Future Ready Forum

Global Megatrends: Key drivers for Strategy & Change

Dr. Frank Siegfried, 20 February 2017

FUTURE READY FORUM

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“Did You Know ?” (Officially updated for 2017)

Source: YouTube

https://www.youtube.com/watch?v=u06BXgWbGvA

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 2

How are we going to approach the topic ?

• Understand Megatrends, Global Risks and “VUCA”

• Observe Singapore’s ongoing Transition

• Discuss how businesses can and need to respond

• Reflect on available options and agility

• Look at some good practices and key success factors

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 3

What are Global Megatrends ?

• Derived from geo-political, economic, societal, technology, and environmental domains.

• Span over 5 - 30 years (Strategies ~ 1-3 years).

• Complex, often non-linear relationships.

• Cause & Effect often not fully understood.

• Possibly create unpredictable outcomes …. on an unprecedented scale ( → RISK !).

• May create profound impacts on business models, values, visions, strategic objectives.

• Derived from Inter-disciplinary research, based on international coordination & collaboration.

• Implications not immediately evident.

• Already started – we see current data patterns.

Tipping Points

Tipping Point

• Globally relevant, interdependent data patterns.

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 4

What is a “Tipping Point” ?

Shift: sudden change of the Ecosystem’s condition

Stable state: condition of an Ecosystem

Are we facing a period of De-Globalization / Protectionism ?

New Stable State

Less uncertainties Tipping Point

(typically a physical measure)

Initial Stable State

Shift (Transition)

Time

More uncertainties ?

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 5

Trend Compendium 2030

http://www.rolandberger.com/expertise/trend_compendium_2030/index.html

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 6

http://www.appliedmaterials.com/nanochip/nanochip-fab-solutions/december-2013/cover-story-fabs-in-the-internet-of-things-era

http://www.i-scoop.eu/internet-of-things/

Internet of Things

~ 2008 - 10

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 7

Growth of Computing Power

Adapted from: https://singularitycometh.files.wordpress.com/2011/04/singularity_graphic.jpg

Smart Sensors

Distributed Intelligence

Self-Learning

Autonomous Systems

Singularity

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Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 8

Capital Market Volatilities Emerging Markets

Capital Outflow ($bn, monthly)

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 9

Major systemic financial failure is the highest impact global risk.

Since 2012, its likelihood increased from 3.2 to 4.7 (of 5.0)

Global Risk Report 2017 (World Economic Forum)

Source: YouTube

https://www.youtube.com/watch?v=su_qgPiFiOU

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 10

World Economic Forum – Global Risks 2016

Global Risk Map: Linking GMT to Risks

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Making Sense of the World: “VUCA”

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 12

Singapore and the VUCA World

Global Ecosystem

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Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 13

Singapore’s Transition

(Smart, Innovative, Service-based)

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 14

Differentiation through Innovation

15 Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017

For the next 5 year (2016-2020), Singapore’s “Research Innovation Enterprise 2020” Plan (“RIE2020”) allocates S$ 19 b for R&D initiatives. That’s the equivalent of approx. 3.3% of GDP – similar to the US or EU and more than any other country.

Global Innovation ranking moving upwards

16 Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017

How businesses

can and need to respond ?

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 17

https://www.linkedin.com/pulse/masters-vuca-universe-tony-loyd

Respond to the VUCA World

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 18

Vision

Understanding

Agility

Clarity

Time

Above Average Returns

Profitability

Loss

Questions to ask:

What is happening ?

How is it happening ?

Why is it happening ?

Area of Bankruptcy

Monitor Trends and assess Risks

Managing Organizational Change

Palmer, Dunford, Akin (2009)

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 19

Review Strategies Continuously

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Scenario Planning

Review Strategies &

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External Ecosystem

Internal Ecosystem

Strategic Analysis should take 65% – 75% of your efforts.

Environmental Impact

Societal Impact

Mega- trends

Vision Mission Values

Risk Profile

Above-Average Returns

Competitive Advantage

Implement Strategies + Lead Change

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 20

Develop Scenarios of the Future

Future 1 Future 2

Future 3

Future

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 21

SMU Executive Development; Steve Wyatt, Mike Netzley; 2016

Prepare for and deal with trends and events

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Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 22

Available strategic options

and the need to become

more agile

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017

Strategic Options

.

A) Organic Growth / Export

B) License / Franchise

C) Diversification

D) Collaboration

E) Merger

F) Acquisition

G) Fully owned Subsidiary

H) Outsourcing

J) Restructuring

K) Exit Market

Finance Marketing HRM Operations Logistics

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 24

Implications for and Alignment of

Align the Organizational Structure

Picture from https://www.vertex42.com/ExcelTemplates/organizational-chart.html

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 25

Make sure you implement Strategies

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Strategic Planning

Break-down into Implementation Initiatives

Identify areas that need to be addressed to meet objectives

For each area, define and implement related projects

Break-down into Implementation Projects

Strategic Objectives

Vision, Mission & Values

Establish and coordinate overall master plan to develop critical path, monitor timeline, create “short-term wins” and maximize benefits

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 26

Structured approach to beat the odds

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 27

Typical program

Program initiatives are prioritized and

fully resourced

Initiative confidence checks reveal

emerging risks

Initiative goals are rigorously

embedded in milestones and

impacts

Senior leadership aligns on and

advocates bold change

Forward-looking status reports focus leadership on

emerging gaps and risks

Activist PMO1 supports resolution and

escalation of issues

Pulse checks allow active management of

staff buy-in

Extended leadership team

enrolled and mobilized in

program

Low-burden reporting frequency initiated

Sustained confidence and establishment of

real delivery capability

Best-in-class managed program

Time

New Strategy kick off

Program value

Planned value

Realized value

Boston Consulting Group

Leadership - Food for thought

A recent survey confirmed that few Leaders (only 8%)

are good at both creating good strategies

and putting them into practice.

What is also interesting is that

Leaders who are good at strategy

are nearly always also good at execution .....

...... to the extent that making a distinction between the two is futile.

Paul Leinwand, Cesare Mainardi, and Art Kleiner, Harvard Business Review

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 28

Change Culture to align to new Context

Global Megatrends: Key Drivers for Strategy & Change, Dr. Frank Siegfried, 20 February 2017 29

• Who you hire ?

• Who you fire ?

• Who you promote ?

• What you talk about in key meetings ?

• Which heroes you make ?

• What projects you fund ?

• What you measure / incentivise ?

• With what rigour you track progress ?

SMU Lee Kong Chian School of Business SMU Executive Development Dr. Frank Siegfried franksf@smu.edu.sg

Centre for Strategic Futures Strategic Group Prime Minister’s Office http://www.csf.gov.sg/our-work/publications

Contact and Recommended Reading