Industry Analysis XMBA [email protected] The organisation The business ecosystem The future...

Industry Analysis XMBA [email protected] Analysis XMBA [email protected]

The organisation The business ecosystem

The future

Increasing

awareness

Scenarios(Imagining the future)

Strategic options

(Exploring our future possibilities)

Co-evolution(Discovering our place & relationships)

The Goal:The Goal:To increase awareness To increase awareness about the organisation, about the organisation, its environment and its environment and the future.the future.

The Goal:The Goal:To increase awareness To increase awareness about the organisation, about the organisation, its environment and its environment and the future.the future.

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


Tools for Difference FutureTools for Difference Future

A Clear- A Clear- enough futureenough future

A Single A Single forecast forecast precise precise enough to enough to determine determine strategystrategy

Traditional Traditional strategy strategy toolkittoolkit

A range of FutureA range of Future

Range of Range of possible possible outcomes, but no outcomes, but no natural scenarionatural scenario

Technology Technology forecastingforecasting

Scenario Scenario PlanningPlanning

Alternative Alternative FutureFuture

Few discreet Few discreet outcome that outcome that define futuredefine future

Decision Decision AnalysisAnalysis

Game theoryGame theory

True True AmbiguityAmbiguity

No basis to No basis to forecast the forecast the futurefuture

Analogies and Analogies and Pattern Pattern recognitionrecognition


The environmentThe environmentThe environmentThe environment

International lawInternational lawInternational lawInternational law

GovernmentsGovernmentsGovernmentsGovernments

Standards bodiesStandards bodiesStandards bodiesStandards bodies

StakeholdersStakeholdersStakeholdersStakeholders

Supplier’s Supplier’s supplierssuppliersSupplier’s Supplier’s supplierssuppliers

Customer’s Customer’s customerscustomers

Customer’s Customer’s customerscustomers

New entrantsNew entrantsNew entrantsNew entrants

CustomersCustomersCustomersCustomersSuppliersSuppliersSuppliersSuppliers

CompetitorsCompetitorsCompetitorsCompetitors

SubstitutesSubstitutesSubstitutesSubstitutes

OrganisationOrganisationOrganisationOrganisation

A Business EcosystemA Business Ecosystem

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


A way of viewing the worldA way of viewing the world

A scenario is a sequence of eventsA scenario is a sequence of events

Businesses and computer systems Businesses and computer systems can be viewed as sequences of can be viewed as sequences of events / activitiesevents / activities

Sequences interactSequences interact

Life is complicated, but you need a Life is complicated, but you need a way of finding your way throughway of finding your way through


9/119/11

Thaksin CarbinetThaksin Carbinet

Asia FinancialCrisisAsia FinancialCrisis

SARSSARS

??

??

??

Asean +3Asean +3

First Thai female prime First Thai female prime ministerminister

Electric carsElectric cars

Moon BaseMoon Base

??

??

??

Who would have imagined 5 years ago

that:

10 years from now it is possible that:

E


“The horse is here to stay but the automobile is only a novelty.”

President of Michigan Savings Banks, 1903 (advising Henry Ford’s lawyer not to invest in the Ford Motor Company)

“Automobiles will start to decline as soon as the last show is fired in World War 22. Instead of a car in every garage, there will be a helicopter.”

Aviation publicist, Harry Bruno, 1943

“I think there is a world market for above five computers”IBM Chairman, Thomas Watson, 1943

“There is no reason for any individual to have a computer in their home”

Digital Equipment President, Ken Olsen, 1977

Prediction is difficult….even for experts


The right question…..The right question…..

“The only relevant discussions about the future are those where we succeed in shifting the question from whether something will happen to what would we do if it did happen”

Arie de GeusFormer Head of Group Planning, Shell International


What is a scenario?What is a scenario?

An interpretation of the presentand

an archetypal image of the futureand

an internally consistent story about the pathfrom the present to the future


Scenarios can be used …..Scenarios can be used …..

To aid in the recognition of ‘weak signals’ of To aid in the recognition of ‘weak signals’ of changechange

To avoid being caught off guard - “live the To avoid being caught off guard - “live the future in advance”future in advance”

As a language for discussion - and to As a language for discussion - and to challenge ‘mental maps’challenge ‘mental maps’

To understand the world better - and make To understand the world better - and make better decisionsbetter decisions

To test strategies for robustness - with “what To test strategies for robustness - with “what if” questionsif” questions

E


Scenario AnalysisScenario Analysis

Breaks complex systems into Breaks complex systems into simple componentssimple components

Provides structure to the analysisProvides structure to the analysis

Is used as the basis of further Is used as the basis of further analysis and design in the analysis and design in the development of activity diagrams development of activity diagrams and sequence diagramsand sequence diagrams


Companies use scenarios Companies use scenarios to…..to…..

