The intention of this article is to give guidelines for formulating flexible and contingent strategies that not only adapt to changes, but also anticipate them and, why not, promote them, thus achieving a transition from a “reactive” culture to a preventive and especially "proactive".
For a strategy to be flexible, it should be subject to adjustment according to circumstances or needs. And for it to be contingent, it must contain different variants or strategic routes that, as far as possible, lead to the proposed Strategic Destination.
However, the fact of having a flexible strategy brings with it three determining factors. First, that the Future will be explored in order to know the different possibilities (scenarios); second, that "strategic contingencies" will be devised on them; and third, that the Future will be monitoredwith the intention of adjusting or modifying the plan in time, that is, before circumstances can affect the achievement of the strategic objectives; If this monitoring is not carried out, the organization will limit itself to reacting to the changes, will suffer the consequences and most likely will see the achievement of its strategic objectives compromised. Not to mention that much of the effort devoted to defining a flexible and contingent strategy was lost.
Let's see then how to Explore, Engineer and Monitor the future (terms coined by Meneses J. in his book Hanni-Ba'al, 2015).
Exploration of the Future. The Future Maps
In order to explore the future, it is necessary to create a map of future possibilities, that is, to know the different feasible scenarios of materialization. However, it is not enough just to know the scenarios, you must also know the sequence of events that leads to each of these and the different options that each offers the organization in terms of opportunities and risks, in order to prepare for take advantage of them or circumvent them as the case may be. All these elements mentioned make up what we call the “Future Map” and for its elaboration it is necessary to mix or combine the analysis of actors and variables.
According to Meneses J. (2015) "Roleplaying Games have proven to be a very fast, powerful, simple and precise tool for preparing future maps, through which strategic sequences, influential authors and other information that did not exist are generated in the classical methods ”. Through this technique, the fact of having to make a ranking of power or a list of influence of the actors is ignored, since the sequence of events that is generated internally determines the capacity of action of each actor.
Future Map - How to formulate flexible and contingent strategies
Let us pause for a moment on the graph to see that the same scenario can be reached by successions of different events, which in turn carry different risks and opportunities. That is why it is so important to make the map of the future and not simply limit yourself to knowing the scenarios as a brief result. It is on this future map that the organization will draw its strategic route.
The Strategic Route
Now that the possible scenarios are known, with the sequence of events that configure them and their associated opportunities and risks, the organization must decide what its scenario is and the route by which it wants to reach it, for which it is necessary to define two crucial aspects:
The first consists of the criteria under which the organization will base its decisions when choosing the betting scenario, for example, profitability, indebtedness, reputational risk, etc. It should not be many for the decisions to be agile and to achieve the desired anticipation. After defining them, they should be prioritized or weighted, in such a way that when entering them in the analysis they determine which of those scenarios are favorable or adverse to the interests of the organization. Another advantage of defining these criteria in advance is that they allow quick decisions to be made when changing the strategic route if necessary.
The second aspect that must be known is the probability of occurrence of each of the scenarios. This can be calculated with the probabilities of occurrence of the events in the chain of events that configure it. I am not saying that the exact probability of each of the events must be known, but if it can be evaluated in relative terms such as high, medium or low, for example. In this way we will have some highly probable scenarios, others of medium probability and others of low probability of occurrence. The latter are better discarded as experience has so far shown that they do not materialize. Always, always, always, it is necessary to corroborate what probability of occurrence the catastrophic scenario has.
Bearing this in mind, the organization can now decide which scenario to bet on and the route by which it wants to reach it.
Strategic Route - How to formulate flexible and contingent strategies
Engineering the future. Define contingent strategy
Once the strategic route has been drawn, it is possible to define the objectives that must be achieved along that route in order to reach the defined Strategic Destination; These objectives cannot only be related, but must also be designed sequentially, based on the selected route.
Almost all planning offices understand that once the Strategic Destination has been determined, the scenario will not change, and if it changes, there are no plans to face this new reality; An example of this is the urgent way in which many organizations had to redo their strategies when the price of oil fell. The contingency in the strategy is achieved by defining objectives also for the different strategic routes in the most probable scenarios, in case the organization makes the decision to change route due to changes in the scenario. Of course, I emphasize that contingencies must always be defined for the catastrophic scenario, if it has a medium or high probability.
To engineer goals, decision makers must:
- Analyze the future map and its scenarios. Identify the probabilities of occurrence of each. Evaluate the categorization of the scenario with respect to the original decision criteria. Identify the risks of each scenario. Establish possible risk mitigation, transfer or acceptance measures. in each scenario Identify the bet or ideal scenario (s) Select the route or sequence of events to achieve them and the contingent routes Determine the objectives that must be achieved to achieve the Strategic Destination, taking into account the sequence of events, both in the defined Strategic Route and in the Contingent Routes.
Another advantage of having the Future Maps is that once the Rupture Events are known, the organization can and must identify which of them has any interference, that is, it can modify them as appropriate, either by its own action or by third parties with those who can establish agreements or alliances, so that reality follows the desired future path. In this way it is possible to go from a "reactive" culture to a "proactive" one.
Just as an engineer must do the calculations so that a dam does not break or a bridge does not fall, the strategist planner must do the necessary calculations to define the route (s) by which he can take the organization to its Strategic Destination, as well as the contingencies that it must foresee in case of changes of scenery. This guarantees the success of the strategy.
Monitoring and review
A complete method of Strategic Anticipation should not only cover the Exploration and Engineering of the Future, it should also integrate Future Monitoring mechanisms in real time, which will allow the adaptation of actions day by day, increasing the range of maneuver.
Future Monitoring is made up of a set of technical activities, related to each other, that allow us to constantly update knowledge on possible and probable scenarios. Ideally, a list of possible decisions, mutations, outcomes, and scenarios that could occur in the future should be developed to guide monitoring of these events. Each breakout event must contain at least one Future Indicator to alert management to changes in scenario; and management may, based on this information, make a better decision on whether to maintain or change the strategic route; and here the contingent strategies defined for each alternative route come into play.
To obtain the future indicators, you must:
- List the possible mutations of the system (Rupture Events). List the decisions that generate these mutations. List the possible results of those mutations.
As progress on the Strategic Route is systematized and documented, learning is also achieved in the interpretation of the different events and the actions of the actors, which management can integrate into its future decisions, facilitating personal learning cycles. and organizational.
Designing Contingent and Flexible Strategies enables leaders to be precise drivers of their organizations, to see new options on the road and away from them, or to take them based on a thorough analysis.
Conclusions
Anticipation is not simply projecting the data from the past and the present, because if a disruptive event were to occur, the strategy would collapse causing the well-known “Crisis” that force the organization to react, which is nothing more than lack Strategic Anticipation.
With Strategic Anticipation, we managed to move from a reactive culture to a proactive culture, where the “Strategic Importance” criterion becomes more relevant for decision-making than the “Urgency” criterion.
Some of the factors that make you configure one scenario or another are alterable. Of course, they can only be altered by those who know what factors can be altered, how they can be altered and what is the result of altering them, to leave them in the position that is convenient for the organization and thereby engineer its future. This is being proactive
To conclude, I want to bring up a phrase by Julián Meneses, author of the ultrafast method of foresight “Hanni-Ba'al” for the medium, short and very short term: “The future can be explored; And just as it can be explored, it can also be designed, engineered and created. It is not only a possibility, but our responsibility, to build a better world, since it does not depend on chance ”.
Excerpted from: Julián Meneses (CEO of Strategic Anticipation). Hanni-Ba'al Rapid Prospective Method. How true strategists anticipate achieving competitive advantage. Ed. Strategic Anticipation
