The only we know is that we are uncertain about the future

by Magnus Penker on August 28, 2010

Are we facing a boom, a double dip, or a potential break-down of the global environment? No one can know for sure? The degree of uncertainty is higher than for a long time. We probable has to go back as far as the industry revolution to experience the same degree of uncertainty. Can we learn from history? Yes, but there are also differences making the assumptions and risk mitigation harder and less likely to be based on past experience. A connected world, 3 billion people demanding same level of standard as the Triad regions in terms of consumptions, energy, and experience and education, have changed the fundamentals of our world system. It is faster, less predictable, scared resources except from brain power which has an increased supply.

What now? Should we believe in faith or actively taking control over our situation as entrepreneurs, investors or as employed?

A strong tool for handling uncertainty is scenarios planning – which is a way of painting possible future scenarios comparing and contrasting possible strategic decisions towards. Several of the world leading experts in scenario planning are working for Shell, who also publishing their results/scenarios in publicum. For inspiration, have a look at their work with Shell’s new world scenario recently published on their site.

A method for identifying, elaborating and describing scenarios (based on Wikipedia http://en.wikipedia.org/wiki/Scenario_planning) can be outlined in 13 steps:

  1. Decide on the key question to be answered by the analysis
  2. Set the time and scope of the analysis
  3. Identify major stakeholders
  4. Map basic trends and driving forces
  5. Find key uncertainties
  6. Check for the possibility to group the linked forces into two
  7. Identify the extremes of the possible outcomes of the (two) driving forces and check the dimensions for consistency and plausibility.
  8. Define the scenarios, plotting them on a grid if possible.
  9. Describe the scenarios in text, choice powerful names
  10. Assess the scenarios. Are they relevant for the goal? Are they internally consistent? Are they archetypical? Do they represent relatively stable outcome situations?
  11. Identify research needs
  12. Interate
  13. Use scenarios ion your strategic decision making process

About Magnus Penker :

Director-level consultant defines corporate strategy, sets direction, executes growth and turnaround business plans. Read more at http://www.linkedin.com/in/magnuspenker

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