research tecnology management - 2010 - the foresight process futures studies and scenario planning
TRANSCRIPT
8/21/2019 Research Tecnology Management - 2010 - The Foresight Process Futures Studies and Scenario Planning
http://slidepdf.com/reader/full/research-tecnology-management-2010-the-foresight-process-futures-studies 1/4
Resources and Reviews For
Leaders of
Technotogical
Innovation
With
this
issue
we
introduce
a
reimagined nformation
Reso urces. What was a simple list
of provocative but unrelated
current readings now becomes another durable resource to
complem ent our feature articles and other columns. In this space we
I I
offer a series of
primers on key topics
with
pointers to important resources to keep you informed of new
developments and
help
you expand
your repertoire of tools and
ideas.
In some issues this
column will be written by the editors but we welcome your contributions in
th e
form of
suggestions for topics and of column su bmissions.
T h e F o r e s i g h t P r o c e s s F u t u r e s
S t u d i e s
a u d
S c e n a r i o P i a u u i u g
In an increasingly dynamic (some would
say unstable) global economy, every
business decision is a bet on the future.
Those bets are even bigger for innovation
and R&D managers, whose job it is to
single out the products, services, or
business models on which the next w ave
of their company's future will ride.
What will consumers want? What will
they value? Where will technology go
next? What effect will the climate crisis
and a growing ecological awareness
have on business—on our business?
Will the economy stabilize? Or move
into some new paradigm? Do we even
know what questions to ask? Too often,
even when they are based on research,
these decisions are made in a moment,
based on a decision m aker's (often
fragmented) understanding of the past
and vision of t h e present.
Futures studies, also known as
Foresight, offers one way of
approaching the problem of th e future
(Wikipedia offers reasonably useful
summaries of t h e field u nder both
terms). Broadly speaking, futures
studies is exactly what it sounds like: a
field dedicated to studying the future.
It's not prognostication; rather, futurists
work froin a solid understanding of the
past and the key forces driving the
present to extrapolate to possible
futures. The plural is not a typo.
Futurists don't predict
the
ñiture; they
explore the range of possible futures.
The field emerged as an academic
discipline in the 1960s, with the work of
people like Hemian Kahn (who assessed
the possible outcomes of nuclear war in
Thinking about the Unthinkable and
predicted the economic boom of the
1980s and 1990s in The Coming Boom:
Economic Political and Social
[New
York: Horizon, 1982]) and W endell
Bell, whose two-volume
Foundations of
Future Studies: Human Science for a
New Era
(New Brunswick, NJ:
Transaction, 1997) offers a
comprehensive survey of
th e
foundation
and intellectual framework of the field.
Pierre Wack brought Herman Kahn's
thinking into the business world with his
work at Royal Dutch Shell in the 1960s
and early 1970s, when he foresaw the
possibility of a severe oil shock—
allowing Shell executives to respond
appropriately when the shocks arrived.
Wack documents his experience at Shell
and offers insight into his process in a
two-part
Harvard Business Review
article, The Gentle Art of
Repe rceiving (part one appeared as
Scenarios: Uncharted Waters Ahead,
Sept.-Oct. 1985, and part two as
Scenarios: Shooting the Rapids,
Nov.-Dec. 1985).
Kahn and W ack focused on a particular
tool of futures studies, scenario
planning. Scenario planning involves
identifying the major forces in play in
the environment and projecting how
September— October 2 1
changes in those forces will affect other
elements to produce a particular future.
The result is a range of possibilities,
each accompanied by a vivid description
of the future produced by each set of
possible factors. The po int, as Wack
puts it, is not so much to have one
scenario that 'gets it right' as to have a
set of scenarios that illuminates the
major forces driving the system, their
interrelationships, and the critical
uncertainties ( Shooting the Rapids
1 4 6 .
But foresight is a process, not a product.
