Black Swans
Any discussion of new directions for strategic planning and management must inevitably address the growing debate around the accuracy of the forecasting models used as the basis of decision-making.
Decision Making and Planning Under Low Levels of Predictability, appearing in the International Journal of Forecasting, argues that accurate forecasting is not possible. Uncertainty is the business as usual scenario. Its authors, therefore, introduce four principles to advance strategic thinking under uncertain scenarios, including challenging mental frames, understanding human motivations, applying crisis management and assessing strategic options in a structured option-against-scenario evaluation.
One of the authors Nassem Nicholas Taleb - the analyst who forged new ground in risk analysis and decision making by focusing on how to turn a lack of information and understanding into decision-making - is set to release an updated edition of his best-selling book the Black Swan this month, in which he plans to tell us how to operationalize this lack of knowledge. Rather than building more complex models, to face globalization, he will argue for making our structures less complex.
Qualitative Intelligence
Along the same lines of thinking, a Harvard Business Review case study in May's edition argues that qualitative intelligence is needed to manage in a world of an "ambiguous system of systems."In Beyond the Numbers: Building Your Qualitative Intelligence, Roger Martin saliently questions whether our quantitative models and predictive analysis skills are up to the task in a crisis situation. Qualitative intelligence can be added to an organization by taking a Systems View of the Organization, published previously by this author. Do expect qualitative intelligence to play a bigger role alongside quantitative analysis in organizational management in the future.
Black Ash
A common theme in our research is that strategic management is being drilled down deeper into organizations. As a result, coaching and group facilitation of middle and senior managers, to develop specific strategic management skills such as strategic thinking, which includes scenario thinking, is becoming more common.
The airline crisis created by the Icelandic volcanic ash highlighted the need for scenario thinking/planning capability at all levels of an organization to cope with crisis situations. Lots of 'what ifs' were raised during the grounding of European planes, but not everyone had the tools to assess the options and their impact. Risk managers are now talking about preparing for "black ash" events, clearly a play on "black swan," or low probability events that are hard, if at all possible, to predict.
For over twenty three years, Stephen has helped businesses, government agencies and non-profits organizations in Asia to learn and apply Strategic Management and Innovation to their organizations to sustain and improve long term performance. He has successfully led and facilitated numerous "live" strategic planning efforts and in-company senior management development programs, for a wide range of organizations including multi-national companies, small-medium enterprises and government agencies.
As an international consultant, Stephen has led public workshops/seminars on key strategic management topics such as strategic thinking and planning, change management, leadership and innovation, in Singapore, Malaysia, Indonesia, India, Dubai, China and the USA. He has trained hundreds of managers in workshops and seminars, with consistently excellent evaluations by the participants, who come from a wide range of industries in both the private and public sectors.Read more articles by Stephen at http://www.hainescentreasia.com/ezines/index.htm
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