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Fierce Foresight tm
Creating Tomorrow Out of the Changing of Today
WorldFuture 2013
Dr. Michael PettyNorth Star Partners
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Fierce Foresight tm
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Fierce Foresight tm
Failed to foresee
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Fierce Foresight tm
Failed to foresee
Failed to foresee
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Fierce Foresight tm
Failed to foresee
Failed to foresee
Failed to foresee
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Fierce Foresight
“What everybody knows is what has already happened or become obvious.
What the aware individual knows is what has not yet taken shape, what has not yet occurred”
Sun TzuThe Art of War
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Objectives
Develop the ability to “fiercely” confront today’s reality
Introduce tools to initiate the creation of insight of today and foresight of the future
Recommend an ongoing foresight system to “fiercely” pursue the opportunities and risks of today’s reality and its changing environments
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Fierce Foresight tm
Foresight (noun):1. care or provision for the future
2. the act or power of foreseeing
3. an act of looking forward
4. knowledge or insight gained by or as by looking forward; a view of the future.
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Fierce Foresight tm
Fierce (adjective): menacing, cruel,barbarous, threatening
Synonyms (Roget’s Thesaurus): robust, intense,strong, powerful, passionate, unbridled, bold, relentless
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Fierce Foresight tm
Gaining a view(s) of the future
by robust, intense, passionate, bold and
relentless pursuit.
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Fierce Foresight tm
Interrogating Reality
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“the present is the future
in its most creative state”
T. Irene SandersStrategic Thinking and the New Science
Fierce Foresight tm
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Interrogating Reality
The objective of interrogating reality is to answer three critical questions:
What are the current influences on the business?
What influences are changing?
What influences could change?
Interrogating Reality–Part I
Insight of the present is
the foundation of foresight
of the future(s)14
Interrogating Reality–Part I
Asking the tough questions about today’s operations:
Do we really understand our business model?
If not, Business Model Canvas is a great tool!
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Interrogating Reality–Part I
As we know it today
The Business Model Building Blocks
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Interrogating Reality–Part I
An example: Starbucks Exercise
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Interrogating Reality–Part I
Asking the “fierce” questions about today’s operations/business model:
What’s working?
What’s not working?
What’s working that’s in jeopardy?
Interrogation Matrix: Current Influence
Component Socio/Demo
Tech Economic
Environ
Legal/Pol
Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure
Revenue Stream20
Interrogation Matrix: Current InfluenceStarbucks Exercise
Component Socio/Demo
Tech Economic
Environ
Legal/Pol
Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure
Revenue Stream21
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Interrogating Reality–Part II
Asking the “fierce” questions about tomorrow’s operations:
What’s working today that may not tomorrow?
What business environmental factors are changing?
What known critical future issues are not being discussed?
Interrogating Reality–Part II
Asking the “fierce” questions about tomorrow’s operations:
The Business Model Canvas on steroids
What are the underlying assumptions of each component of the Business Model?
Which assumptions are in jeopardy?23
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Interrogating Reality–Part II
What are the critical assumptions underlying
each building block?
What assumptions are in jeopardy?
Interrogation Matrix: “Changing” InfluenceStarbucks Exercise (cont.)
Component Socio/Demo
Tech Economic
Environ
Legal/Pol
Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure
Revenue Stream25
Interrogation Matrix: “Changing” Influence
Component Socio/Demo
Tech Economic
Environ
Legal/Pol
Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure
Revenue Stream26
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Interrogating Reality–Part II
Asking the “fierce” $64 billion question:
What STEEP factor could change?
What underlying assumption could be in jeopardy?
Interrogation Matrix: “Changing” Influence
Component Socio/Demo
Tech Economic
Environ
Legal/Pol
Customer SegmentsValue PropositionDistribution ChannelsCustomer RelationsActivitiesPartnersResourcesCost Structure
Revenue Stream28
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Interrogating Reality–Part III
Asking the “fierce” questions about today’s reality:
Is the business model understood and are the underlying assumptions identified?
Are ongoing changes in the environment being actively and “fiercely” assessed?
Are future (but yet unknown) changes in environment factors being actively assessed?
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The Three “Fierce” Questions
1) What general (tectonic) factors influence our business today?
2) What general factors are changing?
3) What general factors could change?
