Difference between revisions of "Coen van Paassen - Learning Log"

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Rotterdam School of Management<br>
Rotterdam School of Management<br>
EMBA 2005<br>
EMBA 2005<br>
December 13, 2005<br>
December 14, 2005<br>
Jeffrey Sweeney
Coen van Paassen
<br>


<br>[[Image:RSMEMBA2005JRSM.jpg]]<br>
Introduction. <br>
 
This learning log is a part of the course Understanding the new global business environment, and is complementary to the scenario of the group I am(/was) part of. Our group developed scenarios for ‘The Dutch Hospital Care in 2015’. This subject is selected as a result of our common interest in this field and by either the professional backgrounds of the team members (health insurer and pharmaceutical company) or the foreseen business potential (PWC consultancy). <br>
'''Professional Reflection'''
This learning log reflects on the mentioned elective respectively from a professional, an academic and a personal perspective. I found that the professional and personal learning is much intertwined; the professional learning reflects more or less what I learned individually and can implement at my work (or suggest so to do).<br>
 
The material is gathered from the lectures, the readings, discussions with class-mates and from the sessions with my group when working on our scenario. <br>
When considering scenario thinking, I immediately think about the opportunity to apply the practice in my work.  I do not play a strategic role in my company but am responsible for tactical and operational management.  I manage the computer systems infrastructure for our European operations. This includes a wide area network as well as shared computer systems that are used by our Operating Companies.  The infrastructure spans thirteen countries and is managed by three major parties that are based in the Netherlands and India. Currently, we are nearing the end of a six-month project to relocate the entire system to a new hosting and network provider.  
<br>
 
1. Professional reflection<br>
I am experiencing a lot of pain in trying to change the entire system because the individual parties involved in the system have reached a state of entropy.  When trying to make large changes, I am restricted by resistance and am forced to make slow and gradual changes that take all of my energy.
The main issue I like to reflect on in this section is the applicability of scenario planning for Merck. Based upon my experience gathered over the last few months, I tend to conclude that scenario planning is a valuable tool for Merck on at least the corporate level. Central in this reflection is the quote (D. Erasmus):’The question for an organization is not to choose which scenario to realize because by definition it cannot, but rather to ask what to do now if the scenarios materialize’.<br>
 
Summarizing, I think that both scenario planning and the use of systems thinking can be a very useful tool for Merck. Besides planning on a corporate level (see example below), I believe that scenario planning also can be successfully applied in any subsidiary. Here issues like the development of (local) reimbursement and like the future of the health insurance should be approached in the structured way of scenario planning. At the other end of the spectrum there are opportunities of applying scenario planning for the pharmaceutical industry as an entity (e.g. on how to react on pandemics or how to cope with HIV). Scenario thinking is out of the box thinking, challenging old assumptions; perhaps a cure for the pharmaceutical companies.<br>
After reading the articles about system thinking and modeling and experiencing the scenario creation process in class and in my group, I now understand the complexities of change that were not evident in the Change Management class from the previous semester at RSM. I feel that I am better equipped to identify the major leverage points in the system and enact changes that are needed in my project.
Example: there is one area in particular where I think it can be very valuable: that of determining the best strategy in response of what I consider a major threat to the pharmaceutical industry. The most prominent environmental factor influencing this industry is the worldwide the cost containment measurements. In all (developed as well as developing) countries, governments are attempting to reduce costs /or the increase of these, of healthcare in general and of pharmacotherapy specifically. An important epidemiologic causal factor is growth of the population in the developing countries and the so-called ‘double aging’ (i.e. more people becoming old and reaching an even higher age) in the developed countries. These factors are believed to create an increasing demand for pharmaceutical care. The most common instruments used for cost containment by governments are either a lower reimbursement- /price level, or delisting of drugs. Often there is an explicit preference for the (cheaper) drugs after patent expiration (so-called generics). This development is a threat to some- and an opportunity to other firms. In general, companies conducting research and focussing on innovative drugs (such as Merck) are at a disadvantage compared to for instance the generic industry. Considering the cost containment as a threat to growth, the dilemma Merck is placed for is how to create share-holders value in the future; what business model to pursue. Historically, Merck discovers and develops drugs. Besides this ‘innovation model’, Merck also could decide to shift emphasis towards generating sales by marketing generics. This could be done with (only) own molecules but also with drugs originally developed by competitors. The latter is e.g. now the business model of Novartis. Another option is to enter the market of non-prescription drugs (over the counter; OTC). Also here the basis can exist of self developed drugs or (also) these of other companies. As an example of such a strategy, GlaxoSmithKline acts as an example.<br>
 
