Foresight For Profitable Futures Mark Ostryn

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Haven’t made this presentation before. Marjorie has let me loose. Its full of personal opinions. Follows up from my BV&DD Presentation. Winter prog saw this – its 8 tips to give you company long term value for when you exit. It gives me the chance to elaborate at detail about one of the drivers – that of a future vision. It’s timely – you’ve just completed a round with the judges and you’ve probably got some feeling about how your business plan is going to proceed.

At the same time that Marjorie confirmed that I could run this presentation, she also has decided she wants to include me in a strategy meeting for the workshop in late October.

Any comments about this?

At the same time, I have a nagging doubt. NOT what is the future for the enterprise workshop BUT how will entrepreneurs wish to be educated?

Teacher as “topic expert” to teacher as guide and coach NU – podcasting, blogging Experts create courseware Students learn anytime, anywhere, any pace. MIT OpenCourseWare Connexions Wikiversity Moodle Curriki.org

WHO? Is it of value to make a broad generalisation of who they are? MBA? Dyslexic & seeing practical education? Scientists wanting business skills? WHY? Do they need to learn. To do their job better. Cognitive – to know understand and explore. Dig a bit deeper - (Maslow) Self fulfilment, realise potential, self transcendence- connect to something beyond the ego – help others find fufilment. Maslow says that when we become self actualised we develop wisdom and automatically know what to do in a variety of situations. HOW? Related to the psychology – hyper individuality, exploring niches, participatory rather than sit on sidelines. (success of blogging, YouTube & Twitter)

Globalisation of education.

Moodle –Open Source capability providing any educator the capability to establish online lkearning sites.

One highly effective way to inspire and engage stakeholders is through asking two, simple and open-ended questions (Competing for the Future, Prahalad & Hamal 1994): Making this anoynmous and continuous and encouraging every stakeholder from the cleaner to the executive and your suppliers to your shareholders will reveal many previously hidden signals of change, cheaply and efficiently. And, other benefits can be achieved such as: knowing people's fears and doubts ahead of communicating strategy conducting further prioritisation rounds of questioning using Delphi survey techniques demonstrating to your Board the wide consultation that has taken place

Changed from CERTAINTY (learned) to UNCERTAINTY (learner): Strategic Planning to Scenario Development. Cause & Effect to Systems Thinking. analytical & Critical to Creative & holistic. Competitive to Collaboration. silos to Cross Disciplinary. Yang to Ying

Periodic and episodic analysis is no longer enough to cope with rapid change; real-time recognition, interpretation, and action on issues are required to reduce roadblocks to ongoing competitiveness.

A volunteer – Isatech, NICTA,

HORIZON SCANNING Horizon scanning: the initial and continuing process of reviewing and analyzing current literature, Web sites, and other media to identify and describe noteworthy trends and their possible development and future. Need to better understand the nature and pace of change in that environment, identify potential opportunities, challenges, and likely future developments relevant to your organization.

Look for material that expresses: New: novel, advance, innovation, renovation, fashion, latest, renew, innovate, newness, fresh First: inception, conception, initiative, beginning, debut, onset, birth, infancy, start, dawn, commencement Idea: notion, belief, apprehension, thought, impression, ideation, point of view, standpoint, theory, prediction Change: alteration, mutation, permutation, variation, modification, inflexion, mood, deviation, turn, inversion, subversion, forecast Surprise: marvel, astonish, amaze, wonder, stupefy, fascinate, dazzle, startle, take aback, electrify, stun, bewilder, boggle, wildcard Opportunity: chance, opening, crisis, juncture, conjuncture, favourable, high time Threat: future, prospect, anticipation, perspective, expectation, horizon, outlook, look-out, coming, forthcoming, imminent, approaching, fear, uncertainty Unprecedented: no precedent, unparalleled Choose sources by identifying opinion leaders in specific sectors. Apply robust decision rules to choosing sources, ensuring that they incorporate both the latest high quality evidence and identify weak signals from fringe sources. Use evaluative modulators to help see patterns and gaps such as relevance, likelihood, controversy, speed, time horizon, and geographic spread.

