Research Strategies for Future Planning
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Colleen Murray
What Scenario Planning can teach us about creating value in times of both prosperity and uncertainty.
Originally Published in Interactions Magazine, March 2009
In 2005, Motorola hit the market with a new ultra-slim, sexy cell phone. It was called 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 turn-around. 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 the mobile phone space. Instantly, 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 embody these insights into great consumer experiences. 2 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.
Getting beyond current thinking
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 that 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 familiar – to keep safely within the frames of how we see and think about the world. Design and research-led organizations, like Motorola, are optimized to understand what’s going on in the world today, in an effort to better understand consumers. 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 anticipate what they will need in the future.
Planning for an uncertain 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 towards the future could have indicated massive changes in technology, consumer lifestyles or the competitive landscape, to help them develop a future pipeline, rather than focusing on the present.
Scenario Planning originated as a military planning tool. In the 1960s, Hermann Kahn brought it to the U.S. Airforce in an effort to help leaders get a grasp of the different political situations they might find themselves in 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. 3 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 that this sort of vision is useful for any project, not just ones with a Scenario Planning component.
Developing growth platforms in five key stages
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 Observe – collecting 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 Iterate –moving back and forth, left and right and back to observations through the cycle, time and time again.
Reframing research methods to help plan for the future
Many organizations use some variant of this process to help them gain insights about the world, and develop solutions that solve for them. 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:
1. Observations: Look broadly to expand and inform our thinking.
2. Frameworks: Imagine where trends are going, not just where they are today.
3. Imperatives: Use ideation as a tool to explore what’s most important.
4. Solutions: Develop rich experiences to create give context to proposed solutions.
5. Iteration: Monitor leading indicators to engage in an ongoing strategic conversation.
Observations: Look broadly to expand and inform our thinking.
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. They collect the necessary data to better understand only the immediate problem at hand. While this approach helps get the project done faster, it may not lead to any new insights about the world.
To counter the tendency to focus in on what is already known, Peter Schwartz, a futurist, author and co-founder of the Global Business Network, challenges research to reach as broadly as possible— to 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. 4 He asks, what are the most relevant social, demographic or lifestyle trends? What are the technologies or R&D trends that could make a dent in the future of the business? What are the forces and industries shaping the economy and business climate? What are the environmental issues that could have a real and dramatic impact? And what are the policies and regulatory issues that might make a difference? Exploration within these 5 categories is a great way to ensure coverage across a vast territory in a shortened timeline.
Frameworks: Imagine where trends are going, not just where they are today.
Frameworking is the process of organizing information, bringing 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 near-in work, it may be even better to uncover where the world is headed, not just where it is right now.
To do this, Scenario Planning thinking suggests focusing on “critical uncertainties.” Filtering out the issues will be the most critical to the business landscape. Typically, most organizations spend time articulating the insights that are already known and likely to make an impact. Yet these may not be the factors that will matter most. It’s often even more important to identify the issues that are less likely to occur, but if and when they did would make a big difference 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 US economists have been blindsided by the unexpected, as the unprecedented credit crisis shows.
Imperatives: Use ideation as a tool to explore what’s most important.
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 out 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 rapid-fire develop scenarios 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, teams explore many outcomes, and quickly converge about what’s most important. 5 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 issues that are most critical to understand.
Solutions: Develop rich experiences to create give context to the 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 give context to any solution.
At Jump, we often use the metaphor of the theater to remind ourselves to make our solutions as multi-sensorial as possible. In collaboration with our clients, we’ve run successful Scenario Planning worksessions where we weave visual, auditory and kinesthetic elements into the day, facilitating our team through multi-sensory experiences to give them a taste of the future. We fill clients’ heads with relevant data by sending pre-reading documents and articles 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: Monitor leading indicators to engage in an ongoing strategic conversation.
Although most researchers probably already think of the Explore process as iterative, most iteration is done in service of driving to a final solution. Scenario Planning reframes this notion, advocating that 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 could impact 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 affect 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 became an indicator that could 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.
Hindsight is 20/20
Even the most experienced researchers, designers and strategists can overlook what might seem obvious later. It happened to Motorola. While it’s hard to say exactly what went wrong, their actions indicate they were focused more on current activity then what the world might look like a few years down the line. They found themselves with a portfolio built for 2006, still around in a 2008 whose mobile landscape has been redefined by the iPhone. We can avoid the same fate. The methods used as part of a Scenario Planning process, including 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 we can best prepare for uncertainty, can help reframe how we do our work. The world keeps changing. People and their needs evolve. And companies need to evolve as well, in order to stay competitive and create new value during uncertain times. These strategies can help us to make smarter decisions today and give us confidence in planning for the future.
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