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Mapping out the future
Where do you see yourself in 10 years' time? This may be a clichéd, interview-type question but it is also one that we find difficult to answer. We look at the future; we try to make the best decisions, but we face uncertainty.
It is hard to decide what kind of career to pursue, when it's not clear what industries will exist in 10 years' time. More fundamentally, we don't know what will be important to us then. Many factors have an influence; our current life stage, what has happened in our careers, our financial situation, and the effects of the global recession, for example. All of these may alter values and aspirations – in 10 years' time, perhaps you will be off saving the last few orang-utans!
This uncertainty is just as acute in business, the difference being that senior managers are asked to build robust marketing strategies for an unknown future. Just as early explorers set out with little more to guide them than a clear hypothesis and knowledge of the world they knew, the dilemma in business is that all of our knowledge is about the past, but the decisions we are making are about the future. We are faced with 'mission-critical' decisions all the time. You have a choice – you can:
• Let all the uncertainty freeze you into doing absolutely nothing, and just carry on as normal
• Delude yourself that you can see past all the uncertainty, and carry on regardless
• Attempt to paint pictures of the future to guide you to the right decision.
I prefer the third option. Painting pictures, or developing scenarios, is the best way of mapping what the future could look like. Then you can start to build strategies that would work in those futures. A map is physical; something we can touch, interact with and interpret. A map showing the future would be invaluable and, by using scenarios, you can make one. The pictures will still have to be interpreted, just as on a standard Ordnance Survey map, but at least you won't be setting out on the journey blind.
Like a map, the scenarios you develop should be tangible, plausible and describe relationships such as those between different systems, customers, trends, market forces, regions. The process can be split into five stages.
1. Provide the co-ordinates
The most important thing is to isolate the key business question – or key decision – and set the time frame. Be specific, because if you leave it too open, the scenarios created may not be relevant, or may not provide the right stimulus to interpret the direction of travel.
The futures you develop must stimulate and challenge and focus effort, energy and creativity in the right place. In essence, these maps are providing different perspectives on the future world, which allow you to pressure-test your key question or decision choice.
This is a creative journey you are likely to be taking as a team, so agreement on the focal question/decision is crucial, and provides a common starting place. Perhaps you want to bring a new diabetes product to market and your question is related to how the market is going to react, given increased regulatory pressures and recent safety concerns. Maybe your question is a bigger organisational one about the right business model for the future or about what is possible, given the company's focus, values and the balance of its pipeline in 2016.
There are increasing price pressures on healthcare systems globally, with many blockbusters losing patents and increasing EU focus on generic uptake. Perhaps you have a series of products going off patent in the next five years, and want to find the most appropriate strategy. Developing different scenarios will help you innovate and explore possible approaches that may play out across different futures.
Building and embellishing these scenarios will come later. This stage is about setting and agreeing the co-ordinates and deciding on the right strategy, given the number of patent expiries we need to manage.
2. Define the boundaries
Just as in map-making, the next task is to define the boundaries, like a cartographer adding the county lines, mountain ranges and valleys. You know the key co-ordinates and the centre point; the next decision is how far you want to expand the map. There is no point in looking at just one position: you must look at the relationships within the system and space. The team must decide on the possible driving forces and trends that are likely to influence the development of different futures.
Given the setting of your recent co-ordinates above, you may have noticed recent EU Commission reports suggesting that it is going to be much harder on originator companies in terms of marketing activities, exclusivity deals and patent litigation at the end of patent life. Or maybe you have become aware of the increased focus on pharmacy substitution across the EU with pharmacists driven to using the cheapest generic. What you need to do now is capture these and other trends to help define the boundaries.
The usual environmental prompts will help your thinking – consider what is happening politically and what are the economic, sociological, technological (includes competitors), legal and ecological issues (PESTLE).