The explicit use of systems diagrams can be used in order to find out possible flaws in the design of action-plans on a local (i.e. national) level. Too often it happens that we are surprised by the reaction of the environment (be it competition, physicians, distributors).
I have also begun using some of the techniques of scenario thinking to better handle some of the uncertainties in my project.  For one, I have created a new approach to setting up system recovery tests based on scenarios rather than test cases.   Secondly, I am re-scoping new requirements for the project in a flexible manner by creating different scenarios related to the usage of the systems. Finally, I am establishing scenarios to help optimize the organizational structure and ensure that the future operations of the system are stable and streamlined for long term success.
The remaining question is whose role in the organization scenario planning should be: in my opinion top management should at least actively be involved but most preferably take the lead.<br>
 
<br>
Beyond these applications, I do not have much opportunity to use scenario thinking in my current profession. I will continue to develop my understanding and attempt to use the methodology throughout my career. If I am able to use scenario thinking to improve flexibility in my approach to solving problems, then I may be able to use it to further my career.  
A few additional observations as they came up during the sessions or while reading about the subject;<br>
 
 In his article, de Geus stated: Institutional learning is much more difficult than individual learning. This is found very true for the current organization of Merck where there is in many subsidiaries an absence of robust, repeatable process for creating and nurturing new growth business. Perhaps implementing scenario planning on a broad basis can create such a platform.<br>
 
 There is a lot to learn in the ‘Spot the gorilla- exercise’. In various aspects, Merck is so focussed on ‘counting the bounces’ in many occasions that very important information is neglected.<br>
'''Academic Reflection'''
<br>
 
2. Academic reflection<br>
The discipline of scenario thinking can be difficult to master and may be more of an art than a science. I found that learning and applying the scenario thinking process was challenging but in the end has enabled me to better handle the uncertainty of the future. The only question that remains in my mind is how to fully benefit from the findings in business? 
The academic reflection is the most difficult part of this learning log for me. To be honest, I have not spent a lot of time in trying to substantiate the value of scenario planning through scientific publications. Nor did I look for more background beyond the provided background articles in the reader. Therefore my reflection is limited to the material that we all received: <br>
 
 The provided articles about the process of scenario planning by Wack , de Geus , Erasmus  and Kauffmann  illustrate the value of developing scenarios. They describe the process itself as well as the benefits of both going through that process and the outcomes of it. It has no doubt that this literature will (further) convince ‘believers’ yet I doubt if critics will find enough evidence to become more interested in scenario planning.<br>
When thinking of the difficulties I had with scenario thinking, I find that I was mostly challenged to focus on the process and not the results. Typically, although I am always interested to produce quality work, I try to keep a production process as efficient as possible. This allows me to deliver reasonable results in a limited timeframe. The scenario development process is more complex since it involves many input streams and therefore requires a never-ending iterative approach. The results of the scenario process are never complete; instead its value is in its consistent way of dealing with uncertainty.
 It will not be a surprise that the readings by McLuhan have been difficult to read and understand. My (perceived) understanding comes from the explanations in class, including the discussions with fellow students and the video. I regard the value of his theory and opinion mainly in pointing out the danger and risks in communication we normally are not aware of.<br>
 
 I consider the Wiki website (www.scenariothinking.org) also part of the academic reflection. The system of a wiki creates an open source that enables (and stimulates) learning; by this it adds to the general knowledge.<br>
This brings me to the next challenge I faced in scenario thinking, the daunting task of dealing with the major uncertainties to develop an accurate perspective of the scenario subject matter. This required identifying unknown factors and to become an expert in certain subject matters in a very short amount of time in order to identify the most important driving forces. The last challenge that I struggled with while developing scenarios was the task of arranging a limited number of scenarios so that they cover the spectrum of possible futures and do not leave gaps that can result in costly surprises.
<br>
 
