The Art of the Long View

Author: Peter Schwartz

The author tells of a huge portfolio of own experiences .

A few things that stick with that are mainly (not in that order in the book)

  • “ Appendix: Steps to developing scenarios ”
  • Chapter 8: ” Composing a plot ” .

While the appendix tells the story – or rather the procedure – of developing scenarios, the eighth chapter tells us that there are a number of plots that are more fruitful for scenario planning. These are:

  • Winners and losers
  • Challenge and Response
  • Evolution

Other possible plots are:

  • Revolution
  • Cycles
  • Infinite possibility
  • The Lone Ranger
  • “ My Generation ”

I would like to go into these:

“Winners and losers” means the resources are limited, and if one party becomes richer, the other becomes poorer . Life is a zero sum game (Lester Thurow ). Only one candidate can become president, only one country can dominate the economy, only one person becomes CEO. There is only one market leader. Conflict cannot be avoided. This sometimes creates alliances, in which with whom one is involved can be more important than what one deals with together. The enemy of my enemy is my friend. Conspiracy theories are common and widely believed.

“Challenge and Response” : two scenarios are eg. “the economic system will crash” or “we will overcome the problems and move forward in stable prosperity”. These extremes may not occur, but a “management of imbalance” is possible, where we have to ask the question how we are going to learn to live with them, not how we can get rid of them. The system will survive, although it might bring us to the brink. The idea is that we undergo one test after another, through which we grow. Succeeding in each test is therefore less important than using it to grow. The Japanese definition of optimism is valid: “to have enough challenges to give meaning to life.” You look at every difficulty as an opportunity to learn. It gives confidence to an organization to believe that people will want to work with them to solve problems. To do this, the organization must meet the public halfway.

“ Evolution ” : evolutionary changes are largely biological in nature. Nature gives way to industry, changing the view of the city and its surroundings. These changes are hard to spot unless you specifically focus on them. Once you catch them, you can manage them easily, as they tend to be slow in nature. The most common evolutionary plot currently is that of technology. This emerges slowly from other technologies, mature and then suddenly become disruptive in the world. Technology is also evolutionary because it has to fit into an existing environment. If you really want to make major changes to existing technology, you also need to make sure the environment can be ready. Edison had success with the electrical lamp because he devised a system of electricity metering systems around it that supported it. The competition of organizations also seems to follow the rules that apply to competition in nature. Decisions to adopt new technology have a lot to do with exploring a fertile niche in a competitive ecosystem.

“ Revolution ” : This is about dramatic changes, usually unpredictable in nature . Black swans are one such example. These are “discontinuities” like the Watergate scandal that toppled Nixon. Discontinuities can also be disasters, caused by nature or by man. Examples are Covid-19, sudden climate change, a large meteorite impact, a series of severe earthquakes…

“ Cycles ” : small towns can grow big with industrialization, and shrink back with their disappearance . Economy goes in waves. Restricting drug shipments caused the market to flood. Also with locally manufactured drugs. Because drugs too follow the market principles of supply and demand. The timing of cycles is important to exploit them. That timing is unpredictable unless you can find and measure indicators that require you to actively explore the location or the market or the terrain or whatever. The only thing that can help you is awareness, in whatever form. Cycles also often have delays, which can make them dangerously misinterpreted: when everything is going well, there is often a problem looming, and vice versa. As a result, a cyclical plot will often give rise to a sense of scarcity, giving rise to a “winners and losers” plot.

“ Infinite possibility ” : There is the impression that “growth is inevitable” . The only question is how high it can go, how much can be expected. It starts with a public perception: the world will grow and improve, more and more, always. It’s a seductive perception: many things happen that otherwise wouldn’t be possible. Money is invested in research, people spend instead of saving for the future, excess comes in many forms. From 1975, the computer industry was in this plot situation, until now.

“ The Lone Ranger ” : This highlights a system full of entrepreneurs. It follows a social logic, driven by a street sense and street wisdom that is created in an incoherent way. The strong order of politics, commerce, and technology does not influence the individuality of our souls. However, there are also problems with the Lone Ranger scenario: when two Lone Rangers come to blows, it becomes a “Winners and Losers” conflict.

“ My Generation ” : the youth of today and tomorrow are growing up with different experiences than our / previous generations . After WWII from 1963 there was more “ affluence , peace , love and understanding ”. With sufficient supplies of housing, food, drink, work and companionship, they could focus more on self-expression, status, and the meaning of life. Scenarios should also always focus on the influence of culture on people’s values, especially across generations, especially for large generations.

