Foresight and strategic reframing

[Virtual Presenter] Foresight and strategic reframing are crucial aspects of organizational success. This presentation aims to highlight the significance of anticipating and shaping the future through scenario planning. By examining how organizations can utilize this approach to develop adaptable strategies, we will delve into the realm of uncertainty and explore ways to navigate it effectively..

Why is scenario work important?. Scenario work helps to imagine potential development trajectories and to understand the interconnectedness of things. In order to be able to respond to changes in the operating environment, they must be detected, they must be interpreted as meaningful and it is worth acting based on them. In the context of leadership, this means to focus problems often encountered in everyday life. Because the amount of information we receive from our environment is huge, we always look at the world through certain lenses that have been refined based on previous experiences..

[Audio] Predicting the future is difficult. Many times we have seen predictions go wrong. For instance, in 1943, Thomas J. Watson, the chairman of IBM, thought that there would only be a world market for five computers. Twenty years later, Ken Olson, the president of Digital Equipment Corporation, believed that there was no need for anyone to have a computer in their home. Similarly, a Decca Recording Company executive turned down the Beatles in 1962, stating that groups of guitars were on the way out. These quotes serve as a reminder that predicting the future is indeed challenging..

History of scenario planning. The American game theorist Herman Kahn is often considered the developer of scenario planning. The American school emphasized the probabilities (calculation) of the consequences/outcomes of the scenarios. Along with it, the normative approach developed in France quickly developed, which looked at scenarios what “should” follow/happen. Newland and Wack, who were responsible for planning at Shell in the late 60s and early 70s, required that the scenarios should above all be plausible..

[Audio] Scenario planning is an iterative process of experimentation and continuous learning. It is a collaborative effort between various stakeholders, including external experts, to create a shared understanding of the future. The process involves designing a framework based on assumptions about the time span, number of actors, and other factors. The goal is to help organizations re-conceptualize their current and future operating environments, detecting weak signals and exploring new possibilities. By doing so, scenario planning enables organizations to adapt to changing circumstances and develop strategies that align with emerging trends..

[Audio] The Oxford model emphasizes the importance of understanding the contextual environment in shaping a company's strategy. The contextual environment encompasses various factors such as employees, social values, politics, climate change, and interest rates. These elements can significantly impact a company's strategy, making it essential for businesses to stay informed and adaptable. The model highlights the significance of considering these factors in order to create a positive and productive work environment, maintain a positive image, and stay competitive..

[Audio] Foresight must be a systematic part of strategic management. This means that we need to continuously learn from our scenarios and adapt them to changing circumstances. We call this process scenario work. It requires a culture of experimentation and the ability to evaluate and reframe our scenarios. This way, we can ensure that our strategy remains relevant and effective over time..

Example of scenario work (MacEachen/Shoemaker). Introduction is important: as heterogeneous a group as possible including external stakeholders/experts where possible hierarchies away! participants need to feel psychological safety and mutual trust!.

[Audio] The impact of foresight and strategic reframing on strategy in practice is crucial. It involves recognizing change drivers, identifying the forces of change that have the greatest impact on the company's immediate operating environment, and positioning them in a 2x2 matrix. This helps to create a narrative and a common understanding of how the future will change or develop. The scenarios developed from this process are then used to modify or update the strategy, plan, or operating methods..

[Audio] The concept of foresight and strategic reframing in the context of strategy in practice refers to the ability of leaders to anticipate and prepare for various scenarios that may arise in their organization. This involves identifying potential change drivers and positioning them in a 2x2 matrix to create four possible scenarios. Each scenario represents a different future state, and by working backwards from the end state, leaders can determine the key assumptions, events, and structures required to achieve that outcome. This approach enables leaders to create a narrative and a common understanding of how the future will change or develop. The scenarios are then used to modify or update the strategy, plan, or operating methods. Four potential scenarios were presented, including a major crisis, gradual decline, complex crisis and long-term decline, and stable growth. Each scenario requires a unique set of skills and strategies, and leaders must be able to adapt and navigate through these scenarios to ensure the success and growth of their organization..

Wrap-up of the scenario work. How can a company take advantage of scenario work in these turbulent times? Instead of trying to determine the most likely outcome, several plausible scenarios are explored. Scenarios are developed by taking into account the effects of plausible changes in the general contextual environment on the immediate transactional environment. Take advantage of diversity by also inviting outsiders to participate in the scenario work.

[Audio] In today's fast-paced business environment, it's crucial to stay ahead of the competition by continuously learning and adapting. The ability to learn faster than one's competitors may be the only sustainable competitive advantage. This emphasizes the importance of embracing a culture of experimentation and continuous improvement. By doing so, organizations can refine their strategies and remain agile in response to changing market conditions..

[Audio] Scenario planning is a methodical approach to developing strategies that consider multiple possible futures. By examining different scenarios, organisations can prepare for various outcomes and adjust their strategies accordingly. This approach enables companies to think critically about potential challenges and opportunities, thereby rendering them more resilient and better equipped to respond to changing circumstances..

THANK YOU!. 14.2.2023. Kinesiso-Jlo/hHtamHispolku.