In 2005 Motorola hit the market with a new, ultra-slim, sexy cell phone: the RAZR. Almost instantly, it became one of the most sought-after phones of all time. For two years the RAZR captivated the industry. Consumers around the world couldn't wait to get their hands on the sleek, fashionable phone. Analysts praised Motorola's miraculous turnaround. Publications gave the product one innovation award after another. And then, just as suddenly as the RAZR appeared, it was gone. The iPhone came along and fundamentally changed both the market and consumer expectations for mobile phones. In an instant, we moved from fashion to advanced functionality, and Motorola plummeted.
What can cause a company to go from earning $623 million in 2006 to just $100 million a year later ? Motorola is an innovative company. It is known for being driven by design. Its leaders hire top-notch researchers and anthropologists to understand people's needs around the world. And they know how to translate these insights into great consumer experiences . This drive for innovation is arguably what led the company to create the RAZR in the first place. And yet, for all of its capabilities, Motorola was still blindsided by the competition.
Companies everywhere fear what they can't see coming. It's hard enough just to stay on top of what we know, not to mention the things we don't. But in today's competitive market, that's exactly what's necessary. Why do so many organizations fall prey to unpredictable challenges? Perhaps it's because during times of uncertainty, it often feels best to stick with the familiarto keep safely within the frames of how we see and think about the world. In an effort to better understand consumers, design- and research-led organizations, like Motorola, are optimized to understand what's going on in the world today. These groups have a plethora of processes, methods, and tools to help them accomplish this. Still, many companies struggle to plan for what's next: to learn not just what customers need today but also to anticipate what they will need in the future.
Scenario planning is a strategic method that can help organizations prepare for change. It's a process for looking at what's going on in the world, using these trends to explore a variety of potential futures, and synthesizing these futures to strategize how to prepare, no matter what comes to pass. Scenario planning is not a prediction tool. Rather, it can help both companies and individuals make smarter decisions in the short term, while planning for the long term. For Motorola, an eye toward the future could have indicated massive changes in technology, consumer lifestyles, or the competitive landscape and helped them develop a future pipeline.
Scenario planning originated as a military planning tool. In the 1960s Hermann Kahn brought it to the U.S. Air Force in an effort to help leaders get a grasp of the different political situations in which they might find themselves down the road. It was first introduced to the business world in the 1970s when Shell Oil used the method to help divert disaster during the OPEC oil crisis. Today foresight experts such as William Cockayne work with organizations to better prepare for identifying long-term opportunities and potential issues . At Jump Associates, we've used scenario planning to help our clients reinvent existing categories, identify new markets, and develop new sources of revenue. In the process, we've seen how scenario planning helps us envision potential futures and benefits any project, not just ones with a scenario planning component.
A strong process can ensure favorable results for any strategic effort. At Jump we use an explore process for developing new growth platforms that takes us through five key stages. First, we observecollecting data about the world. Next, we develop frameworks, finding patterns and meaning in the data we collect. Third, we craft imperatives, translating our knowledge into principles for action. We then ideate solutions, taking action to implement the imperatives we've uncovered into new ideas for products, services, and businesses. Finally, we iteratemoving back and forth, left and right, and back to observations through the cycle, time and time again.
The act of innovation can be seen as a process of toggling between items in the concrete world and abstract concepts, between analysis of the situation and synthesis of a desired result. Jump Associates uses an iterative explore process for identifying and developing new platforms for growth.
Many organizations use some variant of this process to help them gain insights about the world and develop solutions that connect with people's needs. This process is not scenario planning. It's an exploration into identifying and developing new platforms for growth. And yet, many scenario planning techniques can help add a strategic lens to the ideas, imperatives, and even the conversations we have with our colleagues, throughout the journey. When viewed through the lens of a scenario planner, each step reveals a reframe that can help uncover new sources of growth and create lasting competitive advantage.
These reframes include:
- Observations: Look broadly to expand and inform our thinking.
- Frameworks: Imagine where trends are going, not just where they are today.
- Imperatives: Use ideation as a tool to explore what's most important.
- Solutions: Develop rich experiences to create context for proposed solutions.
- Iteration: Monitor leading indicators to engage in an ongoing strategic conversation.
Observations. When researchers begin a new project, they strive to see the world with fresh eyes, listen, learn, and identify new points of view. The reality is that they are often rushed to recruit participants, shorten the timeframe, or cut back on activities. They resort to what they already know and collect the necessary data to better understand only the problem at hand. While this approach gets the project done faster, it may not lead to any new insights about the world.
To counter the tendency to focus on what is already known, Peter Schwartz, a futurist, author, and cofounder of the Global Business Network, challenges research to reach as broadly as possibleto expand and inform organizational thinking. In his book, The Art of the Long View, Schwartz suggests using the STEEP framework (social, technology, economy, environment, and politics) to collect data . He asks, what are the most relevant social, demographic, or lifestyle trends? Which technologies or R&D trends could make a dent in the future of the business? What are the forces and industries shaping the economy and business climate? Which environmental issues could have a real and dramatic impact? And what are the policies and regulatory issues that might make a difference? Exploring these five categories is a great way to ensure coverage across a vast territory in a shortened timeline.
Frameworks. Frameworking is the process of organizing information to bring structure and clarity to what might otherwise seem complex. Most often, researchers look for this meaning in the observable and real. While this is helpful for developing incremental solutions, it may be even better to uncover where the world is headed, not just where it is right now.
