Ning's Learning Log about Scenario Thinking

Learning Log of ICT Planning Ning Xu

Personal reflection of scenario thinking

Think like a smart guy

The first thing I would like to say here is Mr. Erasmus’ extrovert personality and thought-provoking teaching style are the most shinning point of this course. As far as I learned from these lectures, scenario planning is really a smart guy’s job, which requires a fully systematic consideration of not only the current situation, but also a whole context and all the related driving forces. To manage all these uncertainties and dynamics, you gotta be very smart. During the whole course, I tried to train myself to think like a smart guy and think smarter than I used to do.

All the lectures are centered on one term: scenario thinking, which is bound to tell you crazy stories and give you surprises about the future. But not as a layman believes, scenario thinking has its own logic and theoretical basis. Especially after I read several articles from the reader and frequently visited the ScenarioThinking.org and Digital Thinking Network sites, a full view of scenario thinking has been established in my mind, which I will explain more in the upcoming professional and academic reflection parts of this learning log.

Learn to predict the future

On the first lecture, we were told to finish a seemingly impossible mission: read a massive reader in which all articles were too far away from my scope of knowledge. But when I actually dived into the reading, I found it was not that difficult to dig some treasury out of it. My favorites are the first article “Scenarios: Shooting the Rapids” which illustrated global oil market development scenarios and how the Royal Dutch/Shell adapted its strategy according to the prediction; and another one “A Common Language for Strategy” written by Mr. Erasmus himself. In the “Strategy” article, Mr. Erasmus sketched a future graph for organizations influenced with two basic variable directions: control to empowerment and consolidation to fragmentation. I really like this idea of building a matrix-like structure for future scenarios which my Google teammates and I adopted in our system map design where we focused on four different development directions of Google’s future.

In addition, the atmosphere on class is also amiable and active. Mr. Erasmus encouraged us to pop up questions and challenge his ideas, which is totally different from the “respecting the authority” tradition in Chinese culture. By workshop discussions and individual introduction of our own product of the future, I feel more confident of speaking out my mind in front of an audience, which is supposed to be the biggest fear of mankind.

Enhance myself from team work

I always prefer working with my fellow Dutch classmates than my countrymen. Because I believe that a mixture of nationalities in a team can bring more fruitful ideas and benefits to our achievements. And in fact, such concept is always right as I have worked so many times with different classmates from different backgrounds, which I believe is the essence of this ICT in Business program. In addition, Mr. Erasmus also encouraged us to form diversified team to work on scenarios which actually needs diversity themselves.

During the first discussion, I was really shocked about how differently a group of people could consider one same problem. About the Google future, I would like to put my thoughts in the China market related issues like censorship and Google’s adaptation to Chinese authority and also Google’s customized services to Chinese language users. Also because I am quite a movie fan, I tried to link Google with its media dominance or penetration possibility. Whereas other teammates had their own concerns like legal and privacy issues, online shopping competitions with existing giants like Amazon.com etc. From these real world experiences, I learned a lesson that in order to build a convincing and valuable scenario plan, a diversified team and dedicated teamwork is really necessary.

After several debate-ridden meetings with my teammates, our “Google’s future” scenario planning began to form its shape. During the past three weeks, our brains were literally swept by a huge storm. We tried our best to know nearly everything concerning Google and its business; and also everything Google might have impact on in the future. However, we are still scenario planning virgins, so some part of our work is error prone as indicated by Mr. Daniel’s feedback about our presentation that we did not take too much into consideration the feedback loop of all the new future products unveiled by Google. Therefore, future work on this Google assignment is still required and undergoing on the wiki site now.

Furthermore, I believe the presentation is equally rewarding as an indispensable part of this course. It is a whole showcase for every team member to present his or her contributions to the “public” which can be considered as a good rehearsal for our future jobs such as ICT-related and strategic analysis consultants. Personally, I always think being a presenter is an opportunity to hone my speech skills and establish my own charisma of being convincing by what I say and saying it confidently.

Share our knowledge by Wiki

I was pretty much a Wikipedia fan even before this course, but I had not been a Wiki fan myself. Reading Wikipedia is really fun but the first time I actually edited a Wiki article is on the ScenarioThinking.org site which is based on MediaWiki technology. It is said that, “the highest level knowing something is to share what you know”. I totally agree with the idea of sharing knowledge as I am also fascinated by similar technologies like Internet, P2P and Wiki as well.

