Weak signals

 

There’s some disagreement about what the term ‘weak signal’ represents in terms of emerging trends or scenario thinking, but I like to think of them as hidden or ambiguous signals of change. In my view weak signals generally represent a change of direction for existing attitudes or behaviour, but they can also represent early indications of totally new ideas or events.

The image above is silly but significant. To many people coins are a pain in the pocket. They are heavy and dirty and somewhat outdated in the digital age. There was even a report a while back that in the US it now costs more than one cent to make one cent due to the cost of the metal. I suspect small coins will be more or less dead in many parts of the world within ten years. Larger coins within twenty. However, I suspect that paper notes will endure far longer, partly for the same reasons that paper newspapers, paper books and paper itself have lasted so long.

Videos and articles on Scenario Planning

 

 

 

 

 

 

As regular readers will know, my book on scenario planning (co-written with Oliver Freeman) is now out. At some point I’ll create some short films about both the book and the wider concept of scenarios as a way of engaging with the future. In the meantime there’s a good video (15 minutes) by Oliver right here.

BTW, on the subject of scenarios, here are a few other resources (some new, some old, all good).

Bain & Company on scenario planning

McKinsey & Company on scenarios

Forbes magazine on scenario planning

Harvard Business Review on scenario planning

Economist magazine on scenario planning 

Fast Company magazine on scenario planning

Wall Street Journal on scenarios

Independent newspaper on scenario planning

More scenario books and documents on my What’s Next bookshelf here.

 

Resources for scenario planning and futures thinking

The problem, of course, with saying that you are not blogging for a while (previous post) is that when you start blogging again it could reasonably be expected that you will say something hugely important. Well sorry to disappoint, but I’m still working on that. In the meantime I have noticed a few things of relevance to anyone involved with thinking about the distant future, which I thought I’d share.

The first is a paper by Jessica Bland and Stian Westlake at NESTA (a UK organisation providing grants and research for innovation and early stage ideas). It’s called Don’t Stop Thinking About Tomorrow: A Modest Defence of Futurology. Click here for the PDF (24 pages). Thanks to Alex Ayad at Imperial College London for sending this.

Broadly, what it says is that new forms of data potentially provide a variety of new ways to forecast the immediate future. This, I guess, taps into the thoughts of Nate Silver and the area of ‘Big Data’. The paper also suggests that scenarios – done well I should add – can help organisations to become more resilient in the face of extreme change. Third, it suggests that narratives around how the future could look are essential ingredients in the innovation process. This last point is a good one because in my experience scenarios are generally thought of as a corporate strategy tool when in fact they can also be hugely useful for innovation, category management and risk also.

The other item of interest is a UK Defence Academy document about cyber-crime, although the real ‘find’ is a three by three matrix that Hardin Tibbs at Synthesys Strategic Consulting has developed. As Hardin explains it: “The ‘Cyber Gameboard’ consists of a nine-cell grid. The horizontal direction on the grid is divided into three columns representing aspects of information (i.e. cyber): connection, computation and cognition. The vertical direction on the grid is divided into three rows representing types of power: coercion, co-option, and cooperation. The nine cells of the grid represent all the possible combinations of power and information – in other words, cyberpower. The grid then allows interactions between cyber players to be mapped.” (Thanks to Oliver Freeman at Futures House in Sydney for sending this).

 

 

 

 

 

 

 

 

 

Get the whole report here.

The main image, BTW, is me standing by my Trends and Technology Timeline 2010-2050. It was in a meeting room of a German company earlier this week. They told me in advance that they liked the map and had printed it and put it on a wall, but I wasn’t expecting anything quite so large!

40 Years of scenario planning

 

Busy today, so here’s a picture I took last year at an event celebrating 40 years of scenario planning at Shell. Note: Mostly men! BTW, one thing I did read today* that I liked was a linkage between gym membership and a nostalgia for factory work. I’m not saying I believe this, I just think it’s an original and interesting idea.

* It was a review of “Say What You Mean: The n1 Anthology” (Notting Hill Editions) in the FT. The ref within this is a 2004 essay called “Against Exercise” by Mark Greif.