Ask the team to use these prompts to brainstorm all the possible trends and forces (boundaries) that may be important influencers on your future, based on your key question. Some elements will seem almost predetermined, such as an ageing population or continued pressure on the health economy. These should be included in all scenarios, but the difficulty is then deciding which trends and driving forces should define the scenarios?
3. Locations and features
Having captured all the boundaries, start plotting features – this means deciding which trends will define the future worlds and prioritising the most critical uncertainties.
We will have a whole list of items that we know could be in our world and on our map, but we need to decide what should be emphasised.
As with cartography, there are lots of different ways to draw the map. In the pharmaceutical industry, there are many influencing factors, so we must cut through the complexity.
Remember, a map represents different elements and the inter-relationships between them. In a road map, not everything is featured, but it still does the job. To interpret it, you don't necessarily need to see the location of every tree and fire station.
In scenario-learning jargon, a deductive process can be followed to make you focus on the critical uncertainties. You have your business question, such as going off patent. What are the trends that are most critical to your decision? As a team, make a judgement. Perhaps it is the level of pharmacy substitution and the level of patent protection your particular brand has?
Next, uncover where you are most uncertain. This means that you are uncertain how (not if) this trend will unfold in the future. Do not fall into the trap of defining 'uncertain' as 'if.'
Essentially, critical uncertainty comprises those trends or forces that you believe will critically affect how your final strategy looks, and the possible ways in which the critical trend could unfold. For example, there is the idea of pharmacists becoming more influential, given strong incentives to substitute within brands and within class, versus them continuing to appear as a priority but becoming no more influential than they are today.
4. Draw and embellish
Build the scenarios – your views of the future. As a team, you have already done much of the hard work in terms of isolating the driving forces and prioritising which ones will anchor your various scenarios.
At this stage, be creative, but remain pragmatic in your embellishment. You could spend months taking the senior leadership team out of action, developing beautifully crafted, innovative and challenging scenarios. But, remember the purpose: a road map does its job well, but it's not a work of art.
Flesh out your thinking using creative techniques such as 'headlining,' to show how scenarios have evolved over time, providing a narrative with which people can connect. Consider the relationships and interplay between different features in your scenarios. Then supplement your creativity with gap-filling research, focused on ensuring credible worlds are developed. Peter Schwartz, co-founder of the Global Business Network, puts it succinctly: "You can tell when you have good scenarios when they are both plausible and surprising."
So, in a world where pharmacists rule and the EU takes heavy legislative action against originator companies, what is the right loss of exclusivity strategy? What about a world where pharmacy substitution becomes less influential, the patient has greater say and originator patents become harder to challenge? What then?
5. Read and interpret
In the same way that a map is not the ultimate goal, but simply an aid to the journey, so scenarios are not the goal; they are there to help you make the right decisions and build the best strategies. It's like scaffolding to a building. The scaffolding is important – it helps you create the structure – but the most important thing, the focal point, is the building (strategy) itself.
Having developed these credible and surprising worlds, you must learn from them and create the strongest strategy. You can have the most beautifully crafted map, but if you don't interpret it correctly, you are going to take a wrong turning.
Consider each scenario. What are the opportunities? What are the competitors likely to do? What capabilities are required to compete? What are the indicators of that future unfolding? What strategic options are available? What contingency plans may be needed?
Also, look at the scenarios as a whole and ask whether there are strategies you can employ which play out across all, or most, of these worlds. Where are areas of exposure? As a team, decide on the best strategy, highlighting indicators of possible exposure that may need contingency plans.
Right route
So, you have drawn your map and interpreted it. The last stage is actually to take action. If you sit in your car with your route plotted, you still won't go anywhere until you start driving. You may need to go back to the map over time and take another look; you may learn new routes and features, but you are actively engaging with the future and giving yourself the best chance of success.
Take yourself out of your comfort zone, feel motivated by the possibilities presented by different futures, and now answer the question – what are you going to be doing in ten years' time?
The Author
Jon Bircher is a managing consultant at The MSI Consultancy and is one of the creators of the FUTURES initiative.
