future environmental scanning: a content-rich...
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FUTURE ENVIRONMENTAL SCANNING:
A CONTENT-RICH WEBINARThe Systems Thinking Approach
Founded in 1990 • Offices in over 20 Countries
WEBINAR MARCH 2011
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Future Environmental Scanning: A Content-Rich Webinar
Future External Environmental Scanning:SKEEPTIC
Socio-Demographics
Consumers/Clients Competition/Substitutes
Industry Economy
Technology Ecology
Political/Regulatory
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The Haines Centre: A Global Alliance of Master Consultants and Trainers
Founded 1990 - Offices In Over 25 Countries
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Who’s Steve Haines?
Founder & CEO: Haines Centre for Strategic Management®
Systems Thinking Press®
Founded in 1990—38 Offices—25+ Countries
STEVE is a:
“CEO—Entrepreneur—Global Strategist”and
“A Facilitator—Systems Thinker—Prolific Author” (16+ books)
A graduate of the US NAVAL Academy's Legendary Leadership Class of 1968
ASP Hall Of Fame-7th Selectee
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Who’s Gail Aller-Stead?
• Partner and Change Management Lead, located in Toronto, Canada
• Known as a:• Strategic architect • Culture and change steward• Operational executor
• Clients tell her they engage her services because she excels in designing and delivering the mechanisms they need to help them:• Define their desired direction and strategy – and then –• Implement and sustain their desired direction and strategy
• Graduate, Pepperdine University (MSOD)
• SMP Pioneer (Association for Strategic Planning)
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The New Normal
Complex Timesare
The New Normal
Are you An Architect of the Future
OrA Defender of Decline?
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The Focus Of This Webinar
The new normal of difficult and turbulent timesrequires
Future environmental scanning on a regular basis
We now have a complete re-orderingof
Global Economic Structures
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Polling: Do You Agree or Disagree?
STEP ONELook for the Icon of the person raising a hand on the bottom left panel ofyour screen.
STEP TWORead the given statement and choose the:• Green ‘’ if you agree• Red ‘x’ if you disagree.
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Agenda for Today’s Webinar
I. Overview and Introduction: Part II vs. Part I Differences
II. Future Environmental Scanning: Concepts, Quick Review from our
previous Webinar
III. Content-Richness: Specifics of Future Global Environmental Scanning
(Using SKEEPTIC as the New Standard—Not all slides are covered due to
time)
IV. Summary: Major Changes World-Wide contributing to this Complete Re-
ordering of Global Economic Structures
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Rates of Change
“If the rate of change on the outsideexceeds
the rate of change on the inside,the end is near.”
—Jack WelchFormer Chairman and CEO
General Electric Corporation
WHAT HAS HAPPENED IN THE WORLD IN JUST THE PAST YEAR?
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Shorter Term Global Changes Right Now
Look at recent Events:
• Middle East Revolutions—Tunisia, Egypt, Bahrain, LibyaWhat is different about each? Are they all the same?
• Nuclear Reactor Meltdowns• Earthquake and Tsunami• Gulf Oil Spill• New Zealand Earthquake Disaster• Volcano eruptions• Haiti Disaster• Floods in Pakistan, etc.
• Implications for Wall St., Oil Prices, Global Economy, Recession????
What are the implications for your organization as to:1. Re-Planning –Strategic Plan as a Living Breathing Document2. Scenario Planning
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Lions, Gazelles, and
Strategic Actions
Every morning in Africa a gazelle wakes up.It knows it must outrun the fastest lion or it will be killed.
Every morning in Africa a lion wakes up.It knows it must run faster than the slowest gazelle or it will starve.
It doesn’t matter whether you’re a lion or a gazelle: When the sun comes up, you’d better be running -- around the globe!
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Industry DeconstructionAnd Construction
Customer - Consumer
Intermediaries/Brokers
Delivery Channels
Content - Provider
ClosingtheGap
ISP
Search * Key
Storefront Destruction“Go Direct”
DeconstructDeconstruct
DeconstructReconstruct
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Name This Country
Richest in the world? Largest military? Center of world business and finance? Strongest education system?World center of innovation and
invention? Currency the world standard of value? Highest standard of living?