Key Issues in the construction industry? Mark Ostryn - Knowledge 2020 Pty Ltd http://www.knowledge2020.com 0411 742400 Business Valuation & Due Diligence - Enterprise Workshop Autumn Programme 2009

Where do you get your info from? What are the biggest challenges with information?

Driving this shift are: increasing capabilities to monitor, sense, and interpret weak signals. recognition that more intelligence is less as computing power makes it possible to aggregate and drill down into change observations made by the many. knowing that the same change observations are collected by organizations and analyzed in almost identical ways even if the emphasis and outcomes of the analysis are entirely different. the desire to overcome the silo effect of different teams in different parts of the organization not contributing to overall organizational intelligence. the desire to improve greater efficiency and effectiveness of horizon scanning. benefits to be had from Web 2.0 technologies in creating collaborative, dynamic, analysis and subsequent innovation. a need to rapidly respond at the right time to a far wider array of threats and risks. Cost-effective tools now provide continuous anticipatory intelligence but do not replace sound analysis. Instinct and sound thinking is still required but with a much improved lens and less drudgery than traditional methods.

Also appears on Foxtel and Sunrise – general comments on getting rid of clutter.

Who uses blogs? Who uses alerts? Who uses aggregators?

RSS feeds – great cos you learn to trust certain people’s judgement

Ranking about how you should act.

Strategic Foresight: is the ability to systematically think about and develop alternative futures. is the planning that results when future methods are applied to real-world situations. is the theory and practice of envisioning alternative future scenarios in order to make better decisions today, turning insight into opportunity. uses emerging signals from political, economic, social, and technlogical environments. It feeds the front end of innovation from a human needs and technology realization opportunity perspective. contributes to coping with uncertainty and complexity. It deals with the identification, assessment and usage of emerging signals to recognise and give warning about threats and opportunities at an early stage. Successful strategies are rarely achieved by spontaneous flashes of genius, but rather result from the systematic collection, analysis and evaluation of facts, circumstances, trends and opinions. Scenarios Scenario planning is one of the most well-known and most cited as a useful technique for thinking about the future. Scenario planning questions assumptions we all make about the future. The method creates plausible views of the future that decision-makers can use to determine their best response and how to react to alternative plays. Scenarios are qualitatively distinct visions, told as stories, of how the future looks. They make explicit the assumptions of how the world works. Building scenarios helps us to: Understand the realm of possible options Makes us live the future in advance so as we can take better decisions today Changes our vision of how the world works Generates a common understanding of the real issues Lets us test our decisions against a range of possible worlds Helps us to deal with complex adaptive environments where the outcome is uncertain Scenarios are not an end in themselves, but a tool to: Identify risks to, and opportunities over a desired time period Expose long term challenges for strategies and policies Deal with a mix of wide ranging qualitative and quantitative inputs Enable assumptions to be made clear and explicit Make real the implications of these challenges Encourage collaboration Support and improve vision and policy making by starting grounded and challenging conversations about choices, trade-offs, and conflicts Build capacity among staff in futures work

