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Presentation to Strategic Planning Society by Gill Ringland
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Scenario Planning
Strategic Webinar Series15 May 2013
Agenda
• Opening remarks - Fiona Carter, Executive Officer SPS
• Scenarios for India and China to 2015 - Gill Ringland, CEO SAMI Consulting
• Q&A
2
The Strategic Planning Society
SPS was formed in 1967 and is a global network dedicated to the development of strategic thinking, strategic management and strategic leadership.
Our Members are individuals, corporate organizations and business schools.
We are dedicated to supporting Members to develop their strategic management and leadership capabilities.
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Our Missionimprove the practice,
development and recognition of strategic management
Our Visiona dynamic, global strategic management community
About the SPS Strategic Webinar series
A series of Webinars launched in January 2013 for SPS Members worldwide.
Topics chosen for their broad application and appeal to the Membership of SPS.
To provide insight and practical recommendations for strategic managers and leaders.
Future sessions are planned to address subject areas such as strategy and sustainability, strategy and organizational design and strategy implementation.
Let us know if you would like to contribute to an SPS Webinar.
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Scenario Planning
• There is on-going turbulence of the world economy
• Scenario planning is being increasingly used in the public, private and NGO sectors.
• Asset managers are realising that 80% of their concern needs to be with the global business environment, and 20% with the specific investment – a reversal from the boom years to 2008.
Our speaker will share a case study with you:
• A set of scenarios for India and China to 2015, examining how they were generated, what the scenarios got right and what not, lessons learnt.
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Our speaker
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Gill Ringland
• CEO of SAMI Consulting.
• Previously head of strategy at ICL now part of Fujitsu.
• Currently working with the European Commission, Eurocontrol, the Technology Strategy Board and ACCA.
• Scenario planning books,
• Also Beyond Crisis ,co-authored with Oliver Sparrow and Patricia Lustig,
• In Safe Hands? on Financial Services to 2050
• Here be Dragons, Exploring how organisations can incorporate thinking about the future into their day to day planning and projects.
Robust decisions in uncertain times
SAMI
• Our offer– To enhance the capability to anticipate
– To transform emergent thinking into strategy and implementation
– Consulting, backed up by executive education and research to deliver “robust decisions in uncertain times”
• “You can never plan the future by the past”– Edmund Burke, 1729-1797
7www.samiconsulting.co.uk
Robust decisions in uncertain times
India and China to 2015
• Study commissioned by the City of London in
2006
• The City was concerned at the impact of India
and China on London’s Financial Services
– Were India and China the same or different?
– Were India and China a threat or an opportunity?
• 5,000 copies of the report were distributed
• Report in pdf on the SAMI web site
– www.samiconsulting.co.uk.under News &
Publications.
www.samiconsulting.co.uk 8
Robust decisions in uncertain times
Scenarios for India and China
• Methodology
– Worked with Oxford Analytica’s country experts to
develop the scenarios
– Held workshops in the City of London to explore
implications for asset management, insurance and
international banking
– Published report in October 2006
• Will focus here on
– What were the scenarios and what has happened
since?
www.samiconsulting.co.uk 9
Robust decisions in uncertain times
www.samiconsulting.co.uk 10
• It is a mistake to see them as homogeneous – there are many
Chinas and Indias.
• The dynamics of development apply to China or India as much
as they do anywhere else.
• China or India can be thought of as a producer, a political power
or a marketplace, each raising distinct questions leading to
distinct approaches
• Our approach was - what are these countries going to be like as
places to do business, in which to invest, with which to
collaborate or compete?
Comparing China and India
Robust decisions in uncertain times
10203040506070
Attitudinal Distance
France
Japan
Spain
Brazil
China
Korea
India
Kenya
Indonesia
Nigeria
Australia
Canada
USA
UK
GermanyIndustrial
Developing
Market
Collective
Future-oriented
Mixed views
Mld Inc
Poor
Chile
S Africa
Peru
Ecuador
Guatemala
Mexico
Pakistan
Thailand
Turkey
Comparing China and India
Robust decisions in uncertain times
China
India
-30
-20
-10
0
10
20
1960 1965 1970 1975 1980 1985 1990 1995 2000
Annual real GNP growth
China
Middle
income
Lower middle
income
Indexed GDP, 1960=100 (constant money)
500
1000
1500
2000
1960 1970 1980 1990 2000
India
Relative size in 2004
China
India
Lower
middle
income
Middle
income
Comparing China and India
Robust decisions in uncertain times
The big questions for India
• India is a very complex and consensus driven society
• Would frustration about – China’s example
– Loss of esteem in Asia
– New generation with new views
lead to further liberalisation of economic, regulatory and social controls?
• How would the balance of power between a federal style of government with localism, and a more centralised system, play out?
13www.samiconsulting.co.uk
Robust decisions in uncertain times
Liberalisation is
reversed
Liberalisation
accelerates
Centralised system of
governance
Federal style of governance
The Elephant
Lumbers along
The
Elephant
Breaks its
Chains
Retreat to the
Woods
2006
Scenarios for India
Robust decisions in uncertain times
What has happened in India?
• India is one of the fastest growing economies in the
world as a result of liberalization of the last decades,
covering manufacturing, agriculture and financial
services.
• The balance of power between the central government
and the states has shifted slightly towards central
government as India moves to play a bigger part on the
world stage viz-a-viz the UN, Pakistan, etc. For
comparison purposes, the central government of India
has more power than the US Federal Government.
www.samiconsulting.co.uk 15
Robust decisions in uncertain times
Liberalisation is
reversed
Liberalisation
accelerates
Centralised system of
governance
Federal style of governance
The Elephant
Lumbers along
The Elephant
Breaks its Chains
Retreat to the
Woods
2006
Scenarios for India: Direction
Robust decisions in uncertain times
The big questions for China
• How long can China’s rapid economic growth
persist?
– Can China cope with the complexity it is creating?
– What are the adaptation mechanisms?
• How will China interact with the rest of the world?
– Will she be seen as a source of economic wealth and
growth?
– And/or a threat on the world stage, a source of instability?
17www.samiconsulting.co.uk
Robust decisions in uncertain times
Scenarios for China
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2006
Robust decisions in uncertain times
What has happened in China
• China’s economic growth has continued
– No longer as connected to US trade after 2008:
– focus on growing internal consumer markets
– 7.7% growth annualised in last quarter
• China has a foreign policy to protect its interests
– investments in raw materials in Africa, Latin America,
SE Asia, ex-USSR countries ,---
– Seen as a source of cyber-crime
– aggressive in South China Sea
– Supports North Korea (shared road bridge)
www.samiconsulting.co.uk 19
Robust decisions in uncertain times
Scenarios for China: Direction
www.samiconsulting.co.uk 20
2006
Robust decisions in uncertain times
What can we learn from these?
• Scenarios need to build on history but not be constrained
by the past
– Experts can find it difficult to recognise signs of change
• Thinking about the trajectory – how the organisation
might get from A to B is important for identifying early
indicators that might show which scenario was emerging
– Elephant Breaks its Chains – early indicator: Indian companies
off-shoring to lower wage economies.
– Lion leads the Dance – early indicator: gradual liberalisation of
the renminbi $ exchange rate
• The scenarios allowed for discussion of previously less
explored future directions for China and India.
www.samiconsulting.co.uk 21
Robust decisions in uncertain times
Thank you!
www.samiconsulting.co.uk 22
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eSAMI ---- please ask –
For details of our training courses (with the
Horizon Scanning Centre of the Government
Office for Science) contact training
@samiconsulting.co.uk.
For details of our Blowing the Cobwebs off our
Mind events, please ask,