Predict Your Future
“Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.”
– Peter F. Drucker
We all know we can’tÂ predict the future with any measure of success. The faster we try to go, and the faster the world goes, the harder it is to have any confidence in the critical decisions we must make about our organization’s future. IfÂ we are to strategizeÂ and plan and act and succeed in this complex and uncertainÂ world of ours, we needÂ some way to develop a sense of the terrain ahead.
We needÂ future radar.
One of the primary tools for leaders and organizations to develop future radar – or more formally,Â strategic foresight – is a process called scenario planning.
Scenario Planning – the Partner to StrategyÂ 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…