Future Building

Future
Building in
Business
Strategy in times of
uncertainty
Wednesday, 2 March 2011

Dr Norman Chorn
Economist
Future Builder
Organisation architect
Thought Leaders Mentor

Why are we here?
Because our planning doesn’t work well in uncertainty
Because we need more planning in uncertainty
Because we need to create our own future

Today
The “new normal” - why
conventional planning won’t work
for you anymore
Strategy vs Planning in your
business
Key principles of FutureBuilding
DIY FutureBuilding

Resources
Pre-reading
Keynote deck
Interactive workbook
FutureBuilding planner
The network
Me (if you’re really desperate!)

The new normal

Have you noticed?
New economics
✓
more regulation
✓
lower growth
✓
savvy consumers
✓
zeroing transaction costs
✓
low cost competitors
✓
BRIC taking lead
New social
✓
ﬂuid families
✓
ageing population
✓
suspicion of politics
✓
suspicion of big biz
✓
more conservatism
✓
anti-globalisation
✓
social justice
✓
protectionism
New environment
✓
climate change
✓
emissions legislation
✓
degradation of soil, air, water
✓
cost of energy
✓
new forms of energy
New technology
✓
online impacts everything - rapid paradigm changes
✓
global online services industry
✓
technology enabled new work modalities
✓
democratisation of media
✓
rapid innovation and obsolescence

Jeff Brenman

Assumptions
are key
...but the environment
keeps changing

If only we’d seen this coming!

Is planning different to strategy?

A simple distinction
Planning = setting objectives and actions to achieve a
goal
Strategy = positioning and equipping the organisation
for the future

Planning (Jomini) Strategy (Napoleon)
Approach
1. Establish your base of
ops
2. Determine objective
point
3. Choose lines of ops to
move your army forward
1. Learn from history and your
experience
2. Clear your mind - immerse yourself in
battle
3. Wait for ﬂash of insight as elements
combine in unique way
4. Act with resolution
Success
By having greater force
than enemy at objective
point
By identifying the “decisive point” in the
battle
Objective
Chosen before - then move
to achieve it
Not chosen before - emerges as you
learn and adapt
Key Objective point Decisive point

7 Key principles of
FutureBuilding

The future does not exist
a priori
1

The future is a set of possibilities that can
be inﬂuenced by purposeful behaviour
discovery
choiceaction
2

No monarchy has fomented its own
overthrow
3

Embrace uncertainty
4

FutureBuilding
does not attempt
to predict the
future
Alternative futures are
possible
5

FutureBuilding focuses
on developing the
capabilities needed for
alternative futures
6

It is better to be vaguely
right than completely wrong
Clem Sunter7

Examples of future worlds

Negotiating the future
Yes
Yes
Yes
Current
negotiations
in 1980s
Is settlement
negotiated?
Transition rapid
and decisive?
Policies
sustainable?
No
No
No

Lo concern by
public for health
Lo social engineering
Hi social engineering
Hi concern and
public
mobilisation
Public health in Australia

Progressive
society and
policies
Lo cost of energy
Hi cost of energy
Defensive
society and
policies
No option
Sydney
The lucky
city
Not our
problem
Batten
down the
hatches
Sydney property development

Your own clients?
External focus
on markets and
customers
Values and self direction
Process and controls
Internal focus
on organisation
and people

What are scenarios?

Good scenarios
Coherent stories about
alternative futures
They have a series of plot
lines that intersect and
produce an internally
consistent story
Based on the key drivers
and uncertainties from the
environmental scan
Can be external or internal

Scenarios created by..
Right brain creative
process - it’s ok to
have fun!
Social interaction
Learn by doing
Pathﬁnders are key

Current mental models Novelty
Scenarios should balance...

DIY FutureBuilding

Pre build - get the
foundations right
What is the business of your organisation - the business
deﬁnition:
• product / services?
• customer groups?
• value proposition to each customer group?
What are your KSFs?
What are your clients’ major concerns?
WHAT IS THE FOCAL QUESTION?

7 steps to Build your Future
3. Skeleton scenarios
2. Deductive or inductive scenarios?
1. Trends, drivers and uncertainties
4. Flesh out scenarios
5. Winning strategies
6. Key capabilities
7. Plan for capabilities

Deductive
define the broad
structure of the
alternative futures first...
...then identify the story
within each scenario
Inductive
identify the story line first
...then define different
scenarios to complete
the range of alternative
futures
1

In your “environment”, identify:
✓ key trends
✓ important drivers of change
✓ most signiﬁcant uncertainties
*Remember to use Pathﬁnders
2

Select the dimensions / plot lines that explain the
most DIFFERENCE in the data. Then construct a
set of skeleton scenarios --> alternative futures
3

Make the stories
(scenarios) as
complete as possible -
describe what life is like
in that future world
Flesh out the skeletons into stories for each
of the alternative futures4

Develop the “winning” strategy for you to
win in each of these alternative futures5
Consider all aspects of the strategy
✓ product / service
✓ market / customer
✓ value proposition
✓ how you will differentiate yourself
✓ relationship architecture
✓ how you will make a return

Identify the key capabilities you will need to
develop to execute the winning strategies6
Several classes of capability
✓ knowledge of techniques, processes, issues
✓ understanding of industries, types of clients
✓ key skills and competencies
✓ relationship architecture
✓ reputation, track record, credibility
✓ assets, tools, infrastructure
✓ qualiﬁcations, licenses, permits

67 And now for your action planning

Future
capabilities
Future
capabilities
Future
capabilities
Future
capabilities
Action plan to develop
future capabilities
Now
Some 50 - 70% of
these capabilities
are likely to
overlap
Back-casting
Future

Building your future
1. Choose between deductive or inductive scenarios
2. Identify key trends, drivers and uncertainties
3. Construct your skeleton scenarios by choosing orthogonal
dimensions or the most signiﬁcant plot lines
4. Flesh out alternative stories of the future
5. Build “winning strategies” for each alternative future
6. Identify the key capabilities required for each strategy
7. Action plan to develop common capabilities

“You can’t just ask
customers what they
want and then try to
give that to them. By
the time you’ve got it
built, they’ll want
something new.
There’s an old Wayne
Gretsky quote that I
love. ‘I skate where the
puck is going to be, not
where it has been..’”

“The complexity for
minimum component
costs has increased
at roughly a factor of
two per year”
Extract from Moore's original paper in 1965
Gordon Moore - co-founder of Intel
Thanks to Craig Rispin

“Don’t let the future
just happen to you -
go and create you
own ideal future!”
Craig Rispin - Futurist

The future is not what it
used to be...
The world has changed - conventional approaches no longer
work
Don’t attempt to predict the future
The future can be inﬂuenced
Pathﬁnders are necessary to envisage alternative futures
Focus on building strategies and capabilities for alternative
futures
Skate to where the puck is going to be

Future Building

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