On this ScenarioThinking.org site, all previous works done by other classes of students are accessible for newcomers like us. Thereby, we learned a lot from previous students’ accomplishments and also their mistakes. And luckily, I successfully applied for and got an internship on working to improve this website from Mr. Erasmus. After several intensive working days during the spring break, I really fell in love with this exciting technology. I even have incubated one of my own business ideas which might be viable under Wiki technolgoy and I am determined to try it out in the near future. Furthermore, I also expanded my horizon to a new business branch: online marketing and search engine optimization, which is actually highly related to my current research seminar topic about weblog marketing.

Professional reflection of scenario thinking

Scenario thinking my own professional future

Being an ICT in Business student, our future professions, as most of us expects from this program, will not only be constrained to technological jobs. And my learning experiences of this course also help me to perform a scenario thinking practice about my own future career path. Let’s begin with a number of driving forces that might play a leading role in the years to come.

• Grades
• Language Capability
• Working Experiences
• Emotional Quotient
• Personality and Charisma
• Dutch Immigration Regulation
• Economical Status in Two Years' Time

It is really exciting to think about my professional future in a “scenario thinking” way. As shown by the listed driving forces above, I think the most decisive uncertainties are Grades, Language Capability and Working Experiences. And the No.6 and No.7 driving forces are external ones that I have no control over.

Scenario thinking practices and experiences that I learned from this course help to guide myself in planning my own future. By sketching a clear view of the future uncertainties, I can really concentrate my mind to the most rewarding time investment: continue working hard on all the courses, keep on working on ScenarioThinking.org Wiki site development to gain more overseas working experience and honing my English and Dutch capabilities as well.

Become a scenario thinker myself

Another valuable lesson that I learned from this course is the professionalism that a scenario thinker must possess in order to provide services to his/her clients. Mr. Erasmus is truly a role model in this field. As one of my career perspectives is also to become a consultant serving multinational companies in their strategic decision making processes, the knowledge that I learned from the past 6 weeks is truly a foundation for all the possibilities of such a professional direction.

Moreover, the team work related to all the planning work is another good practice of my possible future consultancy career. During the whole process of discussion and debate, I learned to express my views in a clear way and practiced the techniques of persuading other teammates to believe what I say and furthermore, accepting others’ constructive ideas as well. All the training itself is a good simulation of a future working scenario, which I enjoyed a lot and learned a lot too.

Academic Reflection

Scenarios are not enough

The father of scenario thinking, Pierre Wack, helped Royal Dutch/Shell not only survived through the oil crisis but also prospered the later post-oil-crisis era as well. As can be seen from this Shell case, Wack believed that his best designed scenarios were still in need of tighter linkages to strategic operations and decision making processes[1]. To engage operation managers with real world, efficient and continuous actions, developing coherent, plausible and imaginative scenarios are truly of great importance for an enterprise or organization, but also far from enough from actually interpreting them into executive decisions and finally into strategic actions.

In a nutshell, we can build a model illustrating the steps needed to translate scenarios to strategic actions.

Figure 1. From Scenarios to Strategic Actions

The ultimate dilemma

As highlighted by Ian Wilson in [2], all scenario thinking implementations are confronted with the following dilemma:

“However good our futures research may be, we shall never be able to escape from the ultimate dilemma that all our knowledge is about the past, and all our decisions are about the future.”

How to solve this dilemma? Ian Wilson believed that “a starting point for dealing with this dilemma is to establish a clear-cut ‘decision focus’ for every set of scenarios”[2], which is also to say, before reviewing the driving forces during the scenario developing process, scenario thinkers have to reach an agreement with enterprise management on which strategic decisions should be designed to be affected and influenced. According to real world cases, the narrower the scope of decision making concern is, the easier for consultants to come up with plausible and pragmatic scenarios. So combining the above two aspects, the previous figure about the 3 steps from scenarios to strategic actions can be extended a little bit to a more detailed one which shares some similarities with SRI Consulting Business Intelligence’s model[3].

Figure 2. A General Approach of a Scenario Planning Methodology

As implied from this new approach, “decision focus” is playing the leading role ahead of all the other planning steps now.