A note of caution: when people think about scenarios that go negative, they very often think too negatively, what you should do is also look for feedback mechanisms or other influences that can have a dampening effect.

The steps were then explained in the appendix itself. These are here:

  1. Identify the issue or decision to focus on.
  2. Key forces in the local environment that influence success.
  3. Identifying driving forces in the macro environment that influence key forces.
  4. Sort by importance and uncertainty.
  5. Select the scenario logics.
  6. Work out the scenarios.
  7. Identify the implications of the different scenarios.
  8. Select the leading indicators and signposts.

How to avoid a climate disaster

Author: Bill Gates

“The solutions we have and the breakthroughs we need”. That is the subtitle of the book about which a lot of advertising was made on all kinds of media. And the author quotes in his work a number of interesting comments. What touched with me initially is that we need to think more quantified: yes, planting trees is good, but is that enough? And why?

That is the great added value for society: it creates awareness in numbers (numbers of billions of tons of CO2 equivalents per year) of the problem. All these numbers are so big for me that I can hardly imagine them.

The major classes of problems the author cites and discusses are:

  • Power generation         
  • Making stuff
  • Food Production
  • Mobility
  • Heating and cooling off

Towards the end, he cites a number of technological and non-technological recommendations.

  1. Multiply investments in research and development in the field of clean energy and climate by five over the next ten years.
  2. Focus more on high-risk, high-reward research and development projects.
  3. Link research and development to what we need most.
  4. Involve business from the start.
  5. Harness the power of tenders.
  6. Create incentives that lower the costs and reduce risk.
  7. Build the infrastructure that allows new technologies to enter the market.
  8. Change the rules so that new technologies can compete.
  9. Link CO2 to a price.
  10. Create clean electricity standards.
  11. Create clean fuel standards.
  12. Create standards for clean products.
  13. Get rid of what is old.

I regard his “plan” as a source of inspiration, which governments all over the world must (quickly) consider and follow up if we want to stand a chance.

Besides this, as an exercise in scenario planning, I see the following uncertainties with an important impact on a global level:

  1. Are all countries going to fight this challenge in closed ranks, or are governments going to act in scattered order?
  2. Will the technology be able to innovate quickly enough and will the solutions be accepted by society? These seem to be two criteria, but there is really only one: will the technology be successful soon enough or not?

If we put these things against each other, I come to the following possible four futures , provided that the governments comply :

What do these possible futures look like?

Some freewheeling in the scenarios gives the following: (Numbers are indicative.)

Scenario 1: Nature survives : the current generations understand the importance of fighting global warming together. Science provides alternative energy sources that are CO2 neutral. Politics provides measures that can compete with conventional energy sources like fossil fuels. Politicians speak intensively with science. Youth is encouraged to continue on these paths. More global cooperation in the fields of energy, medicine and food supply is being made, through targeted scientific research. Humanity is developing a broader framework for mutual cultural understanding across borders. The loss of biodiversity is more limited than the other scenarios. (E.g. ‘only’ 5%) Forestry is being done. Birth control is imposed worldwide.

Scenario 2: Started too late : The steps taken by politics and science are analogous to those of Scenario 1, but the technical solutions come too late. Global warming is spinning out of control and there is a major destruction of biodiversity by 80%. Global population shrinks by 80% due to the further spread of tropical diseases, food shortages and drought. Migration is to be expected. War for the last resources is very likely during the evolution of this scenario. A major economic crisis follows in which the stock markets collapse. The world market collapsed. People try to get by with local initiatives.

Scenario 3: It could have worked : Science is coming up with technical and non-technical solutions fast enough, but politicians and business don’t think it’s necessary to work together in concerted efforts. Measures to use the climate-friendly solutions and make them competitive differ too much from country to country and give multinationals loopholes to work elsewhere than in their home country with solutions that are cheaper and climate-unfriendly, all to satisfy stakeholders. In some countries protests break out against these differences in measures. The approach to climate change is inconsistent and inefficient. This gives rise to a huge rise of global warming of more than 4°C by 2060 as it can in scenario 2. Famine threatens through poor political coordination and drought. As a result, here too is a large decline in biodiversity of 80% .

Scenario 4: The doomsday scenario : We don’t have to say many words about that. The idea that things are better elsewhere will cause large groups of people to make desperate attempts to migrate away from the arid places on Earth. The drought will greatly reduce biodiversity (more than 80%). Due to the need for energy and food, there is a threat of global hybrid conflicts. These conflicts lead to a decimation of humanity. The global economy enters into an unsustainable crisis along the way and economy is reduced to 5% of current activity.

