Copyright Rom Gayoso©

How To Win In Every Scenario:Phoenix Launch @ChangingHands

Agenda

Intro Learning ObjectivesContext Scenario Planning ProcessSummary

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Introduction: Why do I write?• Wilkes University: economics students; strategy

• Grand Canyon University: economics students

• SCIP: The SCIP Board challenges all of us CI practitioners to step up to the plate to tackle intractable problems – or those that refuse to yield

• WFS: Challenges us to work to build better futures  

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Learning Objectives In this presentation you will learn:

– 5-Step Process designed to combine quantitative, qualitative methods and data visualization tools to help us create our own scenarios.

– We will also discuss scenarios for a complicated moral dilemma from Bioethics (Funding for Stem-Cell Research), for tackling a hot topic in energy (Renewable Energy & Carbon Emissions), and a conflict.

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Context: Strategic Planning The literature (Drucker, 1995; Hughes, 2005; Mintzberg,

1994; Porter, 1980; Shapiro, 1989) defines Strategic Planning as a set of deliberate actions designed with some specific desired outcome in mind.

The set of actions is supported by specific mile stones, which augmented by several techniques, allows management to exert command and control on the organization through the creation of a road map.

The main function this road map is to formalize the process and steps the organization will take in order to turn management’s goals into a series of actionable items designed to support the mission and corporate objectives

Road Map = Strategic Plan

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Environmental Challenges Cognitive dissonance

– Stahl & Grigsby (1992): The external environment is so complex, there are so many stimuli for one to process, it becomes virtually impossible for management to capture the essence of the situation.

Pace of technological change– Drejer (2004): Not only it is difficult to gauge the impact of technological change,

but also the pace of change is increasing rapidly (technological turbulence) Fragmentation

– Fletcher (2006): Consumers demand increasingly higher degrees of product customization

Demand uncertainty– McCarthy & Mentzer (2006): The increased market fragmentation led to a

situation where there are so many possible product variations to keep track, it is difficult for any one to keep track of all targets

Regulation– Dreyer (2004) and Roney (2003): One of the most important factors of

environmental uncertainty is linked to the actions of governments

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Scenario Planning Principles

• Scenarios are complete stories: logical and compelling

• Scenario is a tool to inform decision makers and timely influence their decision making

• The importance of building scenario is to improve managers’ mindsets and environment knowledge

• Scenarios must include indicators so that managers can track how the future is evolving

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Macro data• Demographic• Industry specific• Political

developments• Globalization• Cultural• Legal

Sources:• BEA• Census• Industry Assoc.• Market Research

firms• D&B• Edgar• Frost&Sullivan• Trade shows• Reports• Conferences

Identify • Players• Competitors• Suppliers• Customers

Tools: • Porters• SWOT

2 Collect & AnalyzeCompetitive data

CollectMacro Data

1Composition of the Team

Building the Scenario:Packaging

Value Add

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Crunching• Logical• Consistent with

business challenges• Reflect alternative

realities • Must be credible• Align with Corp.

culture or not• Delivered in

consistent phases within the planning cycle (the business processes)

• Must have high level owner/ evangelist

• Must have clear audience/ forum

Winning• Linking alternative

realities to strategy • Would existing

strategy still work in an alternative reality?

• Identify gaps, risks and opportunities

• Develop risk mitigation strategies

Scenario Planning Process: Steps

Team composition Team skill set:

• God parent/ evangelist

• Veterans• Marketing• Technical• Economist/

Econometricians• Manufacturing • Social Scientist

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Creating Scenarios

Use an even number of alternatives to avoid a middle ground answer

Typically 4 – 6 alternatives, rarely more – “Stars Align” all goes well– “Sky is Falling” all goes bad– Variations on a theme / Shades of gray

Scenario Example 1:Stem Cell Research

Potential Benefits– Stem Cells hold the promise to alleviate the

suffering of Millions of people who suffer degenerative diseases

Costs– In order to harvest the Stems - using current

technology – we need to destroy the cells Dilemma

– What is more important?• Protect the sanctity of life• Alleviate human suffering

Scenarios for Stem Cell Research

Use New Embryos Highly Desirable

Public Funding Research Domestically

Stars AlignI love it!

Scenarios for Stem Cell Research

Limited New Embryos Desirable

Some Public Funding Research Domestically

Very FavorableI Like it.

Scenarios for Stem Cell Research

No New EmbryosSomewhat Desirable, But

Questionable

Limited Public Funding Research Domestically

Low CertaintyIt is OK

Scenarios for Stem Cell Research

No Embryos Morally Unethical

No Public Funding Research Abroad

Sky is FallingNo Way!

Scenario Example 2: Renewable Energy Problem Statement: Energy Consumption in the World in ‘07 and in ‘35

Is the Future that different from the Past?

“low oil prices” “high oil prices”

Source: US EIA

Renewable Energy Scenarios

Drivers

Renewable Energy Scenarios

Scenarios

Scenario Drivers: Ukraine Crisis

Ukraine Scenarios: Example 1

WIMPs– SI: Russia– B: not respected– EG: Rubles for sttlement, business as

usual– C: “weak” oligarch in power aligned

with Russia, civil unrest in the West

Ukraine Scenarios: Example 2

Polonaise– SI: West, EU – B: not respected– EG: EU, IMF funds flow, but antagonism

with Moscow means low growth– C: “weak” oligarch, “weak” federation

in power aligned with the West, civil unrest in the East

Alternative Scenarios: “Dark”Archduke Ferdinand Moment

– Catalystic event causes conflict to expand: Patriarch Kirill, Poroshenko, Putin or Lavrov

Mayonnaise, not Polonaise– “weak” oligarch uses force to settle

disputes, rampant HR abuses, not decisive

– Escalation of commitment– Polish border event

Telling The Story With Images

Book coverIntroducing Ms.

Snyder

Ms. Snyder’s Work: Tapestry

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Conclusion

We saw how we can tackle big problems We discussed a system to help us

methodically address complex challenges We considered three cases: Stem Cell

Research, Renewable Energy and Ukraine Crisis

Scenario Planning is KEY!

Thank You! My family for giving me time to write Changing Hands for supporting local writers Testimonials: Dr. Liuzzo, Dr. Thomas You can reach me any time you need!

– Email: phoenixeconomist@gmail.com– Blog: http://phoenixeconomist.blogspot.com/– Author’s Site:http://phoenixeconomist.wix.com/scenario – Graphic Artist’s Site:http://shaynasnyder23.wix.com/artbyshayna