3. Personal reflection<br>
Even though maintaining discipline during the scenario creation process was challenging, I found other components of scenario thinking to come easily. I have systems thinking experience since I have been working with computer systems for 10 years.  Performing root cause analyses and preparing business continuity plans helped me to look back at past situations and prepare for possible futures.  Since I am curious and am interested in learning, I have a wide scope of knowledge and read from several different sources of information. With this experience and a creative mindset, scenario thinking comes naturally.
With the risk of making a ‘grade-limiting’ remark; this course was the one (at least in my package of electives) most mysterious to me at the beginning of the semester. Despite the title of the course, the practical name of the course soon became, even before it started, scenario thinking. <br>
 
Another, also applicable, name could have been personal development. Fueled by video’s/films and literature, the course was actually more than Understanding the new global business environment. What I mean by this is that even without having to work on our scenario, the course material invited to think about the world around ourselves. How to regard information? What are the pitfalls when we absorb information and news? Are we deceived on purpose? Have misinterpretations in communication seriously impacted world history? All these questions including possible answers have a consequence far beyond the scenarios that have been a deliverable of this course and make people think based upon a critical view on the world.<br>
What did I learn about scenario thinking? I learned that I should not take my first assumption as the truth. I saw how to draw upon other people’s knowledge to gain robust viewpoints.  From my team, I learned to focus more on the process and maintain a dynamic mindset. I also learned how to improve my ability to learn from history and to think laterally when considering the future.
<br>
 
More focusing on a few of the personal learnings from scenario planning; since we were involved in an increasingly intensive group process, my individual learning went parallel with that of the group.<br>
The one thing that I am not sure about after experiencing the scenario thinking process is how to apply the insights gained and implement a business strategy. Examples in class concerning the price of oil and drug use in America seem simpler since there is one main variable: supply vs. demand. In our group we foresaw futures for hospitals in the Netherlands where they could be bankrupt and governmentally controlled, privatized and targeting specific niches, or owned by a multinational corporation and serving all of Europe. These insights leave me with little direction of what a hospital should do to prepare for these possibilities.  It would seem that hospitals could detect warning signs of each scenario and then take action but it is possible that they might not be able to change their fate. Knowledge of the future is not very helpful if one does not have the power to use it towards their advantage.  
 One factor very different from my first expectation is that it is not about developing the ‘one and only’ scenario and than prepare for it, but merely beware of multiple possible realities and prepare for prominent factors.<br>
 
 There is no short cut to the scenarios: every step has to be ‘lived’. In the beginning of the process we tried to more or less work backward while beginning at a simple grid where the axis would be the most relevant driving forces.<br>
 
 A critical and difficult step in the whole process is coming from the questions via the answers to these questions (thus data) to actual information. Using the cherry-tree metaphor: fruit grows neither on the trunk nor on the large boughs but rather on the small branches: it takes a long time to arrive there. It took a lot of brainstorming and discussions. <br>
 
 Scenario planning can never ever be a one person job (even with unrestricted time); there is a need for cross-fertilization in order to come to creative and complete scenarios. This is even besides the issue of a learning organization.<br>
'''Personal Reflection'''
 As D. Erasmus said: ‘Complex systems require complex representation’. However logic, my first reflex is to simplify the reality to (whenever feasible) into a model that fits on one powerpoint slide. This probably is a result of training and classic conditioning within my professional environment. Yet, it became obvious that certainly in the case of scenario planning there is no simple reality (and furthermore; ‘messy is good’).<br>
 
 Regarding the subject it became evident to me that the most crucial role in the future of the hospital care is played by the government. The most relevant factor is the finance structure (as well as the amount of money).<br>
I feel that ordering the complexities in my personal life and exploring the different scenarios that I and my family might face, we may better manage our work/life/school/family system and stay a strong family. Therefore I applied scenario thinking to my family in the hopes of opening up communication channels on difficult subjects and finding a common understanding between myself and those I love.  These scenarios are focused on the next five years of our lives.
 Perhaps also the different profiles in the group require some reflection. On one hand they provide a more rich input in the whole process; the positive effect. On the other hand however, different styles have also led to different levels of (observable) involvement in the process. <br>
 
