Hello, world. Welcome to our new blog. In this space we intend to launch an ongoing, entertaining, frequently updated dialogue about the inherent uncertainty in human events, and what organizations can do about it.
FSG partner Patrick Marren chronicles a century of late-summer anxiety…and wonders what it all means for the pressing worries of 2011.
August 1911: The specter of Anarchism grips America. Anarchist Ben Reitman, disciple of Emma Goldman, counsels a rally of New York laborers to commit murder if necessary to bring about change: “If the rich thought that you would destroy their property or injure them, they would pay attention to the unemployed…. Your hope, I tell you, lies in your ability to injure society.” (N.Y. Times, Aug. 31, 1911)...
It already seems like ages ago that the healthcare reform legislation was the centerpiece of the nation’s political conversation. While the most vocal opponents of the Obama administration continue to call for a repeal of healthcare reform, most of the nation (based on the results of a May Wall Street Journal poll) favor giving the new law a chance to work. The Obama administration is hoping as much, with the oil spill crisis in the Gulf of Mexico alone absorbing an extraordinary amount of executive time and attention.
The November 2009 issue of the McKinsey Quarterly includes an article by Charles Roxburgh entitled “The Use and Abuse of Scenarios.” It includes a number of good tips about scenario-based strategic planning, based on his experience in building scenarios over the past 25 years. It also highlights some important distinctions between his understanding of scenarios, and the way in which FSG has gone about creating and using them over the past few decades. And finally, it brings to the surface the urgent concerns of executives as they go about leading their organizations under uncertain conditions.
Much has been made lately of “long tails” and “Black Swans.” The latter is a formulation of Nassim Nicholas Taleb, an options trader and academic whose book, The Black Swan, lays out what Black Swans are and why just about everyone but him in the financial world is a fool.
As the economy fails to recover instantaneously, and foreign enemies bluster, President Obama is taking increasing heat from expert critics. It is clear that his administration has made many missteps already in its handling of the economy, foreign policy, and virtually every other area. Some of these mistakes will take years, if not decades, for the United States to recover from.
Forecasting is based on expert opinion. Expert opinion, in turn, is essentially a collection of “if-then” statements about how causality works in one’s sphere of expertise. These “if-then” statements, it should be noted, are all based upon observation of how things have worked in the past. Hence, forecasting is based on how things have seemed to work in the past.
It’s early April – not even 100 days into the Obama administration – and already it’s been a turbulent year. At this moment, a modest rally is buoying Wall Street and investor hopes that maybe – maybe – the worst may be over, as leaders of the G-20 nations meeting in London pledge hundreds of billions more dollars and coordinated action in the face of the greatest financial mess since the Great Depression.
The term “scenario planning” encompasses a surprisingly diverse range of activities. While there are many potential schemes for categorizing these activities, the discussion below presents a fairly comprehensive view of them, and indicates – if imperfectly – the relationships among the various approaches.
FSG welcomes Robert Avila as the contributing author of this month’s FSG Outlook. Robert, an economist and former colleague, is an iconoclastic thinker, with a keen eye and a sharp wit. Robert warns that a soft economic landing looks less and less likely this time around.
Recently, I traveled to China for two weeks. Unsurprisingly, this trip personalized my awareness of an immense and different country. But, perhaps because of the amount of time I have spent working with scenarios over the past 15-20 years, it offered much more. China is beautiful, fascinating, and varied. Its future is, however, significantly less predictable than that of any other major country in the world today.
One of the more interesting things I have found in my life and business experience is that numerical measures, or “metrics,” as we consultants are forced by law to call them, start to lose their usefulness on the day they are dreamt up.
The strategic decisions that corporations have to make are of mind-numbing complexity. But we know that the more power you give to a single individual in the face of complexity and uncertainty, the more likely it is that bad decisions will be made.
Hello, and welcome to our new website!! We aim to make this a place you will want to visit on a regular basis. We want to make it a can't-miss destination for people who need help making critical decisions under conditions of uncertainty, and who may be interested in using scenario planning techniques to do it.
Despite our leeriness about extrapolation from the past, we do read a lot of history at FSG in order to write our scenarios. As Mark Twain wrote, "It is not worth while to try to keep history from repeating itself, for man's character will always make the preventing of the repetitions impossible." (Mark Twain in Eruption: Hitherto Unpublished Pages About Men and Events (1940, Bernard DeVoto, editor).
