Transcript Slide 1

Scenario Planning
Strategic Webinar Series
15 May 2013
Agenda
• Opening remarks - Fiona Carter, Executive Officer SPS
• Scenarios for India and China to 2015 - Gill Ringland, CEO SAMI
Consulting
• Scenarios on risks associated with ‘green’ technologies – John
Reynolds, Executive Director SAMI Consulting
• Q&A
2
The Strategic Planning Society
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SPS was formed in 1967 and is a global network dedicated to the
development of strategic thinking, strategic management and strategic
leadership.
Our Members are individuals, corporate organizations and business
schools.
We are dedicated to supporting Members to develop their strategic
management and leadership capabilities.
Our Vision
a dynamic, global strategic
management community
Our Mission
improve the practice,
development and recognition of
strategic management
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About the SPS Strategic Webinar series
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A series of Webinars launched in January 2013 for SPS Members
worldwide.
Topics chosen for their broad application and appeal to the
Membership of SPS.
To provide insight and practical recommendations for strategic
managers and leaders.
Future sessions are planned to address subject areas such as strategy
and sustainability, strategy and organizational design and strategy
implementation.
Let us know if you would like to contribute to an SPS Webinar.
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Scenario Planning
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There is ongoing turbulence of the world economy
•
Scenario planning is being increasingly used in the public, private and NGO
sectors.
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Asset managers are realising that 80% of their concern needs to be with the global
business environment, and 20% with the specific investment – a reversal from the
boom years to 2008.
Our speakers will share two case studies with you:
•
A set of scenarios for India and China to 2015, examining how they were
generated, what the scenarios got right and what not, lessons learnt.
•
Scenarios on risks associated with ‘green’ technologies.
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Our speakers
John Reynolds
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Executive Director of SAMI Consulting
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Clients in the UK Europe and the USA.
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Previously fifteen years of futures and strategy experience in the
Senior Civil Service, Department of Trade and Industry,
Laboratory of the Government Chemist, Radiocommunications
Agency, UK Trade and Investment and the National Security
Programme. .
Gill Ringland
• CEO of SAMI Consulting.
• Previously head of strategy at ICL now part of Fujitsu.
• Currently working with the European Commission, Eurocontrol,
the Technology Strategy Board and ACCA.
• Scenario planning books, also Beyond Crisis ,co-authored with
Oliver Sparrow and Patricia Lustig, and recently, Here be Dragons.
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SAMI Consulting
Robust decisions in uncertain times
Webinar
Scenario Planning
15th May 2013
www.samiconsulting.co.uk
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SAMI
Robust decisions in uncertain times
• Our offer
– To enhance the capability to anticipate
– To transform emergent thinking into strategy and
implementation
– Consulting, backed up by executive education and research
to deliver “robust decisions in uncertain times”
• “You can never plan the future by the past”
– Edmund Burke, 1729-1797
www.samiconsulting.co.uk
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Two studies
Robust decisions in uncertain times
• Report for the Corporation of London
– Scenarios for India and China to 2015: implications
for Financial Services
• Report for the EU OSHA (Health and Safety
Agency)
– Green jobs and occupational safety and health:
Foresight on new and emerging risks associated with
new technologies by 2020
• Both in pdf on the SAMI web site
– www.samiconsulting.co.uk. Under News &
Publications.
www.samiconsulting.co.uk
9
India and China to 2015
Robust decisions in uncertain times
• Study commissioned by the City of London in
2006
• The City was concerned at the impact of India
and China on London’s Financial Services
– Were India and China the same or different?
– Were India and China a threat or an opportunity?
• SAMI worked with Oxford Analytica
• 5,000 copies of the report were distibuted
www.samiconsulting.co.uk
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Comparing China and India
Robust decisions in uncertain times
• It is a mistake to see them as homogeneous – there are many
Chinas and Indias.
• The dynamics of development apply to China or India as much
as they do anywhere else.