 Our ‘pizza-box’ metaphor intended to both illustrate the process coming to our scenarios (informal meetings, pizza, drinks) as well as the atmosphere in which the groups were supposed to present to each other.<br>
I have a multi-cultural family and experience complexities resulting from our cultural differences in addition to my drive to achieve at work and school. I am American while my girlfriend is Dutch.  We are engaged to be married but do not have any plans to arrange a wedding. We have a daughter together and are expecting a second child in March. Recently, my girlfriend has decided to move out of our home in Amsterdam to a town which is closer to her family. This will cause me to have to live in two cities or endure long commuting hours. To remedy this, I have reduced my working schedule to four days a week so that I can spend adequate time with her and our daughter. We have been through some tough times during the past two years and can only hope that we will have more time to strengthen our relationship when I am finished with school.
<br>
 
    All in all: intensive, sometimes frustrating but always worthwhile!
 
'''Driving Forces:'''<br>
• We are both drawn to our separate families<br>
• My career is increasing in importance<br>  
• Our children will require more care<br>
• We both need to feel free and have an escape<br>
• Increasing global instability and tensions could put my residency at risk<br>
• Traveling becomes more dangerous<br>
• We have increasing difficulty in finding common goals and values<br>
• Our difference in customs/language creates a larger barrier between us<br>
• The European economy worsens and puts my job at risk<br>
• I increasingly follow my passion for school and information<br>
• Non-Mutual friends increasingly draw each of our time<br>
• My parents/brothers are less involved in my life<br>
• Resurgence of free time causes me to lose direction in my life<br>
• We are increasingly in love with each other and our children<br>
 
 
'''Scenario 1: Complete Unity'''
 
After I finish school, I spend time with my girlfriend and her family and adopt stronger family values. I learn to be a better father and continue to work four days a week to allow for more quality time with my family.  My girlfriend and I both sacrifice non-common distractions and treat each other with the utmost respect. After our second child is born, we marry and establish homes in the Netherlands and the USA. My wife works part time and I give up aggressive career aspirations in order to maintain a stable household. My wife recognizes that we are a multi-cultural family and allows for time to be spent together while in either country. We learn to make the most out of our differences and act as a well-balanced team.
 
 
'''Scenario 2: Love Limbo'''
 
When I finish school, I find that I can not focus on my family as much as I wanted.  My girlfriend and I decide to hold off marriage until the ‘right time’.  Our second child is born in March which causes more strain on our relationship. My girlfriend moves into her own apartment closer to her family and I decide to spend most of my time in Amsterdam. We see each other in the weekends but are apart during the week. We miss each other while I am in Amsterdam and are happy to reunite every week but always seem to argue after the weekend is over. I spend equal time between my own distractions and family.  My girlfriend gets a job in her home town and makes plans to stay there for the long term.  Our children speak mostly Dutch and very little English.  Once every two years, we travel to the USA for three weeks and see my friends and parents.  The stress during travel leaves us tired and unwilling to familiarize our children in my country.  This way of life continues with only slight variations through the years.
 
 
'''Scenario 3: Broken Family'''
 
After school ends for me, my girlfriend moves to her hometown.  We try to make the best of it but the stress of having our second child in March, my girlfriend’s nostalgia, and my unwillingness to change my expectations cause us to separate.  We arrange formal visiting terms so that I can see the children and act rigidly towards each other.  One year after the separation, my (ex) girlfriend gets back together with her old boyfriend and I decide to return to the United States.  From this point on, I am only in touch with my children over the phone and see them once a year for a two-week visit.  I try to ‘move on’ in life but am haunted by the pain of losing my family.  I attempt new relationships but decide that I am better off living alone and focusing on my career as an outlet.
 
