FEMA’s ‘getting urgent about the future’ initiative at least talks the talk

Posted by Adam Gordon on Jul 16, 2010 in all, policy, risk management

I was interested to see FEMA’s (U.S. Federal Emergency Management Agency) launch of its “Getting Urgent About the Future” Strategic Foresight Initiative, not only in itself unfashionably embracing deeper, longer-term thinking about key policy & security issues, but also making an excellent fist of defining its benefits (a definition that is in all essentials equally valid for business-industry foresight):

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“The world around us is changing in ways that may have profound effects on the emergency management enterprise. Collectively, we must begin to think more broadly and over a longer timeframe if we are to understand these changes and their potential impacts. To this end, FEMA has launched a Strategic Foresight initiative (SFI), the objective of which is straightforward: to seek to understand how the world around us is changing and how those changes may affect the future of emergency management and our community…

“The SFI can serve as one important tool in the development of both strategy and plans. By understanding the potential future environment, organizations will better understand and anticipate risk while ensuring opportunities can be fully capitalized. For example, the SFI may identify new or increasing capability requirements as well as emerging capabilities that do not exist today. Such identifications could support decisions about future investments as well as planning activities and exercises. In a more indirect manner, the SFI can help establish a research agenda for the emergency management field by highlighting areas of emerging relevance and the key questions that remain unanswered.”

[On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security.]

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Credit crunch: the foresight was there, the problem was elsewhere

Posted by Adam Gordon on Dec 15, 2008 in all, decision-making, failed predictions, forecast filtering, Future Savvy, managing uncertainty, Perils of Prediction, scenario planning, strategic foresight

One of the questions I’m asked a lot is whether Future Savvy would have helped to predict the credit crunch. My response, as in this INSEAD interview, has been that the book gives readers the tools to judge the merits of predictions, so wouldn’t have directly helped predict the financial crisis, but it would have been a key resource in drawing attention to the poor view of the future that bankers and regulators were acting on.

In many ways, focusing on whether “this” or “that” is predicted, or not predicted, is to put the cart before the horse. The horse is the adequacy of our approach to anticipating outcomes and the quality of our foresight as a whole. When this is good, the cart – not missing important changes – will follow.

Credit: http://www.lewrockwell.com/blog

In this, it’s important to realize that many did predict the financial crisis (as many predicted 9/11 in various ways). Sticking with the financial crunch for now: it has generally been portrayed it as a “why-didn’t-anyone-see-it-coming” event. It wasn’t. Hats off to The Times for their October 12 piece: “10 People Who Predicted the Financial Meltdown.”(Summary here). Allowing for a fairly loose definition of “predicted,” the article shows that among those who foresaw the crunch were: Vince Cable, deputy leader of the Liberal Democrats (2003); US congressman Ron Paul (2003); Stephen Roach, senior executive at Morgan Stanley (2004); Christopher Wood – chief strategist of a broking firm in the Asia-Pacific Market (2005); and Nouriel Roubini, economics professor at NYU (2006)… and there were many others.

A different problem

So this reframes the problem entirely. It’s not that the predictions were not there. It was that not enough people believed them and, particularly, important decision-makers didn’t believe them or didn’t have the institutional capacity to respond. So there are two halves to the problem: the ability to see the full spectrum of what may happen, including unexpected outcomes; and the ability to act on what we see. Quality in foresight work – the raison d’etre of Future Savvy – makes it possible to see more outcomes more clearly, and to act with more confidence in choosing what to prepare for. (In the real world we can’t prepare for every outcome.)

There was a good letter published in the FT from eminent futurist Peter Schwartz on December 2, which describes this very well. It shows predictions for what they are (one-horse scenarios), and how decision-makers are typically bound into inaction or wrong action not only by working on the basis of a wrong prediction, but by the predictive mindset itself. This mindset – the habit or culture of picking “one right answer” in the face of a complex situation with many competing outcomes, prematurely closes alternatives and leaves us open to surprise. As Schwartz says, as scenario planners have always said (and he was one of the people who defined the field in the first place), a compelling set of alternative future scenarios encourages decision-makers to recognize unlikely and unpopular outcomes, along with expected outcomes, and therefore to be able to respond earlier and more effectively whatever happens.

Scenarios also contribute to the “act” side of the problem. In a well-done set for the banking industry, a financial-meltdown scenario would at least have been in play, institutionalizing the consideration of less unlikely, less popular outcomes in company and government forums, forcing serious consideration of necessary strategies and contingencies, and therein creating the ability to act early and effectively without having predicted the crisis.

The letter is well worth quoting in full:

Sir, The real question regarding the financial crisis is not, as the Queen asked: “Why did nobody see this coming?” In fact, any number of thoughtful people in academia, politics and business had been compiling the data and sounding warnings for several years.
The question we should be asking is: “Why didn’t decision-makers believe that a global financial meltdown was increasingly likely and then act on that belief?” Or, to put it another way: “What would it take to make decision-makers both believe and act?”

