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Block 18: Future Thinking, 7-Is - Coggle Diagram
Block 18: Future Thinking
VUCA :radioactive_sign:
Managing in a VUCA World:
Volatility:
Changes are
frequent
and
unpredictable
, making it difficult for managers
to make confident decisions
. For example, sudden market shifts or technological disruptions can upend business strategies.
Uncertainty:
The future is
hard to predict
, and managers often lack the information needed to make informed decisions. This can lead to anxiety among employees who look to leaders for guidance.
Complexity
: Multiple
interconnected
factors make decision-making challenging. For example, global supply chains are highly complex, and disruptions in one part of the world can have ripple effects elsewhere.
Ambiguity:
Situations are often open to interpretation
, and conflicting information can make it hard to determine the best course of action. For example, the debate over remote work’s effectiveness is ongoing, with research supporting both sides.
Impact on Teams:
• They can cause
anxiety
as people feel they are not fully informed
• They can
reduce motivation
as it becomes unclear what someone is working for
• They can mess up planned change, both for firms (e.g., diversification) and individuals (e.g., career moves)
• They can require lots of
re-training, re-structuring
, re-strategizing, and cultural change, all of which have significant impacts on resources
• They increase the chances that bad decisions will be made as ‘knowing enough’
• They
paralyze the ability to make a decision
, in case we have ‘missed something’
• They can make the organisation itself seem like a VUCA environment
VUCA is an acronym that describes the volatile, uncertain, complex, and ambiguous nature of today’s business and geopolitical environment. It originated in military strategy but is now widely used in leadership and management.
Is the Scope and Speed of Change Increasing?:
Henry Mintzberg’s blog post challenges the notion that change is accelerating, pointing out that many aspects of life (e.g., buttoning shirts, driving cars) have remained relatively unchanged for decades.
However, in the business world, the pace of technological and societal change has accelerated, particularly in the last 20 years. Managers must balance the need for continuity with the ability to adapt to rapid changes.
Spotting Trends :chart_with_upwards_trend:
Spotting Trends
Managers need to identify trends that may impact their business in the future. PESTEL analysis is a useful tool for this, but it can be challenging to determine which factors are most relevant.
The goal is to anticipate future scenarios rather than reacting to them after the fact. This requires managers to think critically about how trends, opportunities, and threats might evolve.
Megatrends:
Definition:
Megatrends are large-scale forces that shape the future, such as technological advancements, demographic shifts, and environmental changes.
Examples:
Decarbonization:
Companies must reduce their carbon footprint and prepare for the impacts of climate change.
Mitigation:
shift to low-carbon fabrics, such as organic cotton, bamboo and recycled polyester
renewable energy in production, such as the transition to solar, wind or hydropower
design fashion that is meant for longevity and Recyclability, by encouraging modular designs, and implementing take back programs.
Technonomic Cold War:
The competition for technological dominance between countries and companies, leading to increased cybersecurity risks. "ban of TikTok"
Behavioral Economy:
The use of data to influence consumer behavior, such as through nudging or personalized marketing.
Synthetic Media:
The rise of deepfakes and manipulated media, which can spread misinformation/falsification and damage reputations.
Future of Thinking:
The impact of technology on critical thinking and attention spans, particularly among younger generations.
Work and Life Unbounded:
The blurring of boundaries between work and personal life, accelerated by remote work and digital communication.
Microbiomes:
The use of microbes to address challenges like climate change and health issues.
Mitigation:
digesting plastic clothes to reduce wastage- • Produce clothes which can be recycled or protect and enhance health through
Synthetic Biology:
The engineering of biological systems to create new products and solutions, such as personalized medicine or sustainable food production.
“Megatrends are macroeconomic...forces that are shaping our world, and our collective futures in profound ways. The implications of these forces are broad and varied, and they will present us with both tremendous opportunities to seize—as well as extremely dangerous risks to mitigate.” (Thomas Modly, PwC Global Leader, Government and Public Services Sectors, 2016)
Conclusion:
Managers should stay informed about global trends and adapt their strategies to align with these forces. The key is to focus on the broader forces of technology, globalization, demographics, and the environment, rather than fixating on specific megatrends.
Scenario Planning :small_airplane:
Scenario Planning:
Scenario planning involves creating multiple plausible futures and developing strategies that are robust across different scenarios.
Scenario Planning uses stories about alternative futures to challenge assumptions and widen perceptions of the present. The process
does not attempt to predict the future
, but aims to
explore possible changes in the environment to inform strategic decision-making
.
Process:
Invite the Right People:
Include participants with diverse perspectives and expertise. representatives of three powers (power to think, power to perceive, power to act)
Identify Key Factors:
Use tools like PESTEL or Porter’s Five Forces to identify factors that could shape the future.
Imagine Different Futures:
Create scenarios that push the boundaries of plausibility, such as a world with severe water shortages or a cure for obesity.
Inhabit Those Futures:
Use
immersive techniques
, such as creating fictional newspaper articles or videos, to explore how the scenarios might play out.
Isolate Strategies:
Identify strategies that work across multiple scenarios, such as investing in renewable energy or diversifying supply chains.
Implement Strategies:
Develop formal plans to implement the chosen strategies.
Ingrain the Process
: Make scenario planning a regular part of the organization’s strategic process.
Use of Scenario Planning:
Scenario planning is used by governments, nonprofits, and businesses to prepare for uncertain futures. For example, the US Coast Guard used scenario planning to prepare for the mass evacuation of Manhattan during 9/11.
The process helps managers avoid relying on a single worldview and encourages them to consider a range of possibilities.
Anticipating Disruptions
Enabling Agile Decision-Making
Building Organizational Resilience
Fostering Innovation
scenario planning is excellent for discouraging managers from relying on one world view. In this sense, it can be used as a debiasing method, encouraging a firm to consider a range of perspectives
however, it is very time consuming and costly when done properly, which can put off many people
Some scenarios never materialize—risk of wasted effort if not executed properly.
Conclusion:
Scenario planning helps managers prepare for a range of future possibilities and adapt to large-scale changes. It encourages a broad perspective and helps organizations stay resilient in the face of uncertainty.
7-Is