Scenario Planning Process – Part 2

I attended an event celebrating 40 years of Shell scenarios last night, so it seems an appropriate moment to follow up on Part 1 of my 20 scenario planning tips and tricks. Here, in no particular order, is an assortment of observations and ideas from the projects I’ve been involved with.

11. Start with meta then migrate through macro to micro
Remember that when it comes to the implications of each scenario it’s always useful to start with high-level implications and then drill down. In other words, start with group implications and then drill down to individual divisions, departments, geographies or product and service lines. Again, a good way of bringing this to life is to use graphics not just words.

12. Don’t walk away
You will have invested time and money in the scenario process and if it’s time and money well spent don’t do it and then forget about it. Try to build scenario thinking into everyday decision-making and formalise the tracking of scenarios through horizon scanning or some similar research activity. Also, refresh the scenarios on a fairly regular basis (every 3-5 years seems like a practical proposition in most organisations)

13. Resist, resist
A common mistake with scenarios once they are done is to focus on the one that’s the most familiar or comfortable and ignore the rest. Don’t, unless you are deliberately building a preferred future. All scenarios should be created and treated equally no matter how uncomfortable they make people feel. Indeed, that’s partly the point of scenarios – to make people feel uncomfortable, either about what they think they know or know they don’t.

14. Emotional intelligence
Scenario planning should be a conversational process. It is about discovering what other people think and finding new ways to look at things. However, all too often the process is too logical and data driven. Be prepared to look for what’s not being said and tap into what’s being felt, but is not, or cannot, be articulated.

15. Tight and loose
There was some research many years ago about what made the difference between a Broadway smash and a Broadway flop. The answer, it seems, is to combine expertise with innocence. Build teams and workshops that consist of people with deep expertise and people with none.

16. Go wide and deep
If you are a bank creating scenarios there’s a great temptation to focus inward and look only at things that directly impact banking and finance. This would be fatal, not least because you will miss the potential of outsiders or non-incumbents to change the playing field. The whole point of scenarios is to explore the external macro-environment in which an organisation will be forced to adapt. Therefore explore up and down and in and out in terms of drivers. The economy, like technology, is likely to be a factor, but so too are demographic trends, the regulatory environment, customer attitudes, energy, politics and a bunch of other things not directly reacted to the industry or organisation in question.

17. Don’t forget about the social side
The area organisations seem to neglect above all others is people. I’m not just talking about demographics, but family structures and above all social trends, especially identity, values and beliefs, which combine with a host of other factors such as regulation (law), pricing and technology.

18. Look for the a ha moment
Done well, the scenario process should result in at least a few, and hopefully all, of those involved having some kind of epiphany. For example, half way through a project looking at the future of public libraries it occurred to many of us that the future of books or publishing is not the same as the future of public libraries. They are connected, but a public library without any physical books could almost work. A similar revelatory moment came in a workshop looking at how the recruitment industry might change. What the team suddenly realised was that it had created various futures for people like those sat around the table and much of the thinking was irrelevant for the majority of the working population, especially those being served by mainstream recruitment agencies.

19. Make specific recommendations
Most scenario projects look at strategic implications, but it’s incredible how many organisations will spend months crafting a set of scenarios and leave it at that. Any scenario planning process should conclude with a set of specific recommendations, which, more likely than not, will stem from a consideration of likely impact against likely probability.

20. And finally…shortcuts
Become ferociously curious about the scenarios created by other people and organisations. You’d be surprised about how much material is freely available and if you don’t have the time and money to create you own scenarios they can be a good short cut. Some scenario experts will violently disagree with this, arguing that scenarios are of use only for the people and time that created them. They answer a specific question and are rooted in time and place. I’d agree, up to a point, but you might be surprised by how much overlap there is between scenarios and stealing (seeking and reapplying in P&G speak) those belonging to others does have some merit.

For more on scenario planning see Future Vision: Scenarios for the World in 2040 by Richard Watson and Oliver Freeman.