The problem is that decision-makers believe that they are forced to pick one right answer: the most likely scenario. Their approach to decision-making does not afford them the opportunity to consider apparently low probability but highly consequential scenarios. The answer, therefore, to the “believe” half of the question is a decision-making process that considers several scenarios: compelling stories about alternative futures that incorporate the analysis of “outliers” and describe three or four plausible paths forward.
Good scenarios force decision-makers to challenge their own assumptions and reconsider what is possible. As a result, they can take seriously those scenarios that seemed less likely at first, but whose plausibility increases over time.

The second part of the question – “What would it take to act?” – is much harder to address. Suppose that Ben Bernanke or Hank Paulson had come to believe a year or two ago that the house of cards was about to collapse and trigger cascading, global failures. What would they have done, given the realities of the complex interconnected systems at the heart of the problem? Perhaps if they had good scenarios with appropriate indicators to start with, they could have rehearsed different strategies and contingencies. Importantly, these decision-makers could have used these scenarios to persuade others on all sides of the issue also to recognise the complexity of the impending crisis in a more timely way. It’s never easy to convince everyone around you that the game they have been playing to their great benefit is about to change. But with a shared recognition of the magnitude of the risks and the ways they might unfold, they could have acted far earlier to prevent some of the dire consequences that have occurred, let alone what is to come.

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Scenario planning orientation and methods interview

Posted by Adam Gordon on Aug 7, 2008 in all, foresight tools & methods, horizon scanning, scenario planning, trend tracking

I was interviewed at length about scenario building by a foresight firm in the UK a few weeks back. They took notes (more than I deserved, no doubt) and here they are, below.
In the notes, which are typed live and necessarily brief, I’m “AG”. The others are participants asking questions and making comments…

1. First, what do you use scenario planning for?
Initially stated everyone did scenario planning, every time you find yourself doing something unusual it implies you’ve done something wrong with scenario planning. We think about the future all the time, constantly making scenarios in head, if move to London think about what need to earn, where live, family, critical uncertainties. We run forward, think about various challenges, we rehearse the future.

CL wondered about ill thought through scenarios?

AG felt it was inevitable that people will disagree. End of day scenarios boil down to politics. Visionary scenario planning gets everyone talking – firstly need to find common threads (if not grounds), that most buy into – even if it is a low common denominator, thus creating a shared vision, then dystopias, but remember the end point is never total agreement.

RS Acknowledgment of importance of politics? Is that your experience of foresight?
AG believes he is a political animal, but no longer involved in protest. Belief is power is absolutely important when thinking about the future. He then amends it to power and money – as often groups without power have public opinions so they can shape the future. There is a danger that they only talk about market forces and technology and that’s it.
RS Is it a struggle working with other foresight groups – is that view not shared?
AG says they can give a shared opinion, but politics mostly overlooked by the groups

RS describes that we all have a political agenda (social inclusion, voices excluded) within this project – it makes it interesting to deal with those who have an economic/gov background, it’s difficult to pretend futures neutral.

2. Could you talk me through a brief overview of your scenario planning method? (How long does each stage take? What preparation is required for each stage? How many people are involved in each step?)

There is an underlying method – but each stage has some degree of flexibility and can use a variety of methods.

A. Handshaking stage
Firstly deciding what you’re doing, basic project stuff – who’s involved, what resources, what deliverables – key is choosing method and who’s involved, may have varying degree of democracy – heads or grass roots, be inter disciplinary or not, have a broad or narrow focus, and what type of input is required. Believes it needs to have mixed agenda. Note that relying totally on academics is bad.
Then you need to decide the dates your final scenarios will relate to – further in the future the more radical but less relevant to other people and harder to action. Most future scenarios are around 10 years ahead – as a rule not less than 5 or more than 20.

To decide the focus you must:
1) Drive management team towards understanding how much influence they have over the future, can they drive future or does external events influence them? Percentage, never exact but idea.
2) Based on the amount of control can decide if creating a visionary scenario or anticipatory (not good word) scenario building. Visionary trying to develop an idea, multiple stakeholders get shared ideal, easier if pressure group, one organisation, as they can develop enrich and jump on to focusing on how we would put this into practice. They create a vision and dystopia. Influence future (money, opinion etc).
In anticipatory, or “Businessy type scenario”, participants don’t mind how things turn out, what they want is to be successful in the world however it turns out. Within organisation goal is to anticipate broad set of possible worlds, particularly critical uncertainties. So they do have research scenarios and different takes on how things emerge, BUT no preferred future. Look at resource and competence so they may have preferences but can adapt. To same extent they look at legacy competencies but this is not a determining factor. Scope alternatives and plan.
The Handshaking stage takes a few meetings to do, small with key meeting, then larger with various stakeholders – perhaps half a day.
In terms of materials one could send out stimulating piece to encourage thought so not stone cold but which doesn’t colour the agenda. Could also have to read a synopsis of what the process is about and the sort of things to think about and expect.