Sensitise managers to the outside worldSensitise managers to the outside world

Provide valuable insightsProvide valuable insights

Deal with uncertaintyDeal with uncertainty

Challenge mental mapsChallenge mental maps

Provide internal ‘language’Provide internal ‘language’

Develop better strategies


Typical Approaches to Typical Approaches to Scenario DevelopmentScenario Development

Discussion and debate - with or without source data

System Change - evaluation of every parameter under different conditions (e.g. treasury model)

Driving Force - identification and assessment of the fundamental influencing factors


Developing Scenarios Using Driving Developing Scenarios Using Driving ForcesForces

GatherData

Identify Driving Forces

Build Scenarios

Political

EconomicSocial &

Demographic

Technological & Scientific

EnvironmentalCommercial & Business


Define the nature of the scenario Define the nature of the scenario ProductProduct

Identify the key Identify the key ParticipantsParticipants

Follow a clearly defined Follow a clearly defined ProcessProcess

Scenario development in practice The three Ps


IndifferenceConcentration

ofRegulation

Poor HousingStock

Presentation V

Substance

PoliticalImperative

PublicPerceptions

Communications

StakeholderPressure

Politics / People

Spin offeconomic

development

Planning Issuesmay affect

rollout of newE-opportunities

Rate of Response

CustomerAspirationsIncreasing

Economics

Do we knowbaseline?

SME Inertia

2010 +?

Inertia / Awareness

Talkis it a

Value or Waste

Buy-inEmployeesCustomers

PressureGroups

Customer demands

lower cost

“Win / Win”

“Lose / Win”

DemandGrowth

£ / t C

Misguided / Informed ?

Long Term Planning

Customerswill notaccept

retrogradesteps

Customersare

prepared topay

ExpectationBusiness

VPublic

DemographicChanges

Short-termism

Environmenttruly becomes

“political” issue

Government must

Coerce?

Open Discussion

transparency

Customer Choice

Oil storagewater / land

pollution“Risk”

Legislation

SustainableDevelopmentLegislation?

Disbenefitsof EU

Legislation

IntegratedPolicy

EULegislation

level playingfield or Env.

Impact

Energy policy not devolved

Point of use

Competition / Public Service

(Water)

Environment Becomes

Competative issue

Partnerships

Media

Brainstorming and “Clustering” Brainstorming and “Clustering” SessionSession

Key issues and potential policy areas IIKey issues and potential policy areas II


Priority issues in environment over the next 25 years

low

Uncertainty

high

low Relative Importance highE


Priority issues in environment over the next 25 years

low

Uncertainty

high

low Relative Importance high

Structures

Behaviour

Waste E -Activity

EnvironmentalImpact

Technology

Surprises

Public Awareness

Partner-ships

Legislation

Long termPlanning

Media

PressureGroups

Politics/People

Economics

Resources


Strategic optionsStrategic options“Our future possibilities”“Our future possibilities”

Key strategic issuesKey strategic issues What are the real areas which affect our business?What are the real areas which affect our business? (E.g. service, channel, market)(E.g. service, channel, market)

Formulate key decision areasFormulate key decision areas Where do decisions need to be made?Where do decisions need to be made?

Create clusters of optionsCreate clusters of options Discover coherent strategiesDiscover coherent strategies Check against distinctive competenciesCheck against distinctive competencies

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


Strategic Strategic option option

generatiogeneration:n:

one one approachapproach

Competence

Development

Existing

New

MA

RK

ETS

SERVICES

PROTECT/BUILD•Withdrawal•Consolidation•Market penetration

SERVICE DEVELOPMENT•Existing competencies•New competencies

MARKET DEVELOPMENT•New segments•New territories•New uses

DIVERSIFICATION•Existing competencies•New competencies

Existing New

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


ScenariosScenarios“Imagining the future”“Imagining the future”

