Auditing the Future

Auditing the Future

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  Matthew Jon Spaniol ExecutiveAdvisor in Scenario Planning Trends & Scenario Group
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  Auditing the Future Twentieth Century Fox
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  Actor- Observer Bias •We attribute our actions to contextual forces, but blame other people’s personalities for their own misfortunes.
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  Since 2000… Since 2006… • Housing bubble • Dot.com bubble • Smart phones • 9/11 • Liquidity crisis • Rise of the Net • Global power shift • Denmark at war • Arab Spring • Sovereign debt crisis • Female majority in • Female majority in Universities workforce/PhD programs • Mobile phones (US), outearning hourly (UK) • Currency Wars & Bitcoin • Wall Street Robots & Tobin Tax
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  What is ScenarioPlanning? • A structured process of developing plausible paths of contextual development • Interactive group-based conversation • Fundamentals: – long view on strategy – outside-in approach – safe space for deliberation
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  Working with Scenarios Forecasting Scenarios • Expected futures • Possible futures • Quantitative • Qualitative • Inside-out approach • Outside-in approach • Short-term function • Long-term outlook • Data extrapolation • Uncertainties
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  Who Uses ScenarioPlanning ? •Boards & Directors SP •Executive Management •Division Management •Business Units •Functional Areas Source: Reynor, Michael. The Strategy Paradox. Deloitte: 2007.
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  Why in theAudit Committee? “Given the uncertain outlook, audit committee chairs should be challenging senior executives to conduct scenario planning… [a]udit committee involvement can help to make this planning sufficiently comprehensive and realistic.” -E&Y Current Issues for European Audit Committee Chairs , 2012
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  1970’s Egyptians Crossing theSuez Canal
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  1980’s Image credit: salon.com
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  1990’s Photo Graham Turner
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  2000’s
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  Versatility of Scenario Planning • Supply chain disruptions • Markets and demand • Consumer behavior and branding • Diversification strategies
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  Uses of ScenarioPlanning •Turn-around efforts •Continuity planning •Portfolio analysis •Graduate training programs •Strategic option analysis •Post-merger cohesion •Stress testing •Innovation •Lean •HR
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  Signs that youmight need an audit of the strategic plan: • Risk taking does not reflect the risk appetite of the board • Opaque or exclusive decision-making processes • Managerial or board level overconfidence • R+D needs realignment • Overwhelming uncertainty in the market • You are operating a mature company in a mature industry
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  Desk Audit ofthe Strategic Plan • What are the time, material and positional needs to win in each scenario? • What are the strategic gaps in each scenario? • What are the risks in each scenario? • What can be done to mitigate the risks?
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  In preparing forbattle, I have always found that plans are useless, but planning is indispensible. -Dwight D. Eisenhower
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  Benefits of ScenarioPlanning • Provides a method and process for anticipating complex industries. • Improves decision-making by enhancing the planning process. – What do we know? – What are we uncertain about? – How could the future develop? – Game to win • Invites possibility: Why? Why not? What if?
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  Outputs from Scenario Planning • Improved quality in strategic conversations • Insightful, clear and confident decisions • Real strategic options; Robust, resilient and adaptive strategies; Contingency plans; New product/service innovations; lowering the costs of surprise • A stress-test frameworks to rethink strategy and business models • Input for the annual strategic cycle
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  Thank You Matthew Spaniol [email protected] +45 50126444
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  Scenario Planning onthe Web trendscenario.com