Click here for tips 1-10

 

Further reading:

The Art of the Long View
Scenarios: The Art of Strategic Conversation

Scenario Planning: How To Do It (Part 1)

Having just co-authored a book on how to do scenario planning (FutureVision by Richard Watson and Oliver Freeman) I thought it might be worth passing on a few tricks. Here is part one of my top 20 tips for creating practical scenarios, but first a very brief outline of the process. Please note that this process has been shortened and simplified for this article. If you would like the expanded process get in touch (richard@deletethisbitnowandnext.com)

Stage 1: Develop the framing question(s)
Stage 2: Examine past and present drivers of change
Stage 3: Brainstorm future drivers of change
Stage 4: Identify the critical drivers
Stage 5: Build a scenario matrix
Stage 6: Develop scenario logic
Stage 7: Build the scenario narratives
Stage 8: Create timelines linking future to present
Stage 9: Map the strategic implications
Stage 10: Develop proactive and reactive strategies
(Conduct ongoing scanning and monitoring)

Now, some tips…

Tip # 1: Get enough buy-in from the get-go
Ensure that you have enough support for the project from the start. Ideally find a senior supporter who has been involved with scenarios before or supports the theory of doing the project. Also make sure that support is as wide as possible and not limited to any one department or business unit. If the prevalent attitude within the organization is that the project is a waste of time and money this will almost certainly turn out to be a self-fulfilling prophecy.

Tip # 2: What do you want to know?
Start with a tightly focussed question about what it is that you want to know. Simply asking ‘what does the future look like?’ is next to useless. The subject is too broad.
For example, if you are a retailer you might be interested in exploring the extent to which retail moves to mobile devices or virtual stores. Feel free to revise or change the question at any time throughout the process though.

Tip # 3: Give it enough time
A rigorous scenario-thinking project will take a minimum of 2-3 months. If you only have a few days you are totally wasting your time. A key component of scenario thinking is conversation and sometimes the conversation won’t flow no matter what you do. It also requires periods of reflection, which by definition cannot always be scheduled in the diary or with meeting reminders. If you rush things you will just come up with the obvious stuff. Finding out what’s not being said or seen is a key part of the process and this takes time.

Tip # 4: Embrace diversity
Groups of experts are useless for scenario thinking. They will either all agree with each other (group think) or will say nothing at all due to peer pressure. However, by themselves experts can provide good insight. Mixed with other people with different skills and experience things can get very interesting indeed. Diversity is critical with scenario thinking so resist silos and homogenous groups at all costs. The trick is to mix things up in terms of age, gender, skills, experience, functions and so on.
A good size scenario building team is generally 3-6 people, although this is merely the tip of the iceberg. When it comes to the initial research, workshops and key meetings this can be expanded significantly.

Tip # 5: Quantity is quality when it comes to drivers
After you have spoken with people – both internally and externally – the next stage is generally to unearth a series of driving forces that are influencing or changing the external environment. This can be a messy stage, because it’s not clear at the start what’s important and what isn’t. Moreover, when it comes to drivers (call them trends if you really must) quantity really is quality. You need to generate dozens of them and have people running around to check them and to find more.

A good way of creating drivers is to use STEEP (Society, Technology, Economy, Environment, Politics), You might prefer STEEPEN (Society, Technology, Economy, Energy, Politics, Environment, Nature) or STEEEPA (Social, Technical, Economic, Environmental, Educational, Political and Aesthetic).

Tip # 6: Is that really the answer?
When you get to your first shortlist of drivers, ensure that the drivers you select really are drivers and not a consequence of other, far deeper, drivers. For example, a shift to social media might be a consequence of something far deeper.

Tip # 7: Naming the scenarios
The naming of scenarios is really important. If you have to explain to people what the scenarios mean you have failed. They should be self-explanatory. For example, a scenario called “Lord of the Flies’ needs little further explanation.

Tip #8: Build a narrative
Ensure that the scenarios are properly fleshed out and that you produce a time line that links each future back to the present. The narratives need to be compelling and should be written in the future tense so as to transport people into this world. A good trick is to write each of the scenarios from the perspective of a different person that is in someway connected to the organization. For example, if the scenarios are for government then write one scenario from the perspective of someone running the government (a senior minister perhaps), one from the perspective of someone working for the government at a more junior level, one from the perspective of a user of government services (a voter) and perhaps one from the perspective of someone supplying services to the government.