First – what are scenarios? – as Michael Porter of Harvard Business School points out, they are not forecasts, they are one possible future outcome. Possible futures – so internally consistent, and with the core ability to communicate in a few sentences. Forecasts aim to reach a “right” answer. But we know that, however the good the process of forecasting, events may drive any organisation “off plan”. So by considering possible qualitatively different futures, people and organisations can anticipate and be prepared to deal with change. There is a neuro-biological explanation for how this works, which we will be happy to discuss later. Why does Shell use scenarios? We will talk a little about the history of Shell’s use of scenarios, but the quotations from Jeroen van der Veer, Shell’s CEO express the two roles that Shell see for scenarios – as an analysis tool, to explore the complex business environment, and as a part of the decision making process. We see three main contributions scenarios make to organisations: firstly, the process of generating scenarios, in itself, brings out the key issues facing the organization; secondly, qualitatively different views of the world allow you to “see” early signals of change, leading to earlier and better decisions; third, scenarios provide a context for discussions and engagement which are non-threatening because they are set in the future, reduce defensiveness and expose default assumptions. We all have default assumptions which may mean that we use a word with totally different connotations in the brain of the speaker and listener – scenarios help reduce this sort of misunderstanding. Shell was part of a consortium led by Hermann Kahn at the RAND Group, developing scenario thinking tools, in the late 60’s. The scenario group as a result developed some “unthinkable” scenarios – that OPEC might decide to drive the price of oil up. Some divisions of Shell did examine the implications for their business; others decided it was “out of the question”. When oil prices shot up in the early 70s, the business performance of the divisions who had examined the scenarios was much better than the industry average or that of the divisions who rejected the idea. Since then, Shell has developed scenarios on a three year cycle, and we will look briefly at the last two – Global Scenarios 2025 and Energy Scenarios to 2050. These two illustrate that scenarios should tackle a specific issue, and that though timescales are always beyond the three or five year planning timescale, the timescale may vary according to the issue being analyzed. We are going to look at case studies of three applications of scenarios illustrating different benefits – linking the long term to short term, linking top down and bottom up, and for multiple stakeholder engagement. Scenarios Scenario planning is one of the most well-known and most cited as a useful technique for thinking about the future. Scenario planning questions assumptions we all make about the future. The method creates plausible views of the future that decision-makers can use to determine their best response and how to react to alternative plays. Scenarios are qualitatively distinct visions, told as stories, of how the future looks. They make explicit the assumptions of how the world works. Building scenarios helps us to: Understand the realm of possible options Makes us live the future in advance so as we can take better decisions today Changes our vision of how the world works Generates a common understanding of the real issues Lets us test our decisions against a range of possible worlds Helps us to deal with complex adaptive environments where the outcome is uncertain Scenarios are not an end in themselves, but a tool to: Identify risks to, and opportunities over a desired time period Expose long term challenges for strategies and policies Deal with a mix of wide ranging qualitative and quantitative inputs Enable assumptions to be made clear and explicit Make real the implications of these challenges Encourage collaboration Support and improve vision and policy making by starting grounded and challenging conversations about choices, trade-offs, and conflicts Build capacity among staff in futures work

Using a deductive based method informed by extensive environmental scanning prior to the workshops, participants were asked to consider whether beer in its current form was likely to play a product role in society in the future, the possible events that might disrupt that role and whether there might be alternatives that could be created, or that exist now but are being ignored by the company. y that their biggest product offering in its core product area was at serious risk, that neither they nor their main rival in the industry appeared to be aware of that threat, and that a continuation and reliance upon the success it already had, would render the company vulnerable. Within three months they redirected $80m to creating a new product, had pushed another product to great success20, and had uncovered a new product category expected by Fosters to grow to around $400m inside a decade. Playing catch-up, Foster’s main rival released a competitive offering almost 12 months later but still fails to make significant headway. Andrew Fairlam, senior Innovation specialist with Fosters stated that ‘the scenario process provided insights to the innovation team better than any other brief we’ve worked with’ and Steve Tighe explains: "The success of the Foster's beer scenarios can be measured by the internal re-perceiving that occurred around the potential for growth of the industry's most competitive segment. As a result of this new way of seeing, existing paradigms were challenged, and increased resources and brand development were targeted at this segment."