In order to benefit from scenarios and
scenario planning, company leaders
must be willing to engage in a strategic
conversation that encompasses the
entire foresight process, from
identifying the focus question for the
process through to integrating the
insight gained back into business
strategy and operations. As Ari de Geus
argues in
The Living C ompany
(Cambridge, MA: Harvard Business
Press, 1997), the sensitivity to
environmental forces and the
willingness to engage change that both
drive and emerge from the foresight
process are key attributes of companies
that survive. For de Geus, the living
company is a learning company—de
Geus pioneered the term learning
organization —one that goes beyond
forecasting the future to learning from
and preparing for it.
De Geus worked with Pierre Wack in
Shell's Strategic Planning Group, as did
Peter Schwartz. Schwartz's
T h e Art of
the Long
View:
Planning for the Future
in an Uncertain orld (New York:
Currency-Doubleday, 1991; rptd. with
additional material 1996) offers an
overview of the scenario planning
process. Although—as some Amazon
reviewers have pointed out—Schwartz's
predictions for 2005 aren't exactly on
point, the real value of Schwartz's book
is in the careful overview of scenario
planning and in the idea that scenario
planning can go beyond illuminating the
future; rather, Schwartz argues,
exploring the future can reveal the blind
spots in managers' vision of today.
In
Scenarios: The Art of Strategic
Conversation (New York: Wiley, 1996),
Kees van der H eijden offers a wide-ranging
overview of
t h e
scenario process. The
strategic conv ersation, for van der
8/21/2019 Research Tecnology Management - 2010 - The Foresight Process Futures Studies and Scenario Planning
http://slidepdf.com/reader/full/research-tecnology-management-2010-the-foresight-process-futures-studies 2/4
Heijden, is the mechanism by which
the insights gathered through scenarios
are linked to the business's driving
idea. Scenarios provides both the
history and ph ilosophical
underpinnings of the method and a
practical how-to for implementing
scenario planning and sparking the
strategic eonversation.
Seenario planning is but one tool of
foresight. In 20/20 Foresight: C rafting
Strategy in an Uncertain World
(Cambridge, MA: Harvard Business
Press, 2001), Hugh Courtney explores
the full range of future exploration tools,
providing an overview for the executive
unfamiliar w ith the field.
Courtney also explores how futures
thinking can be integrated into strategy.
The traditional business case model for
decision making relies almost
exclusively on qualitative data and
pinpoint forecasts of key value drivers
to make the case for action. This leaves
the executive stranded when
uncertainty intrudes, left either to
ignore the doubts or to engage in a
never-ending process of data gathering
in an effort to dispel the uncertainty.
But, as Courtney points out, the future
remains ever uncertain and ignoring the
possibility is not a strong strategic
ehoice. Rather, Courtney suggests,
executives should classify the
uncertainty by strength and importance
and make strategic choices according
to the risk presented by the unavoidable
uncertainties at hand.
More recently, Michael Raynor, author
of
The Strategy Paradox: Why
Comm itting to Success Leads to Failure
And What to do About it)
(New Y ork:
Broadway Business-Random House,
2007), also discusses how futures
thinking may be integrated into strategic
thinking. (The first chapter of Raynor's
book is available for down load at http://
www.michaelraynor.com/books.
html#strategy; y?rA/reviewed the book
in the July/August 2007 installment of
Information Resources.) For Raynor,
embedding futures planning tools in the
organization's structure and strategy can
create opportunities by fostering a
flexibility that will allow the com pany
to respond quickly and effectively to
changing circumstances. Raynor calls
this balance of overarching strategy and
local flexibility strategic flexibility .
A number of organizations and
businesses have embraced both futures
studies generally and scenario planning
specifically. Several of these have
extensive web resources that can h elp
guide an early exploration. For future
studies generally, the World Futures
Studies Federation http://www.wfsf.
org),
a nonprofit organization founded
in the 1960s to encourage and promote
the development of futures studies as a
transdisciplinary academic and
professional fleld in all parts of the
wo rld, offers a rich array of resou rces
about the state of futures stud ies. The
Institute for the Future (http://iftf org) is
a think tank that spun off from the Rand
Institute in the 1960s; the institute is
dedicated to using futures studies tools
to work with organizations of
ll
kinds
to help them make better, more
informed decisions about the future.
