Future Building

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Future Building outlines the key principles and process for developing strategy under conditions of uncertainty and change.

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Future Building

  1. 1. Future Building in Business Strategy in times of uncertainty Wednesday, 2 March 2011
  2. 2. Dr Norman Chorn Economist Future Builder Organisation architect Thought Leaders Mentor Wednesday, 2 March 2011
  3. 3. Why are we here? Because our planning doesn’t work well in uncertainty Because we need more planning in uncertainty Because we need to create our own future Wednesday, 2 March 2011
  4. 4. Today The “new normal” - why conventional planning won’t work for you anymore Strategy vs Planning in your business Key principles of FutureBuilding DIY FutureBuilding Wednesday, 2 March 2011
  5. 5. Resources Pre-reading Keynote deck Interactive workbook FutureBuilding planner The network Me (if you’re really desperate!) Wednesday, 2 March 2011
  6. 6. The new normal Wednesday, 2 March 2011
  7. 7. Have you noticed? New economics ✓ more regulation ✓ lower growth ✓ savvy consumers ✓ zeroing transaction costs ✓ low cost competitors ✓ BRIC taking lead New social ✓ fluid families ✓ ageing population ✓ suspicion of politics ✓ suspicion of big biz ✓ more conservatism ✓ anti-globalisation ✓ social justice ✓ protectionism New environment ✓ climate change ✓ emissions legislation ✓ degradation of soil, air, water ✓ cost of energy ✓ new forms of energy New technology ✓ online impacts everything - rapid paradigm changes ✓ global online services industry ✓ technology enabled new work modalities ✓ democratisation of media ✓ rapid innovation and obsolescence Wednesday, 2 March 2011
  8. 8. Jeff Brenman Wednesday, 2 March 2011
  9. 9. Assumptions are key ...but the environment keeps changing Wednesday, 2 March 2011
  10. 10. If only we’d seen this coming! Wednesday, 2 March 2011
  11. 11. Is planning different to strategy? Wednesday, 2 March 2011
  12. 12. A simple distinction Planning = setting objectives and actions to achieve a goal Strategy = positioning and equipping the organisation for the future Wednesday, 2 March 2011
  13. 13. Planning (Jomini) Strategy (Napoleon) Approach 1. Establish your base of ops 2. Determine objective point 3. Choose lines of ops to move your army forward 1. Learn from history and your experience 2. Clear your mind - immerse yourself in battle 3. Wait for flash of insight as elements combine in unique way 4. Act with resolution Success By having greater force than enemy at objective point By identifying the “decisive point” in the battle Objective Chosen before - then move to achieve it Not chosen before - emerges as you learn and adapt Key Objective point Decisive point Wednesday, 2 March 2011
  14. 14. 7 Key principles of FutureBuilding Wednesday, 2 March 2011
  15. 15. The future does not exist a priori 1 Wednesday, 2 March 2011
  16. 16. The future is a set of possibilities that can be influenced by purposeful behaviour discovery choiceaction 2 Wednesday, 2 March 2011
  17. 17. No monarchy has fomented its own overthrow 3 Wednesday, 2 March 2011
  18. 18. Embrace uncertainty 4 Wednesday, 2 March 2011
  19. 19. FutureBuilding does not attempt to predict the future Alternative futures are possible 5 Wednesday, 2 March 2011
  20. 20. FutureBuilding focuses on developing the capabilities needed for alternative futures 6 Wednesday, 2 March 2011
  21. 21. It is better to be vaguely right than completely wrong Clem Sunter7 Wednesday, 2 March 2011
  22. 22. Examples of future worlds Wednesday, 2 March 2011
  23. 23. Negotiating the future Yes Yes Yes Current negotiations in 1980s Is settlement negotiated? Transition rapid and decisive? Policies sustainable? No No No Wednesday, 2 March 2011
  24. 24. Lo concern by public for health Lo social engineering Hi social engineering Hi concern and public mobilisation Public health in Australia Wednesday, 2 March 2011
  25. 25. Progressive society and policies Lo cost of energy Hi cost of energy Defensive society and policies No option Sydney The lucky city Not our problem Batten down the hatches Sydney property development Wednesday, 2 March 2011
  26. 26. Your own clients? External focus on markets and customers Values and self direction Process and controls Internal focus on organisation and people Wednesday, 2 March 2011
  27. 27. What are scenarios? Wednesday, 2 March 2011
