Methodology

1. Methodology

2. Wicked problems (aka social messes) have five criteria Not easily quantifiable – no data, uncertain data, incomplete data Problem is continually developing and mutating Full of ambiguities, contradictions and vicious circles Stakeholder oriented with strong political, moral and professional issues Reactive: the problem fights back Wicked problems are multi-faceted, multi-dimensional ‘Wicked problems’ H. Rittel & M. Webber (1973) Dilemmas in a General Theory of Planning

3. Strategy foresight engages clients and stakeholders with their complex challenges – aka ‘Wicked Problems’ Wicked problem (Rittel et al 1973) Compare Tame Problem Has a relatively well-defined and stable problem statement Has a definite stopping point i.e. we know when the solution is reached Binary solutions: objectively evaluated as being right or wrong Has solutions which can be tried and abandoned • Not easily quantifiable as uncertain or incomplete information • Continually developing and mutating • Full of ambiguities, contradictions and vicious circles • Stakeholder oriented with strong political, moral & professional issues • Reactive: the problem fights back

4. Wicked problems transcends sectors • What should be our negotiating response based on the various possible positions adopted by the other party? • How should we deal with tax-related private banking challenges? • How do we pre-empt the risk to corporate reputation in a complex, mutating environment? • What are the core issues that a corporate governance strategy should try to incorporate? • How much should the emerging sciences – synthetic biology, stem cells, nanotechnology, pediatric trials – be regulated?

5. Morphological analysis is a problem-structuring method ideal for tackling wicked problems in multiple dimensions using extended typology analysis Fritz Zwicky (1898-1974) Professor of Astronomy, Caltech (1942-68) Co-founder Aerojet Engineering Corporation Developed Morphological Analysis as a problem-structuring method to address genuine uncertainty and stress test boundary conditions, resulting in discovery : Dark matter (1934) Triple hypothesis - supernova, neutron stars, and cosmic rays (1934) Gravitational lensing (1937)

6. Depicting a 3-D Morphological Field Point of origin Where do you place the 4th, 5th…..nth dimension?

7. How to build a morphological model Example: What to do about the Swedish Nuclear Bomb Shelter Program following collapse of Soviet Union

8. Dimensions • What’s the problem (focus question)? • Convene a subject – matter specialist team • Stakeholders facilitated to agree • on most important Dimensions of the problem complex

9. Quantitative scale 2 x 2 matrix Normative, non-quant scale Agree and define a range of ‘values’ or ‘conditions’ for each dimension

10. A morphological model of 2034 configurations – how to reduce to a workable number?

11. Consider every pair - facilitate team to knock out illogical, or empirical, contradictory pairs

12. - or 0 possible x = not possible S or F = not optimal Cross Consistency Matrix Note reduction > 90%

13. Solution space: list of surviving, internally consistent combinations – all blue cells are compatible

14. Strategy Foresight leaves clients with unique software to construct their own scenarios & strategy alternatives • Input and outputs interchangeable - manipulate both cause and effect • Ability to freeze and compare scenarios and strategy alternatives • Reducing alternatives does not require re-developing scenarios • Easily updatable - visual, real time systematic group exploration • Speed, efficiency and cost of facilitation and model development fraction of traditional consultancies – enhances entire value chain

15. What’s the outcome? Managing genuine uncertainty in real time by placing comparative judgements on a sound methodological basis Accommodating multiple, alternative perspectives to anticipate unintended consequences vs. prescribing single solution Anticipating consequences of decisions made under conditions of high uncertainty, incomplete data and high decision stakes

16. SFP uses multi-methodology to give clarity to messy situations and decision-support in ranking solutions Bayesian Belief Networks Assigning a probability to an event to give indication how strongly client believes an event will occur Morphological Analysis Structure (dimensionalise) the problem complex Analytic Hierarchy Process Decision-making process for prioritising alternatives when multiple criteria must be considered

17. Analytic Hierarchy Process • Give a brief description of the methodology • Will avoid the mathematics (Eigenvector)! • Provide examples of where AHP has been used • Illustrate principle by way of simple example – choosing a car

18. Analytic Hierarchy Process is a decision making method for prioritising alternatives when multiple criteria must be considered • Developed by Thomas Saaty in the 70’s for rational decision support for complex decision situations with multiple criteria • Why? Observed the lack of practical, systematic, approach for priority setting and decision making by groups when dealing with uncertainty • Crucial decision situations, forecasts or resource allocations involve too many dimensions for humans to synthesize intuitively

19. Examples of where AHP has been used • Investigating the effect of website quality on e-business success • Assessing supply chain risks for the off-shoring decision by a US manufacturing company • Involving patients in decisions regarding preventive health interventions • Decision support for selecting exportable nuclear technology • A departmental approach to apportion co-author responsibility

20. People deal with complexity by decomposing the problem into hierarchy of common clusters of criteria, sub-clusters of criteria etc. Goal Criteria - Audi A3 - VW Golf - Megane - Ford Focus - Audi A3 - VW Golf - Megane - Ford Focus - Audi A3 - VW Golf - Megane - Ford Focus Alternatives

21. It is simpler to make comparative judgements between two factors using a ratio scale Given uncertainty or incomplete data, relative weights are agreed by the working group or the managerial team and led by a facilitator

22. As an illustration, ranking the priorities of the criteria can be done by a simple method • Sum ratios in each column • Divide each ratio by the column sum • Compute the row averages

23. Repeat process with each decision alternatives (Audi, Gold, Megane, Focus) with respect to each criteria: Qualitative judgements and Quantitative measures can be incorporated in the same decision matrix

24. Combine the hierarchy….. Audi A3 0.12 VW Golf 0.25 Megane 0.06 Focus 0.58 Audi A3 0.38 VW Golf 0.30 Megane 0.07 Focus 0.26 Audi A3 0.26 VW Golf 0.28 Megane 0.24 Focus 0.22 Which car did you choose?

25. The correct method requires dedicated software and facilitation to calculate the… • Eigen Vector • mathematical function used in prioritising elements of different sizes and scale in a matrix • Consistency ratio • a measure how consistent the judgements havebeen relative to large samples of purely random judgements • must be less than 10% (dependent upon team expertise and quality of facilitation)

26. To recap…. The Facilitated Process The Rationale For multi-inclusive modelling i.e. ‘and’ rather than ‘or’ (use morphological analysis) Allows rational group decision making where stakeholders use experience, data/knowledge to address uncertainty Gives decision support to complex, mutating problems • Deconstruct problem into a hierarchy • Make pairwise comparison and establish priorities of elements in the hierarchy • Synthesise the results (to obtain the overall ranking of alternatives w.r.t. goal) • Evaluate consistency of judgements