A Dialogical Way to Use Scenarios for Strategy Development and Innovation

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Nov 3, 2013 (3 years and 9 months ago)

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A Dialogical Way to Use Scenarios for
Strategy Development and Innovation

Viewpoints and Stakeholders in
Scenario Analysis

By Gerald Harris

March, 2012

Email: gerald@artofquantumplanning.com

Overview

The ideas presented here build on the concepts presented in chapter 5 of my book related to
intentions, actions and reality. The central point of this chapter is that one’s point of view
impacts what one sees as reality (directly impacts what is and what appears to be possible). I
suggest in the chapter that it is preferable to consciously and deliberately be open to multiple
points of view with a learning
-
oriented approach to making decisions and creating strategies.


This presentation shows how two sets of scenarios focused on a common area can be used to
create a dialogue between parties with different viewpoints. I call this “scenarios in dialogue”
because the core of the approach is to create a strategic dialogue between two groups as they
compare and contrast their scenarios.


I came upon this idea while working with a colleague thinking about the future of cloud
computing. We could not determine from which key stakeholder (service providers or
customer/users) point of view to look at the evolving world of cloud computing. We ended up
using both.


Cloud computing and the two sets of scenarios will be presented and I will end with suggested
steps for the strategic dialogue that can seed strategy development and innovation.

The Cloud Industrial Complex

The Uncertain Future

Cloud computing has emerged from a confluence of technological developments and
market/economic opportunities. Cloud computing is a phenomena of key elements of
information technology including the web, portable information devices, broad band
accessibility, cheap storage, and powerful processing capabilities. The core economic
value of cloud computing are associated with its ability to offer an almost limitless way
for information service users (consumers, businesses, governments, etc.) to access and
store unlimited data, process that data into needed information and services,
modernize the applications associated with that data processing. Just as importantly
all of this can done at reasonable and likely declining costs.


Early concerns have focused on security of the data in the cloud, the quality of data
and reliable access. Emerging concerns are related to the impact that cloud
-
applications are having on the evolution of some industries (i.e., competitiveness,
changing barriers to entry, and stripping of business models) and impacts on society
and culture as cloud
-
based applications change lifestyles).


Future of Cloud Computing

End User/Customer Perspective

Cloud Computing Technological Advancement

Innovative

Robust

Highly Integrated

Stagnant

Limited

Unreliable

Information Intensity of Lifestyles and Society

Plateaued

Niche Applications

Silos

Pervasive

Widely Accepted

Seem as infrastructure

A way to think about the future is to isolate powerful, yet uncertain forces which will
influence the course of events. Two are suggested below with their range of uncertainties.

The point of view for these scenarios is that of customers and users. The organizing question for
this set of scenarios is: “What is the future of cloud computing and how will it shape lifestyles
and the way everyday life will be experienced in society?

Cloud Computing Technological Advancement

Information Intensity of Lifestyles and Society

Stagnant

Limited

Unreliable

Innovative

Robust

Highly Integrated

Plateaued

Niche Applications

Silos

Pervasive

Widely Accepted

Seem as infrastructure

The two structural forces
can be used to create this
scenario matrix with
defines the high level
direction of developments
that might shape
alternative futures.

Cloud Computing Technological Advancement

Information Intensity of Lifestyles and Society

Stagnant

Limited

Unreliable

Innovative

Robust

Highly Integrated

Plateaued

Niche Applications

Silos

Pervasive

Widely Accepted

Seem as infrastructure

Several other key factors can be
used in support of these two major
factors to create potential worlds
that can play out over time (three to
ten years for example). Other factor
which might influence the future
could include regulations, economic
issues and financial market
concerns.

Cloud Computing Technological Advancement

Information Intensity of Lifestyles and Society

Stagnant

Limited

Unreliable

Innovative

Robust

Highly Integrated

Plateaued

Niche Applications

Silos

Pervasive

Widely Accepted

Seem as infrastructure

The distinct potential stories that can
emerge in each quadrant as well as
movement through all four can be
used to think strategically. Different
places in the world can also exist
simultaneously in different scenarios
(India may be in the SW quadrant
where as South Korea may be in the
NW quadrant).

Cloud Computing Technological Advancement

Information Intensity of Lifestyles and Society

Stagnant

Limited

Unreliable

Innovative

Robust

Highly Integrated

Plateaued

Niche Applications

Silos

Pervasive

Widely Accepted

Seem as infrastructure

The Clash of the Titans

This is a world in which cloud
-
based applications
are limited by the large companies in the field
who use barriers such as IP, brand identity, and
technical barriers to limit the fluidity and
openness of customer applications. Consumers
can do a lot with cloud base applications within
market segments and under the control of key
service providers. (Facebook, versus Google
versus Apple versus Microsoft).

Head in the Clouds

This is a world where pervasive, interconnected,
wide
-
ranging cloud
-
based services restructure
everyday life into an “ information
-
mediated”
existence. Everybody and everything has an
information envelope which is continually
accessible and sharable. What is shared with
whom, and human imagination are the limits on
cloud
-
based living.

Win Some, Lose Some

This is a world in which cloud
-
based service and
applications are limited by government
regulations and restrictions, and limits in cloud
computing technology in the areas of reliability
and security. Cloud
-
based services are vibrant in
some consumer markets, but absent in some
others where policies demand more controls.

Revenge of the Real World

This is a world in which cloud
-
based services
offer marvelous technological options, but find
limited markets based on spotty value
-
added
perceptions by consumers. Issues related to
privacy and use of personal time lead to
successful niche applications but limited cultural
a lifestyle shifts.

