garage, there will be a helicopter.” Aviation publicist, Harry Bruno, 1943 “I think there is a world market for above five computers” IBM Chairman, Thomas Watson, 1943 “There is no reason for any individual to have a computer in their home” Digital Equipment President, Ken Olsen, 1977

7. The right question….. “The only relevant discussions about the future are those where we succeed in shifting the question from whether something will happen to what would we do if it did happen” Arie de Geus Former Head of Group Planning, Shell International

8. What is a scenario? An interpretation of the present and an archetypal image of the future and an internally consistent story about the path from the present to the future

9. Scenarios can be used ….. • To aid in the recognition of ‘weak signals’ of change • To avoid being caught off guard - “live the future in advance” • As a language for discussion - and to challenge ‘mental maps’ • To understand the world better - and make better decisions • To test strategies for robustness - with “what if” questions E

10. Scenario Analysis • Breaks complex systems into simple components • Provides structure to the analysis • Is used as the basis of further analysis and design in the development of activity diagrams and sequence diagrams

11. Companies use scenarios to….. • Sensitise managers to the outside world • Provide valuable insights • Deal with uncertainty • Challenge mental maps • Provide internal ‘language’ Develop better strategies

12. Typical Approaches to Scenario Development Discussion and debate - with or without source data System Change - evaluation of every parameter under different conditions (e.g. treasury model) Driving Force - identification and assessment of the fundamental influencing factors

13. Political Social & Demographic Economic Commercial & Business Technological & Scientific Environmental Developing Scenarios Using Driving Forces Gather Data Identify Driving Forces Build Scenarios

14. Scenario development in practice The three Ps • Define the nature of the scenario Product • Identify the key Participants • Follow a clearly defined Process

15. Brainstorming and “Clustering” SessionKey issues and potential policy areas II Energy policy not devolved Oil storage water / land pollution “Risk” Partnerships Demographic Changes Political Imperative Stakeholder Pressure Government must Coerce? Disbenefits of EU Legislation Legislation Integrated Policy Environment truly becomes “political” issue Presentation V Substance Politics / People Public Perceptions Communications Open Discussion transparency Media Sustainable Development Legislation? EU Legislation level playing field or Env. Impact Point of use Short-termism Poor Housing Stock Concentration of Regulation Indifference Customer Choice Customers are prepared to pay “Win / Win” ò “Lose / Win” Customer demands lower cost Environment Becomes Competative issue Planning Issues may affect rollout of new E-opportunities 2010 + ? Talk is it a Value or Waste Pressure Groups £ / t C Buy-in Employees Customers Economics Demand Growth Rate of Response Long Term Planning SME Inertia Misguided / Informed ? Customers will not accept retrograde steps Spin off economic development Customer Aspirations Increasing Competition / Public Service (Water) Expectation Business V Public Do we know baseline? Inertia / Awareness

16. Priority issues in environment over the next 25 years high Uncertainty low low E high Relative Importance

17. Priority issues in environment over the next 25 years high Public Awareness Surprises Partner-ships Structures Long term Planning Pressure Groups Media Uncertainty Resources Economics Politics/ People Legislation E -Activity Waste Behaviour Technology Environmental Impact low low high Relative Importance

18. The Process The Organisation Business Ecosystem The Future Reflections Overview Strategic options“Our future possibilities” • Key strategic issues • What are the real areas which affect our business? • (E.g. service, channel, market) • Formulate key decision areas • Where do decisions need to be made? • Create clusters of options • Discover coherent strategies • Check against distinctive competencies

19. The Process The Organisation Business Ecosystem The Future Reflections Overview Competence SERVICES MARKETS Development Strategic option generation:one approach Existing New • PROTECT/BUILD • Withdrawal • Consolidation • Market penetration • SERVICE DEVELOPMENT • Existing competencies • New competencies Existing • MARKET DEVELOPMENT • New segments • New territories • New uses • DIVERSIFICATION • Existing competencies • New competencies New

20. The Process The Organisation Business Ecosystem The Future Reflections Overview Scenarios“Imagining the future” • Identify key driving forces • Choose most uncertain/most significant • Develop alternatives • ‘Flesh out’ with narrative

21. The Process The Organisation Business Ecosystem The Future Reflections Overview High Importance Low Uncertainty High Low Identify key driving forces Note which key external drivers are both important & uncertain Driver 2 Driver 1 Driver 5 Driver 3 Driver 4

22. The Process The Organisation Business Ecosystem The Future Reflections Overview No Yes Yes Scenario 3 Scenario 1 Scenario 2 Scenario 2 Scenario 1 No Scenario 4 Scenario 4 Formulate ‘yes-no’ questions Driver 2 Driver 5

23. The IS Matrix CONTROL 3 . Options 4. Decisions UNCERTAINTY CERTAINTY 2a. Key Uncertainties 1. Rules of the Game 2b. Scenarios ABSENCE OF CONTROL

24. Scenarios for the US CONTROL 3 . Options 4. Decisions ‘Homeland Security’ Steel tariffs Agricultural subsidies Constructive engagement Isolation UNCERTAINTY CERTAINTY 2a. Key Uncertainties 1. Rules of the Game Nuclear terrorism Disintegration of world order Demographics Globalisation Global Climate Change Potential for epidemics New technological wave We live in one world Nature of warfare has changed 2b. Scenarios ‘Friendly Planet’ ‘Gilded Cage’ ABSENCE OF CONTROL

25. The Process The Organisation Business Ecosystem The Future Reflections Overview 2003 2004 2005 2006 2007 Develop future time line for each scenario • Map out critical events leading to the unfolding of this scenario enabling you to: • Scan for triggers which will alert you to the scenario • Rehearse your strategic responses to the events of the scenario

26. The Process The Organisation Business Ecosystem The Future Reflections Overview Scenario 1 Scenario 2 Scenario 4 S W Option 1 O T S W S W P P M M I I Option 2 O T O T S W S W Option 3 O T O T Cross-impact matrix Test each option against each scenario. Learning S W P M I SWOT analysis is one useful tool; O T de Bono’s Plus/Minus/ Interesting is also good. Add learning points and actions required. Actions

27. The Future The Process Are scenarios the answer? The Organisation Business Ecosystem Overview Reflections • Do scenarios help? • Shell used them effectively • IBM & General Motors did not • Why not? • Diversity • Is there enough diversity in planning process? • Culture • Is the culture open to new thinking & doing?

28. The Future The Process Strategic intent The Organisation Business Ecosystem Overview Reflections • Strategic intent must inform all of organisational life • Strategic intent must take account of the realities of the organisation and its environment • Strategic intent is more important than ‘strategy’