Omni Tanker Key advantages - Suitability & Versatility (wide rang eog liquids), wash out ability, durability & lightweight (increased payloads)

Action Planning is a process for defining organisational strategy (preferred future), or direction in the face of what has been learned from Horizon Scanning and Strategic Thinking and making decisions on allocating resources to pursue this strategy. D - Define the problem or challenge you are facing E - Explore the choices that you have C - Choose your strategy (from the above choices) I - Identify the consequences of the choices D - Do-act out the choices you have made E - Evaluate - look back at your decision and see if it was a good one. If not, choose another one and repeat the process. Action planning involves the following elements: Future briefing: Describing the results of a Horizon Scan Breakout thinking: Finding new paradigms Scenario planning: Creating alternative futures Competitor analysis: Undertaking an external scan Stakeholder mindset: Understanding customer needs and desires Organisational critique: Preparing an honest internal assessment Plausible responses: Developing response strategies Agreed strategy: Determining the way forward Action plan: Preparing and executing the response

Using a decision tree approach to help a pharmaceutical company decide to invest in the clinical trial of a new drug Co deciding whether to invest in a clinical trial for a new drug. Costs are known but drugs efficacy & future revenues are uncertain. Even if trial was successful, additional trials would be required before the drug was sold. How much if anything should be invested In the trial? Look at all possible outcomes of future trials and all of managements decisions in each event. RISKS Uncertainty about revenue potential of drug Three sets of clinical trials required plus FDA approval required. Probability of success =25% (25% x $62m) + (75% x -$23.1m) = -$1.8m Analysis ignores company option to abandon the process after each trial phase, option to retrial, option to reformulate & retrial. Thus if you eliminate certain unchosen options, you get an adjusted NPV of +$9.3m. Decision tree works well for complex options that involve a number of risks with multiple expiration dates and volatilities that change over time.

NETWORKING Networking: engaging stakeholders through ongoing dialogue Futures networking Foresight projects are almost always collaborative. Maximising the breadth and depth of inputs to a project or programme and communicating the outcomes successfully to all stakeholders is an essential ingredient for success. Social networking Social interaction (tagging, commenting, ideation, narrative analysis) Global sourcing/outsourcing/global scouting Virtual worlds Expert panel portals Prediction markets Integration with business and competitive intelligence Shared futures databases/benchmarking/networks Surprise and serendipitous discovery Productivity Integrated tools and methods Automated scan hit finding From text to searchable video Web-based modelling and simulation Integration with business and competitive intelligence Surprise and serendipitous discovery Fast action/reaction/low cost/high value added

“ How much you own doesn’t matter anymore, it’s how much you have access to” “ If you share then more people will share with you” “ Its not the information (its abundant), it’s what you do with it” “ Networks give you cognitive ability beyond your own

RISE OF PERSONAL BRANDS: Self publishing will intensify. ATTENTION CRASH: Too much of everything is everywhere. Has led to News Readers and aggregation is everything. Future is all about unique content being created by many people. Context will be everything GLOBAL SOCIAL NETWORK FATIGUE: Will be micro based ones manifesting in BarCamps (retreat to past community)Ning evolution – quantity to quality. QUALITY OF CONNECTIONS: Not all friends are equal – strength of links not how many. ANALYTICS AND RESEARCH: Understanding what people are doing on your market and adapting it. Smart business better at engaging their customers. CONTENT AS MEDIA: not banner ads CONSUMER GENERATED BRANDS more people generating brand & marketing content. Display the uniqueness of an individual – micro brands. Consumers taking branding into their own hands – shifting it into real world goods and services. VIRTUAL WORLDS: SecondLife had technological challenges, but VW will see mass acceptance. Takes many itineration’s for anything to get right. Will be one of the main ways to surf the world in the coming years. Key indicators –young peoples world e.g. Club Penguin is all about Virtual experiences. WEB & MOBILE CONNECT: OPENNESS WILL MAKE US VERY PRIVATE:

What is Club Penguin? Club Penguin is a snow-covered, virtual world where children play games and interact with friends in the guise of colourful penguin avatars. How does it work? Players create a penguin and explore the snow-covered island of Club Penguin, engaging in a variety of fun and imaginative activities. How much does it cost to play? It's free to play, explore and chat with friends on Club Penguin, but special features such as priority access, exclusive parties and opportunities to create, discover and play in new and exciting ways require a membership .