"Silos" are an inevitable part of any organization; indeed, of any human activity. Even if you confine yourself to individual action, your own mind is thinking within certain categories, usually operating off a mental model that tells you what to expect - "If I do X, then Y will happen" - and what NOT to expect - Z or W or something completely different.
Scenario fodder for the week: Raghuram Rajan's "Fault Lines: How Hidden Fractures Still Threaten the World Economy" won many awards as best business book of 2010. A couple of years on, it's worth examining Rajan's major theses to see how they have played out.
Another quick and filthy Friday Scenario Planning exercise. Someone is holding a gun to your head and asking what the impact of the 2012 election will be on your organization. Here's your answer: Austerity -- either moderate or less moderate.
Frank Newman's book, Six Myths that Hold Back America, exposes what he says are six false beliefs that are widely held in the United States – even or especially among people who are in a position to make policy.
Scenario consulting has rarely had a better promotional material than Europe has been pumping out the past year or so. Uncertainty abounds.
Sunday's election in Greece has once again caused the Very Serious People in Europe to breathe a sigh of relief. "New Democracy, the mainline conservative party that wants to stay in the euro, won the election and can form a government! We're saved!"
So far I have soft-peddled my actual politics on here. It's only seemed like the sensible thing to do on the website of a commercial enterprise to keep my political opinions to myself. But there comes a time when you just have to say what you really believe.
Today we examine the sixth and final “myth” from Frank Newman’s book Six Myths That Are Holding Back America – the worry that U.S. Treasuries could come to have the same problems of lack of demand due to fear that it will not repay the bonds coupled with escalating interest rates.
Scenario planning requires imagination. Everyone likes to pretend that imagination is fun and games. But really, imagination is often very difficult and painful, because it requires us not just to take incremental steps along a pre-existing path, but to make up an entirely different path.
July 21, 2042 (Fox/MSNBC News): The nation reacted with a mix of horror, outrage, calls for new laws, and debate over the Second Amendment as the scale of the latest mass murder came into focus over the past two days.
After decades of trying to help clients anticipate the widest range of plausible possible future events, the following quote rings quite true to us: “Those who know more forecast very slightly better than those who know less. But those with the most knowledge are often least reliable.”
This has been a ridiculously busy and stressful week for three of our recent scenario-based strategic planning clients: the United States Coast Guard, the Port Authority of New York and New Jersey, and the Federal Emergency Management Agency (FEMA).
With the Internet revolution already established, are the best days of productivity growth – and therefore income growth – behind us? That worrisome question is popping out of the trends in growth in non-farm output. But it’s possible the best is yet to come.
Another blast from the past for your enjoyment, as we twiddle our thumbs as Washington flicks lit matches around a gunpowder factory, just as it did at the end of 2012 and in mid-2011 (and will do again next year).
David Brooks has a column today about the effect computing technology might have on the sorts of intellectual skills humans will value in the future.
"We're clearly heading into an age of brilliant technology. Computers are already impressively good at guiding driverless cars and beating humans at chess and Jeopardy. ...[C]omputers are increasingly going to be able to perform important parts of even mostly cognitive jobs, like picking stocks, diagnosing diseases and granting parole. ......
Is the current California drought about climate change or some periodically recurring rainfall shortage? The experts don't agree. Which is why planners affected by this situation should rigorously think through multiple scenarios -- and their implications.
Errol Morris’s documentary on Donald Rumsfeld is in the theatres. The film, plus a companion four-part series on the former secretary of defense in the The New York Times, raises interesting questions about knowledge, uncertainty and corporate strategy.
A Greek election may offer a glimpse of the future - or a brief detour to a failed past.
This past Sunday, Syriza, the Coalition of the Radical Left, won a large victory in Greek parliamentary elections over the main establishment parties, the center-right New Democracy party, led by Andonis Samaras, the Movement of Democratic Socialists, led by George Papandreou, and the already shriveling Panhellenic Socialist Movement (PASOK), recently led by Evangelos Venizelos, and founded by Papandreou's grandfather.
Opposition to proven preventive measures is not a left-right issue - and metaphorically, it also affects a lot of businesses.
In the past few days, a mighty attempt has been made by various Media Creatures to shoehorn a controversy over a measles outbreak and non-vaccination of children into yet another left-right bipolar fight.
When it comes to feel-good scenarios about the future, FSG scenario planners tend to be a circumspect bunch. Still, on the occasion of New Year's, we're not beyond putting a positive spin on current events. Here's what gives us hope...