To do this, scenario planning suggests focusing on "critical uncertainties." Filtering out the issues will be the most critical to the business landscape. Most organizations typically spend time articulating the insights that are already known and likely to make an impact. Yet these may not be the factors that matter most. It's often even more important to identify the issues that are less likely to occur but that would have a greater impact on the company's fortunes. Imagine how much better prepared the United States would have been if economists had dared to imagine and take steps to avoid what seemed inconceivable a year ago? Leading U.S. economists have been blindsided by the unexpected, as the unprecedented credit crisis shows.
Imperatives. At the imperatives stage of a project, researchers attempt to bring many insights together to provide direction and guide ideation. Scenario planning reframes this idea, suggesting that preemptive ideation, not just analysis, is an essential tool for identifying what will be most important. Just as if writing a story, it's important to pick a few key things that are most important to the plot. It's often helpful to try on a few different rationales, to see which one sticks. The same is true when developing imperatives. Collecting the team's ideas, putting those ideas on the table, and analyzing them to harvest tacit insights will help to focus the work and identify the most important issues.
Art Center College's Advanced Mobility Research and Graduate Industrial Design Programs have been exploring ways to do exactly this. They have developed a scenario planning card game. Players develop scenarios at a rapid clip based on the trends printed on each card. Players are forced to quickly enter a dialogue and brainstorm possible solutions and strategies. As a result, they explore many outcomes and quickly converge on what's most important . Any individual, company, or industry would be smart to create their own deck of scenario playing cards. Such a tool is a fun way to explore the most critical issues.
Solutions. During the solutions phase of a project, time is spent making ideas tangible. Designers often turn to visualization as a means to do this. Others might write reports or create spreadsheets to express their idea. But scenario planners know that great scenarios are great stories. Rich narratives bring life and context to any solution.
High levels of creativity and collaboration are required to solve complex problems. At Jump we spend time immersing ourselves in multisensory experiences to push the boundaries of our everyday thinking.
At Jump we often use the metaphor of the theater to remind ourselves to make our solutions as multisensorial as possible. In collaboration with our clients, we've run successful scenario planning work sessions in which we weave visual, auditory, and kinesthetic elements into the day, facilitating our team through multisensory experiences to give them a taste of the future. We prep clients by sending them reading material ahead of time to get them in the right head space. In the session, we use music and lights to set different tones and moods. And we facilitate a series of exercises to help them think through the implications of the work. All of these things contribute to developing rich experiences that give context to our solutions.
Iteration. Although most researchers probably already think of the explore process as iterative, most iteration is done in service of a final solution. In scenario planning, the strategic conversation never ends. It's most important to identify a few "leading indicators" or factors to monitor over time. These are issues that are important to an industry or that could affect a business decision on the horizon. Chosen and monitored carefully, these signposts become a source of enduring competitive advantage. The trick is not keeping track of everything, but identifying the few key issues to keep tabs on over the long haul. Within the context of a strategic conversation, they help to reveal how activity within a given industry is likely to shape the future.
When Peter Schwartz was working for Royal Dutch/Shell in the early 1980s, he proposed studying the future of the Soviet Union. At the time, leaders questioned the relevance of this recommendation. The Soviet Union was a small factor within a large industry. And yet Schwartz saw that this was an indicator that needed to be monitored. It had the force to cause major changes within the oil industry. What was going on in the Soviet Union had the power to signal a change in the political climate. Shell focused on the questions that challenged company mindsets, and when the Soviet Union collapsed in the early 1990s, Shell was uniquely positioned to take advantage.
Even the most experienced researchers, designers, and strategists can overlook what might seem obvious later. It happened to Motorola. While it's difficult to say exactly what went wrong, their actions indicate they were focused more on current activity than on what the world might look like a few years down the line. In 2008 they found themselves with a portfolio built for 2006, the mobile landscape having been redefined by the iPhone. We can avoid the same fate. The methods used as part of a scenario planning processincluding looking at what's going on in the world today, using those trends to develop and explore a variety of potential futures, and using these futures to strategize how to best prepare for uncertainty, can help reframe how we do our work. The world keeps changing. People and their needs evolve. In order to stay competitive and create new value during uncertain times, companies need to evolve as well. These strategies can help us to make smarter decisions today and give us confidence in planning for the future.
4. Schwartz, Peter.The Art of the Long View: Planning for the Future in an Uncertain World. New York: Currency Doubleday, 1991. Many of tools and methodologies for developing scenarios that are mentioned in this article have been adapted from the thinking of Peter Schwartz.
5. Art Center College of Design's Advanced Mobility Research and Graduate Industrial Design Programs have developed the "Mobility VIP card game." More information on this tool, as well as their Mobility Vision Integration Process can be found at http://www.mobilityvip.
Colleen Murray brings an interaction designer's sensibility to the creation of compelling future strategies. A constant explorer, she has spent a significant portion of her work at Jump Associates focused on helping clients to map out potential new business opportunities. She has helped Jump chart new territory in developing proprietary methods for opportunity mapping and scenario planning. Also an experienced strategic planner, she is adept at leading the most complex projects and finding new ways to get things done. Her experience had crossed a number of industries, including consumer electronics, digital entertainment, consumer package goods, and office environments. She is an adjunct faculty member of Illinois Institute of Technology's Institute of Design, where she teaches students how to plan design research. She holds a master's degree in design planning from the Illinois Institute of Technology and a B.F.A. in graphic design from the University of Illinois.
©2009 ACM 1072-5220/09/0300 $5.00
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. To copy otherwise, to republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee.
The Digital Library is published by the Association for Computing Machinery. Copyright © 2009 ACM, Inc.