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Why Future External Environmental
Scanning is Critical
“The future is shaped
by those who see the possibilities
before they become obvious”Singapore Straits Times
What Papers do you Scan Globally?
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The USA in 1908
Average life expectancy of 47 years 14 percent of homes had bathtubs 8 percent of homes had telephones 8,000 cars and 144 miles of paved roads Maximum speed limit in most cities of 10 mph Average wage of 22 cents per hour More than 95 percent of all births took place at
home……..
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Ninety percent of all doctors had no college education:Instead, they attended “medical schools”, many
condemned in the press and by government as ‘substandard’
Two of every 10 adults were illiterate Only 6 percent of all Americans graduated from
high school Sugar cost four cents a pound. Most women washed their hair only once a month,
using borax or egg yolks………
The USA in 1908
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The leading causes of death were:1. Pneumonia and influenza2. Heart Disease3. Tuberculosis4. Stroke5. Diarrhea
The American flag had 45 stars The population of Las Vegas, Nevada was only 30! Crossword puzzles, canned beer, and ice tea hadn’t
been invented yet 230 reported murders in the entire nation
Imagine the changes to the USA in 2108!
The USA in 1908
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Our “Truths” are Collapsing
"What does it take to win in a world where
Change is not only rapid
But accelerating,
Where ancient 'truths' collapse
with disconcerting regularity?"
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VUCA
The U.S. Armed Forces strategic training schools developed a
specific term to describe today’s world: VUCA
Volatile, Uncertain, Complex, and Ambiguous
This means that past events are not reliable indicators
for
what we can expect in the near future
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VUCA-Military View
Future External Environmental Scanning should look at:
1. Globalization
2. Resource Competition
3. Radical Ideologies
4. Weapons Proliferation
5. Natural Disasters
6. Climate Change
7. Rising New Global Powers
8. Overpopulation
9. Urbanization
10.Wars
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“Currently-Existing” Large-Scale Economies
“Industrialized”• EU (European Union)
• NAFTA
• Japan
• Singapore
• Australia
• ASEAN
“BRIC”:• Brazil
• Russia
• India
• China
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G-20 Economies
Argentina
Australia
Brazil
Canada
China
European Union
France
Germany
India
Indonesia
Italy
Japan
Mexico
Russia
Saudi Arabia
South Africa
South Korea
Turkey
United Kingdom
United States
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14 Emerging Economies
BEST• Bangladesh
• Egypt
• South Africa
• Turkey
Remember BEST, MVP, PICK, and NIC
MVP• Mexico
• Vietnam
• Philippines
NIC• Nigeria
• Indonesia
• Columbia
PICK• Pakistan
• Iran
• Chile
• (South) Korea
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Why Thinking Matters
How you Think
Is how you Plan . . .
Is how you Act . . .
And determines
The Results You Get in Work and Life!
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Future External Environmental Scanning
“Most people try to skate where the puck is. I try to skate to where the puck will be.”
- Wayne Gretzky
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Our Levels of Thinking
Problems that are created by our current level of thinking can't be solved by that same level of
thinking.
—Albert Einstein
So ...if today we generally use analytical thinking,we now need to use “Systems Thinking ”
to resolve our issues.
—Stephen G. Haines
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Scan Your Future External Environment
The World Is Interconnected
“What will be changing in your future external
environmentthat may impact you?”
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The Value of Mental Models
Give people the conceptual tools,
the integrated frameworks, and the models they need
to organize their evidence, their experience, and their learnings
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Environmental Scan and Assessments
The Situation: There is no standard model for conducting future external environmental scanning
Best Practice: Use the acronym “SKEEPTIC” as the new standard for conducting future external environmental scans
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Step 1: SKEEPTIC
TODAY – IMPLICATIONS(Opportunities – Threats) SPONSOR
List 5-10 environmental trends and projections facing you over the life of your strategic plan
S Socio-Demographics (People/Society)
K Competition/Substitutes
E Economics
E Ecology
P Political / Regulatory
T Technical
I Industry / Supplier
C Customers/Citizens
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Step 2: SKEEPTIC
The second step in completing SKEEPTIC is to convert your data into useful, relevant information:
1. Identify the implications for each of the SKEEPTIC sections. In other words, ask yourself “So What?”
2. List the levels of probability and impact of those items of importance to your organization
SKEEPTIC Issue Probability Impact
1 Vendor Management M M
2 Shift in budgeting priorities of governments
H M
3 System reliability and uptime H H
4 Publishers are moving out of print-based
H L
5 Overlapping scopes of practice
H H
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Step 3: SKEEPTIC
PRO
BA
BIL
ITY
High
Medium
Low
Establish contingency plans. Act immediately if appropriate
High Risk. Immediate actions required2
High RiskImmediate actions required3,5
Acceptable Risk. No action now but review periodically & consider possible improvements
Establish contingency plans. Act immediately if appropriate1
High Risk Immediate actions required
Acceptable Risk. No action now but review periodically & consider possible improvements4
Acceptable Risk. No action now but review periodically & consider possible improvements
Establish contingency plans. Act immediately if appropriate
Low Medium High
IMPACT ON OUR ORGANIZATION
The third step in completing SKEEPTIC is to then plot these items on the matrix. Items 2,3,5 must be acted upon immediately. Items 1,4 are of lower priority.
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Disruptive Technologies
What are some disruptive technologies we’ve seen recently?
What are other disruptive technologies that might be coming in our future?
When should we start our thinking, our planning, our acting?
• Hybrid cars
• Internet
• Smart Phones
• DNA
• PCs
• Drone airplanes
• iPAD
• DVDs
• Human Genome
• Digital Revolution
• Wireless
• Carbon Fiber
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Topple Rate of Organizations
The Situation: As Thomas L. Friedman writes in The World is Flat , the lowering of trade barriers plus exponential advances in technology enable us to do business instantaneously with billions of people:-- across the planet and from anywhere on the planet --almost regardless of company size.
The Result: The “topple rate” (the frequency at which established organizations lose their market leadership positions) has doubled since the 1970’s
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Expect the Unexpected
Resilient, resourceful leaders expect the unexpected.
“What we anticipate seldom occurs, what we least expect generally happens.”
–Benjamin Disraeli, 19th Century British Prime Minister
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Which Levels do we Scan?
There are 8 Levels of Living Systems Should We Scan This Level?
8 Earth Yes7 Societies Yes6 Communities Yes5 Organizations Yes4 Departments, Functions, Project Teams Yes3 Individuals Yes2 Organs Yes – if Medical
Research1 Cells Yes – If Medical
Research
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Re-ordering of Global Structures
A Future External Environmental Scan by the Haines Centre for Strategic Management Global Partners
Socio-DemographicsS
K
1. Generational Shifts: Millennials, Boomers,Population Growth
2. Innovative employees, entrepreneurs in the emerging markets, Countries
3. Demands from Chinese employees, manufacturing going elsewhere
5. Innovation world-wide, globalization, shrinking world
6. Scarcity, polarization, fear, world-wide austerity
Competition-Substitutes
4. Females are 50%+ of USA workforce, women demanding recognition in other parts of the world
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Re-ordering of Global Structures
E
P
E Economics 7. Global economic system meltdown. Rebuilding? Speed?USA Deficits and Debt, “PIGS” in EU, death of Socialism?
8. Japan’s Economics: Where from here after crippling natural disasters and nuclear technology meltdown?
9. Countries/Federal/State/Local Deficits/bankruptcy/Unions?
• State Oil Companies (Top 12 world-wide )10. Wealth Transfer:
11. Green Economy, Growth. Germany leads, USA lags Climate Change? (Consume or generate wealth)
12. Terrorism Worldwide (Islamic Extremists)
14. War Potential – Hot Spots (Iran, Korea, Libya, Yemen, etc)
• Sovereign Wealth Funds—China’s world currency?