Conclusion :

What this breakdown shows to possible future scenarios is that the measures proposed by the author make sense, but only if two conditions are met:

  • Politicians will to work together across borders and cultures to give climate solutions a competitive advantage when they present themselves, by all countries simultaneously.
  • There is an effort made by companies, universities, governments and citizens alike to generate ideas and work on potential solutions together, again and again, even when an initial design does not seem to work.

The author offers a range of ideas for this. Governments can offer the platform on which these problems are tackled. However, it does not have to be strictly these scenarios that guide such work. But they do give a clear picture of what might be coming our way.

Project Risk and Opportunity Management

Authors: Agnar Johansen ; Nils OE Olsson ; George Jergeas ; Asbjorn Rolstadas .

One issue the authors are addressing seems to me to be the shortage of opportunity management in project management, while risk management is constantly evolving. They focus on a very large number of aspects of project management, which are always concisely discussed. Their starting points are that projects are to be successful, and what that means for the project, the parties that make up the project and what the contact points are with all other management points of attention. One conclusion is: the mindset must change.

According to the authors, a project is successful if this is the case in 3 areas, namely :

– Project objectives

– Business objectives

– Social objectives.

If we see the social objectives as achieved, we arrive at the following schematic overview:

Project goals achieved?
Yes No
Achieved your business goals? No Wasted investment Failed project
Yes Successful project Limited return on investment

 

Project challenges in the oil and gas industry are:

– The project costs that run up to 100%.

– The percentage of the engineering design that is complete before approval is given to commence expenditure ranges from 15% to 80%.

– The poor team performance due to a misalignment between management and the project team, and a lack of communication.

– A decreased competence of all project teams (owner, engineering , construction and manufacture): there are no “A” teams anymore.

In order to meet the project challenges from the start, the owners must take the time to define and plan the project. For example, they must:

– Appoint the right people to represent and advise them; they must be qualified, experienced and capable of working with others.

– Understand the internal and external risks and opportunities involved in the project, quantify them and make financial provisions.

– Clarify time schedule, cost and quality.

– Charging project costs over the entire life cycle of the project, not just initial costs of the construction.

– Ensure that the financial and other resources required for the project are available when needed.

– Ensure compliance with legal obligations and regulations.

– Monitor progress and performance with a focus on emerging opportunities and risks.

For all involved, the motivation behind the project is value creation. Important for creation of value is that the project (executing) organization brings business objectives into account, in addition to the project objectives, to understand the rationale for the project and that it works in the best interest of the owner. He, in turn, has to monitor the project closely and understand the interest of the business of the implementer (executive organization).

There are often conflicting interests between the owner and the implementing organization. Therefore, an agreement must be sought.

However, society also always has an interest in the project, for value creation from their point of view, e.g. through job creation.

These different points of view of value creation, i.e. different interests between these three parties, are the cause of each time a different view of opportunities and risks in the management process.

That brings unpredictability into view.

Unpredictability in projects is due to uncertainty . Uncertainty can be defined as any lack of information. Uncertainties lead to risks and opportunities in projects. So it is important to know the nature of the uncertainties. These are the ( un ) known ( un ) knowns .

Every uncertainty has one or more of the following causes:

– Nature

– Man

– Technology

The uncertainties of nature in projects have a low frequency but have a huge potential impact.

The uncertainties in projects caused by humans include the behavior of individuals, as well as the decisions made within and between organizational units. It stems from the behavior of the stakeholder (s) of the project. Project management may not be able to fully understand their rationale, motivation and business interests.

The uncertainties in projects that arise from technology concern the potential malfunctioning of equipment and systems. This can be based on design errors, damage incurred during transport or storage before it is deployed in the project, construction errors, poor testing, machine breakdown, … Usually these can be traced back to a human error.

Uncertainty management involves the change management that occurs throughout the project life cycle, to correct errors and unrealistic or unfeasible design , to comply with laws and regulations, to ensure occupational safety and to maximize the benefits of the project (by reducing risks and exploit opportunities).

Risks appear spread over time. Projects that seemed healthy at first can suddenly become unmanageable. Risks combine and interact to end up in chaos. Many risks are linked to the life cycle of the project. Risks with a link to legislation, e.g. can disappear quickly after approval for the project has been granted. Technical risks decrease as engineering follows. Some risks, especially the market-related ones, go further as they are independent of the life cycle. Global market risks are beyond the reach of virtually everyone involved. By removing risks in this way, you can create opportunities.

