Something Covid has taught us is that there are certain unpredictable (often chaotic) events that can happen at any time that you can’t predict and you simply have to respond to.
When we come out the other side, some things bounce back to normal, and some things change forever. What we are less conscious of are the more complex, less obvious forces that are happening all the time. They have a similar effect, in that sometimes things bounce back to normal and sometimes things change forever. Some examples of these complex forces would be exchange rates, interest rates, consumer behaviour, competitor behaviour and the role of automation and technology.
It’s a great reminder of the importance for businesses to have a flexible (rather than fixed) plan for the future. A reminder for businesses to step back and reflect on who they are, how they do things and how they want to evolve into the future. We don’t have a crystal ball to tell us how the future is going to look. The best way to do this… is scenario mapping.
Scenario mapping takes two key forces that could have an effect on your business environment and analyse the possible outcomes. This allows us to peak into possible futures and help us to 1. identify what the signposts are that indicate to us that we are heading in a certain direction and 2. prepare to maximise the benefits and minimise the drawbacks of heading in that direction.
One of the key forces that could arise and have a big impact on the environment in which you do business is a movement toward collectivism, whereby society in general becomes more interested in grouping together OR to individualism, whereby society in general has a greater interest in moving towards operating as individuals, making it more about individual choice and individual rights. So on the Y axes you would have collectivism vs individualism. On the X axes you would have the business continuum. At one end would be a movement for businesses to become more fragmented, where their supply chain is more separate. In this instance they would work with other companies in order to get things done. The other end of the spectrum would be a movement to consolidate our supply chain, perhaps by buying the supply chain.
Once you have the differing combinations of these scenarios you can use these in your strategic planning to ensure you have a business plan that allows you some flexibility to move into the future by changing how you do things to fit the environmental changes happening around you.
PWC have done some scenario mapping and come up with 4 possible future worlds based on the following mega-trends including the change in workforce demographics, the role of the government, urbanisation etc. The four worlds identified by PCW are;
- The Blue World – where capitalism reigns supreme, it’s where bigger is better. Organisations see their size and influence as the best way to protect their profit margins against intense competition from their peers and aggressive new market entrants. Corporations grow to such a scale, and exert such influence, that some become more powerful and larger than national economies. It’s a world where individual preferences take precedent over social responsibility.
- The Red World – this world is a perfect incubator for innovation with organisations and individuals racing to give consumers what they want. Digital platforms and technology enable those with winning ideas and allow for specialist and niche profit-markers to flourish. Businesses innovate to create personalisation and find new ways to serve these niches. But in a world where ideas rule and innovation outpaces regulation, the risks are high.
- The Yellow World – this is a world where workers and companies seek out greater meaning and relevance in what they do. Social-first and community businesses find the greatest success and prosper. Crowdfunded capital flows towards ethical and blameless brands. It’s a world where workers and consumers search for meaning and relevance from organisations, ones with a social heart. Artisans, makers and ‘new Worker Guilds’ thrive. It’s a world where humanness is highly valued.
- The Green World – This is a world where corporate responsibility isn’t just a nice-to-have but it’s a business imperative. It’s characterised by a strong social conscience, a sense of environmental responsibility, a focus on diversity, human rights and a recognition that business has an impact that goes well beyond the financial. Workers and consumers demand that organisations do right by their employees and the wider world. Trust is the basic currency underpinning business and employment. Companies have to place their societal purpose at the heart of their commercial strategy.
How can businesses use these scenarios to plan for the future?
Business leaders can use these future worlds to figure out how they can make changes to their own business model in order to adapt to a world which is more socially aware, or one in which there is a fast pace of innovation, for example.
“What organisations need to do right now is work out what their current workforce looks like, understand very clearly what their purpose or mission is as an orgnaisation, and have a plan in place that allows them to make choices when those changes arise”; John Williams Joint Global Leader, PCW.
Scenario mapping allows you to take a positive role in preparing your business for the future, rather than just waiting to see what happens and then reacting to try and keep up.
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