B. Horizon scanning
There are 100s of ways of doing this. Basically need to go into world and do research on what’s going on in key dimensions, technology, markets – broad scan of world relevant to issue area, bring in people outside of own industry. Best tool in this area is “learning journey” – jazzy word for anthropology of own society, structured agenda for talking to people about concerns, what they know, what they’d like, focusing on future – so need to be carefully done to avoid reiteration of now or what they think you want to hear.
Note that you can commission this – but it is not market research.
No answer to how long, dependent on time and resources, but should budget third of total time.

C. Pulling it together
Mulch through the data gathered – preferably in funky creative meetings, collate, output into things like forces, drivers of change, trends, blockers of change, critical uncertainties. What comes out is a picture of world that’s relevant to us.
This activity could be whole group or just the scenario developing team – it’s to pull out what’s important.
The format could be something like workshop, sleep/gap, then another half day or so.

D. Separating critical from predetermined
This could require a Mini Delphi, talk to experts to find out what are the sorts of things in forces of change list that are predetermined – so things we know will happen in 2020, perhaps the number of students, or trends to sustainability.
The various issues will have lifecycles in being a key focus, they’ll always be there but the amount of interest will vary, eg sustainability. In the future sustainability will be less of a concern, but not less important, it will just be integrated into our expectations we won’t focus on it. An example relating to education is how we’ve shifted views on punishment; it was a stick, then detentions, then exclusion…
[Divergent conversation about the failure to correctly predict overpopulation – they just extrapolated – AG argues it was not a failed forecast, just bad forecasting - a failed forecast is interlocked bad assumptions. There was a discussion whether carbon credits will have the same results.]

E. Question all assumptions/Test lists
Note: This stage might highlight the need for more research or stakeholder engagement.
The goal is to end up with two lists that rank for importance. One is about predetermined things – things that we are sure about for our purposes – note that we may, or may not, need to talk about them. Then there are uncertainties (anything we can’t clarify with further research). They are sometimes called “strategic uncertainties”.

F. Create scenarios
These lists form basis of scenarios, they allow us to try out alternate resolutions of the unknowns. AG hates the 2 by 2 matrix approach (from Boston management), but it is sometimes a useful tool. Shell use a fork in the road approach, or possibly a roundabout, where there are clear alternatives. For example, they know sustainability will happen but they have various scenarios predicting the demand for resources. [RS comments that Shell also have a trilemma approach, so deal with three worries.]
More generally scenarios are structured round uncertainties. The van der Heijden approach is to list things and tell stories – NEEDS creative facilitators. He has a pack of cards which people develop stories around. Each group is given part of the puzzle to resolve. Basically you need judgement to choose how.
The groups then write stories and the facilitator ensures the scenarios cover the cone of plausible uncertainties. Note there must be multiple scenarios, a single story is not helpful.
The creation of scenarios will take a minimum of 2 days to talk through, write, draw or tell.

Note: Jump scenarios are conversations over a day. There is no learning journey and it’s hard work for the facilitator. The result is paragraphs rather than stories. These are good for management to emphasis the alternatives and broaden thinking

G. Check and test scenarios
Vital outside people criticise. What could and would work? This stakeholder analysis is meant to be a practical exercise.

H. Put them out
Visioning scenarios (including preferred outcome) get published, they need to get folks on board. Business ones tend to be more internal.
Then test existing strategic agenda within scenarios. They’re a test bed for strategy and choices. How would things work?
Or backcast using the scenarios – so how to reach or avoid scenarios.
AG keen to promote that there needs to be standards, just like testing a pram, you need to exhaust all the things that could happen before it gets its kite mark.
[There was a conversational aside over the time spent on this. AG worried not enough time spent using them and that politics will block change – “if broke don’t fix it”. People need to be desperate to be receptive.]

3. Do you use any tools for scenario planning? If so, can you briefly describe them?

Classic management tools – so getting people to communicate, being experienced based.

4. Are any of those tools online?

Nothing practical is online but there are resources and case studies (see his website). Although then amended that can do Delphi online. Note that learning journey is not market research, not supposed to be investigating people’s mental models – “good foresight is not predictive”.

5. What scenario planning tools would you ideally like to have available?

Something that follows stages explaining steps, timelines, who’s involved, explaining predetermined and uncertainties when listing – basically scaffolding.

6. If time was restricted for a scenario planning exercise, which parts would you keep because they’re the most important?

Would go through all stages (tick all boxes) but go lightly on some. However the less knowledge bought in the more focus on facilitation. The key is to get people to develop interesting motivating diverse stories appropriate to their needs.

7. What tools or approach would you recommend if a non-expert wanted to do scenario planning?

When asked AG said that don’t need a facilitator but would do better if had one. They focus the time and can support the whole process – not just when in workshops. Those involved aren’t experts and have a stake in the present so they’re going to struggle to change their minds.

When asked if it could be done alone AG said yes, BUT that it would be better if one could do at least step G, testing scenarios, with others.

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