For a more business-focused approach,
visit the Global Business Network
(GBN), a network of consultants that
Resources
ooks and articles
Kahn, H. 1962.
Thinking the Unthinkable.
New York: Horizon.
Kahn, H. 1982.
The Coming Boom: Economic, Political, and Social.
New York:
Horizon.
Bell, W. 1997.
Foundations of Future Studies: Human S cience for a New Era. 2
vols.
New Brunswick, NJ: Transaction.
Wack, P. 1985. Scenarios: Uncharted waters ahead. Part 1 of The Gen tle Art of
Repereeiving.
Harvard Business Review
63(5): 73-89.
Waek, P 1985. Scenarios: Shooting the rapids. Part 2 of The Gentle Art of Reper-
eeiving. Harvard Business Review 63(6): 139-150.
de Geus, A. 1997.
The Living C ompany.
Cambridge, MA: H arvard B usiness Press.
Schwartz, P. 1991.
The Art of the Long View: P lanning for the Future in an U ncer-
tain
World
New York: Curreney-Doubleday. Rptd. with additional material 1996.
van der Heijden, K. 1996 Scenarios:
The
Art of Strategic Conversation. New York:
Wiley.
Courtney, H. 2001 . 20/20 Foresight: Crafting Strategy in an Uncertain World Cam
bridge, MA: Harvard Business Press.
Raynor, M. 2007.
The
Strategy Paradox: Why Comm itting to Sttccess Leads to Fail-
ure And W hat to do About it). New York: Broadway Business-Random House.
Online
World Futures Studies Federation
http://www.wfsf.org
Institute for the Future
http://iftf.org
Global Business Network material on scenarios and seenario planning
http://www.gbn.com/about/seenario_planning.php
Shell material on scenarios and scenario planning
http://www.shelLeom/home/content/aboutshell/our strategy/shell global scenarios/
dir global scenarios_07112006.html
Scenarios-An Explorer s Guide,
Shell publication
http://www.shell.com/home/content/aboutshell/our strategy/shell global_seenarios/
scenarios explorers guide/scenario explorers guide 30102006.html
Research • Technology Management
8/21/2019 Research Tecnology Management - 2010 - The Foresight Process Futures Studies and Scenario Planning
http://slidepdf.com/reader/full/research-tecnology-management-2010-the-foresight-process-futures-studies 3/4
uses scenario planning and other tools to
help its clients plan for, and flourish in,
the future. With Peter Schwartz among
its five founders, GBN includes scenario
planning among its primary tools and
offers extensive information and case
studies about the process (http://www.
gbn.com/about/scenario_planning.php).
Shell, where Pierre Wack initiated
modem scenario planning, remains very
active in the field. The strategy section
of its website includes a richly detailed
description of scenario planning in
general and of the scenarios they have
developed over the past several years
(see, specifically, http://www.shell.com/
home/content/aboutshell/ourstrategy/
shell global scenarios/dirglobal_
scenarios 07112006.html). Shell also
offers a detailed guide to the scenario
planning process,
Scenarios
~
An
Explorer s Guide,
available for
download from their site.
All executives engage in foresight,
whether or not their organization has
an established foresight proce ss. A
conscious foresight process, shaped by
strategic considerations and supported
by an ongoing strategic conversation,
can ensure that foresight supports
long-term suc cess.
/
would like to thank Christian Crew s,
principal at AndSpace consulting, a
foresight, design, and strategy
consultancy, for his generous assistance
in researching this column.
Reviews
Innovate the Future: A Radical New
Approach to IT Innovation
David roslin Ne w York Prentice-Hall,
20 W)
In
Innovate the Future,
David Cros l in
attacks the thorny problem of creating
and launching successful innovations
through the lens of transfomiative value.
Croslin, president of consulting finn
Innovate the Future and former
executive at Hew lett-Packard, Verizon,
and M CI, brings his extensive
experience to bear on the IT industry,
but offers insights and approaches that
can be used across other markets.