Ecology
Political --Regulatory 13. Role of International Bodies,Transnational Corporations
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Re-ordering of Global Structures
P
TTechnology
16. Attack on Capitalism as “The Best”
18. Nano-technology everywhere—Techno Explosion
• Greed / Corruption
17. Technology e-business, mobility, e-games. Communications revolution continues
19. Internet Vulnerability, Cyber crime, cyber warfare
Political-Regulatory
• State Capitalism / Social Capitalism• Benevolent Dictators
• Jockeying for “Global Commons” dominance
15. Empires, government bureaucracy(crumbling infrastructure declining)
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Re-ordering of Global Structures
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23. Middle East, Spread of Bottom-up revolutions. Four Freedom Desires, democracies??
22. Race for resources world-wide –commodity prices have increased (wheat, oil, food)
20. Innovations of emerging markets (vs. low cost supplier)
21. Emerging markets (BRIC plus now—many more countries and middle-class consumers)
Industry -Suppliers
C Customers -Citizens
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The Competitive Advantage of Nations
--With thanks to Michael Porter’s ideas
Since World War 11
1970’s-1980’s
1990's
2000
2004
2011
South America and Mexico—Ranching and Farming (Agriculture)
- Japan(Quality culture management and manufacturing systems)
- Mexico/Canada(NAFTA)
- China(Manufacturing)
- India(Back of House Support)
- ???
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What have we learned in the past 2,066 years?
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. -Cicero – 55 BC
“Those who cannot remember the past are condemned to repeat it.”
- George Santayana
“People must again learn to work, instead of living on public assistance.”
-Cicero – 55 BC
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A snapshot of 2020
2020 will have 3 world superpowers USA China India
The next 2 superpowers beyond 2020 Brazil Indonesia
Middle East Arising (in what form?) The Greatest Transfer of Wealth in the History of the World Transferred $7 trillion in wealth through crude oil in past 20 years Saudi Aramco alone (the largest oil company in the world) transfers
$350 billion/year in profits to government (crude oil sales only) Think how much OPEC has received with Oil at $100 bbl?
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Emerging Global Markets
1. Chile, Argentina, & other members of Mercusor2. Brazil3. China4. Germany & EU5. India6. Indonesia7. Mexico and Central America8. Malaysia9. South & East Africa10.South Korea
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China
1. Manufacturing center for the world
2. Raw materials demands
3. Currency level—Currency becoming the world currency??
4. USA investments/Tied to our economy
5. Non English speaking generally
6. Local elections
7. Mekong River Dam-Environmentalists win
8. Taiwan issue
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India
1. India—3 Times the population & one-third the size of the USA
2. Political Elections—Still proceed with modernization—a human face
3. British Legacy: Rule of Law and Bureaucracy-
4. People: 2/3 still in poverty-rural India (First World-Third World)
5. Outsourcing: Software-Call Centers-Pharmaceuticals (Drs.)
6. People: English-International-Bright-Hard Working-USA trained
7. People: 250,000 engineering graduates a year (Education key)
8. People Demand: Retention issues-going to older people, not young
What is India’s place as a world leader in 30 years?
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The Middle East
1. Iraq and AFPAK Wars
2. Fundamentalism—Terrorism—Saudi Arabian impact
3. Dubai—Singapore of the Middle East
4. Gulf Coordination Council
5. Iran-Middle Class
6. OIS-54 Nations—Muslim Moderates-includes Arab League
7. Wars and Truces:
Pakistan-India Cricket Games
Kashmir Dispute
8. Israel-Palestinians
9. War in Libya now-what is different from others?Bahrain, Yemen, Tunesia, Kingdom of Saudi Arabia, Egypt, Jordan?
10. Military vs. Police too differences too
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Europe
1. EU Expansion in 2004 and 2007 to 25 members. “Growth pains”, especially migration flows of workers from new to old member states
2. Pressure on the Euro – bailouts to the PIGS (Portugal, Ireland, Greece, and Spain)
3. Turkey-Cyprus-Muslim and what’s considered “European”4. UK Concerns, Atlantic or Europe?5. NATO membership – What’s its mandate post-Cold War?
6. World Competitiveness??
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Ultimately….
What we think,or what we know,
or what we believeis, in the end,
of little consequence.The only consequence ...
...is what we do!