Scenario Scenario PlanningPlanningScenario Scenario PlanningPlanning

Barcelona, 16 March 2011Barcelona, 16 March 2011

Carsten Beck, CIFSCarsten Beck, CIFS

CIFS• Founded in 1970 by Thorkil

Kristensen

• Member-based non-profit

• Private, neutral and

independentindependent

• Cross-disciplinary think-tank

• (economists, political scientists,

ethnologists, communication experts,

sociologists, astrophysicists and

philosophers)

• About 30 employees

• International Future Clubs

www.cifs.dk

CIFSCIFS

Members reportsMembers reportsMembers reportsMembers reportsMagazineMagazineMagazineMagazine

Courses and worshopsCourses and worshopsCourses and worshopsCourses and worshops

Members seminarsMembers seminarsMembers seminarsMembers seminars

10 10 10 10 Trends Trends Trends Trends towardstowardstowardstowards 2020202020202020

WorkingWorking withwith the futurethe future&&

changechangechangechange

Why do companies have to focus on the future?

Source: McKinsey Quarterly, 2005. Huyett/Vigurie

Why cant we ask consumers about the future?

”If I asked peoplewhat they wanted, I what they wanted, I would have made a faster horse”

Henry Ford

Why you need scenarios?

3D Color TV

Wall-Panel

Slide-back Roof Personal Helicopter &

Roof Landing Area

MovingStairway House-control

Panel

Glass Walls Dust-free

Floors

Menu Selector &

Microwave Stove

Giant-size

Fruit

Ultrasonic

Laundry

Electrical

Heat Unit

Phono-vision

Receiver

Why is there always more to do?

"Who the hell wants to hear actorstalk?”

H.M. Warner, Warner Brothers, 1927.

Why do great companies fail?

”I am not an economist, but I do believe that we are growing”

President George W. Bush July 2008

• Desired futures

•Value-based

• Likely futures

• Based on

relationships

• Hide risks

• Possible, plausible

futures

• Based on uncertainty

• Illustrate risks

Working with the future

ScenariosForecasts Vision

• Hidden risks

• Qualitative

• Energizing

• Used daily

• Used as a basis for

voluntary change

• Hide risks

• Quantitative

• Need for decisions

• Used daily

• Strong in the short-

term and low

uncertainty

• Illustrate risks

• Qualitative and

quantitative

• Need to know what

needs to be decided

upon

• Used occasionally

• Strong in the

medium- to long-term

perspective

Context and driving forces

Political factors

Economic factors

Society and Suppliers

Shareholders

Transactional environmentContextual environment

Society and values

Technologicalfactors

Environmental factors

Legalfactors

Customers

Competitors

Regulation

Markets Funding

Organization

Culture & values

StructureCompetenciesOfferingsManagement

The last 10 years…

• Dot-com crisis

• 9/11

• Internet penetration and social media in Africa

• Revolution in North Africa

• EU countries on the brink of bankruptcy• EU countries on the brink of bankruptcy

• Climate crisis

• Culture wars and the Muhammad Cartoon Crisis

• Women as a majority in universities

• Mobile phones in Africa

• China as a superpower

• Financial crisis

• The demand for Africas raw materials

SourceSourceSourceSource: : : : DalbergDalbergDalbergDalberg

Wild card: Foreign land acquisitions

Process: step-by-step

0. Problem formulation

1. Megatrends and their consequences

2. Identification and selection of

uncertainties

2.uncertainties

3. Development of broad scenarios based

on the selection

4. Organizational profiling in each field

5. Scenario-driven strategy

Process: step-by-step

0. Problem formulation: Global middle

class

1. Megatrends and their consequences

2. Identification and selection of 2. Identification and selection of

uncertainties

3. Development of broad scenarios based

on the selection

4. Organizational profiling in each field

5. Scenario-driven strategy

MegatrendsMegatrends

DrivingDriving forces for forces for changechange

Megatrends

•10-30 year horizon

•Difficult in Africa

•You cannot choose not to be influenced

•Influences all of society

•But local varieties: religion in Nigeria•But local varieties: religion in Nigeria

•Influences all people

•Look at patterns in consumption:

•Food, phone, bike, tv etc

•Strongly influences values and norms

•The uncertainties remain: exactly how and

how quickly

15 Megatrends1. Knowledge

2. Technological development

3. Acceleration

4. Complexity

5. Globalisation

6. Commercialisation6. Commercialisation

7. Economic growth

8. Democratisation

9. Materialization/ experience economy

10. Individualization

11. Network economy

12. Focus on health

13. Climate

14. Demographics

15. Urbanization

World population is growing…..Population in 2009 and prediction for 2030Population in 2009 and prediction for 2030Population in 2009 and prediction for 2030Population in 2009 and prediction for 2030

1.94%

-1.47%

17.58% 8.67% -7.60%World

CIS

China

EU-27

United States

Japan

22229999

500mn

800mn

1.5bn

19.96%

55.05%

% increase20092030

38.95% 23.95%

26.59%

1.3bn

21.66%

9bn 7bn

18.45%

World

MENA

SSALATAM

ROW

Asia ex CIJ

India

Sources: UN, Standard Chartered ResearchSources: UN, Standard Chartered ResearchSources: UN, Standard Chartered ResearchSources: UN, Standard Chartered Research