• China or India can be thought of as a producer, a political power
or a marketplace, each raising distinct questions leading to
distinct approaches
• Our approach was - what are these countries going to be like as
places to do business, in which to invest, with which to
collaborate or compete?
www.samiconsulting.co.uk
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Comparing China and India
Robust decisions in uncertain times
70
60
Attitudinal Distance
50
40
30
20
10
Australia
Canada
Market
USA
UK
Industrial
Germany
France
Japan
Collective
Spain
Brazil
China
Korea
Future-oriented
Chile
S Africa
Peru
Ecuador
Developing
Mld Inc
Guatamala
Mexico
Pakistan
Mixed views
Thailand
Turkey
India
Kenya
Poor
Indonesia
Nigeria
Comparing China and India
Robust decisions in uncertain times
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Annual real GNP growth
China
10
India
0
-10
Indexed GDP, 1960=100 (constant money)
-20
Relative size in 2004
-30
1960
1965 1970 1975
1980 1985
2000 1990 1995
China
2000
China
India
1500
Middle
income
Lower middle
income
1000
Lower
middle
income
500
Middle
income
India
1960
1970
1980
1990
2000
Scenarios for India and China
Robust decisions in uncertain times
• Methodology
– Worked with Oxford Analytica’s country experts to
develop the scenarios
– Held workshops in the City of London to explore
implications for asset management, insurance and
international banking
– Published report in October 2006
• Will focus here on
– What were the scenarios and what has happened
since?
www.samiconsulting.co.uk
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The big questions for India
Robust decisions in uncertain times
• India is a very complex and consensus driven society
• Would frustration about
– China’s example
– Loss of esteem in Asia
– New generation with new views
lead to further liberalisation of economic, regulatory
and social controls?
• How would the balance of power between a federal
style of government with localism, and a more
centralised system, play out?
www.samiconsulting.co.uk
15
Scenarios for India
Robust decisions in uncertain times
Federal style of governance
Retreat to the
Woods
The Elephant
Lumbers along
Liberalisation is
reversed
Liberalisation
accelerates
2006
The
Elephant
Breaks its
Chains
Centralised system of
governance
What has happened in India?
Robust decisions in uncertain times
• India is one of the fastest growing economies in the
world as a result of liberalization of the last decades,
covering manufacturing, agriculture and financial
services.
• The balance of power between the central government
and the states has shifted slightly towards central
government as India moves to play a bigger part on the
world stage viz-a-viz the UN, Pakistan, etc. For
comparison purposes, the central government of India
has more power than the US Federal Government.
www.samiconsulting.co.uk
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Scenarios for India: Direction
Robust decisions in uncertain times
Federal style of governance
Retreat to the
Woods
The Elephant
Lumbers along
Liberalisation is
reversed
Liberalisation
accelerates
2006
The Elephant
Breaks its Chains
Centralised system of
governance
The big questions for China
Robust decisions in uncertain times
• How long can China’s rapid economic growth
persist?
– Can China cope with the complexity it is creating?
– What are the adaptation mechanisms?
• How will China interact with the rest of the world?
– Will she be seen as a source of economic wealth and
growth?
– And/or a threat on the world stage, a source of instability?
www.samiconsulting.co.uk
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Scenarios for China
Robust decisions in uncertain times
2006
www.samiconsulting.co.uk
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What has happened in China
Robust decisions in uncertain times
• China’s economic growth has continued
– No longer as connected to US trade after 2008:
– focus on growing internal consumer markets
– 7.7% growth annualised in last quarter
• China has a foreign policy to protect its interests
– investments in raw materials in Africa, Latin America,
SE Asia, ex-USSR countries ,--– Seen as a source of cyber-crime
– aggressive in South China Sea
– Supports North Korea (shared road bridge)
www.samiconsulting.co.uk
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Scenarios for China: Direction
Robust decisions in uncertain times
2006
www.samiconsulting.co.uk
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What can we learn from these?
Robust decisions in uncertain times
• Scenarios need to build on history but not be constrained
by the past
– Experts can find it difficult to recognise signs of change
• Thinking about the trajectory – how the organisation
might get from A to B is important for identifying early
indicators that might show which scenario was emerging
– Elephant Breaks its Chains – early indicator: Indian companies
off-shoring to lower wage economies.