A number of outlets have beaten us to the punch and put forward a variety of scenarios for our nation's future under President Donald Trump.
First off, the Brookings Institution has three Trump scenarios, written by Philip A. Wallach, Senior Fellow in Governance Studies. They are entitled "America Made Great Again: Trump as Figurehead and Negotiator;" "Congress Made Great Again: Trump's Failure and the Return of America's First Branch;" and "Just Sad:...
By Kevin McDermott, Founder of Collective Intelligence and FSG Associate, and Charles Thomas, FSG Managing Principal
Organizations are managed by people who acquired expertise from experience in an existing operating environment. But operating environments change unrelentingly. How does one get out ahead of this change?
There have been a lot of historical analogies being thrown around lately.
The presidency of Donald Trump has caused a lot of smart people (and a lot of less-well-educated ones) to dig up stuff from the past that they see as relevant to our current situation - and to where we may be headed in the near future.
This is the second of two pieces about demography, focusing on another aspect, less to do with the population’s overall size than with its structure - specifically the changing composition by age group....
For almost two years, FSG has been exploring the future of medicine and medical education, in support of the administration and board of the Accreditation Council for Graduate Medical Education (ACGME). As noted previously in these pages, FSG developed a set of four ‘future of medicine’ scenarios and facilitated a series of scenario-planning workshops to help guide ACGME strategic decisions at a time of significant uncertainty.
The 3.0 edition of Creating and Sustaining Strategic Intent in the U.S. Coast Guard has now been released. FSG worked with the Coast Guard in developing the content and case studies for the publication.
With the launch of our new website, some of our legacy content has been moved to new places. Back issues of FSG Outlook can now be found in the Archives section of our new blog page (also conveniently named FSG Outlook).
Nate Silver is not a household name in the scenario-planning world, not yet anyhow. But FSG partner Patrick Marren has discovered in Silver’s writings a lot of rich fodder for scenario thought, of interest to strategists, planners and risk managers.
It’s been a busy summer for FSG scenario consulting, with several projects running at high-speed, another couple about to be launched, and a steadily building proposal pipeline. Does this mean a new surge of interest in scenario planning? Could be.
Since re-launching our website earlier this year, FSG has been steadily building up content that sheds light on some of the biggest things we have learned over more than 20 years working together as scenario consultants for some of the most dynamic enterprises in the world.
For more than a year, FSG and its partner Hassett Willis & Company have been busy supporting a scenario-planning exercise sponsored by the Federal Emergency Management Agency (FEMA), as part of its Strategic Foresight Initiative (SFI). Launched in 2010, the SFI is a community-wide effort to anticipate emerging challenges and opportunities in emergency management and disaster response.
FSG scenario consultants had a busy summer facilitating scenario workshops. In June, FSG ran the second of two Evergreen scenario-planning workshops for the U.S. Coast Guard this calendar year. Evergreen, the Coast Guard’s long-term strategy and strategic-renewal process, is now in its third continuous cycle.
It’s been said – and it’s still true – that scenario planning is most valuable as a tool to deliver strategic insights for longer-term planning. But in recent years, with the accelerating pace of change (and the increased recognition of such), private sector executives have tended to pass on in-depth strategic exercises in favor of what most would consider to be business planning. FSG believes this is a mistake, and that the need for thinking rigorously about what lies “around the corner” is always valuable, especially in turbulent times.
FSG's Charles Perrottet has initiated a series of FSG Outlook blog entries discussing Frank Newman's recent book Six Myths That Hold Back America. Six Myths is an extremely useful read for scenario planning purposes...
In mid-May, FSG principals facilitated a scenario-planning exercise for the Port Commerce Department of the Port Authority of New York & New Jersey. Under the guidance of FSG and our partner, Cargo Velocity, some 60 workshop participants devoted three days to exploring the strategic implications of five alternative future operating environments for maritime trade and logistics.
FSG Associate Gerard Smith spent an afternoon with a class at Northwestern University’s Medill School of Journalism in Chicago, presenting some thought-provoking trend analysis on the impact of the Internet on the business model of journalism.
Wicked problems resist resolution, but as guest contributor Mark Trexler argues, the uncertainties surrounding climate change should not prevent organizations considering the implications and planning accordingly.
What's ahead for the US after the 2020 election and beyond? Prediction is perilous. But FSG has collaborated on a set of short-term scenarios that suggest several plausible paths ahead for US politics, policy and the economy.