 
'''Conclusion'''
 
As I mentioned before, it is difficult to know what to do with the insights gained from scenario thinking.  In this case, the same is true.  I shared these scenarios with my girlfriend and it helped us to start a conversation on the subject.  I feel that by simply discussing these issues openly, we build a better bond and have already stared to improve the possible outcome.  If our situation changes, then we can always look back to the scenarios and look for the warning signs that we identified.  This may help us to consciously follow our future paths rather than let ourselves slowly lose the bond that we currently have.

Revision as of 22:21, 14 December 2005

Learning Log

Understanding the New Global Business Environment

Rotterdam School of Management
EMBA 2005
December 14, 2005
Coen van Paassen

Introduction.
This learning log is a part of the course Understanding the new global business environment, and is complementary to the scenario of the group I am(/was) part of. Our group developed scenarios for ‘The Dutch Hospital Care in 2015’. This subject is selected as a result of our common interest in this field and by either the professional backgrounds of the team members (health insurer and pharmaceutical company) or the foreseen business potential (PWC consultancy).
This learning log reflects on the mentioned elective respectively from a professional, an academic and a personal perspective. I found that the professional and personal learning is much intertwined; the professional learning reflects more or less what I learned individually and can implement at my work (or suggest so to do).
The material is gathered from the lectures, the readings, discussions with class-mates and from the sessions with my group when working on our scenario.

1. Professional reflection
The main issue I like to reflect on in this section is the applicability of scenario planning for Merck. Based upon my experience gathered over the last few months, I tend to conclude that scenario planning is a valuable tool for Merck on at least the corporate level. Central in this reflection is the quote (D. Erasmus):’The question for an organization is not to choose which scenario to realize because by definition it cannot, but rather to ask what to do now if the scenarios materialize’.
Summarizing, I think that both scenario planning and the use of systems thinking can be a very useful tool for Merck. Besides planning on a corporate level (see example below), I believe that scenario planning also can be successfully applied in any subsidiary. Here issues like the development of (local) reimbursement and like the future of the health insurance should be approached in the structured way of scenario planning. At the other end of the spectrum there are opportunities of applying scenario planning for the pharmaceutical industry as an entity (e.g. on how to react on pandemics or how to cope with HIV). Scenario thinking is out of the box thinking, challenging old assumptions; perhaps a cure for the pharmaceutical companies.
Example: there is one area in particular where I think it can be very valuable: that of determining the best strategy in response of what I consider a major threat to the pharmaceutical industry. The most prominent environmental factor influencing this industry is the worldwide the cost containment measurements. In all (developed as well as developing) countries, governments are attempting to reduce costs /or the increase of these, of healthcare in general and of pharmacotherapy specifically. An important epidemiologic causal factor is growth of the population in the developing countries and the so-called ‘double aging’ (i.e. more people becoming old and reaching an even higher age) in the developed countries. These factors are believed to create an increasing demand for pharmaceutical care. The most common instruments used for cost containment by governments are either a lower reimbursement- /price level, or delisting of drugs. Often there is an explicit preference for the (cheaper) drugs after patent expiration (so-called generics). This development is a threat to some- and an opportunity to other firms. In general, companies conducting research and focussing on innovative drugs (such as Merck) are at a disadvantage compared to for instance the generic industry. Considering the cost containment as a threat to growth, the dilemma Merck is placed for is how to create share-holders value in the future; what business model to pursue. Historically, Merck discovers and develops drugs. Besides this ‘innovation model’, Merck also could decide to shift emphasis towards generating sales by marketing generics. This could be done with (only) own molecules but also with drugs originally developed by competitors. The latter is e.g. now the business model of Novartis. Another option is to enter the market of non-prescription drugs (over the counter; OTC). Also here the basis can exist of self developed drugs or (also) these of other companies. As an example of such a strategy, GlaxoSmithKline acts as an example.
The explicit use of systems diagrams can be used in order to find out possible flaws in the design of action-plans on a local (i.e. national) level. Too often it happens that we are surprised by the reaction of the environment (be it competition, physicians, distributors). The remaining question is whose role in the organization scenario planning should be: in my opinion top management should at least actively be involved but most preferably take the lead.

