Strategic Foresight and Scenario Planning

• What will the store of the future look like?

• What will the future of the European energy market look like?

• How will car ownership look like in the future?

Contextual - driving Forces:

Political, Economic, Social

Transactional - Focal Issue - key factors

Clients, Communities, Competitors

One rule: consider the long term as the sufficient time period for changes in historical relations and trends: not too distant in time so one can still think strategically about the future and build scenarios; but also not so close to the present in order to avoid a simple and too conservative projection of past and present structures and drivers;

1. Retrospective and Peripheral view 360°
2. Outside-in thinking
3. Actors games
4. Multiple perspectives
5. The Long Term and "the Long View"

Quality of Decision Making

• Provides guidance for strategic actions being taked today - not only what to do, but how and when to do it
• Provides useful information for actors whose decisions consider long-term developments
• Allows for decisions to be based on a wider societal debate and a greater variety of knowledge sources

Impact of Decision-Making

• Creates commitment among actors to support future-oriented visions
• Encourages stakeholders to join forces to achieve common goals

Ability to reat to future changes

• Allows for knowledge and ideas to flow more freely, enhancing innovation and the capacity to design and manage non-routine events
• Increase risk awareness and provides a basis for more effective contingency planning and appropriate forms of resilience
• May result in new decision-making processes in organisations

1. A clear or unclear problem with no clear solution
2. Medium to high uncertainty surrounding the key issue
3. Organization that is open to change
4. Following necessary resources:
   1. A credible leader for the process, who takes responsibility
   2. time to dedicate to the process
   3. resources for external facilitation and support

ENGAGE IN SCENARIO THINKING

Agility = Sensitivity * Unity * Fluidity

Perceive - Strategic Sensitivity

Seeing and Framing opportunities and threats in a new way - in time

Commit - Leadership Unity

Collective decision-making and commitment

Execute - Resource Fluidity

Fast and efficient resource mobilization, redeployment

• Describe and deepen the understanding of the context of the topic. Integrate and explore data sources.

• Perform a strategic intelligence scanning (collect ideas and insights, organize information, collect data on past and current trends, research on sources of change).

• Explore patterns of change (Trends and Megatrends, Uncertainties and Pre-determined Elements, Weak Signals and Emergent Issues, Wild Cards and Black Swans).

Drivers are any forces not controlled by your organization that can potentially influence a given strategic focus

Driving Forces are forces of change outside your organization that will shape your future dynamics in predictable and unpredictable ways

Technological - Digital Transformation and Technological Convergence

Economic and Geopolitical - Economic Globalization

Human - Demographic Change

Planet and Territory - Environmental Sustainability

The future will result from the interaction between Trends and Megatrends coming from the past and shaping the future, Weak Signals or issues at an embryonic stage of development, Wildcards that might surprise us in a positive or negative way, and Structural Uncertainties that might take us not just for one but for a plurality of possible futures.

TRENDS are a declaration of the direction of change. It is usually a gradual and long-term change in the drivers that shape the future of an organization, region, nation, sector or society.

MEGATRENDS are long-term processes of transformation with a broad scope and a dramatic impact. They are powerful factors which shape future markets

Time Horizon - Megatrends can be observed over decades. Quantitative, empirically unambiguous indicators are available for the present. They can be projected – with high confidence – at least 15 years into the future.

Reach - Megatrends impact comprehensively on all regions, and result in multidimensional transformations of all societal subsystems, whether in politics, society, or economy. Their precise features vary according to the region and subsystem in question

Intensity of Impact - Megatrends impact powerfully and extensively on all actors, whether it is governments, individuals and their consumption patterns, or corporations and their strategies.

Climate change and environmental degradation

Continuing urbanization

Widening inequalities

• P: What are the political priorities, regulatory issues, forms of legislation that could affect the organization?
• E: What major trends in the economy such as oil prices, interest rates, reduction in income or real spending exist?
• S: What are major changes in tastes, preferences and behaviours?
• T: What significant developments on the technology frontier could impact the organization?
• E: What environmental concerns face the business?
• L: What are the prevailing legal conditions and how might they affect business dealings?

WEAK SIGNALS are external or internal warnings that are too incomplete to permit an
accurate estimation of their impact, and/or to determine a complete response (Igor Ansoff, 1982).
Regarding Weak Signals: AMBIGUOUS INTERPRETATIONS BUT… CONCRETE EVENTS

Groups of recent (and still scarce) events that:

• Point towards directions not covered by identified trends
• Point towards an eventual inversion of identified trends
• Point towards the possibility of a wild card

Characteristics

• Anticipatory
• Qualitative
• Ambiguous interpretations
• Fragmentary
• Various formats and sources

Emerging ideas, trends, technologies which hint at what the future may hold

-Beijing’s ‘time bank’ lets adults care for elderly and earn support when they become old

WILD CARDS are discontinuities, sudden events with a low probability, high impact and a
surprising character.

What might never happen...

9/11

Covid-19

PREDETERMINED ELEMENTS are “… those events that have already occurred (or that almost
certainly will occur) but whose consequences have not yet unfolded.” Pierre Wack, 1985

Predetermined elements of structure are areas where structure will change, but the change is largely predictable

How to identify Predetermined Elements?
• Select highly relevant trends that come from the past and extend towards the future.
• Recognize emergent issues that will turn into highly relevant trends.
• Identify key areas where structure will change, but the change is largely predictable
• Identify key events whose major consequences have not yet unfolded

Examples

Growing urbanization, Continued loss of biodiversity

• Imagine and build alternative futures and generate images of the future
• Investigate uncertainties and assumptions
• Identify the desired future
• Build scenarios using selected technical methods and approaches (Matrix Approach, Inductive Approach, Morphological Approach, Porter’s Approach, Incremental
Approach, Extreme-World Method, Backcasting)

• Start by articulating the official future —the future that your organization or group is planning for —and exploring what must be true for this future to be realized.
• Then ask: How could we be wrong about the official future?
• Next, develop at least two stories of the future that diverge from the official future in provocative and plausible ways.

A somewhat conservative approach

Scenarios can also be built by simply telling stories about the future based on your critical uncertainties

• Develop several stories, studying, refining, and deepening them until you arrive at a set of divergent, plausible, and challenging scenarios relevant to your focal question.

• During this process, you may identify an underlying structural framework — such as a matrix — that reveals relationships between scenarios. Recognizing such a framework can enhance the clarity and effectiveness of scenario communication.

Risks - Where there is enough historical precedent, in the form of similar events, to enable us to estimate probabilities for various possible outcomes.

Structural uncertainties - Where we are looking at the possibility of an event which is unique enough not to provide us with an indication of likelihood. The possibility of the event presents itself by means of a cause/effect chain of reasoning, but we have no evidence for judging how likely it could be.

Unknowables - Where we cannot even imagine the event. Looking back in history we know that there have been many of these, and we must assume that this will continue in
the future. But we have no clue what these events could be.

• Importance / relevance (strong potential impact) to the focal issue
• Critical drivers for understanding the future dynamics of the focal issue.
• High level of uncertainty
• Are the basis for the development of Scenarios.
• Define the dynamics that must be monitored and towards which it is crucial to find answers.
• Must be “sufficiently” independent of each other

Criteria

Importance / Impact
Level of Uncertainty
Independence