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SAMI. Using Scenarios Gill Ringland CEO & Fellow, SAMI Consulting. Agenda. Why use scenarios - scenarios & forecasts Applications of scenarios Presenting scenarios Outcomes of using scenarios. Experts in oil prices. Actual peak $145 in 2008. London population. 1991 forecast.
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SAMI Using Scenarios Gill Ringland CEO & Fellow, SAMI Consulting www.samiconsulting.co.uk
Agenda • Why use scenarios - scenarios & forecasts • Applications of scenarios • Presenting scenarios • Outcomes of using scenarios www.samiconsulting.co.uk
Experts in oil prices Actual peak $145 in 2008 www.samiconsulting.co.uk
London population 1991 forecast www.samiconsulting.co.uk “A trend is a trend until it bends”
Forecasts Forecasts are over-precise RangeOfUncertainties Today Trends Timing ? www.samiconsulting.co.uk
Changes from outside ---- GE Oil & Gas Planning Horizon Other industries New technologies Competitors Politics, economics Planning Horizon Customers Regulators 3 years 5 years 10 years Societal change Timescale www.samiconsulting.co.uk
Scenarios • Forecasts focus on “the right” answer and a partial “right” is often viewed as wrong • Scenarios are • “an internally consistent view of what the future might be”, • “not a forecast but one possible future outcome” • Scenarios explore different possible futures Forecasts Scenarios www.samiconsulting.co.uk Source: Professor Michael Porter, “Competitive Advantage:”, (Free Press, 1985)
How scenario thinking works • Ingvar, a neurobiologist, found that the human brain is constantly attempting to explore options for the future even while we are asleep • “memories of the future” • Models of the world provide a context for these explorations • “memories of the future” act as a filter to signals. • Scenarios provide several alternativemental models of future worlds for the brain to explore • increases the range of “what we have experienced” and “what is relevant to our future” • increases the ability of the brain to perceive. . Source: D. Ingvar, “Memory of the Future”, Human Neurobiology, 4(3), p127-136, 1985 www.samiconsulting.co.uk
Thinking styles Line manager, Corporate Strategist Scenarios Future Engineer manager thinker Early indicators Portfolio Ideas & systems Alternate “843” trends Decisions, management Planning worlds interconnected Timelines Options Decisions www.samiconsulting.co.uk
Applications of sccenarios • Public policy • Creating a stakeholder dialogue • eg future of Arnhem in Scenarios for Public Policy • Exploring policy options • eg scenarios at the dti in Scenario in Public Policy • Inside organisations • Common language for new teams • eg EC HLEG Converging Technologies on SAMI web site • Part of strategic planning • eg ICL in Strategic Planning • Briefing on “new worlds” and strategy • eg FutureParts in Here be Dragons www.samiconsulting.co.uk
Presenting scenarios • Three audience types • Managers • Public (and Social scientists, marketing) • Scientists and engineers • See paper “Presenting scenarios” www.samiconsulting.co.uk
Early indicators • Early indicators are a powerful way of engaging the organisation • Are clear “events” which would be a sign that a scenario is evolving • Shell & gas fields • Gorbachev promotion as early indicator of changes in Russia • Decided not to buy gas fields as Russian ones would change pricing • ICL and the ICT industry • In Coral Reef scenario, AT&T would sell NCR • In Deep Sea scenario, IBM would regroup as an integrated supplier • Both happened in the same month • Insight for ICL – the computer and communications industry were on different cycles • Often ask a group to think up newspaper headlines that would signal a scenario, as a way of “thinking in” to a scenario. www.samiconsulting.co.uk