Predict Your Future
Yes, you’re right – we can’t predict the future in this complex world of ours. But isn’t that what we need, anyway – organizations and ventures that anticipate and adapt to big changes in market and environment while still carrying out their mission?
In order to simulate a future-knowing organization, we seek a few key qualities:
- An aspirational goal – something that we want that really matters to us
- Sense-making and sensing – the ability to imagine, to make sense of changing events and patterns, and to sense weak signals portending change
- Resilience – an organizational structure that flexes and adapts when it encounters something it wasn’t explicitly designed for
Scenario Planning – the Partner to Strategy
in a fast-changing world
Forecasting based on a single notion of the future is no longer adequate. Such single-point approaches can give a false, sometimes dangerous, confidence that we are in control. Our organizations and institutions face significant future uncertainties arising from the complex global environmental, social and commercial systems in which they live.Â A defining characteristic of a complex system is that future performance of the system cannot be predicted from past performance. Families with children are complex systems – which is why parents often muse that raising their first child really didn’t prepare them for their second one!
In organizational terms, we face multiple future possibilities, with no easy way to predict what will emerge. The more we know about complexity, the more apprehensive we become about planning for the long term.
Shell Oil, a pioneer in Scenario Planning for organizations, faced just that challenge in the 1960s while making decade-long, multi-billion-dollar investments in exploration and refining capacity. Scenarios developed in the 60s sensitized management to the emerging oil crisis of 1973, allowing them to halt investment in unnecessary capacity and save billions. In contrast to Shell’s rapid decision and strategic course change, their competitors lagged by four to eight years, heavily over-investing in capacity, wasting billions of dollars and losing ground that took decades to regain. Needless to say, scenario building is central to Shell’s strategic planning and decision-making. AsÂ Jeremy B. Bentham,Â Global Business Environment atÂ Shell International BV puts it:
“No one can definitively map the future, but we can explore the possibilities in ways thatÂ are specifically intended to support decision-making. At Shell we use scenario building toÂ help us wrestle with the developments and behaviours that shape what the future may holdÂ and prepare ourselves more effectively. We also believe it can inspire individuals andÂ organisations to play a more active role in shaping a better future – for themselves, or evenÂ on a global scale.”
Armed with the insights of scenario planning, it’s time to integrate them into your Strategic Planning…