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Fierce Foresight tm
The Black Swan
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The Black Swan
The Black Swan: The Impact of the Highly Improbable (2007)
Nassim NicholasTaleb : “we do not live in a probabilistic
world”
One of most influential books of the first decade of the 21st Century
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The Black Swan Defined
A Black Swan is an event that is:
Happens unexpectedly
Devastating in its consequences
Subsequently rationalized
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The Black Swan Stress Test
What event (or related series of events)
could make your business irrelevant or worthless
in six months or less?
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The Black Swan Stress Test
What event (or related series of events) could make your business irrelevant or worthless in six months or less?
Example: The US auto industry
U. S. Automotive Business Model
Design
Cars
Assemble Cars
Sell Cars
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Underlying Assumptions•Proper Needs Assessment•Necessary Demand•Acceptable Styling•Appropriate Technology
•Available Resources•Cost Efficient Operations•Appropriate Quality
•Competitive Price•Available inventory•Available consumer credit
U. S. Automotive Business Model
Design
Cars
Assemble Cars
Sell Cars
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Underlying Assumptions•Proper Needs Assessment•Necessary Demand•Acceptable Style•Appropriate Technology
•Available Resources•Cost Efficient Operations•Appropriate Quality
•Competitive Price•Available inventory•Available consumer credit
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The Black Swan Stress Test
What event (or related series of events) could make your business irrelevant or worthless in six months or less?
Example: The US auto industry Sixty year old business model Key element – providing retail customers
loans or leases to transact new car purchases Made irrelevant in less than six months in
2008 Impact of banking industry credit crisis
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Stress Test Rules(Table Exercise)
What event (Black Swan) or series of events could render the current business model irrelevant/worthless in six months or less
Identify ten “Black Swan”
Improbability of likelihood is irrelevant(What probability of total loss is acceptable to
you?)
The Black Swan Matrix
Black Swan Socio/Demo
Tech Economic
Environ
Legal/Pol
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Black Swan Assessment
Black Swan
Description Industry (In or Out)
Environ. Factor
(Existing or New)
Strategy(Yes or
No)
1 AAA In Existing Yes2 BBB Out Existing No3 CCC OUT New No4 DDD In New No5 EEE Out Existing No6 FFF In New No7 GGG In Existing Yes8 HHH Out New No9 III Out Existing No10 JJJ In New No
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Is Your Business Model at Risk?
Sony Walkman – market leader for 20+ years
MP3 technology - alternative (albeit illegal) music delivery system (Napster)
Apple via iTunes/ iPod - capitalized on the change in technology and change in music contracting
The Walkman - officially retired for lack of market demand.
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Is Your Business Model at Risk?
Sony Trinitron Television – the premium TV product for three decades
Sony Walkman – market leader for 20+ years
Sony eBook reader – on market
almost four years before the iPad.
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Fierce Foresight tm
The Flip-Side: The Golden Goose
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The Golden Goose Defined
The Golden Goose is an event that is:
Happens unexpectedly
Creates extraordinary opportunities as a consequence
Subsequently rationalized
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The Golden Goose “Euphoria” Test Rules
Identify the event (Golden Goose) or series of events that would render your current business model extraordinarily successful in “6” months
Identify ten “Golden Geese”
Improbability of likelihood is irrelevant(What probability of extraordinary success
would you pass up?)
The Golden Goose Matrix
Golden Goose Socio/Demo
Tech Economic
Environ
Legal/Pol
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Golden Goose Assessment
Black Swan
Description Industry (In or Out)
Environ. Factor
(Existing or New)
Strategy(Yes or
No)
1 AAA In Existing Yes2 BBB Out Existing No3 CCC OUT New No4 DDD In New No5 EEE Out Existing No6 FFF In New No7 GGG In Existing Yes8 HHH Out New No9 III Out Existing No10 JJJ In New No
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Three More “Fierce” Questions
1) Are you aggressively hunting the Black Swan?
2) Are you aggressively hunting the Golden Goose?
3) If not, why not?
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Fierce Foresight tm
Fiercely Creating Tomorrow
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We Have Seen the Future(s)
Three Fierce Questions
Black Swan
Golden Geese
Now, what do we do about it?
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The Three “Fierce” Questions
1) What general factors influence our business today?
2) What general factors are changing?
3) What general factors could change?
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Fierce Actions
Priority “A” – High potential impact or “indeterminable” impact – immediate action
Priority “B” – Moderate impact or probability – regular and recurring monitoring
Priority “C” - periodic review
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Fierce Accountability Assign each potential Fierce Action to a
senior executive for immediate analysis and action
Immediate identification of trigger event for follow-up action
Monthly update to senior management team
( evolving impact assessment)
Contingency plan at trigger event
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Fierce Contingency Plans
What must be done now?