GM / Hummer Then 2 examples re: opps for SME’s Nike & Runkeeper Demise of Google? (see notes on cafe in Victoria from SmartCompany.com and David Snowden)

Nike’s solution uses a sensor and accelerometer, and not GPS. This means that you need to go out and buy a separate sensor (and for best results, Nike shoes) to use the Nike system. Second, the lack of GPS also means that Nike’s solution incorporates no location data. It can track distance (sort of) by number of steps, but isn’t as accurate as GPS tracking and shows no path traveled on a map. It also assumes a set stride length, so for activities like interval training where your pace varies, it becomes inaccurate quickly. Third, with the Nike solution, it only works when you are doing activities involving taking steps.

Shows I stay up late and watch SBS foreign films

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Foresight For Profitable Futures Mark Ostryn - Presentation Transcript

Mark Ostryn [email_address] 0411 742 400
What Drives Business Value? CREATING & BUILDING VALUE RIGHT PRODUCT, RIGHT MARKET, RIGHT TIME FUTURE VISION STRATEGIC FLEXIBILITY CREATING BARRIERS TO ENTRY DEVELOPING SCALABILITY TEAM, COMMITMENT & ADVISORS ACQUISITIONS ALLIANCES & PARTNERSHIPS
Strategy for NSW Enterprise Workshop?
Shorter Term Issues
- How do we ensure we get a “break even” number of participants next year?
- What target market should we be addressing – start ups, $2m turnover?
- What is the key differentiator / USP (or whatever) that should attract participants?
My Long Term Question
- What is the future of vocational training for entrepreneurs?
Transition of Education
Analysis of the Customer – The Entrepreneur.
- Who?
- Why?
- How?
- When?
- What?
- Where?
Examples of an Education Revolution
Moodle – Enabling Online Learning
Already 1,000+ Australian Sites
Curriki – Collaboration in Education
iTunesU – Free Podcasted Learning
Education Scenarios - GBN Exclusive Inclusive Hierarchical Participatory SOURCE: Global Business Network
Two Fundamental Questions
- How will the future be different?
- What should we be doing about it?
Business Planning – Mark’s Alternative View
- Define alternative views for how the world will look in 5 years.
- Define your company’s role in each of those alternatives.
- Define how you will ramp up to that position without running out of cash!
Goal = you to create a business plan that you’ll WANT to update
Change SOURCE: Janine Cahill
Collaborative Foresight IDENTIFYING THREATS AND OPPORTUNITIES SHARING FUTURES INTELLIGENCE & DEBATING AGREEING GOALS, OBJECTIVES & SEEKING TO FOLLOW THEM SHARING COMMON VISION, MISSION, STRATEGIES & AIMS SOURCE: PREST/ Manchester Institute of Innovation Research
Asking the right questions
- If I could answer any question for you, what would it be?
- If you looked back from 10 years hence, and told the triumph in the ____ market, what would it be?
- If you looked back from 10 years hence, and told the failure in the ______ market, what would it be?
- What are one or two critical strategic decisions regarding the __________ market on the horizon?
- What are the top 2 or 3 trends driving the future of the ______ market?
- What are the obstacles to progress in the ________ market?
- What should I have asked that I didn’t? (at the end).
- SOURCE: ADAPTEED FROM How Often? : Tomorrow Project
Open Ended Questions
- How might the future be different?
- What certainties/uncertainties are implied in the conclusions?
- What is likely to remain the same or change significantly?
- What are the likely outcomes?
- What and who will likely shape our future?
- Where could we be most affected by change?
- What might we do about it?
- What don't we know that we need to know?
- What should we do now, today?
- Why do we care?
- SOURCE: ADAPTED FROM How Often? : Tomorrow Project
Horizon Scanning Continuing Process of Trend Tracking
Material – Key Words
- New
- First
- Idea
- Change
- Surprise
- Opportunity
- Threat
- Unprecedented
Construction 2020 – Key Issues
- Speed of innovation