  28. 28. Good scenarios Coherent stories about alternative futures They have a series of plot lines that intersect and produce an internally consistent story Based on the key drivers and uncertainties from the environmental scan Can be external or internal Wednesday, 2 March 2011
  29. 29. Scenarios created by.. Right brain creative process - it’s ok to have fun! Social interaction Learn by doing Pathfinders are key Wednesday, 2 March 2011
  30. 30. Current mental models Novelty Scenarios should balance... Wednesday, 2 March 2011
  31. 31. DIY FutureBuilding Wednesday, 2 March 2011
  32. 32. Pre build - get the foundations right What is the business of your organisation - the business definition: • product / services? • customer groups? • value proposition to each customer group? What are your KSFs? What are your clients’ major concerns? WHAT IS THE FOCAL QUESTION? Wednesday, 2 March 2011
  33. 33. 7 steps to Build your Future 3. Skeleton scenarios 2. Deductive or inductive scenarios? 1. Trends, drivers and uncertainties 4. Flesh out scenarios 5. Winning strategies 6. Key capabilities 7. Plan for capabilities Wednesday, 2 March 2011
  34. 34. Deductive define the broad structure of the alternative futures first... ...then identify the story within each scenario Inductive identify the story line first ...then define different scenarios to complete the range of alternative futures 1 Wednesday, 2 March 2011
  35. 35. In your “environment”, identify: ✓ key trends ✓ important drivers of change ✓ most significant uncertainties *Remember to use Pathfinders 2 Wednesday, 2 March 2011
  36. 36. Select the dimensions / plot lines that explain the most DIFFERENCE in the data. Then construct a set of skeleton scenarios --> alternative futures 3 Wednesday, 2 March 2011
  37. 37. Make the stories (scenarios) as complete as possible - describe what life is like in that future world Flesh out the skeletons into stories for each of the alternative futures4 Wednesday, 2 March 2011
  38. 38. Develop the “winning” strategy for you to win in each of these alternative futures5 Consider all aspects of the strategy ✓ product / service ✓ market / customer ✓ value proposition ✓ how you will differentiate yourself ✓ relationship architecture ✓ how you will make a return Wednesday, 2 March 2011
  39. 39. Identify the key capabilities you will need to develop to execute the winning strategies6 Several classes of capability ✓ knowledge of techniques, processes, issues ✓ understanding of industries, types of clients ✓ key skills and competencies ✓ relationship architecture ✓ reputation, track record, credibility ✓ assets, tools, infrastructure ✓ qualifications, licenses, permits Wednesday, 2 March 2011
  40. 40. 67 And now for your action planning Wednesday, 2 March 2011
  41. 41. Future capabilities Future capabilities Future capabilities Future capabilities Action plan to develop future capabilities Now Some 50 - 70% of these capabilities are likely to overlap Back-casting Future Wednesday, 2 March 2011
  42. 42. Building your future 1. Choose between deductive or inductive scenarios 2. Identify key trends, drivers and uncertainties 3. Construct your skeleton scenarios by choosing orthogonal dimensions or the most significant plot lines 4. Flesh out alternative stories of the future 5. Build “winning strategies” for each alternative future 6. Identify the key capabilities required for each strategy 7. Action plan to develop common capabilities Wednesday, 2 March 2011
  43. 43. Wednesday, 2 March 2011
  44. 44. “You can’t just ask customers what they want and then try to give that to them. By the time you’ve got it built, they’ll want something new. There’s an old Wayne Gretsky quote that I love. ‘I skate where the puck is going to be, not where it has been..’” Wednesday, 2 March 2011
  45. 45. “The complexity for minimum component costs has increased at roughly a factor of two per year” Extract from Moore's original paper in 1965 Gordon Moore - co-founder of Intel Thanks to Craig Rispin Wednesday, 2 March 2011
  46. 46. “Don’t let the future just happen to you - go and create you own ideal future!” Craig Rispin - Futurist Wednesday, 2 March 2011
  47. 47. The future is not what it used to be... The world has changed - conventional approaches no longer work Don’t attempt to predict the future The future can be influenced Pathfinders are necessary to envisage alternative futures Focus on building strategies and capabilities for alternative futures Skate to where the puck is going to be Wednesday, 2 March 2011
  48. 48. Wednesday, 2 March 2011

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