It is impossible to read a newspaper these days without coming across the word “turbulence”. But what is turbulence and, more importantly, what can business and government leaders do to ensure that their organizations can navigate, survive and thrive in turbulence?
A recent book, Business Planning For Turbulent Times, offers insights drawn from the experience of scenario practitioners and scholars about how to engage turbulence.
Face up to the ‘wicked’ and messy reality: The global economic situation shares similarities with the challenges of global climate change and global energy insecurity. Each is shaped by the deliberate and unintended outcomes of a complex interplay of human activities. The “problem is the problem” because of the inherently uncertain global level impacts implied and also because of the many different actors involved—their different motivations and the contradictory certitudes about what should be/can be/is the right thing to do.
Indeed, the resolution of the global financial crisis, climate change and energy insecurity are the so-called “wicked problems”. While quick fixes must be sought under the scrutiny of excruciating global public pressures, the resulting “silver bullet(s)” can result in unintended consequences—over the longer term, these so-called “cures” can kill the patient!
Illustration: Jayachandran / Mint
Avoid ‘predict and plan’ and ‘beat the competition’: When you are in a hole, stop digging! As the world continues to awaken to the realities of a globally interconnected world, many international companies and governments are being forced to realize that the 21st century context does not lend itself to “predict and plan” processes.
Metaphors of adaptive policy and ambidextrous strategy are emerging as the world moves away from the machine world era concepts of control, optimization and efficiency. Imagining possible futures can help clarify present conditions and options. Linking early warnings from the “horizon” to these possibilities appears more promising than simplifying the mess we face as “problems” to be “solved” or “wars” (on poverty or drugs or terrorism) to be “won”.
Learn ‘with’ rather than ‘about’ the future: In scenario planning, three perspectives of time are used to see and guide today’s actions—past, present and future. What is coming from the past which will catch up with us in the future, what contexts are coming towards us and what futures can we advance to? The aim is to avoid “reacting” to the future and default to modelling and forecasting approaches—which project the future as a continuation of the known past. Scenario planning can support strategic innovation and renewal by exploring how to shape (but not control) the future. It can also help avoid the unrealistic dreaming syndrome in visioning.
Seek out ‘uncomfortable’ knowledge: As our knowledge grows, so does our ignorance. The Achilles heel of many successful organizations is that they ignore signals of error. Embracing ignorance productively is one of the large challenges of the 21st century. A good start is to make disagreement into an asset to encourage bad news to travel fast.
Expect the unexpected: The US Congress’ $700 billion (about Rs35 trillion) intervention in the financial sector is almost the same percentage of Gross Domestic Product, or GDP, invested in the post World War II Marshall Aid Plan. The UK government’s £500 billion banking bailout indicates further state intervention in the global financial and banking sector is to be expected. The wider and longer-term consequences of these interventions will have knock-on effects. On the other hand, the new financial system may constrain the financing of energy projects and will impact carbon markets and climate adaptation funding.
Anticipating the unexpected can be improved with the scenarios: We can learn to look forward and avoid the restricted perspective of the rear-view mirror!
Shift from command to transformative leadership: Leadership in the 21st century will need to loosen its emphasis on questions of “where do we want to go?” and learn to ask “what if?”. The leader’s job is to help people address the possibility that the future they have assumed may not materialize.
Seek experiments rather than solutions: Wicked problems require leaders to forego linear approaches to problem solving and adopt more iterative approaches —exploring “have I got the right question” rather than starting with “what are the options/is the best solution”.
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Angela Wilkinson is director of scenarios and futures research at Saïd Business School. Rafael Ramirez, fellow in strategic management at Saïd, has recently been named chairman of the World Economic Forum Global Agenda Council on Strategic Foresight.