Scenarios for south africa

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The future of South Africa depends on progress along the three Driving Forces of change of POLITICAL-, ECONOMIC-, and SOCIAL- TRANSFORMATION. The solution lies in an approach that inextricably links economic policy, social development and political transformation. The Ubuntu scenario requires an entrenched democracy, a reconciled Nation, united behind a common vision, an open and deregulated economic system, alleviation of poverty and high social delivery of housing, health and education.

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Scenarios for south africa

  1. 1. The Scenario Building Process and Scenarios for South Africa Making the impossible happen Dr. Llewellyn B. Lewis The Strategic Forum www.strategicforum.co.za <ul><li>THE STRATEGIC FORUM </li></ul><ul><li>A place of assembly </li></ul><ul><li>for strategic conversations </li></ul>
  2. 2. CHANGE ENVIRONMENTALY DIRECTED REACTIVE CHANGE : THE RECOVERY TROUGH SHOCK DENIAL BARGAINING ANGER SADNESS DEPRESSION ACCEPTABLE PERFORMANCE PREDICTING THE FUTURE POSSIBLE RESULTS FIRST CURVE SECOND CURVE CONTINUOUS IMPROVEMENT BENCHMARKING SURVIVAL RESISTANCE TO CHANGE (Based on Handy : 1994)
  3. 3. CREATING THE FUTURE SELF-DIRECTED TRANSFORMATION CRITICAL MESS ENVIRONMENTAL CHANGE RISK RUDE AWAKENING CHAOS UNCERTAINTY FIRST CURVE SECOND CURVE CREATING THE FUTURE IMPOSSIBLE RESULTS EMERGING ORDER STRANGE ATTRACTORS (Based on Handy : 1994) THE BUTTERFLY EFFECT THE EDGE OF CHAOS ZONE OF CREATIVITY AND ADAPTABILITY
  4. 4. CREATING THE FUTURE CREATIVE TENSION <ul><li>SEEKS RESOLUTION : RESULTS IN ACTION </li></ul><ul><li>STRATEGIC ACTION PLANS </li></ul><ul><li>PERFORMANCE GUIDELINES </li></ul><ul><li>BUDGETS </li></ul><ul><li>DONE BY MANAGEMENT </li></ul>STRATEGIES A LOGIC AND FIRST LEVEL OF DETAIL, FOR HOW THE VISION CAN BE ACHIEVED DEVELOPED BY LEADERSHIP CONTEMPORARY ANALYST 2020 2011 CURRENT REALITY INFORMED BY MEMORIES OF THE PAST (HISTORY) HISTORIAN VISION INFORMED BY MEMORIES OF THE FUTURE (SCENARIOS) PROPHET CONTEXT : A COMPELLING PICTURE OF THE FUTURE WE WANT TO CREATE. CREATED BY LEADERSHIP
  5. 5. <ul><li>STRATEGIC FORUM </li></ul><ul><li>A place of assembly </li></ul><ul><li>for strategic conversations </li></ul><ul><li>THE </li></ul><ul><li>SCENARIO BUILDING PROCESS </li></ul>
  6. 6. <ul><li>“ A well- designed scenario process has great value the first time it is used, but like a good wine, it improves with age. The tool promotes mental agility by opening minds to multiple possibilities. </li></ul><ul><li>- - - - - - - - - - - -, ‘ If you use scenarios, you’ll never read the newspaper the same way again.’” (Charles M. Perrotet, in Learning from the future : 1998 : 139) </li></ul>Making sense of the future with Scenarios
  7. 7. FIRST QUESTION What percentage of your time is spent on EXTERNAL rather than INTERNAL issues ??
  8. 8. SECOND QUESTION Of this time spent looking OUTWARD how much of it is spent considering how the world could be DIFFERENT in five or ten years???