Some precautions

Firstly, after the design of several scenarios, it is unwise to develop a strategy for each scenario, because by doing so, the meaning of scenario planning would be more misleading than it originally is. Executive managers have a natural-born tendency to focus on actions and the specific strategy driving behind them. Therefore, on one hand, giving them a set of strategies for different scenarios will make them confused about what exact actions should be taken. In fact, what we need from this set of scenarios is its framework, within which one and only one resilient and pragmatic strategy is the best option. On the other hand, this resilient strategy is supposed to be tested through all the scenarios before including more radical and bold actions in it. By doing so, managers can have a perspective of how well this strategy can go in the future.

Secondly, it is also unwise to assign various probabilities to different scenarios and develop one strategy only for the most probable one. Because the set of scenarios as whole is inseparable and should be seen as one indicator that describes boundaries of the uncertainties and the limits to plausible futures.

Step-by-step approach

As Pierre Wack wrote in his article “Scenario: Shooting the Rapids”[1] about a typical problem facing scenario planning consultants which is that “the interface of scenarios and decision makers is ignored or neglected”. This problem can be illustrated as follows that there is a clear gap between scenarios and executive decisions.

Figure 3. Gap between Scenarios and Executive Decisions

How to bridge this gap? In Ian Wilson’s article [2], he listed 4 possible solutions:

1.Sensitivity/Risk assessment

At first, a set of major key conditions are identified which the future market or industry would have to meet. Then the part of our strategy can be drafted based on meeting these conditions. Furthermore, the state of these conditions can be assessed in other scenarios also, in order to complement this proposed strategy with more hedging factors.

2.Strategy evaluation

This approach views different scenarios as a test beds for an existing strategy. The validity of this strategy is evaluated by designed scenarios. During this evaluation process, some deeper insights are revealed into this strategy’s effectiveness in a range of business conditions. In addition, further modification points, risks and threats are also accurately identified and sufficient attention is paid to contingency planning.

3.Strategy development (Using a “planning-focus” scenario)

By selecting one of the scenarios (most of the time, the one with the highest probability), a specific strategy is developed based on this starting point, and then this strategy is assessed in different environments from other scenarios. During this assessing process, hedging and contingency planning elements are complemented in this strategy.

4.Strategy development (Without using a “planning-focus” scenario)

During this approach, management executives take all the scenarios in to consideration without thinking about their different probabilities and work on developing a resilient strategy that can successfully deal with all the uncertainties and crucial conditions included in the scenarios.

How to make things work?

By comparing the different 4 methodologies of going from scenario planning to strategic actions, I personally prefer the final approach which totally gets rid of “old-school” way of taking the probability factor into account. However, this one is also the most demanding approach. A scenario thinker has to think inside a framework, not just a specific scenario’s context.

“While the scenario method is an important tool, the real key to success with using it is the quality of the people who use the tool and their willingness to open their minds to rediscover the world”.[4]

Basically, more active participation from senior management is an essential part of successful strategic implementation of scenario planning. By doing so, the quality of people who actually use the scenario thinking tool guarantees the transformation from consultants’ planning to real operations. Here are two basic rules about how to actively engage the executive decision makers in the process of scenario planning:

1. Face to face interviews with senior management team members are playing a critical role in assessing a wise strategic decision or an unanswered question that will have credibility within the company. A scenario thinker is required to imbed the relevant trends--not issues that are off the mark. During these interviews, assumptions are laid bare in front of both consultants and senior management and then be openly challenged.

2. Explicit links to the rest of the strategic management process should also be established, which again the involvement of management is an indispensable part. Being a tough and time-consuming process itself, scenario planning involves a fairly large commitment of senior management’s time, workload and wisdom. It is also a difficult process to understand before going through the experiences which are actually the best assets of executive decision makers.

Conclusion

Due to limit of time, I can’t read sufficient number of articles and papers on the methodologies about how scenarios can be transformed into strategic actions. However, this reflection paper is the best that I can do up till now. As my internship in DTN will still go on, I am determined to dig more into this area in the future which will be a worthwhile investment for my career development.

References

• [1]Scenarios: Shooting the Rapids, Pierre Wack, Harvard Business Review, 1985
• [2]From Scenario Thinking to Strategic Action, by Ian Wilson, Wolf Enterprises, http://horizon.unc.edu/projects/seminars/futurizing/action.asp
• [3]SRI Consulting Business Intelligence’s Scenario Thinking Approach, http://www.sric-bi.com/consulting/ScenarioPlan.shtml
• [4]Future Scenarios: the Art of Storytelling, http://www.moyak.com/researcher/resume/papers/nrcscenarios.ppt