The Development Academy of the Philippines (DAP) successfully held its webinar series on Futures Thinking last 8-9 November 2021. The online lecture is part of the second season of Public Sector Productivity Webisodes, an initiative to raise awareness of public sector organizations on relevant productivity and innovation topics. Dr. Alan Cajes, vice president of the DAP Corporate Concerns Center, was the resource person for the two-day series.
The first day of the webinar was mainly an overview of futures thinking and its related concepts. Cajes defined futures thinking as the use of divergent and creative thinking in creating multiple scenarios about what might happen to one’s organization given the critical uncertainties or drivers of change today. He explained further, “we can view futures thinking as a kind of wind tunnel to ensure that our respective organizations will survive and complete their respective missions, despite the uncertainties of the future. This process boosts our immune system as a civilization. It increases our inner capacity to deal with risk, uncertainties, and other drivers of change. It makes us more prepared and ready.”
Change can be seen as a threat, but it can also be advantageous if one learns to adapt faster. Futures thinking makes this possible, even considering the increasingly volatile, uncertain, complex, and ambiguous (VUCA) world—the prices of commodities fluctuate, global competition in the market becomes tighter, and many other variables take place with no precedents. There is also the additional challenge presented by other kinds of drivers of change, such as wildcards and black swans. The former refers to low probability events and developments that can affect the future significantly, for instance, the past world wars and the ongoing pandemic, while the latter refers to events that are not on the radar or are unlikely to occur and can only be identified after it has happened, for example, the emergence of personal computers and the 9/11 attack. Other factors, such as individual biases, blind spots, and finite resources and capacities, also contribute to the difficulty of futures thinking.
Cajes then went on to discuss the typical responses people have to future uncertainty, which may include denial, oversimplification, linear thinking, false confidence, and paralysis by analysis. Futures thinking would allow leaders to avoid these pitfalls and equip them with a more strategic response to uncertainty.
Past successes show the value in employing methods such as scenario development to deal with uncertainty, as seen for instance in a study conducted by DAP and the University of the Philippines during the mid-1970s, which probed the future of the Philippines over a 30-year time horizon. In the said study, scenarios were defined as perspectives of the future, to be used for defining potential actions in the present. As Dr. Onofre Cruz, founding president of DAP, said in the report, “if we can identify many possible futures, and reduce this to probable futures, then we can select our preferred futures.”
Cajes maintained that planning a range of futures by coming up with multiple scenarios is key to avoiding traps of prediction. Scenarios help make sense of the complexity of today’s reality, where critical uncertainties are more pronounced and disruptive than ever. By analyzing observable trends, events, and driving forces, those who practice futures thinking can then play out and choose multiple futures or scenarios.
Four types of futures are imagined in the scenario development process. First are possible futures, the widest range of possible future scenarios. Narrowing down the possibilities, there are plausible futures, which refer to scenarios that could happen given the bounds of uncertainty, and probable futures, which refer to scenarios that are likely to occur. Lastly, the preferred future, which is the ideal future state, is the type of future that is based on the aspirations of a certain individual or organization.
Cajes also elaborated three principles that must be considered in the scenario planning process. First is outside-in thinking, which entails looking at one’s organizational processes and operations from the perspective of the stakeholders, in particular, the citizens. He emphasized that, in scenario planning, it is important that decisions are made based on the customers’ needs, requirements, and expectations. Another principle is to embrace diverse perspectives. A healthy planning process can be attained when people value the perspective of one other, even ones that are contrary to one’s own. He added that having participants with diverse perspectives when embarking on scenario planning would also substantially contribute to ensuring a rich discussion and exchange of ideas. Finally, participants in the process ought to take a long view as scenario planning is designed for planning about ten to twenty years’ horizon.
On the second day of the series, Cajes’ presentation delved deeper into the process of strategic foresight using scenario development. Here, he outlined seven steps in depth.
Adopting a process akin to problem solving, the first step is to state the strategic challenge or the adaptive types of problems an organization faces which require complex solutions that are dependent on an uncertain future. The strategic challenge serves as the basis for the framing question which, given a set time horizon, defines the scope and limitation of the scenarios. The next step is to identify the driving forces, which refer to the factors that drive a possible result, impact, or outcome of critical uncertainty. Examples of this include infectious diseases, environmental risks, weapons of mass destruction, and livelihood crises, among others. These critical uncertainties, or those driving forces that are considered highly important to the strategic challenge of the organization yet highly uncertain in terms of how they might unfold in the future, serve as the basis for constructing the scenarios. Other factors such as predetermined elements (i.e. demographic information, occupation of people, the location, the migration patterns, their age, the increase in population, among other things) and wildcards are also determined in this step.
After all the important information has been gathered, the third step is to construct a quadrant of the building blocks, consisting of the critical uncertainties, predetermined elements, and other secondary elements, arranged by their level of potential impact and uncertainty. This step is then followed by the creation of a matrix scenario with vertical and horizontal lines representing critical uncertainties and quadrants for each of the four types of futures to be identified.
Once through with the scenario framework, the participants may now proceed to storytelling. Cajes underlined how powerful the role a story can play in the scenario development process. As he put it, “[stories] can affect us because they can be so powerful and so clear and, therefore, vivid and they can move us into thinking about possible solutions in order to prevent them from happening.”
Moreover, the final steps are to determine the implications and options in terms of key activities and robust strategies and, from these, name the indicators and signposts to be tracked along the way.
To better explain the relevance and application of scenario development in the public sector, Cajes illustrated a matrix of hypothetical future scenarios for a provincial local government unit (PLGU). In his example, the critical uncertainties that he identified were about their adaptive capacity and their stability in terms of global, regional, and national economic performance. The image below shows the given scenarios A, B, C, and D, which represent the preferred, ideal, business-as-usual, and better-than-current scenarios, respectively.
Towards the end of the lecture, Cajes laid down the main difference between the scenario planning process and the traditional planning approach. Overall, the traditional planning approach zeroes in on the partial reality, while the scenario planning process takes on a wider lens in analyzing the dynamic VUCA reality. The former assumes that the future is simple and certain, while the latter views the future as having multiple dimensions and a high level of uncertainty. Scenario planning, thus, entails active and creative imagination of the future.
Furthermore, what lies ahead may be unclear yet but one thing for certain is that one can do his or her part in preparing for future challenges. Strategic foresight may hence prove to be one vital gear to ensuring that organizations, especially the public sector, can thrive in this VUCA world.