Tip # 9: Don’t keep it all to yourself
A scenario project that is totally outsourced is missing out on the knowledge and freshness of those outside the organization can provide. On the other hand, a scenario project that is wholly outsourced is missing out on the experience and wisdom of those that work inside the client organization. Mix things up a bit and create a team that’s a mixture of both.

Tip # 10: Don’t pitch the timeframe too close
If it’s 2012 there’s a tendency to pitch the thinking in 2020 because that’s a nice round number and links with phrases like ‘2020 Vision’ and all that. Resist.
2020 is only 7 years away and your thinking won’t necessarily extend much beyond the present. What you may find is that all you end up with is what’s happing right now and then labelling it ‘the future’. Go further out. Ten years is really the minimum and your thinking will be challenged far better if you go out 15 or even 20 years. There is the argument that 20 years is just too far away to be practical, but remember that in the final stages you always link the scenarios back to the present day.

To follow next week…tips 11-20.

Future Vision

 

 

 

 

 

 

 

 

 

 

 

 

 

Future Vision was officially launched today in Australia. I blogged the preface a while ago, so here’s a tiny bit more (part of the forward from an early version) as promised. If you want to buy the book here’s the Amazon/Kindle link.

Forward: into the unknown

Several years ago, an office worker in Tokyo dropped dead at his desk and wasn’t discovered until five days later. This was despite the fact that his co-workers regularly walked past and said “hello.” In a similar incident, a fifty-one-year-old had a heart attack in an open plan office in New York on a Monday morning, but nobody noticed the fact that he was dead until the Saturday, when a cleaner attempted to wake him up to ask whether he was working over the weekend. Apparently it wasn’t unusual for the man to be there because, according his boss, without any hint of irony, “he was always the first to arrive and the last to leave.”

Is this the future? Is this how things will eventually work out for many of the so-called free agents inhabiting anonymous desks inside vast corporations or for the emerging class of digital nomads electronically tethered to virtual offices via a compote of Blackberries and Apples?

The answer is no. It is one possibility. It is one future, but there are many others.
One future might be a cross between Terry Gilliam’s film Brazil and Fritz Lang’s Metropolis. This would be a dystopian future where people are forced to work longer hours for larger bureaucracies in a futile attempt to earn more money to offset rising food prices, higher energy bills, declining real wages, increasing debt and disappearing retirement. Conversely, people might willingly choose to spend more time inside lifeless cubicles at work because, while the work is mind numbing, they feel increasingly isolated and uncomfortable at home.

This could be because the family, as a building block of society, has atomised and more people are living alone, or because a relationship hasn’t turned out as planned and work offers more satisfaction and companionship. Add a pinch of ubiquitous media, autocratic data-driven governments, brain-to-machine interfaces, GPS, RFID, facial recognition, genetic prophesy, predictive modelling and CCTV and, while this future isn’t quite like Orwell’s 1984, the date could be seen by some to be getting closer not further away.

Alternatively, we might see a move in a totally different and much more utopian direction. Maybe we’ll start to see that there’s more to life than dropping dead at your desk and people will start to fight for the right to re-balance their lives in their favour. Perhaps automation – especially robotics and artificial intelligence – will finally deliver on its promise of a leisure society and people will spend more of their time re-connecting with their families and doing more of the things that really interest them. This could also be a world where the state limits freedom of choice in areas such as healthcare and pensions and provides a higher degree of security in return for higher direct or indirect taxation. A sustainable world driven as much by the heart as the head, where local forces start to push back against globalisation and where new technologies are carefully scrutinized for long-term social impact and value. An ethically driven world where physical community is rediscovered and corporations are restrained due to, amongst other things, skills shortages, the high cost of energy and limited raw materials.
A world not dissimilar, in many ways, to the one described many decades ago in Ernst Schumacher’s book Small is Beautiful: Economics As If People Mattered.

