QER SMT Scenario Planning Workshop

by Professor Ron Johnston28 April 2009

Brisbane

QER faces a future marked by

uncertainty, complexity and change • Structure of the global economy

• Extent and impact of potential climate change

• Range of responses to growing oil scarcity

• New technologies with high impact on supply and demand for energy

• Conflict between economic and environmental values

• State, national and international legislation and policies

Foresight

Assisting organisations to think systematically about the future so they can develop robust strategies for it by:

– Understanding what types of futures might be possible

– Challenging presumptions

– Building greater resilience into strategy

Differentiating Foresight

Action-oriented [vs. ‘contemplative’ (passive)]

Participatory [vs. non-participatory]

Alternative futures [vs. a single future state]

Probable, possible and preferred futures

Basic types of dialogue in a Foresight exercise

Diagnosis Prognosis Prescription

Understanding where we are…Understanding where we are…

Exploring what could happen…Exploring what could happen…

Debating what we would like to happen…

Deciding what should be done …

Debating what we would like to happen…

Deciding what should be done …

Structured stakeholder dialogueStructured stakeholder dialogue

Tool Future Time-horizon (years)

Expert Vs Participative

Strategic Planning Preferred 1-3 E+

Trend Analysis Probable 2-5 E++

Horizon Scanning Possible 2-5 E + P

Panel/Inquiry Preferred 2-5 E + P

Roadmapping Preferred 3-7 E++

Delphi Polling Probable 5-15 E++

Scenario Planning Possible 5-50 E + P++

Modelling Probable 5-50 E++

Scenario Planning Avoids the incrementalism of traditional planning

TIME

GO

AL

What should we do today?Where we

are now

Where do we need to be 15-20 years

from now?

Anticipating

TIME

GO

AL

Where we are now

Where can we be next year?

And the next?…

Incrementalism

Versus

Annual Planning Scenario Planning

Avoiding Limitations

We will:

MasterPlan

CoreStrategies

Today

Today

Most LikelyFuture

AlternativeFutures

Instead of:

…A set of core strategies, but not a single “grand strategy”…

Developing Future Scenarios

The “Planning Space”Key Global Affairs

Mission Drivers

Energy

Economy

Education

Trade

Regional Conflict

Technology

Demographics

Health & Disease

Fiscal Health

Ethics

Derive Key Forces For Change (Dimensions) Outside Direct Control

Set the Boundary Conditions

of the Planning Space

Scenarios Selected to Capture The Range of Planning Uncertainty

Evergreen II Scenarios

Profits & Principles

Congagement

Asian Way

Lockdown

Future OperatingEnvironments

Be Careful What You Wish For

USCGExpertise

(Workshop)

Immersion inFuture “Worlds”

Optimal USCGStrategies

Set ofRobust

Strategies

Scenario Planning

A scenario is a ‘story’ illustrating visions of possible future or aspects of possible future.. Scenarios are not predictions about the future but rather simulations of some possible futures. They are used both as an exploratory method or a tool for decision-making, mainly to highlight the discontinuities from the present and to reveal the choices available and their potential consequences

Elements of Scenario Planning

1. Identify the focal issue 2. Identification and analysis of the

drivers 3. Rank by importance and uncertainty4. Selecting scenario parameters5. Writing the scenarios6. ‘Back-casting’ to identify key

interventions

Economic Drivers

Resumed economic growth High energy demand from China, India Strong drive for alternate fuels Commodity prices soar again

Truncated economic growth High oil prices constrain economic recovery Capital availability limited

Environmental Drivers

Strong environmental pressures High range climate change Copenhagen sets tough ETS requirements –

targets to decarbonise economies Major investment in climate change

Moderate environmental pressures Low range climate change Increasing doubt about greenhouse science Priority to create jobs

High range climate change

Technological Drivers

Major advances in supply technology Efficiency of oil extraction doubled through

application of biological agents Electric car production soars based on new

battery technologyMajor advances in demand technology Energy management industry booming with

new products and services High efficiency cars dominate global

production

Political Drivers

Market based approaches High level of taxation on road use Private sector investment drives alternate fuel

developmentInterventionist approaches Major government investment in alternate fuel

development Governments strongly influenced by

environmental pressures

Social/Values Drivers

Values dominated by environmental concerns

Hydrocarbon anathema Large decrease in transport of goodsValues dominated by economic concerns Environmental extremism rejected in favour of

jobs and community well-being

alternate fuels