– Lion leads the Dance – early indicator: gradual liberalisation of
the renminbi $ exchange rate
• The scenarios allowed for discussion of previously less
explored future directions for China and India.
www.samiconsulting.co.uk
23
Scenarios on risks associated
with ‘green’ technologies
Robust decisions in uncertain times
• Project for European Agency for Safety
and Health at Work (EU-OSHA)
http://www.samiconsulting.co.uk/4EUOSHAreport2013.pdf
• Worked with UK Health and Safety
Laboratory (HSL) and Technopolis
• Looked at new and emerging risks from
new technologies in ‘green jobs’ to 2020
• Scenarios central to the project
www.samiconsulting.co.uk
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Process
Robust decisions in uncertain times
• Selection of (16) key drivers of change
• Selection of key technologies (Nanomaterials;
bioenergy; waste management; construction; transport;
manufacturing; decentralised energy production &
transmission; energy storage; wind energy)
• Developed a set of base scenarios
• Developed timelines for each key
technology
• Analysed new and emerging risk for safety
and health at work
www.samiconsulting.co.uk
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Main Drivers of Future Change
Robust decisions in uncertain times
1. Economic Growth
•
•
Growth In Europe
Global Growth rates
2. Green Culture and Values
•
•
•
•
Public Opinion
Government Incentives and controls
Energy Efficiency and Resource Use
Waste Management and Recycling
3. Rate of Innovation in Green technology
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Weak
Green Values
Very Strong
Scenario axes
Robust decisions in uncertain times
Deep Green
Win - Win
Strongly green
culture and values
High innovation
Scenario 4
Bonus World
No progress over
a lost decade
in Green Technology
Strong Growth
Global and European
Economic Growth
Low Growth
High Growth
Innovation Axis
Robust decisions in uncertain times
For
Profit
For
Green
Growth
(Diagrammatic representation only)
For
Green
Future
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Win - Win
Robust decisions in uncertain times
Defined by
• Strongly Green Values
• High economic growth
• High rate of Innovation in Green
Technologies
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Win - Win
Robust decisions in uncertain times
• Green growth is sustainable.
• Green activities are seen as a major
contribution to economic growth rather
than simply as a cost
• Technology is delivering on its promise to
make green growth achievable.
30
Strongly Green Values
Robust decisions in uncertain times
• Growing public concerns over climate
change and other environmental threats
• Mandate for deeply green legislation
• Green behaviour is strongly approved of
• Better models show how vulnerable the
human race will be to climate change and
the loss of ecosystems services.
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High Innovation in Green
Technology
Robust decisions in uncertain times
• The trajectory of technology accelerates
– More and more young engineers and scientists
qualify around the world,
– Developments are propagated immediately
• Technology has made green growth
achievable. Most innovations use fewer
resources and less pollution.
• Energy science continues to deliver
• The path to a zero-carbon future is now clear
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Win-Win Human systems
Robust decisions in uncertain times
“every day we
continue to redesign the
human-machine
interface...”
“welcome to
the L.Z.C.
Safety &
Health @
Work training
module. Today
we look at
everyday
hazards...”
“We scored
8 out of 10
in the last
green
audit… how
can we do
even better
next time?”
“I guess
every smart
grid needs a
call centre
but it’s still
pretty
stressful”
‘Win-Win Manufacturing
Robust decisions in uncertain times
now that robots
or “co-bots” do
most of the
work.... What’s
there to worry
about ???
Boredom ... insecurity
... Keeping up with
innovation ... And,
what if they do not
keep out of our way...
+++ THIS
HUMAN HAS A
POOR
TRAINING
RECORD+++
KEEP HER
UNDER ACTIVE
SURVEILLANCE
+++
Bonus World
Robust decisions in uncertain times
Defined by
• High economic growth
• Low Green Values
• Medium rate of Innovation in Green
Technology (directed towards profits)
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Bonus World
Robust decisions in uncertain times
• People will choose the route of increased
prosperity
– when faced with the costs of going green.
• Technology is helping the world to be more
efficient in its use of resources
– but this efficiency merely translates into
increased consumption
• Carbon emissions and resource use are
still rising.