- Demographics e.g. Ageing
- Health & Safety
- ICT
- Modern construction methods
- New construction materials.
- CO2 emission reduction
- Building energy conservation
- Sustainability – water / waste
- Government goals
SOURCE: Shaping Tomorrow Through Practical Foresight
Change Drivers
- Monitor, sense & interpret weak signals
- More intelligence is less. Computing power enables aggregation and drill down
- Everyone can collect. Its interpretation & action that counts
- Benefits from Web 2.0 technologies – creating, collaborative, dynamics analysis & subsequent innovation
- Need to rapidly respond to a wider array of risks & threats
Define your Processes
- 1. Create a framework
- 2. Have an opinion
- 3. Gather & classify and interpret data to build knowledge
- 4. Create some scenarios
- 5. Develop flexible strategies.
SOURCE: Joe Coates
RSS (Really Simple Syndication) allows aggregation of favoured blogs
Competitive Intelligence “defining, gathering, analysing, and distributing Intelligence about products, customers, competitors and the environment to support managers to make strategic decisions”
Key C.I. Challenges
- Identifying a market opportunity and entry strategy
- Analysing Competitor's Positioning, Strategy and Likely Moves
- Looking for Acquisitions, Partnerships and Alliances
Investigating the Bread Market - 2005
Assessing Trend Relevance SOURCE: Shaping Tomorrow Through Practical Foresight Consider trend impact globally Consider trend impact on your organisation Timeframe Scope Impact Likelihood Urgency When will trend begin to have an impact? What is likely future uptake of this trend? What is likely future impact of this trend? What is the likelihood of the trend having an impact on your organisation? How quickly does the organisation need to respond to this trend? Assessment Rating Assessment Rating Assessment Rating Assessment Rating Assessment Rating 1-4 years 5 Global 5 Significant 5 Almost Certain 5 Now 5 5-9 years 4 Widespread 4 Major 4 Likely 4 Within 3-5 years 4 10-14 years 3 Niche sector/market 3 Moderate 3 Possible 3 6-9 years 3 15-20 years 2 Organisations 2 Minor 2 Unlikely 2 10-15 years 2 20+years 1 Individuals 1 Insignificant 1 Rare 1 16-20 years 1 Never * 0 Non-existing* 0 20+ years** 0
Strategic Thinking Think about and develop alternative futures
Scenarios Forecasts Scenarios
- “ an internally consistent view of what the future might be”,
- Professor Michael Porter, Harvard Business School
time GDP etc Trends Uncertainties
Simple Scenario – Dave Snowden
Book Scenarios http://www.scenariothinking.org/ wiki/index.php/Image:ScenariosBooks.png
Tips for Successful Scenarios
- Stay Focused
- Keep it simple
- Keep it interactive
- Plan & allow enough time
- Don’t draft too many
- Select people to own scenarios
- Budget resources to communicate scenarios
- Avoid probabilities
Omni Tanker
R&D Options for Omni Tanker
- Road transport tanks – tankers
- Rail transport tanks – fixed and demountable
- Intermodal ISO container tanks – Road/Rail/Sea
- Storage tanks – stationary tanks
- Aircraft wing tanks
Alternative Growth Strategies
- I. Joint venture manufacturing
- II. Licensing Agreement
- III. Sale of the technology
Action Planning Defining Preferred Futures
Adaptive Scenarios
Real Options – Decision Tree Source: LEK Paper. Making Real Decisions With Real Options
Networking Collaboration with stakeholders & the global community
SOURCE: Various Dave Snowden Presentations
Tom McKaskill – Reputation Development
Collaboration for Mutual Betterment
Six Pixels of Separation – Mitch Joel
- Rise of Personal Brands
- Attention Crash
- Social Network Fatigue
- Quality of Connections
- Analytics & Research
- Content as Media
- Consumer Generated Brands
- Virtual Worlds
- Web & Mobile Connect
- Openness makes us Private
Community Collaboration - Freemium
Focussed Social Networking
Are the Big Boys infallible?
“ We really wanted to separate ourselves from that sort of very technical, geeky side of things. Everyone understands speed and distance.” Michael Tchao, the head of Nike+
Fin