  9. 9. THIRD QUESTION Of the time devoted to looking FORWARD and OUTWARD how much of it is spent in CONSULTATION WITH COLLEAGUES where the objective is to build a DEEPLY SHARED, WELL TESTED VIEW OF THE FUTURE as opposed to a personal and idiosyncratic view???
  10. 10. THE 40 / 30 / 20 RULE Senior management devotes LESS than 3% [40% x 30% x 20% = 2,4%] of its energy in building a CORPORATE PERSPECTIVE OF THE FUTURE
  11. 11. THE 40 / 30 / 20 RULE Managing the Here and Now Managing the There and Then
  12. 12. SYSTEMS MODEL OF SCENARIO DEVELOPMENT www.strategicforum.co.za Scenario B Scenario Input Scenario Determinants Normative Scenarios Scenario C Scenario D Development Scenario A Stability Actors Actors Core drivers Actors Values Policies Strategies Strategic Posture <ul><li>Strategic Issues </li></ul><ul><li>Key </li></ul><ul><li>Uncertainties </li></ul><ul><li>Critical Success </li></ul><ul><li>Factors </li></ul><ul><li>Critical Resources, </li></ul><ul><li>Key Capabilities </li></ul>
  13. 13. CREATING THE FUTURE WITH SCENARIOS KEY ACTORS STRATEGIC POSTURE SCENARIO LOGICS SCENARIO STORY LINES IMPACTS MONITORING CURRENT REALITY vs SCENARIOS STRATEGIC INTERVENTIONS CRITICAL SUCCESS FACTORS SCENARIO VARIABLES DRIVING STRUCTURAL CHANGE FOCAL ISSUE STRATEGIC INTENT STRATEGIES STRATEGIC ISSUES KEY CERTAINTIES KEY CHALLENGES CORE DRIVING FORCES KEY UNCERTAINTIES
  14. 14. CREATING THE FUTURE “ There are always two parties, the party of the past and the party of the future; the establish ment and the move ment” (Ralph Waldo Emerson) “ The future never just happens; it is created” (Will and Ariel Durant : The Lessons of History)
  15. 15. Making sense of the future The State of the Nation : 2010 -2020 The Reinvention Scenario logics CORE DRIVING FORCES EVENTS TRENDS AND PATTERNS The Virtuous Cycle The Vicious Cycle VARIABLE BEHAVIOUR CHANGING STRUCTURES Causal relationships SCENARIOS KEY STAKEHOLDERS STRATEGIC POSTURE The Iceberg STRATEGIC ISSUES; KEY UNCERTAINTIES; CRITICAL RESOURCES; KEY CAPABILITIES. Increasing ability to understand
  16. 16. TYPES OF CHANGE <ul><li>Cyclical change : </li></ul><ul><li>Is temporary </li></ul><ul><li>Comes in fits and starts (can return to prior status) </li></ul><ul><li>Demands a tactical response </li></ul><ul><li>Structural change : </li></ul><ul><li>Is a fundamental transformation of some activity or institution from a previous state </li></ul><ul><li>Is irreversible </li></ul><ul><li>Demands permanent adjustment </li></ul><ul><li>Demands a strategic response </li></ul>
  17. 17. TYPES OF CHANGE <ul><li>Cyclical : </li></ul><ul><li>Gold price </li></ul><ul><li>Inflation - interest rates </li></ul><ul><li>Violence </li></ul>(Examples in South Africa today) <ul><li>Structural : </li></ul><ul><li>Changing black/white population ratio </li></ul><ul><li>Urban black/white mix </li></ul><ul><li>Redistribution of wealth </li></ul><ul><li>Educational mix </li></ul><ul><li>Privatisation and deregulation </li></ul><ul><li>Trade union activity and power </li></ul>
  18. 18. SCENARIO PLANNING PROCESS <ul><li>When crisis happens, managers know but don’t take action timeously </li></ul><ul><li>Why don’t management pick up signs before crisis ? </li></ul><ul><li>The mind cannot see what is has not experienced before </li></ul><ul><li>Older companies have good institutional memory, therefore a better chance for survival </li></ul><ul><li>Hypothesis : Bombarded with overload of information - the brain needs a filter </li></ul><ul><li>A memory of the future must be created to provide this filter </li></ul><ul><li>Every incoming signal is tested against the Alternative Time Paths created. If the signal is relevant to an Alternative Time Path - it is heard. </li></ul>
  19. 19. FALL INTO THREE GROUPS <ul><li>More of the same but better </li></ul><ul><li>Worse (decay and depression) </li></ul><ul><li>Different but better (fundamental change) </li></ul>SCENARIOS - THE ART OF THE LONG VIEW <ul><li>To reperceive </li></ul><ul><li>To question assumptions </li></ul><ul><li>To change the view of reality </li></ul><ul><li>To liberate people’s insights </li></ul>
  20. 20. SCENARIOS - THE ART OF THE LONG VIEW THREE POINTS OF VIEW “ Status Quo “ : Tomorrow will be more or less the same as today “ Cassandra “ : The world is always on the brink of disaster “ Dr Panglos “ : The world is the best it can be and can only get better !
