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UNDERSTANDING THE NEW GLOBAL BUSINESS ENVIRONMENT: SCENARIO THINKING

REFLECTIVE ESSAY

Harold Doorenbos

INTRODUCTION Forecasting the future: is it a gift, an art or a science? The class on Scenario Thinking has taught me that the future is more predictable than one thinks. Assuming that being gifted with a proven 6th sense is a dream, necessary prerequisites of being able to predict the future with a reasonable level of accuracy is having a diverse set of creative brains, which are willing to work hard, and which follow the framework lectured in the class on Scenario Thinking. Having gone thru this experience, while developing 4 possible scenarios for The Lowlands in 2025, I’m inclined to conclude that predicting the future, applying Scenario Thinking, is a science with artistic elements. [Erasmus, 1999] confirms this experience in his description of “best practices for scenario builders”, where team diversity is seen as “strength”, and where knowledge is seen as “power”.

This paper is a reflective essay with three elements. Firstly I will place scenario thinking in an academic context, building on learning’s coming from the scenario thinking group exercise, building on the reader and shared articles, and building on the videos shown in class. Secondly I will elaborate on whether Scenario Thinking could be a useful tool for a fast moving consumer goods company like Procter & Gamble. I’m employed at Procter & Gamble and have a role to bring product and packaging ideas to realization in the market place. Finally I will end with a personal note, in which I will consider some elements of the team and class dynamics.

CHAPTER 1 ACADEMIC REFLECTION OF SCENARIO THINKING. The article of [Wack P., 1985] describes that the future is predictable if it is seen as a set of logical consequences of events (“seeds”) that have already happened or are happening right now. [Wack P., 1985] uses the example of a monsoon rain taking place upstream of a river. The consequences of this event further down stream (the future) can be predicted with a 100 % certainty: floods! There are a couple of considerations that can be derived from this example: observability of events (“you only get what you see”), controllability of the consequences (“you only see what you get”), and single vs. multi variability. The event (monsoon) needs to be observed (recognized) in order to be correlated with the consequences (floods). Consequences are only foreseeable if it can be linked with recognized events. Controllability of the consequences takes the response time into account. Assuming the event is observed, the consequence can be controlled if there is sufficient response time to contain the consequences. In that case the future (foreseeable consequence) will have to be tailored taking into account corrective actions that will or can be taken in response to an event. These actions are aiming to prevent the consequence from happening. So if the future (the measurement) is “sufficiently” far away the consequences can be controlled by taking corrective action, read suppressed. The example of the monsoon and the flood is a single variable event, with single variable consequences. With many things in life events and consequences are multidimensional, with interaction effects that can suppress or amplify one or more consequences. In this context, and being a control engineer, the “introduction to system thinking” by [Kauffman L., ?] is like music to my ears. In an illustrative way he introduces system thinking considering system boundaries, starting- and boundary conditions, stability (eigen values), input(s), output(s), system observability and -controllability. It is my firm believe (looking into the future ) that system theory, and artificial intelligence will become more and more important complementary tools to refine and/or refute future scenarios. The development of adequate interfaces to these tools (ease of use, and visualization of consequences) will be vital in making Scenario Thinkers effective and “heard”. I underscored the word complementary in the previous paragraph, as philosophical and artistic elements will need to be considered to model and predict the unforeseen. In this context I’d like to articulate the concept of the human bandwidth introduced by Daniel Erasmus derived from McLuhan: “The medium is the message”. The striking and convincing example explained in class was the explanation why SMS (Small Messages Service) has become a dominant communication medium that was not predicted by it inventors, but could have been predicted and designed in if McLuhan was considered. Human beings are attracted by implicit media, rather then explicit media: “the smaller the bandwidth” the better. Tickle the imagination and people will be more receptive to what they are offered. The second example which I want to articulate in this context is the video of Al Qaida by the BBC, where a different cause and effect relation, read event and consequence relation is being presented: Al Qaida is just an idea in the minds of the leaders fighting terrorism. By presenting this idea as a threat it became a self fulfilling prophecy.

CHAPTER 2 PROFESSIONAL REFLECTION OF SCENARIO THINKING. Is Scenario Thinking or Scenario Planning a useful tool for a fast moving consumer goods company like Procter & Gamble? I’m employed at Procter & Gamble and have a role to bring product and packaging ideas to realization in the market place. More specifically I work in the Engineering function which intends to bridge R&D and Manufacturing. Procter & Gamble is a company with more then 100.000 employees, a turn over in excess of 50 billion US dollars, and operating in various product categories like “Pampers”, “Ariel”, “Pringles”, “Pantene”, “Oil of Olaz”, “Hugo Boss”, “Swiffer”, and newly acquired brands like “Gillette”, and “Oral-B”. As Procter & Gamble is such a large global company organized in different Global Business Units, I personally have no understanding in which way Scenario Thinking is being considered and applied. It is my firm belief that aspects of Scenario Thinking are considered in many functions, but as far as I know it is not an established tool in predicting for instance consumer trends. Procter & Gamble operates from the principle that the consumer is the boss (the consumer needs to be delighted). The consumer will reward Procter & Gamble with record sales and profitable growth if he or she is delighted at the fist moment of truth (selecting the package in the super market), and at the second moment of truth (experiencing the product, and decide on repurchase). I would advocate developing a case study where Scenario Thinking is prototyped. Key to success will be to find a compelling way to market it up: senior management needs to be convinced thru compelling visuals and by quantifying the business benefit (show me the money).

CHAPTER 3 PERSONAL REFLECTION OF SCENARIO THINKING. The class of Understanding the new global business environment has been one of the more entertaining and insightful classes of the EMBA Erasmus University program. Instrumental has been the unconventional organization and the displayed passion of the lecturer on the subject. It was a class with unexpected dimensions combining science with philosophical and psychological elements. If I may make a few recommendations for further optimization: The title of the class is liable for change. In my view it should be called Scenario Thinking: the art and science of predicting the business future. After introducing the principles and techniques of building scenario’s (system thinking, driving forces with enablers and inhibitors), the class should more reflect on what Scenario’s mean and/or can do in a business context. The initial articles in the reader (Shell scenarios) provide insights into these areas, but in the class and class discussions the bridge to the business context is not sufficiently made. The group exercise was adequate and has truly helped to understand the practicalities behind building scenarios. On the downside it appeared to be one of the more time consuming activities within the program.