Croslin readily admits that every book
about innovation at some point suggests
that comp anies must think outside the
box in order to innovate. But Croslin
identifies how the bo x is constructed
by a company's tendency to seek future
success by perpetuating processes and
priorities that have worked in the past
without considering where the company
and the product are in the innovation life
cycle. The result is a complex but
compelling model of where innovation
fails to add value and how to restart the
innovation m achine.
The most valuable part of
Innovate the
Future
may be in the final chapter,
where Croslin presents four use cases
that exemplify key themes in the book:
identifying the customer, targeting
transformative value, working with
limitations to transformative value, and
maximizing lifestyle integration. Only
in these final examples does the real
depth and value of Croslin's model
become fully evident. In fact, this final
section could actually be read first to get
a sense of why the complex, difficult
graphics and models that pepper the
early chapters really matter.
The graphics, and the dense discussion
that accompanies them, make for hard
going at times, but in this case,
persistence pays off. The book offers a
concrete model for the innovation life
cycle that points to useful strategies for
sustaining—and creating—innovation.
Croslin's model suggests a number of
creative ways to evaluate competitor
value chains and anticipate ways to
disrupt them, thus providing key
guidance to innovators seeking to
develop a compelling and sustainable
market presence.
Croslin begins by differentiating
inventions, which emphasize features
and capabilities, from innovation, which
is best seen from the perspective of the
customer's consumption priorities.
Consumption priorities are those factors
that drive purchases, such as
convenience; they may be shaped by
such elements as increases in
consumers' available time or money or
their need to modify their lifestyle.
Croslin describes six innovation types,
emphasizing the importance of what he
terms targeted innovation, innovation
that matches the company's business
priorities with consumer consumption
priorities to maximize the
transformative value of the product.
Transformative value—recognizing,
developing, and exploiting it and
September
—
October 2 1
preventing competitors from doing the
same—is a key topic for Croslin.
Targeted innovation means doing more
of those innovations that add
transfomiative value and limiting those
that decrease it. Croslin expands on this
idea by describing the innovation life
cycle, which begins with the initial
invention and disruptive innovation. The
innovation life cycle continues to the
positive incremental invention and
innovation stage, where additional
transfonnative value is added in the
form of new features that continue to
position the company ahead of its
competitors in the eyes of the consumer.
Unfortunately, company pressures to
continue building revenue and reducing
costs in this stage can reduce the
flexibility that decision makers had in
the initial innovation stage, putting the
brakes on this positive incremental
stage. When this happens, the company
moves into a negative incremental
invention stage. Here, repetitive
incremental investments negatively
affect the transformational value by
increasing the product's complexity,
creating feature overkill with a
comm ensurate increase in cost or
maintenance requirements. This results
in a reduction in customer satisfaction;
thus, the company's innovation
investments actually hurt revenue
streams and market share.
In the final stage of
th
innovation life
cycle, incremental innovation goes from
negative to destructive. In this stage,
each additional investment decreases the
customer's perception of transfonnative
value of the company's product to the
point where the customer shifts
perceived value to a com petitor's
product. Here, company decision
makers continue to be constrained by
revenue growth and cost cutting
expectations, and their actions often
result in product commoditization and
market stagnation. The challenge,
Croslin asserts, is to restart the
innovation life cycle, escaping the
downward spiral of destructive
incremental innovation.
All of this leads to the real heart of the
book and the source of its value: Croslin's
discussion of how to disrupt the natural
flow of th innovation life cycle, his
Innovation Checklist, and a description
of various targeted innovation
8/21/2019 Research Tecnology Management - 2010 - The Foresight Process Futures Studies and Scenario Planning
http://slidepdf.com/reader/full/research-tecnology-management-2010-the-foresight-process-futures-studies 4/4
Copyright of Research Technology Management is the property of Industrial Research Institute, Inc. and its
content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's
express written permission. However, users may print, download, or email articles for individual use.