Identify key driving forcesIdentify key driving forces

Choose most uncertain/most Choose most uncertain/most significantsignificant

Develop alternativesDevelop alternatives

‘‘Flesh out’ with narrativeFlesh out’ with narrative

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem

Identify key driving Identify key driving forcesforces

Driver 1

Driver 3

Driver 5

Driver 4

Driver 2

Low

Low

High

High

Uncertainty

Importance

Note Note which key which key external external

drivers are drivers are both both

important important & &

uncertainuncertain

Note Note which key which key external external

drivers are drivers are both both

important important & &

uncertainuncertain


Driver 2Driver 2

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem

Formulate ‘yes-no’ questionsFormulate ‘yes-no’ questions

Yes

Yes No

No

Driver 5Driver 5

Scenario 1

Scenario 3

Scenario 2

Scenario 4

Scenario 1 Scenario 2

Scenario 4


CONTROL

ABSENCE OF CONTROL

CERTAINTYUNCERTAINTY

1. Rules of the Game2a. Key Uncertainties

3 . Options 4. Decisions

2b. Scenarios

The IS Matrix


CONTROL

ABSENCE OF CONTROL

CERTAINTYUNCERTAINTY

1. Rules of the Game2a. Key Uncertainties

3 . Options 4. Decisions

2b. Scenarios

Scenarios for the US

Demographics Globalisation Global Climate Change Potential for epidemics New technological wave We live in one world Nature of warfare has changed

Nuclear terrorism

Disintegration of world order

‘Friendly Planet’

‘Gilded Cage’

Constructive engagement

Isolation

‘Homeland Security’

Steel tariffs

Agricultural subsidies


Develop future time line for each Develop future time line for each scenarioscenario

20032003 20042004 20052005 20062006 20072007

Map out critical events leading to the Map out critical events leading to the unfolding of this scenario enabling you to:unfolding of this scenario enabling you to: Scan for triggers which will alert you to the Scan for triggers which will alert you to the

scenarioscenario Rehearse your strategic responses to the Rehearse your strategic responses to the

events of the scenarioevents of the scenario

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


Cross-impact Cross-impact matrixmatrix

Test each Test each option option against each against each scenario.scenario.

SS WW

OO TT

SS WW

OO TT

SS WW

OO TT

SS WW

OO TT

SS WW

OO TT

SS WW

OO TT

Option 1

Option 2

Option 3

Scenario 1 Scenario 2 Scenario 4

Actions

Learning

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem

MMPP II

MMPP II

MMPP II

SWOT SWOT analysis is analysis is one useful one useful tool;tool;

de Bono’s de Bono’s Plus/Minus/ Plus/Minus/ InterestingInterestingis also is also good.good.Add Add learning learning points and points and actions actions required.required.


Are scenarios the answer?Are scenarios the answer?Do scenarios help?Do scenarios help?

Shell used them effectivelyShell used them effectivelyIBM & General Motors did notIBM & General Motors did not

Why not?Why not?DiversityDiversity

Is there enough diversity in planning Is there enough diversity in planning process?process?

CultureCultureIs the culture open to new thinking & doing?Is the culture open to new thinking & doing?

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


Strategic intentStrategic intent

Strategic intent must inform all of Strategic intent must inform all of organisational lifeorganisational life

Strategic intent must take account Strategic intent must take account of the realities of the organisation of the realities of the organisation and its environmentand its environment

Strategic intent is more important Strategic intent is more important than ‘strategy’than ‘strategy’

Overview

The Organisatio

n

The Future

The Process

Reflections

Business Ecosystem


JJ . . CC . . Glenn and TGlenn and T . . JJ . . Gordon, 'The Millennium ProjectGordon, 'The Millennium Project : : Issues and Issues and Opportunities for the Future', Opportunities for the Future', Technological forecasting and social change: Technological forecasting and social change:

An International Journal An International Journal, North, North--Holland, New York, volHolland, New York, vol . . 61, no61, no . . 2, June 2, June

1999, pp1999, pp . . 97-20897-208..

sustainable development for land, water and oceans through energy efficiency actions sustainable development for land, water and oceans through energy efficiency actions

- long term perspective planning at personal, corporate and political levels- long term perspective planning at personal, corporate and political levels

population growth rate checked through female rights and education programs population growth rate checked through female rights and education programs

peace paradigm for coexistence extending economic cooperation across regions peace paradigm for coexistence extending economic cooperation across regions

science for appropriatescience for appropriate--technology in genetics, biotechnology & information systems technology in genetics, biotechnology & information systems

global ethics and thinking assisted by literacy, education and medical support global ethics and thinking assisted by literacy, education and medical support

democratic institutions, reconciliation, freedom, equity and selfdemocratic institutions, reconciliation, freedom, equity and self--determination determination

- non violent conflict resolution with United Nations reform and global cooperation- non violent conflict resolution with United Nations reform and global cooperation

ecologically based agriculture predicated on alternative progress indicators, and ecologically based agriculture predicated on alternative progress indicators, and

global philosophies, value systems and thought towards environmental security. global philosophies, value systems and thought towards environmental security.

Industry Analysis XMBA [email protected] The organisation The business ecosystem The future...

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