Categorized | Business Authors

Scenario Planning: A Field Guide to the Future

Scenario Planning: A Field Guide to the Future

Woody Wade

A short authors bio:

Raised in Indiana and a graduate of Harvard Business School, Woody Wade now runs a one-man management consulting business in Switzerland focused on helping companies visualize the future.

A former marketing executive, his career has included stints at Novartis and Citibank, and he served on the Executive Board of the World Economic Forum in Geneva. His last position before striking off on his own was as the Director of Marketing for the world-renowned Ecole Hôtelière de Lausanne (the Lausanne Hotel School), which started life in the 1890s training hoteliers but 100 years later needed repositioning as a business school specializing in producing top management talent for the global hospitality industry – “a challenge like trying to change the image of a stately Rolls-Royce into a high-performance Ferrari,” Wade says.

Wade says he’s happiest when his work combines writing with off-the-wall creativity. In fact, his first two books, written several years ago, were collections of prank business letters, written for fun but which got some serious attention from the Swiss media and landed him on the list of bestselling English books there.

Wade lives near Lausanne, in a vineyard looking out over Lake Geneva and the Alps.

A book synopsis / Key Ideas:

The book urges managers to think about the future not in terms of a single forecast or prediction, but as a “portfolio” of different scenarios. That’s because at any point in time, many futures are possible, depending on how trends actually develop over time. By imagining how they might continue, managers can visualize a range of “business landscapes” that could plausibly emerge, possibly very different from each other. With this insight into how their environment could unfold, they can then formulate strategies that take these different outcomes into account – and assure they’re better prepared for whichever competitive landscape does emerge.

Why did you write this book?

I think the subject of “the future” fascinates a lot of people. In business, though, it can be intimidating as well, because you have to make decisions for the future, not knowing how it will turn out. This basic paradox is what got me interested in scenario thinking – as a way of seeing how the future could develop in different directions. Just for fun, I began to develop some unusual ideas about how certain aspects of the future could unfold in perhaps surprising ways, and I posted these essays on my web site. One day I got a call from a man who said he’d been on the site and asked if I’d be interested in pulling my thoughts on scenario planning together and turning them into a book. Who would say no to that? The rest is history!

write a paragraph stating why readers should buy your book and what they will get out of it after reading it.

Everything will change in the future – but how? We don’t know, yet we still have to plan for it anyway. This book gives you a methodology for visualizing how the important things in your world could realistically change, so you can anticipate future “landscapes” you might find yourself competing in.

Scenario planning: Not predicting the future,

but exploring it!

Your book is about scenario planning. Isn’t that a technique for huge corporations? Can startups and small companies benefit, too?

At some level, I think everybody wonders how the future will turn out. For most of us, though, this is just an idle way to pass the time – daydreaming, more or less. But if you’re the owner or CEO of a business, no matter how big it is, thinking about the future is not a parlor game; it’s a vital necessity, so you can get a handle on how your competitive landscape might change as time goes on. The changes could bring about exciting new opportunities, but they could also usher in serious threats to your existence: new competitors, new buyer behaviors, new rules to follow… If you’re responsible for your company’s future success, and you don’t take time to think about the changes that could develop in your business landscape, you’re not doing your job properly. And you risk being taken by surprise.

As I say in the book, if you’re a manager, you actually “live for the future.” By that I mean that although you may have to make decisions today, those decisions are usually made so as to improve your chances of success not today, but at some point in the future. For example, a marketing decision you make today is likely to be about improving your image, or sales, or market share – but not today, or even tomorrow, but more likely six months from now. Or take an even bigger decision: to reduce costs, you decide to invest in a new factory with new manufacturing technology. But here again, it may be a long time – a couple of years, or more – before the impact of this decision shows up on your bottom line. The bigger the decision, the more future-oriented it probably is. And the more important it is to gain some insight about how the future might turn out – just to mitigate the risks of making a decision that could turn out to be fine if the future develops in one direction, but not fine at all if things unfold another way.

What got you interested in this subject?

What specifically sparked my interest in scenario planning was when I was working at the World Economic Forum. At these very high-level gatherings we put on, for example every year at Davos, I would see time and again that the one thing business and political leaders really want to discuss is: Where are we headed? What does the future have in store? CEOs need to position their companies for future success, and they have no time to waste. So they’re hungry to understand the trends and tendencies that could have an impact on their companies – changes in consumer attitudes, political and regulatory changes, new technologies, big new ideas. At the time, I didn’t know if any of them were relying on scenario planning in their companies, as I wasn’t aware of the technique myself. But it was eye-opening to me how critically important it was for them to be able to anticipate changes in their markets and business environments. Later, when I first read about scenario planning, I realized that this was the tool – possibly the only tool – that could help someone in that position approach the future in a structured way and make sense of all the possibilities.

So scenario planning helps predict the future? How does that work?

No, it can’t predict the future any more than you or I can. But what it does do is open your eyes to the idea that there is no such thing as “the” future anyway, and it gives you a framework for visualizing how several different futures might possibly arise. That’s a very important distinction. It’s not about predicting what will happen. It’s about exploring what could happen. In the process of exploring, you discover that not one but several potential outcomes are possible, and if you’ve done your thinking properly, each scenario should be plausible.

How is that useful?

It helps you see that you have to be flexible, and ready to anticipate change. For example, let’s say you’ve developed some possible scenarios for the future of your company’s key market. Which one will come about? Nobody knows. But if you’re confident that one of the scenarios is likely to develop – even though you can’t yet say which one – you can already get the company prepared by developing a plan for each one, and then making sure you’re on the lookout for certain signposts that will indicate which future is actually developing. When you begin to see which scenario is taking shape, your plan is ready and you can implement it – perhaps well ahead of your competitors.

