Given all that is going on, I thought thge topic of Scenarios, Forecasting and Shaping the future seemed a good theme to get the thinking flowing…. (This was sent to my clients June 2020)
Three big topic & questions
In the world of strategy, I live in, there are three quite large questions:
- “Is our strategy robust, no matter how the world might evolve?” Scenarios and scenario planning are usually used to explore this question.
- “If we look forward, how likely are things to happen?” Typically this involves future thinking and some varieties of forecasting is used to anticipate, predict and plan for what is expected over the horizon, and associated uncertainties and risks.
The third question goes to the heart of future thinking and strategy is about, namely vision, purpose and making change happen:
- “Are we planning for the future? Or are we planning the future?” (I thank Mark Carney talking about climate change and for the clarity & simplicity of this third quote)
On this overall theme, here are a few insights from what I have been doing and reading this year and during lockdown:
- Reading about Forecasting: Amongst the books I have been reading, ‘Superforecasters’ provided insights for thinking about the future, strategy and the role of leadership in decision making conversations.
- Client work: This included the widest scope strategy map I have ever drawn. A quite ridiculous scope (see later).
- Sustainability, the Environmental & multiple Capitals …and how to embed this in the strategy and the organisation.
Superforecasters: Philip Tetlock & Dan Gardner
Why read? Being conscious of the outside world, being able to sense and anticipate how things might change, (even with global pandemics) isan important skill and role and skill of management teams. It fits with strategy as a continuous learning process.
What might you learn:
- Many ‘forecasts” are vague and untestable: “Pundits” often make vague predictions, that on closer examination… could mean anything… anytime… with any likelihood… and their track record is never tested.
- The importance of forecasting triage: How forecasting falls into three bands:
- Impenetrable, cloud like questions that are almost impossible to forecast with any certainty (Any forecast is likely to be ‘as good as a dart throwing chimp’)
- Clocklike forecasts: Easy, short term and not a challenge.
- The sweet spot, where accurate forecasts are possible and provide actionable insights.
- Key question: Are you working in this sweet spot of the forecastable? At the same time are you considering the wider scenarios that might emerge?
- Super Forecaster’s thinking patterns: The Super-Forecasters, were proven, statistically, over time, to be far more accurate than even those professionals in agencies such as the CIA. Their thinking patterns are relatively easy to adopt by aspiring superforecasters, and are summarised in ten guidelines which include (my summary):
- Breaking seemingly intractable problems into tractable sub problems (What are you fighting with that could be broken down into sub-problems?)
- Taking an inside and outside view (Where can you find external examples of the same issues?)
- Continuing to look for information, and refining their forecasts as more information becomes available (Are you continually observing, refining and learning?)
- Looking for multiple perspectives, the more the better. (Don’t get stuck in a single perspective. Taking multiple perspectives allows you to identify and understand a wider range of clashing causal forces.)
- Developing a sensitivity to meaningful levels of probability. (When someone says 50/50 do they really mean the same probability as tossing a coin, or do they mean “I have no idea, so I might as well toss a coin”? They are quite different.)
- Genuinely learning from forecasting process mistakes rather than the rear-view mirror of hindsight.
- The role of leadership, leaders and decision making in teams was particularly interesting.
- It explores the characteristics that enable experienced teams, to be given the freedom to reliably analyse and decide their local course of action to deliver the overall mission.
- It emphasises the value of precision questioning and constructive confrontation, and understanding the arguments of others.
Of course you can just as easily apply this thinking to scenarios as well as forecasts. Just don’t expect to predict which scenario will eventually transpire.
The whole book is well worth working through, chapter by chapter. Here is an amazon link to Superforecasters. It is a good complement to Thinking Fast and Slow by Daniel Kahneman (which I am sure I have recommended before).
Insights from the widest scope strategy map I have ever created
The challenge: enabling European cloud and edge computing to support the development of industry, commerce and society, across the EC. This was part of a European Cloud computing project (H-cloud), and the ‘Strategy Map’ provided a structure to explore
- The demand side for cloud and edge computing: Exploring scenarios across diverse sectors to look at technology adoption and deployment as well as the challenges and complexity of data use and sharing.
- The supply side: the structure of the cloud and edge computing landscape, the enablers of success, the drivers of change and how that landscape might evolve to meet future needs. This included the environmental implications of both data movement and technology.
What struck me was the importance of collaboration, within and across industries, to shaping the future use of data and technology, and the overall impact across multiple capitals. Working with a client on industry collaboration and future thinking across the water industry, probably influenced my thinking on this topic.
I should emphasise in this EC project, I was part of a consortium that included various subject matter experts. However, the strategy map’s demand/supply side framework was the structure that supported the initial demand and supply scenario analysis of those experts, and was the framework sent to the EC. It was certainly Interesting.
Sustainability, environmental impact and multiple capitals
It is clear the Covid-19 crisis has brought further focus on sustainability. So, I have been collecting together my years of material from client work on strategy and measuring Environmental Impact, Social Impact, Natural Capital and Multiple Capitals. Many organisations are thinking about this in the context of their purpose and future. Many are thinking how it shapes, and they shape, their future. Collating all my material together is work in progress, so you will either have to wait for another newsletter, or give me a call. 😊
Any thoughts – simply drop me a line… or give me a call. I am always happy to chat. And while you think about shaping your future… and start forecasting what might happen… stay safe and well.