High Level Scenario Descriptions

Cloud Computing Future

Industry Providers Perspective*

Evolution of Cloud Computing Industry Business Models

-
Whole Systems Cloud
Service Providers

-
Fast Expanding Build Out of
Cloud Infrastructure

-
Niche Players/Target
Service Providers

-
Disjointed Building of
Cloud Infrastructure

The Evolution of Cloud Computing Technology

Out of Synch Software and
Hardware Advances

In Synch and co
-
evolving
Software and Hardware
Advances

A way to think about the future is to isolate powerful, yet uncertain forces which will
influence the course of events. Two are suggested below with their range of uncertainties.

*
This scenario matrix is created from the perspective of the uncertainty around how the cloud
computing industry may
evolve. The focus questions of the scenarios are what
business models,
what
services might emerge,
using what combinations of evolving cloud computing
capabilities?
The stakeholders for this set of scenarios would be executives and investors in the industry.


Evolution of Cloud Computing Business Models

Evolution of Cloud Computing Technology

Strong Niches

Whole Systems

Hardware/Software Out
of Synch

Hardware/Software In Synch

The two structural forces
create the potential high
level alternative futures. A
key question might be how
market offerings may
evolve in each of the
quadrants.

Evolution of Cloud Computing Business Models

Evolution of Cloud Computing Technology

-
Strong Niches

-
Emergent Companies

-
Whole Systems

-
Dominant Oligopoly

-
Hardware/Software

Out of Synch

-
Hardware Quantum
Jumps

-
Hardware/Software


In Synch

-
Software Evolution Leading

Given these uncertain developments in
technology development and the
economics of expanding cloud
infrastructure what kinds of services
will be offered? How will the power of
cloud computing be used in various
forms of final applications? What
business models will be used to offer
those services in a profitable manner?

Will Whole Systems companies
buy niche players after they
demonstrate market viability or
compete directly with them from
their larger base?

Evolution of Cloud Computing Business Models

Evolution of Cloud Computing Technology

Strong Niches

Whole Systems

Hardware/Software Out of Synch

Hardware/Software In Synch

Let a Thousand Flowers Bloom

This is a world very similar to the early
years of the internet boom of the 1990s
where applications looked like
businesses. Lots of start
-
ups, lots of
failures and plenty of successful
companies. In the long term firms
merge and a consolidated industry
emerges.

A Big Boys Game

This is a world in which participation in the
cloud computing business is dominated by
companies with large balance sheets, lot of
R&D capability and large market presence.
Those companies (Apple, Google, Amazon)
dominate the applications in the cloud
space and get the majority of revenues.
They set standards for middle sized
companies and acquire them as needed.

Fractured Markets

This is a world of competing standards and
chunky markets as big players compete
with different suites of incompatible
technologies. Consumers are hived off into
different products and offerings. Large
companies struggle to get to scale for large
profits.

Perfect Competition

This is a world in which small, medium and
large companies all compete and innovate
offering a wide range of services and
products. Cloud computing invades and
reshapes a wide range of industries with
applications fit for their customers and
products.

High Level Scenario Descriptions

Cloud Computing Scenario Dialogue

As an example, I will suggest that the two sets of cloud computing scenarios match well
quadrant for quadrant (they can be placed directly on top of each other). For instance the
Northeast scenarios of “Perfect Competition” and “Head in the Clouds” are the same world
viewed from the different stakeholder perspectives (industry services providers and
consumer/users respectively). Both key stakeholders might be experience this as a world rich
with opportunities. Industry service providers might be constantly trying to create the next
new great application and business while consumers might be constantly looking for the next
application that will make their lives better and different.


The scenarios in the Southwest quadrants may also be very similar worlds viewed from
different stakeholder perspectives. The “Fractured Markets” and “Win Some, Lose Some”
scenarios would lead to a tough business environment for investors and a inconsistent and
piecemeal market for consumers. Movement from place to place or nation to nation would be
challenging due to differences in availability of services and product and inconsistent standards.



Scenarios in Dialogue Process Steps

The core of the dialogical process with scenarios is to match and contrast different
scenario spaces (or even scenarios developed as pathways through a set of
quadrants). The steps are as follows:

1.
Both scenario teams live in their scenarios and suggest key implications and
potential strategies.

2.
Both teams view each others scenarios and pinpoint similarities and differences.
Find the most useful parallels and match points.

3.
Where scenarios from different teams are similar or match very closely, compare
the different key implications and strategies. Dialogue about the similarities and
differences. Share and contrast potential strategies. Capture new ideas and
innovative perspectives.

4.
Each group may have specific questions that arise from their perspective that
they would also ask the other group to respond to.

5.
Capture the results from steps 3 and 4 above to create a learning
-
forward
agenda. Key questions in the learning
-
forward agenda can be organized around
contingent strategies (contingent upon certain conditions arising) and early
indicators (of positive, negative and surprising developments).



Fast Turnaround Scenario Dialogue

With good facilitation this process can be easily performed with five
intensive days of work spread over any chosen period of time.


The two stakeholder teams have to be formed and guided. Each team
would use a day to develop their scenarios (with the proper preparation)
and a day to develop their implications and strategies. Facilitators can
take the results from both teams and prepare for a final day of sharing
and comparing.


Key outputs will include both sets of scenarios, both sets of key
implications and strategies, the contrasted results, and the learning
-
forward agenda resulting from the combined work.


Please contact Gerald at
gerald@artofquantumplanning.com

for a
working proposal and price for services.