New opportunities can arise throughout the project life cycle. These can be internal conditions, such as: better competencies of employees, effective working methods, better or more resources available. It can also be external conditions, such as collaboration with other planned projects in the vicinity, so that the business generally saves time, but also for the user, such as installing sewerage during earthworks for road works … It can also save money by working together making purchases from a common supplier, or purchasing new products that make the work easier for several parties or guarantee better quality. This may require the project manager and owner to allow changes to the original project plan. However, there may be a risk that something will fail when an opportunity is exploited. In that case, active involvement, knowledge and authority are required of the management to allow the benefits of the opportunities to materialize.

Project management is also related to innovation management. Innovation is often used to mean something new, as a product, service, or output, and / or a new process, procedure or method. We add that innovation is also identifying and creating opportunities in projects. Also, identifying and creating opportunities, allowing them to materialize and reap their fruits can encourage innovative and creative thinking in organizations.

At the end the authors are talking about the changed mindset in the industry: Industry Best Practices : an adaptive and aggressive approach.

The adaptive approach is a flexible planning philosophy with a lot of authority delegation to the project team, which allows them to make qualitative and time saving decisions ‘on-the-spot’ without having to refer to a higher authority, and without fear of ‘blame & shame’. This agile planning is needed continuously throughout the project, starting with a moderate upfront effort, followed by continuous updates at a lower level, providing the opportunity to make quick decisions. This creates the opportunity for project managers to anticipate future problems, make an evasive maneuver for them, scan for future opportunities, and make the necessary changes for them.

Sometimes an offensive method is needed to push voluntary change, thereby adding value to the business value over the project life cycle. This approach is perhaps best demonstrated in disaster response / recovery projects. These situations represent the need for diversity in project delivery: the project manager makes the best on-the-spot decisions regarding work logic, procedures, schedules and changes. The project manager challenges the limits of the project and the limited authority of his team.

Effective Opportunity Management for Projects – Exploiting Positive Risk

Author: David Hilson

Released in 2004 , with references to texts from years earlier, but still blazingly topical, underused and under-studied : opportunity management as part of risk management. Benefits management for projects in this case …

The author advocates embedding opportunity management in existing risk management that focuses too much or only on threats. His argument for doing this is that they are two sides of the same coin called uncertainty. The fact that at present in a number of standards the uncertainty of the achievement of the goals may imply either a positive deviation or a negative deviation from their achievement, is underused and too little known in today’s companies.

Throughout reading, it is discovered that it can indeed be incorporated into a single management process, provided a number of minor extensions to existing threat management. This makes the book really to be not just regarded as a mere opportunity management process description: it is in fact a possible comprehensive risk management process description with some tips and tricks. This actually shows that the expansion of threat management with the management of opportunities entails virtually no additional work, but can potentially be very profitable in terms of ROI.

In order for it to succeed, the author sees four CSF (critical success factors) as follows:

  1. You need to know what you mean by the word “risk”.
  2. You have to know how to do it in practice.
  3. You need the right support: people, resources, methods.
  4. A person must know how he thinks and reacts in order to be able to adjust risk behavior.

One possible conclusion after reading is that it is always an advantage to engage in benefits management. People are often too focused on problems.

The fact that this work is written for projects does not detract from the fact that many ideas are valid in the management of processes.

The Intelligence Trap – Revolutionise your thinking and make wiser decisions

Author: David Robson

Very important in making decisions is a psychological view of one’s own leadership. Namely a view that prevents you from falling for the “intelligence trap”. What exactly is that?

In fact, the intelligence trap is a direct result of some people’s inability to think outside of their expectations, to come up with an alternative view of the world where their decision is wrong rather than right. People with very high intelligence are more subjected to this than people with moderate intelligence. Nobel laureates sometimes suffer from this, so often that there is a term for it: “Nobel disease ”.

An active intervention to this pitfall can make use of so-called “ evidence- based wisdom ”. This can be imparted to all ages and to anyone, although one is more likely to benefit from it with moderate intelligence.

A first step is to understand what wisdom is. A definition of “wisdom” is: “he is wise who recognized the limits of his own knowledge” (Socrates) . Apart from that, good factual knowledge and training remain important.