What can be done now?
How fast can it be done?
What must be done at a trigger event?
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Three “Fierce” Black Swan Questions
1) Are you “fiercely” hunting your Black Swans?
2) Do you have contingencies plans in place?
3) If not, why not?
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Black Swan Hunters
Assign each potential Black Swan to a senior executive for analysis and monitoring
Identification of trigger event for action
Quarterly update to senior management team – any change in status (look for “perking” data)
Contingency plan at trigger event
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Black Swan Hunters – Contingency Plans
What must be done now?
What can be done now?
What must be done at trigger event?
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Three “Fierce” Golden Goose Questions
1) Are you “fiercely” hunting your Golden Geese?
2) Do you have aggressive action plans in place?
3) If not, why not?
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Golden Geese Hunters
Assign each potential Golden Goose to a senior executive for analysis, action and/or monitoring
Quarterly update to senior management team
Identification of trigger event for action
Aggressive action plan at trigger event
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Strategic Foresight Heads-up Screen
Issue No./Name
Fierce
Action
Black Swan
Golden Geese
Futures
Wheels
Scenario
Analysis
1. Tech Platform Smith
2. Power Shortage Jones
3. Bionic Network
Clark
4. Consumer App Burke
5. Genetic App Christopher
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Strategic Foresight Heads-up Screen: Issue Report
Issue Priority: “A”Issue Category: “Black Swan”Issue Description: Power OutageAccountable Executive: J. J. JonesDate Identified: July, 2012Potential Impact: Total loss in six monthsCritical Trigger Points (defined):Critical Trigger Points Status:Change in Status Since Last Report:Action Taken:Description of Follow-up Action & Timing:Contingency Plan Activation Date:
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Other “Fierce Foresight” Considerations
Create a budget fund for opportunities and defensive expenditures
Simplify justification for strategic opportunities
Create of periodic reporting system – parallel to operational reporting – and accountability
Include a “foresight” performance component to performance evaluation at both executive and management level
Board level reporting and accountability function
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You have just developed the foundation for a robust strategic issues identification and action system.
You now have the ability to modify and enhance this system and empower your team to think, analyze and act strategically!
You now have the ability to significantly influence the future – to create your own preferred, fierce future!
Create Your “Fierce” Future
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Interrogate reality by understanding your business model
Interrogate reality by identifying the critical underlying assumptions
Interrogate reality by using the BMC/Environment (tectonic) Factor Matrix
Aggressively hunt the Black Swan and Golden Goose
Actively manage all identified potential strategic risks and opportunities
Creating Tomorrow
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Fierce Foresight tm
Dr. Michael PettyNorth Star Partners, LLC6166 Hidden Canyon Rd.Centreville, VA, 20120703.401.2623Mike.Petty@north-star-
partners.comTwitter @DrMikePettyLinkedIn @ mpettyiii
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Fierce ForesightReferences:
T. Irene Sanders, (1998), Strategic Thinking and the New Science
Nassim N. Taleb, (2007), The Black Swan: The Impact of the Highly Improbable
Alexander Osterwalder, (2010), Business Model Generation
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Fierce Foresight
Be Fierce!
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Black Swan Assessment
Black Swan
Description Industry (In or Out)
Environ. Factor
(Existing or New)
Strategy(Yes or
No)
1 2345678910
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Golden Goose Assessment
Golden Goose
Description Industry (In or Out)
Environ. Factor
(Existing or New)
Strategy(Yes or
No)
1 2345678910
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Strategic Foresight Heads-up Screen
Priority “A” Issues /Exec.
Fierce
Action
Black Swan
Golden Geese
Futures
Wheel
Scenario
Analysis
Issue:Executive: Issue:Executive:
Issue:Executive:
Issue:Executive:
Issue:Executive:
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Strategic Foresight Heads-up Screen
Issue No./Name
Fierce
Action
Black Swan
Golden Geese
Futures
Wheels
Scenario
Analysis
1. Tech Platform Smith
2. Power Shortage Jones
3. Bionic Network
Clark
4. Consumer App Burke
5. Genetic App Christopher
The Black Swan Matrix
Black Swan Socio/Demo
Tech Economic
Environ
Legal/Pol
12345678
910 73
The Golden Goose Matrix
Golden Goose Socio/Demo
Tech Economic
Environ
Legal/Pol
12345678
910 74