Scenario planning: strategy for the future of global financial services
For my keynote at the Vision 2020 Financial Services conference last month in Mumbai I prepared some ‘quick and dirty’ scenarios for the global financial services industry landscape in 2020 from a technology perspective. Below is an overview of the content I used in my presentation. The complete slide deck from my keynote is also available, though it needs the explanation as below.
WARNING: These are scenarios prepared for a presentation, so they are far from rigorous or comprehensive. True scenarios should have fully developed storylines that evoke the richness of how the scenario unfolds and could actually happen. To be truly valuable, scenarios need to be created for a specific organization or strategic decisions – generic scenarios are of limited value. Always work with someone highly experienced in the field – most consultants that claim to do scenario planning are making it up. The Driving Forces and Critical Uncertainties identified below are highly summarized, and would be presented and aggregated very differently in a real scenario project. OK warning over, on with the content…
Scenario planning
Scenario planning recognizes that beyond a certain degree of uncertainty forecasting is of limited value (or can even be detrimental to good decisions). The process of creating a set of relevant, plausible, and complementary scenarios (more than the scenarios themselves) can be invaluable in creating and implementing effective, responsive strategies.
The heart of the scenario planning process is distinguishing between Driving Forces (consistent long-term trends) and Critical Uncertainties (unpredictable elements). Once these are identified, they are brought together to create a set of scenarios that reflect both what you know and what you don’t know about how the environment will change.
The image below shows a sanitized version of the process for a scenario planning project I ran for a major financial institution. This was quite a streamlined process relative to a comprehensive scenario planning project, however was designed to bring the insights directly into the existing group and divisional strategy process.
Below are the scenarios in detail:
- Driving Forces: Global Financial Services
- Critical Uncertainties: Global Financial Services
- Scenario Framework for Global Financial Services
- Four Scenarios for Global Financial Services
DRIVING FORCES: GLOBAL FINANCIAL SERVICES
1. Economic shift
Economic power is shifting to the major developing countries. The BRIC countries (Brazil, Russia, India, China) together host close to half the world’s population, and their pace of economic development means that before long there will be multiple economic superpowers. In addition, global economic growth is shifting to the virtual, and developing countries will gradually wean themselves from primary and secondary industries to be significantly based on knowledge-based services.
Future Files by Richard Watson hits global markets
A little while ago I announced that Future Exploration Network’s extraordinary Chief Futurist, Richard Watson, had released his book Future Files: A History of the Next 50 Years, including a few excerpts.
Since then it has sold at a giddying pace, selling out in Australia, and has now been launched in 10 editions worldwide, including two Chinese versions. The book has now been launched in the US and UK to great fanfare. The London book launch broke RSA’s record for most books sold, exceeding that for Clay Shirky’s event (see the event video).
Publisher’s Week in the US made Future Files its Web Pick of Week, saying…
Cheaper than a crystal ball and twice as fun, this book by futurist and web creator Watson examines what “someday” could be like, based on the five key trends of ageing; power shift to the East; global connectivity; the “GRIN” technologies of Genetics, Robotics, Internet, and Nanotechnology; environmental concerns, and 50 less general but equally influential developments that will radically alter human life by the year 2050. Watson gently scoffs at Jetsons-like wishful-thinking technology and flying cars; instead he predicts the fanciful (mindwipes, stress-control clothing, napcaps that induce sleep) and the useful (devices to harness the sea to generate energy; self-repairing car paint; retail technology that helps us shop, based on past buying habits; hospital plasters that monitor vital signs). In between the fun and frivolity, he prognosticates the frightening: the “extinction” of individual ugliness and free public spaces; the creation of hybrid humans; a society made of people who are incapable of the tiniest tasks; and insects that carry wireless cameras to monitor our lives. Part Jules Verne, part Malcolm Gladwell, Watson has a puckish sense of humor and his book is a thought-provoking, laughter-inducing delight.
Great to see Richard’s thinking getting out there! His talents and provocative insights are highly valued by Future Exploration Network’s consulting clients.
Keynote for Optus Business: Five Driving Forces of Connected Business
I have just completed delivering keynotes in six cities as part of a national roadshow for Optus Business. Optus’ annual client event, this year titled Beyond 08, was a morning event for its clients and prospects in Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra. The sessions began with my keynote on Surviving and Thriving in a Connected World, followed by Optus executives presenting insight and client case studies on mobility and IP convergence. Each event included an exhibition featuring Alphawest, the ITC services firm Optus acquired three years ago, and a broad array of Optus Business delivery partner organizations.
Rather than try to run through my entire keynote presentation here, I thought it would be useful to include the key content from just one of the five sections, on the Driving Forces that are transforming a connected world. The rest of the keynote describes in detail what connected business looks like, winning strategies for organizations in a connected economy, and finally the action that needs to be taken to succeed.
The five driving forces of Connected Business are:
1. Connectivity
Increasing connectivity is an overwhelming force, shaping society and business. We have come a long way since the first mobile phones that weighed less than a brick in the early 1990s and the birth of the graphic web browser in 1993. As we shift to pervasive connectivity, giving us access to all the people and information resources of humanity wherever we go, entirely new possibilities are emerging on who we are and how we live our lives. As messages flow rapidly between us, the people on the planet are becoming connected as tightly as the neurons in our brains, giving rise to an extraordinary global brain in which we are all participating.
ABC Radio: Peer-to-peer file sharing and the future of the media
Today’s ABC Media Report featured a special report on peer-to-peer file sharing and its impact on media. The program provided an overview of the history of peer-to-peer content sharing, starting from Napster and its legal travails, moving on to Kazaa, BitTorrent, online video distribution and the situation today, and how it is impacting the music, video and media industries. The report can be downloaded as a podcast (note that the peer-to-peer piece is only on the download, not the stream).
In between various industry lobbyists, lawyers and musicians, I was interviewed as a “futurist,” describing how video content is increasingly being distributed over the Internet and digital channels, and how content providers now have a choice on whether they distribute through traditional broadcast and cable television, or directly to their audience.
I was also quoted on some of the ideas that were contained in the Future of Media Report 2008, on how the media and entertainment industry is likely to quadruple in size over the next 20-25 years, and on the continuing drive to fragmentation that is challenging the industry. I continue to believe that there are major opportunities for those content providers that position themselves effectively in the current extraordinary transformation in content distribution.