And there are many other possibilities, many other paths and many other futures too. How, for example, might oil costing upwards of $200 per barrel change the world? Perhaps people and products would move around less or the high price of food would lead to an unexpected decrease in obesity. What if we invented a new technology based upon photosynthesis that made energy almost free? What if a new ideology capable of challenging free-market capitalism were to appear? Or if the next Russian Empire decided to broaden its borders beyond their current limits. Or what could happen if the heavy use of mobile phones (of which there are already more than 5 billion worldwide) started to cause the death of tens of millions of young people through brain cancer after a long and largely invisible gestation period?

There are many ways in which we can think about the future and looking at the past (i.e. how we got to where we are today) is a good place to start, partly because what happens right now can influence what happens next and also because both are often related to what happened a very long time ago. And there is a third reason. By understanding the complexities of how we got where we are today we will be better served in how we think about the future. Complexity is the name of the game. Of course, history is not always the most reliable guide to the future because nobody owns the facts. The way we interpret the past can cast a long shadow that hides other important facts. Similarly the future can be buried in the fringes of the present, which essentially means that knowing precisely where to look, or who to talk to, can pay dividends and give you a head start compared to less creative and less curious thinkers. Whichever way you look at it, it’s worth remembering that the future is always present.

This is not to say that the process of thinking ahead is not fraught with difficulties, but a bigger problem is time. Thinking seriously about worlds to come takes time, which is in very short supply nowadays. As a result, many organizations focus almost exclusively on short-term issues, which means that reactions are often too immediate and management often consists of racing from one crisis to the next. More often than not, especially in commercial organizations, the focus is on the next 12 weeks (the next financial quarter) or the next 12-months (“results”), which are then compared to the last 12-months. Thinking beyond this, especially 36-months or more ahead, is almost unheard of. As a result, deep questions, along with longer-term opportunities and risks, tend to go unanswered until its too late. And this anomaly is not just a ‘business’ issue. How many of us defer thinking about pensions and superannuation until way past the ideal start date? The economic rise of China went unnoticed by many for many years. In the ‘nineties, world economic forums would get excited by China but then revert to the old concerns about NATO, Japan and the tensions in Europe. But now, while the opportunity is slowly being seen, the risk of a potential reversal, with associated bubbles and concentration risks, is not. The same could be said for fertility or the impact of social media on democracy.

History, as the author and security and intelligence expert George Friedman has pointed out, “can change with stunning rapidity.” If the Chinese economic miracle were to come to an abrupt end, this would create a very different future, parts of which we can instantly imagine if we only put aside the time to do so.

Put in a slightly different way, while there are many trends and traits that at first glance look set to continue for the immediate future, nothing is ever certain – a thought, crisply echoed by the writer JG Ballard, who once said that: “If enough people predict something it won’t happen.” On the other hand we are well aware how expectations are realised in the performance of stock markets so it’s never all one thing rather than another. In fact our favourite word is ‘and’ rather than ‘or’.

The history of prediction is interesting in this context and is littered with false prophets, much as it’s strewn with false profits, and it is important to distinguish between what is probable with what is possible. The best way of doing this is, as the detective Sherlock Holmes once pointed out, is to start by removing whatever is totally impossible and then, whatever is left, no matter how improbable, must be considered as being possible. There is also a technique developed by the Strategic Trends Unit at the UK Ministry of Defence in which probabilities are assigned to specific words. “Will” is assigned a probability of “Greater than 90%” “Likely/probably” is “Between 60% and 90%”, “May/possibly” is “Between 10% and 60% “and “Unlikely/Improbable” is “Less than 10%” However, this is never easy to do. Probability is of little value when engaging with the future, even if we had the time and effort to undertake quantitative analysis. The future is not at the end of a trend line. No wonder then that so many individuals cling resolutely to the past. It’s much easier that way. Similarly, it’s hardly a surprise that so many institutions structure themselves to deal with the immediate present.  It’s much cheaper that way.

But by the time the relevant strategies are in place, the horse has bolted and we are already somewhere new. Most organizations create strategies to deal with yesterday’s problems . But thinking about the distant future is essential if we, as individuals or organizations, are to take full advantage of the myriad of opportunities that lie ahead.