– High resource price stimulate increased
supply
36
Medium Innovation in Green
Technology (directed towards profit)
Robust decisions in uncertain times
• Technology continues to advance, driven
by the profit motive
• High levels of overall innovation
• High growth allows capital-intensive
inventions to be implemented quickly.
• Energy sciences continue to deliver,
– but it is not clear how or whether a zerocarbon future can be achieved without
unacceptable compromises
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‘Bonus World’ Human systems
Robust decisions in uncertain times
“Drilling at 4000m
is easy... no-one can
see anything, so you
just get on with it”
“they call this
the graveyard
shift - 7pm
to 7am ...
lucky we’re
allowed to go
to the toilet
at midnight”
“you seem to have good job
satisfaction… it also pays for
the new sports car”
“we’re freezing
in here... Would
love to invest in
efficiency but
that would
reduce this
year’s profits
‘Bonus World’ Manufacturing
Robust decisions in uncertain times
“Hello - how may
I help you??”
(....I used to work
just in retail...
Now I am
expected to be a
manufacturer as
well. I just press
the buttons and
hope it is OK! )
I’ll have a
Zpad4.2 ...
in lime green
and purple ...
and a cup of
coffee while I
wait please
Deep Green
Robust decisions in uncertain times
Defined by
• Strongly Green Values
• Low economic growth
• Medium rate of Innovation in Green
Technologies
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Deep Green
Robust decisions in uncertain times
• A Green economy is achievable
– but at the cost of economic growth.
• Sustainability and Greenness are valued by
people more than economic growth
• Green activities are seen as a cost that
needs to be borne.
• High taxes on pollution and carbon emissions
• Technology is helping to deliver a green
future
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Strongly Green Values
Robust decisions in uncertain times
• Growing public concern over climate
change and other environmental threats
• Mandate for green legislation
• Green behaviour is strongly approved of
• Better models show how vulnerable the
human race may be to climate change and
the loss of ecosystems services
• Repeated resource shortages reinforce
the need to be green
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Medium Innovation in Green
Technology
Robust decisions in uncertain times
• Technology continues to advance, driven
by a desire to achieve sustainability
• Restricted levels of capital investment
restrict the adoption of capital-intensive
innovations
• Energy sciences continue to deliver
– but it is now clear that low economic growth is
necessary to achieve a zero-carbon future
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‘Deep Green’ Human systems
Robust decisions in uncertain times
“Solar panels are
great because
they are ‘green’...
You don’t need
skills or
qualifications,
just get up there
and do it”
“everybody
loves this green
bicycle delivery
service ... but
the trailer gets
heavier and
heavier”
“We can power
the firm on
these out-ofdate ELV
batteries... is
it the yellow
wire to white?”
“welcome to the community
wind energy cooperative …”
‘Deep Green’ Manufacturing
Robust decisions in uncertain times
Today it’s plasma
TVs – very hitech....
Tomorrow,
washing machines
and hoovers. Day
after... Radios
and alarm clocks.
Yeah right – who
needs the latest
model when you
can fix anything
you want ??
Outcomes
Robust decisions in uncertain times
• The scenarios facilitated important discussions
between different groups of stakeholders in a neutral
and safe environment
• Many current assumptions were challenged (including
targets that are unlikely to be met)
• Some organisations realised that their plans were not
robust
• The scenarios could be used for the analysis of a
broader range of technologies and policies
• The scenarios were a robust tool for the
anticipation and analysis of future challenges; and
developing more robust ‘future proofed’ strategies
and policies
www.samiconsulting.co.uk
46
Thank you!
Robust decisions in uncertain times
Open for Q&A
If you would like to get our monthly enewsletter
eSAMI ---- please ask –
[email protected].
For details of our training courses (with the
Horizon Scanning Centre of the Government
Office for Science) contact training
@samiconsulting.co.uk.
For details of our Blowing the Cobwebs off our
Mind events, please ask,
[email protected].
www.samiconsulting.co.uk
47
Next on the SPS Calendar
The webinar series continues:
• 11 June – Strategy and Sustainability
• 2 July – Global Trends in the Consulting Market
Annual General Meeting
4th June 2013, 18.00-20.00 Central London