Very dangerous is the fragility of the expert. For example, by relying heavily on schemes and protocols, which one must have, he may have trouble adapting to changes in the environment. Flexibility is therefore important. Personal bias is also a problem. One step towards a solution is to adapt the own thinking. This can already be done by reading about it, with inspiring examples. Placing a beginner with another, detailed, view is also an advantage because he or she does not yet know the patterns and therefore sees and can indicate differences in details of the case with regard to the general rule. It can also be done by taking a distant position. An example of this is the listing and quotation of important aspects of a situation or object, spread over several days. In addition, being able to listen to your own emotional compass is an advantage. This has to do with being able to relate the events in your environment and your (gut) feeling in the right way. After all, being able to spot deliberately crafted bullshit is a necessary skill. To this end, the author provides a list of some methods by which false truths are sometimes told.

What can save us from the pitfall are: cognitive reflection, intellectual humility, active “open- minded ” thinking, curiosity, refined emotional awareness and a “ growth mindset ”. We find these things in the nine virtues of the Intellectual Virtues Academy. These are divided into three categories as follows:

Getting started

Curiosity: the opportunity to be amazed and to investigate and ask the “why” question. A thirst for understanding and a desire to explore.

Intellectual humility: the willingness to recognize one’s own limits and mistakes, regardless of intellectual status or prestige.

Intellectual Autonomy: Having the ability for active autonomous and self-guided thinking. The ability to reason and think for oneself.

Executing well

Attention: to be there with your thoughts 100% on the matters of the learning process. Keep distractions at bay. Be with the thoughts and commitment completely on top of the topic.

Intellectual carefulness: the ability to notice and avoid intellectual pitfalls. A commitment to accuracy.

Intellectual thoroughness: the ability to seek and find explanations. Dissatisfaction with rather apparent or superficial and (too) simple explanations. Reaching for a deeper meaning and understanding.

Handling challenges

Open- mindedness : an capacity to think outside the box. Responds honestly to competing perspectives.

Intellectual Courage: Being ready to persevere in thinking or communicating with the risk of fear of being embarrassed or of failure.

Intellectual tenacity: a will to face an intellectual challenge and struggle. Keep your eyes on the prize and don’t give up.

These aspects of the eternal learning mindset apply to an individual, but how do you put together a ‘dream team’? It depends.

If you have a team where everyone has to do things clearly separately, without overlapping job content, then you can use a team of top players: there is no competition.

If you have to put together a team of competitors, where there is overlapping job content , then it is important that they are not all toppers, only about 60% are toppers, but then teamwork, being in tune with each other, weighs more.

With a crisis team, any type of crisis team, it’s the best of both worlds. In a CRT (Crisis Respons Team), for example the company fire service team, it is clearly the second. At a CET (Crisis Expert Team, where a team member might handle a file from A to Z , it might be the first. But with the CMT (Crisis Management Team), where there is little or no overlap between the participants, but there is still a need to work together because people must be able to rely on each other’s results, it is a pure cross: you need 100% toppers, but they also have to be able to work with each other. In the latter case, intellectual humility is an issue, because in this team one often has to deal with high profiles who “know very well what they are worth”. Antibodies against this are exercises in which people learn to share information and are assessed on the integration of each other’s point of view in their own thinking.

A change of mentality that can be useful to contribute positively to this is to initiate discussions throughout the hierarchy, between the different layers of the hierarchy, and to recognize and hear people as experts in the field of, for example, their own ideas about occupational safety.

Also not to be ignored is the use of statistics from near misses. After all, it has been statistically proven that a serious event is preceded by a number of near misses. That was the case with the Challenger , with the Columbia, (NASA) but actually also Covid-19 was preceded by, among others, SARS and MERS. There was a failure to learn lessons and to implement them into the future, or to persist in these lessons learned. For that you need the mentality of a “high reliability ” organization. It has been shown for this type of organization (research by Karl Weick & Kathleen Sutcliffe ) that they exhibit the following characteristics:

Expect to Fail: Employees go to work and every day can be a bad day. But the organization rewards employees for reporting their mistakes.

Reluctance to simplify interpretations: employees are rewarded for questioning assumptions, and for being skeptical of the wisdom of others.

Sensitivity to operations: Team members continue to communicate and interact to increase their understanding of the situation and look for the actual origin of each anomaly.

Commitment to resilience : acquiring the necessary knowledge and resources to bounce back after a negative event. This includes the ‘pre mortems ‘ and the discussions of near misses.

Respect for expertise: here the open communication between different layers of the hierarchy is important, and the intellectual humility of those at the top.