Those of us in business also have difficult choices to make. And those choices have to be made with wildly uncertain futures in mind. We can no longer base our strategies on the old baselines of predictable consumer demand, globalization, office life and business travel, access to talent, credit, or venture funding. How then are we to plan and to budget? Even with the long view of history, we have little to guide us day to day, month to month, year to year. As former Secretary of Defense Donald Rumsfeld famously said, “There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.” And, I might add, the current crisis reminds us that perhaps the worst of all are “ignored knowns”—things we know but pretend we don’t, and are then surprised when they trip us up.
Fortunately, there is a strategic discipline called scenario planning that is designed precisely to address this kind of uncertainty. Scenario planning takes for granted that it is hard for human beings to imagine the future as being radically different from the present. As a result, its practitioners don’t try to predict what will happen, but to stretch the mind to think about what might happen. Peter Schwartz, one of the originators of the technique, wrote in the introduction to his book about it, The Art of the Long View, the scenario is “a vehicle . . . for an imaginative leap into the future.”
Tim O’Reilly uses scenario planning to explore possible new normals. This includes what aspects might and might not return. From there O’Reilly discusses the process of scanning the news for trends.
If you think of trends as vectors, new data points can be seen as extending and thickening the trendlines and showing whether they are accelerating or decelerating. And as you see how trend lines affect each other, or that new ones need to be added, you can continually update your scenarios (or as those familiar with Bayesian statistics might put it, you can revise your priors.) This can be a relatively unconscious process. Once you’ve built mental models of the world as it might be, the news that you read will slot into place and either reinforce or dismantle your imagined future.
Doug Belshaw raises some questions about O’Reilly’s response.
I’m hoping, like O’Reilly, that there are silver linings that come out of the pandemic related to climate change. Unlike him, I don’t think the answer is more consumption. As an article I shared recently points out, not only can we not have billionaires and solve climate change, but the whole edifice of over-consumption needs to collapse under its own weight.
This is also a topic Bryan Alexander has explored, firstly in regards to how the virus might unfold and what might things look like if it continues to 2023.
via John Naughton