  21. 21. <ul><li>Group planning pioneered “scenario planning” - a method for summarising alternative future trends </li></ul><ul><li>They concluded that : </li></ul><ul><li>The stable predictable “oil” world was about to change </li></ul><ul><li>Europe, Japan, USA becoming more dependent on oil imports </li></ul><ul><li>Oil exporting countries Iran, Iraq, Libya, Venezuela becoming concerned about falling reserves </li></ul><ul><li>Others, eg Saudi Arabia, were reaching the limits of their ability to productively invest oil revenues </li></ul>SHELL
  22. 22. <ul><li>With the following impacts : </li></ul><ul><li>Historical smooth growth in oil demand and supply threatened </li></ul><ul><li>Likely to give way to chronic supply shortfalls </li></ul><ul><li>Leading to excess demand </li></ul><ul><li>Thereby stimulating a “sellers market” controlled by the oil- exporting nations </li></ul>SHELL
  23. 23. <ul><li>Slow investment in refineries </li></ul><ul><li>Designed refineries that could adapt to whatever type of crude oil was available </li></ul><ul><li>They forecast energy demand at a lower level </li></ul><ul><li>They accelerated their development of oil fields outside OPEC countries </li></ul><ul><li>Decentralised controls because they believed different nations would adopt different pricing policies </li></ul>SHELL
  24. 24. <ul><li>Continued investment program </li></ul><ul><li>Slower reaction to what they saw as being more of a specific / temporary event </li></ul><ul><li>Persisted with overestimating demand </li></ul><ul><li>Responded at a slower pace </li></ul><ul><li>Reigned in controls to facilitate overview - became less maneuverable </li></ul>OTHER OIL COMPANIES
  25. 25. 1970 : Weakest of 7 largest oil companies 1979 : Strongest of 7 largest oil companies SHELL
  26. 26. <ul><li>STRATEGIC FORUM </li></ul><ul><li>A place of assembly </li></ul><ul><li>for strategic conversations </li></ul><ul><li>THE </li></ul><ul><li>STRATEGIC FORUM </li></ul><ul><li>SCENARIOS FOR </li></ul><ul><li>SOUTH AFRICA </li></ul><ul><li>2010 - 2020 </li></ul>
  27. 27. The STRATEGIC FORUM Scenarios for South Africa Political transformation Economic transformation Ubuntu South Africa united Autocracy Liberalised autocracy Democracy Long walk to Freedom South Africa unchanged 1994 Election 1999 Election Pretoria will provide South Africa entitled Social transformation Cry the beloved Country South Africa corrupted Limited democracy
  28. 28. Political Transformation NOW, 2Q 2010 Muddling along as we are, or change . . . Government intervention, PPP’s; Subsidies, Infrastructure SA Social Capitalism; Growth through Redistribution; The Golden Triangle. SA Social Democracy ; Redistribution with Growth SA Communism; Redistribution with or without growth SA – A Third World Country 1. Ubuntu Scenario 2. Long Walk to Freedom 3. Pretoria will Provide NO CONFIDENCE LOW AVERAGE HIGH CONFIDENCE Risk Avoidance Risk Aversion Risk Tolerance Risk Taking Economic Transformation 4. Cry the Beloved Country Drivers of Change and the SA Scenario Map www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009) Closed System Open System Paradigm Regression Paradigm Paralysis Paradigm Shift Paradigm Reinvention Racial conflict Racial tension Racial tolerance Racial reconciliation (Ubuntu) GDP GROWTH > 5 % PA INFLATION 5 - 8 % PA EMPL GROWTH > 400 000 PA GDP GROWTH 3 - 5 % PA INFLATION 8 - 10 % PA EMPL GROWTH 150 - 400 000 PA GDP GROWTH 2 - 3 % PA INFLATION 10 - 15 % PA EMPL GROWTH 50 - 150 000 PA GDP GROWTH < 0 % PA INFLATION 15 - 25 % PA EMPL GROWTH < 50 000 PA Social Transformation