A few additional observations as they came up during the sessions or while reading about the subject;
 In his article, de Geus stated: Institutional learning is much more difficult than individual learning. This is found very true for the current organization of Merck where there is in many subsidiaries an absence of robust, repeatable process for creating and nurturing new growth business. Perhaps implementing scenario planning on a broad basis can create such a platform.
 There is a lot to learn in the ‘Spot the gorilla- exercise’. In various aspects, Merck is so focussed on ‘counting the bounces’ in many occasions that very important information is neglected.

2. Academic reflection
The academic reflection is the most difficult part of this learning log for me. To be honest, I have not spent a lot of time in trying to substantiate the value of scenario planning through scientific publications. Nor did I look for more background beyond the provided background articles in the reader. Therefore my reflection is limited to the material that we all received:
 The provided articles about the process of scenario planning by Wack , de Geus , Erasmus and Kauffmann illustrate the value of developing scenarios. They describe the process itself as well as the benefits of both going through that process and the outcomes of it. It has no doubt that this literature will (further) convince ‘believers’ yet I doubt if critics will find enough evidence to become more interested in scenario planning.
 It will not be a surprise that the readings by McLuhan have been difficult to read and understand. My (perceived) understanding comes from the explanations in class, including the discussions with fellow students and the video. I regard the value of his theory and opinion mainly in pointing out the danger and risks in communication we normally are not aware of.
 I consider the Wiki website (www.scenariothinking.org) also part of the academic reflection. The system of a wiki creates an open source that enables (and stimulates) learning; by this it adds to the general knowledge.

3. Personal reflection
With the risk of making a ‘grade-limiting’ remark; this course was the one (at least in my package of electives) most mysterious to me at the beginning of the semester. Despite the title of the course, the practical name of the course soon became, even before it started, scenario thinking.
Another, also applicable, name could have been personal development. Fueled by video’s/films and literature, the course was actually more than Understanding the new global business environment. What I mean by this is that even without having to work on our scenario, the course material invited to think about the world around ourselves. How to regard information? What are the pitfalls when we absorb information and news? Are we deceived on purpose? Have misinterpretations in communication seriously impacted world history? All these questions including possible answers have a consequence far beyond the scenarios that have been a deliverable of this course and make people think based upon a critical view on the world.

More focusing on a few of the personal learnings from scenario planning; since we were involved in an increasingly intensive group process, my individual learning went parallel with that of the group.
 One factor very different from my first expectation is that it is not about developing the ‘one and only’ scenario and than prepare for it, but merely beware of multiple possible realities and prepare for prominent factors.
 There is no short cut to the scenarios: every step has to be ‘lived’. In the beginning of the process we tried to more or less work backward while beginning at a simple grid where the axis would be the most relevant driving forces.
 A critical and difficult step in the whole process is coming from the questions via the answers to these questions (thus data) to actual information. Using the cherry-tree metaphor: fruit grows neither on the trunk nor on the large boughs but rather on the small branches: it takes a long time to arrive there. It took a lot of brainstorming and discussions.
 Scenario planning can never ever be a one person job (even with unrestricted time); there is a need for cross-fertilization in order to come to creative and complete scenarios. This is even besides the issue of a learning organization.
 As D. Erasmus said: ‘Complex systems require complex representation’. However logic, my first reflex is to simplify the reality to (whenever feasible) into a model that fits on one powerpoint slide. This probably is a result of training and classic conditioning within my professional environment. Yet, it became obvious that certainly in the case of scenario planning there is no simple reality (and furthermore; ‘messy is good’).
 Regarding the subject it became evident to me that the most crucial role in the future of the hospital care is played by the government. The most relevant factor is the finance structure (as well as the amount of money).
 Perhaps also the different profiles in the group require some reflection. On one hand they provide a more rich input in the whole process; the positive effect. On the other hand however, different styles have also led to different levels of (observable) involvement in the process.
 Our ‘pizza-box’ metaphor intended to both illustrate the process coming to our scenarios (informal meetings, pizza, drinks) as well as the atmosphere in which the groups were supposed to present to each other.

   All in all: intensive, sometimes frustrating but always worthwhile!