Developing a situational awareness for emergent risks is absolutely essential if we do not want to end up standing on the wrong side of history on an ongoing basis. In our work with organizations world-wide, we have also come to the conclusion that workable short-term strategies have the longer-term embedded within.

All well and good, we can hear you saying, but how can one sell the idea of futures thinking to an organization run by an individual that is focused on that set of numbers that will take shape over the next 12 weeks? The honest answer is that you can’t. However, if you are fortunate to work for an organization with an incoming or outgoing head there is hope because these leaders are either concerned with creating a vision or leaving a legacy and both of these mindsets fit rather well with futures thinking.

Furthermore, dark clouds have silver linings. In our view a critical function of leadership is to embrace the plurality of opinions – of diverging worldviews – in order to have a better chance of making sense of the future. The recent history of reactions to climate change is a case in point. If an organization is facing an extinction event (i.e. new technology, government regulation or customer mindsets mean that current products, services, business models or margins appear doomed) this is precisely the time when closed minds are opened up to new possibilities.

One of the features of good leaders is that they have an understanding of past and present. They understand the historical reasons for failure and success, but also appreciate some of the challenges that lie immediately and more distantly ahead. Outstanding leaders do something else too. They have a vision for the more distant future. More often that not, they see things that others cannot, and while their visions maybe partially obscured they are often able to create and communicate compelling stories about why other people should follow them down a particular road.

This skill can work extremely well, but this too can contain a fatal flaw, which is that individuals and organizations can sometimes end up being held hostage to a particular point of view, or vision, of the future. The more dominant a leader – or organizational culture – the more that people will be drawn into agreeing with a particular point of view and the less that people will seek to challenge either it or the hidden assumptions upon which it’s built. The more credible or powerful a source the less likely we are to think that something they say maybe wrong. The more popular or widely circulated something is the more likely we are to agree with it, especially if we are busy.

Let’s get back to the two dead bodies. Both of the stories about workers dropping dead at their desks were featured in newspapers and TV channels around the world, including The BBC and The Guardian. They were widely circulated on the Internet too. But both were untrue….

(continues)

4 Alternative Scenarios for the World in 2040

 

Future Vision is published…

I’m happy to report that Future Vision: Alternative Scenarios for the World in 2040 (published by Scribe in Melbourne) is now out and increasing about. If you would like a free copy I am giving away 6 e-copies and 4 hard copies to the first people to say that they want one (please say whether you would prefer ‘e’ or ‘p’ format).

You can either post contact details on the comments form below or email me with your name and email or postal address to richardat(deletethisbit)nowandnext.com

UPDATE! All free e-copies now taken, but we have 2 more hard copies to give away.

NEW UPDATE!!! All gone I’m afraid but I’m seeing what we can do for people…

Future-proofing and future visioning consultancy

Here’s a bit of news. I’m setting up a UK and European office for Futures House, which is an Australian consultancy specialising in scenario planning. We’re still in the planning stage, but we’re aiming to launch in London in September. Key services will include scenario planning consultancy (running large turnkey projects, but also contributing process and people to much smaller in-house projects), research and report writing looking at the future of specific industries and professions and finally workshops aimed at facilitating client consensus on likely futures and the strategic implications thereof.

Our initial focus will be on just three industries, but we’ll consider anything interesting with an appropriate budget.

Andrew Crosthwaite, formerly Head of planning at Euro RSCG, has already signed up to work alongside me and I’m talking to an ex-McKinsey partner, an ex-government strategist and someone that used to work for KPMG. German, French and Italian partners are in the wings, although our initial focus will be the UK.

In terms of my other work there’s no significant change. The only thing that I am thinking of doing is moving my quarterly What’s Next report from every 3 months to every six months and to and reinstate the annual hard copy publication. The main reason for doing this would be time, but quality has become an issue too. I don’t know whether it’s just a temporary blip, but recently I’ve found it more difficult to source high quality content to comment upon.

This could be linked to current economic conditions (few new ideas or long-term thinking due to a focus on immediate survival) or it could be that long copy analysis is in decline due to shifts in how media is created and consumed.