The "What if?" exercise (Episode One)

This new series of posts will be based on some really interesting things I learned at one of the workshops during the WBD, “Future of Logistics 2025: Global Scenarios”… and as an original way of starting, I have an acknowledgement, a disclaimer and a confession.

Acknowledgement I’d like to specially thank Dr. Heiko A. von der Gracth, who was in charge of the workshop and kindly sent me a lot of material to share with you.
Disclaimer If you started reading this and you’re not very much into logistics don’t worry, because most of the things I’ll be writing about can be perfectly adapted to any other industry.
Confession I’m not that good for finance and economic forecasts, which is one of the main reasons why I love so much the techniques I’m about to share with you.

All that being said, let’s get started! Have you by any chance heard about uncertainty in these last months? I bet you did, and a lot. Leaving aside the reasons why the current financial crisis started and what are the best ways of fixing things, I prefer to concentrate on the most tangible aspects. Like, for example, the huge number of people losing their jobs, and the also huge number of people that are afraid of losing their source of income in the near future. For instance, we cannot tell until when companies will keep firing their employees; what are those people going to do from now on; until when they will prefer to save their money instead of consuming or traveling or investing or whatever. Let’s put it in a graphic way (since I’m terrible at drawing, I borrowed some of the images from the awesome people from The Value Web):





Some things are pretty obvious: although I depicted it in a very simplistic way, the point is that there’s the feeling that we’re in a descending spiral that needs to be broken as soon as possible. But let’s face it, it is very difficult to make decisions when you don’t have any clue about how the picture is going to look in the future. On the other hand, sitting and watching what happens next -and deciding in consequence- is not an option.

How companies cope with this sort uncertainty is a huge deal. The most sophisticated forecasts have been proved wrong or, at least, many companies have come to learn that making decisions based only in forecasts is not enough. We also have decision trees, but they can also be too structured and lead to partial approaches and therefore, to decisions that don't take some important factors into consideration.

So what if we could combine the “safety” feeling that numbers -undeniably- provide, along with the methodic, logical approach to problems we can follow when we develop decision trees, and add some “softer” factors, like social tendencies, expert opinions or human perceptions? That is an informal way of describing the scenario thinking, a technique that according to well renowned journals is absolutely in these days. Want to learn some more? Come back soon for the next posts!

2 Responses to "The "What if?" exercise (Episode One)"

La Venganza de la Mariposa (visit their site)

Nice to meet your blog, my friend!!
It is really interenting and I can't wait for the next post! (I know it might take a while, though... I also know it's worth to wait). See you!

Juan (visit their site)

Interesting! I'm looking forward to hear more on this field =)