  29. 29. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2020 </li></ul>Economic Transformation Political Transformation GDP GROWTH > 5 % PA INFLATION 5 - 8 % PA EMPL GROWTH > 400 000 PA GDP GROWTH 3 - 5 % PA INFLATION 8 - 10 % PA EMPL GROWTH 150 - 400 000 PA GDP GROWTH 2 - 3 % PA INFLATION 10 - 15 % PA EMPL GROWTH 50 - 150 000 PA GDP GROWTH < 0 % PA INFLATION 15 - 25 % PA EMPL GROWTH < 50 000 PA NO CONFIDENCE / LOW / AVERAGE / HIGH CONFIDENCE Risk Avoidance Risk Aversion Risk Tolerance Risk Taking Closed System Open System One Party State Multi-Party Democracy Closed System Open System Paradigm Regression Paradigm Paralysis Paradigm Shift Paradigm Reinvention Racial conflict Racial tension Racial tolerance Racial reconciliation April 1994 Elections The Political Miracle The future of South Africa depends on progress along the three axis of POLITICAL- , ECONOMIC- , AND SOCIAL TRANSFORMATION . The solution lies in an approach that inextricably links economic policy, social development and transformation. The UBUNTU scenario requires an entrenched democracy, a reconciled Nation, united behind a common vision, an open Economic system, the alleviation of poverty and social delivery of housing, health and education. UBUNTU South Africa united Medium to High growth Medium to Strong Opposition Entrenched Democracy Non Racist, Non Sexist, Reconciled Nation LONG WALK TO FREEDOM South Africa unchanged Average to Medium growth Weak to Medium Opposition Espoused Democracy Tolerant Nation PRETORIA WILL PROVIDE South Africa entitled Average to Weak growth Weak to non- existent Opposition Shaky Democracy Tense Nation CRY THE BELOVED COUNTRY South Africa corrupted Weak to Negative growth One Party State Ignored Democracy Divided Nation Social Transformation
  30. 30. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  31. 31. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  32. 32. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  33. 33. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  34. 34. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  35. 35. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-201 </li></ul>
  36. 36. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  37. 37. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  38. 38. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  39. 39. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  40. 40. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  41. 41. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  42. 42. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  43. 43. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  44. 44. <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>
  45. 45. RACIAL CONFLICT CLOSED SYSTEM RECONCILIATION AND NATION BUILDING OPEN SYSTEM High Road Ubuntu Scenario Low Road Cry the Beloved Country Scenario Lower Middle Road Pretoria will Provide Scenario Upper Middle Road Long Walk to Freedom Scenario 10% 40% 30% 20% <ul><li>THE STRATEGIC FORUM SCENARIOS FOR SOUTH AFRICA : 2010-2015 </li></ul>

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