….and moving to cities…..Urbanisation in 2010 and prediction for 2030Urbanisation in 2010 and prediction for 2030Urbanisation in 2010 and prediction for 2030Urbanisation in 2010 and prediction for 2030

MENA

EU

US

China Japan

47.0%

66.8%

73.0%82.3%

87.0%

60.4%

72.6%

78.4%

MENA

India

Sub SaharanAfrica

LATAM

500mn

100mn 2010

2030

1bn % Urban%

61.9%

30.0%

39.7%

37.3%

47.9%79.6%

84.9%

67.5%

Sources: UN, Standard Chartered ResearchSources: UN, Standard Chartered ResearchSources: UN, Standard Chartered ResearchSources: UN, Standard Chartered Research

Middle class now and in 2030

Middle Eastand North Africa

Europe

North America

Asia Pacific

Size of the middle class in 2009 and prediction for 2030Size of the middle class in 2009 and prediction for 2030Size of the middle class in 2009 and prediction for 2030Size of the middle class in 2009 and prediction for 2030

Sub SaharanAfrica

Central andSouth America

500mn

100mn

2009

2030

1bn

Sources: Sources: Sources: Sources: MckinseyMckinseyMckinseyMckinsey, World Economic Forum, World Economic Forum, World Economic Forum, World Economic Forum

Frugal Innovation

Process: step-by-step

0. Problem formulation

1. Megatrends and their consequences

2. Identification and selection of 2. Identification and selection of

uncertainties

3. Development of broad scenarios based

on the selection

4. Organizational profiling in each field

5. Scenario-driven strategy

UncertaintiesUncertainties??

Mantra:Mantra:””Big uncertainties Big uncertainties ––big consequencesbig consequences””

?

??

Identification of uncertainties

Either OrA BC DE FE FG HI JK LM NO PQ RS T

Choose the most important uncertainties

Either OrA BC DE FE FG HI JK LM NO PQ RS T

M

Building broad scenarios

G H

N

Uncertainties

Africa benefits from globalisation Africa is left behind

Mo Ibrahim ++ Mo Ibrahim --

Market Regulation

Convergence Polarization

Centralization Decentralization

Urbanisation works for all Villages left behind

Africa like Asia (consumption pattern) A special path for Africa (consumption

pattern)

More focus on climate/env Less focus on climate/env

Uncertanties

Africa benefits from globalisation Africa is left behind

Mo Ibrahim ++ Mo Ibrahim --

Market Regulation

Convergence Polarization

Centralization Decentralization

Urbanisation works for all Villages left behind

Africa like Asia (consumption pattern) A special path for Africa (consumption

pattern)

More focus on climate/env Less focus on climate/env

• Young urban asiaticconsumers

• Slimmer fit• Slimmer fit

• Less US more global

ScenariosRealistic stories about the future

Scenarios are normally:

• NOT predictions• NOT predictions

• Unlike the present

• Believable and possible

• Argumentable

• Profiled

• Internally consistent

External environment scenariosFeelings

scenario A scenario B

Fast digitalisation Slow digitalisation

Rationality

scenario C scenario D

Scenarios can be used to…

• Identify challenges in the environment – Threats and opportunities

– Help to prioritise and make decisions

• Test, develop and evaluate strategy – and innovate– Business development, HR-development, product development, – Business development, HR-development, product development,

personal development, branding, etc.

• Prepare research and scan the environment – as guidelines

• Establish a common platform for learning, development, communications and a common language

Process: step-by-step

0. Problem formulation

1. Megatrends and their consequences

2. Identification and selection of 2. Identification and selection of

uncertainties

3. Development of broad scenarios based

on the selection

4. Organizational profiling in each field

5. Scenario-driven strategy

MPoliticsPoliticsPoliticsPolitics

EconomyEconomyEconomyEconomy

SocietySocietySocietySociety

TechnologyTechnologyTechnologyTechnology

PEST analysis

PoliticsPoliticsPoliticsPolitics

EconomyEconomyEconomyEconomy

SocietySocietySocietySociety

TechnologyTechnologyTechnologyTechnology

G H

N

TechnologyTechnologyTechnologyTechnology

PoliticsPoliticsPoliticsPolitics

EconomyEconomyEconomyEconomy

SocietySocietySocietySociety

TechnologyTechnologyTechnologyTechnology

TechnologyTechnologyTechnologyTechnology

PoliticsPoliticsPoliticsPolitics

EconomyEconomyEconomyEconomy

SocietySocietySocietySociety

TechnologyTechnologyTechnologyTechnology

Process: step-by-step

0. Problem formulation

1. Megatrends and their consequences

2. Identification and selection of 2. Identification and selection of

uncertainties

3. Development of broad scenarios based

on the selection

4. Organizational profiling in each field

5. Scenario-driven strategy