It does seem logical that different futures could evolve from any particular starting point in time – maybe even an infinite number of different futures. But isn’t that a problem? How many can you realistically analyze? Wouldn’t you be paralyzed by having too many scenarios to choose from?

That’s a good point. Theoretically, using this kind of thinking, you could develop hundreds of potential scenarios for the future, each one just a little different from all the others. But that’s not the objective of scenario planning. The goal is not to try and imagine every conceivable outcome, but instead to focus on just the handful of factors that you’ve determined are critical to your future success – the make-or-break dimensions of your future landscape. How could they change? And how would the world look if they do? With scenario planning, in other words, you become very good at asking and answering the question: “What if?” But it’s important to emphasize you only ask “What if?” about the things that really matter.

Does your book explain how to do this?

Yes, it walks you through the process step by step. And it includes a lot of illustrations and examples, too. I also wrote up four longer case studies that illustrate how different kinds of organizations have used scenario planning to explore the futures that could unfold for four totally different environments.

Different in what way?

They each apply scenario planning to the challenge of seeing how the future might develop for different parts of an economic system. For example, one case looks at how the competitive landscape might change for an individual company.

The second one is about the future not just of one company but an entire industry: an industry association brought together the CEOs of several of the largest companies in its industry from around the world and sat them down to think about the future of their entire business. The individual companies that took part in the exercise all operate in local geographic markets, so they don’t compete with each other, but the factors that affect one will affect them all, so they’re all in the same boat, and very interested in each other’s insights.

The third case study is about the future of a certain country’s tourism sector, which is made up of hundreds of different stakeholders in several different but interdependent industries, ranging from companies providing transportation and hospitality to schools and government entities. So lots of different businesses are involved, but all in the same country and all with an interest in seeing tourism develop in a positive way.

The last case study describes how the World Bank looked at the long-range future of an entire country, India. What are the key uncertainties that will potentially determine the direction India will head in over the next 25 years? How could the country, and its enormous population, be affected by some of the key trends emerging now? Fascinating.

Let’s talk a little more about your background. How long have you been a consultant?

I went independent ten years ago, following twenty years as a marketing executive working for different companies. It’s very different working on your own – I still struggle to sell myself, but as I’m still in business after all these years, I guess I’m doing something right.

Other than scenario planning and writing books, do you have other activities you focus on?

Well, because of my background in marketing, I’ve mostly focused on projects that give me a chance to strategize alongside my clients and come up with ideas to help them become more successful in their markets. That can include all sorts of activities, from brand development to everyday communication projects like ads and brochures. Mostly what I like doing is to act as a kind of “sparring partner” for my clients, giving advice and feedback, helping improve an idea by tearing it apart and rebuilding it.

Do you have someone who gives you advice?

If you mean friends, of course I do. I don’t have an official “Board of Directors,” though – although I read once that an independent consultant should assemble a group of people he trusts and establish a kind of informal team that can get together once in a while and give him feedback and ideas – and contacts. I think that’s a great idea, but I’ve never gotten around to doing it. Yet.

Has the economic downturn of the last couple years affected you?

Sure. People have definitely scaled down their budgets for the kind of things I do. But developing a sound strategy is also important in bad economic times – maybe even more important. So envisaging scenarios for the future is just as critical as ever.

Over the past year or two, I’ve turned my attention a little more to speaking engagements than consulting work. Even if companies are postponing strategy consulting till things start to look up again, conferences and events still go on.

What do you speak about?

The future! No surprise there, I’m sure. In my presentations at conferences and other business gatherings, I generally try to get people interested in the concept of scenario thinking, but the fun part of my time on stage is when I show how your competitive landscape can change dramatically by taking the audience on a tour of some current trends and then showing where they could potentially lead. I don’t really make any hard and fast predictions, but instead offer some ideas that (I hope) get the audience thinking about just how different the world might really turn out to be, ten years down the road.

Is “Scenario Planning” your first book?

No, in fact it’s my third. I wrote two other books back in the 1990s, but they were not at all “serious” business books. They were collections of prank letters! I wrote to various organizations posing ridiculous questions, or making silly complaints, always with a very “straight face” – just to see what kind of answers I would get. It was fun.

For example?

I wrote to the brand managers of Oil of Olay and asked if they had ever considered developing a special formula for dogs getting old and wrinkly – that sort of thing. In that particular case, I got a very nice reply saying, Sorry, no Oil of Olay for dogs, but they said it was an excellent idea and they would discuss it within the company! I’m pretty sure they were just being polite, as I have yet to see such a product on the market…

It sounds like these letters have at least one thing in common with the future scenarios you develop: creativity.

You’re absolutely right. And that’s why I love what I do.

 

Be Sociable, Share!

Leave a Reply

Shoestring Book Reviews

Shoestring Venture Reviews
Richard Hooker on Jim Blasingame

Shoestring Fans and Followers


Categories

Archives

Business Book: How to Start a Business

Shoestring Book

Shoestring Venture in iTunes Store

Shoestring Venture - Steve Monas & Richard Hooker

Shoestring Kindle Version # 1 for e-Commerce, # 1 for Small Business, # 1 for Startup 99 cents

Business Book – Shoestring Venture: The Startup Bible

Shoestring Book Reviews

Shoestring Venture Reviews

Invesp landing page optimization
Powered By Invesp
Wikio - Top Blogs - Business