I don’t often recommend YouTube videos to my readers, but some are just too good to ignore: in particular, every business person should take a moment to watch the interview between David Bach and the iconic father of modern day scenario planning, Peter Schwartz. As Senior Vice President of Strategic Planning and Chief Futures Officer at Salesforce.com, Schwartz is far from unknown by the business community, but corporate leaders come and go: only books live forever, and Schwartz’ lasting claim to fame will always be his authorship of the celebrated The Art of the Long View: Planning for the Future in an Uncertain World, the founding text on scenario planning for modern businesses.
I can think of no video that aligns so perfectly with my own way of thinking about the subject. Schwartz condenses decades of experience in scenario planning into a few crisp observations brimming with optimism and practicality.
At one point Schwartz says that every false trend he mistakenly spotted, every major predictive failure, stemmed from one single cause: lack of diversity.
But by lack of diversity he doesn’t mean a lack of the Woke diversity everywhere in the news today. Rather, lack of intellectual diversity, an absence of a diversity of points of view.
In every fall his consultancy took, says Schwartz, “We were talking to ourselves,” adding that “There must be someone to challenge the consensus for you.”
How much that resonates? How many bad decisions are made because no other options are presented?
We seem, foolishly, to be moving into an era of greater censorship and information management from above, in the questionable belief that social harmony will result. Perhaps they yet will, but Schwartz’ experience counsels us, on the contrary, to cultivate many views, many perspectives. Every time that principle was violated, disaster followed.
Of course, cultivating multiple perspectives doesn’t mean wallowing in them randomly. Schwartz stresses the need to bring in “remarkable people.” He mentions a consultant he once brought in whom some of us may recognize—Peter Gabriel. Discussing the impact of the new CD technology, planners assumed disaster. Why would the public buy CDs when they could just copy them? CD sales would crash, and the music industry would follow. Schwartz asked Peter Gabriel about it. Gabriel disagreed. Let them make copies! It would serve as advertising to boost live performances.
Sure enough: digital piracy is now well-nigh universal, but Taylor Swift’s next concert tour is slated to generate over one billion.
Why was Peter Gabriel right and the planners wrong? Gabriel knew the buyers—the market. He wasn’t speculating. He knew from experience that CDs inspired fans to come to live concerts. That’s another one of Schwartz’ very solid points. Scenario planning is not science-fiction, he points out; it isn’t speculative fantasy or a matter of coming up with some bizarre scenario. It involves a deep analysis of real trends and real forces, but also the use of creative imagination. The ability to translate a scenario, I would say, into a story.
Schwartz observes that stories bring about a “suspension of disbelief” that can lead business leaders to entertain possibilities they might otherwise reject. Not any possibilities, of course, but rather sober and coherent possibilities—not immediately obvious but not unreasonable things that may happen.
True enough, but stories do more than that. Storytelling facilitates not only brainstorming but personal involvement—imagination, yes, but imaginative experience.
What makes a good story? What distinguishes it from a scenario?
Take a simple illustration.
Ask an executive to consider a possible business problem in the future. Any problem at all. They may respond, “Well, fulfillment may be down 11%.” Or, “A supplier may go under. We may need to source new components from elsewhere.”
But ask the same executive about a problem in the past. The pandemic, say. What was that like?
Their eyes will pop.
“Good grief! Things were just crazy! Absolutely nuts! Our offices were like a ghost town. The whole staff went remote. The government locked down all our suppliers overnight. We went with a Russian company—and then Putin invaded the Ukraine! Fulfillment? Oh my God! Don’t even talk to me about fulfillment! We were lucky to survive!”
What’s the difference? The human reality. Emotion. Desperation. Uncertainty. Leadership scrambling for an immediate fix. Managers cutting corners. Long-term planning going out the window as grabbing the first opportunity takes over.
In short, real people dealing with real situations—and providing real lessons.
A story always has the sense, and often the authority, of actual lived reality. That is what makes it plausible and compelling. A scenario can be grasped indifferently by the mind, and it is no less valuable for that, but a story resonates; it moves us; it grasps and engages the whole person. Scenarios are speculation, but stories matter.
Perhaps the most important point Schwartz makes is implicit. It’s that the ‘volatile future’ is not waiting for us in the future: it’s here now. What scenario planner anticipated Covid, hyperinflation, sanctions, France in flames, ChatGPT, Trump? No scenario planner dares to assert that this ‘New Normal’ is stable enough to persist forever, but who has a plausible description of what is coming around the corner next? We must prepare for the improbable, and only our use of creative imagination can prepare us.
From a supply chain perspective, planners have gone from striving for maximum efficiency charting the course of a ship through placid waters, to bringing a battered vessel through a storm that looks like it will never end. The search for pristine perfection has yielded—must yield—to a hypersensitive adaptability to the market in turmoil.
For that reason, I have a little discomfort with the restriction of scenario planning to “the long view.” Yes, the long term needs to be considered. But in practice one needs to consider the short term as well, for too many companies close their eyes to the volatile reality, and react to crises as though they appear overnight. Everyone knew that there would be a pandemic eventually. Everyone knows there will be another one. We did very little to prepare for the last one, and what are we doing about the next one? Sighing with relief the last one is over. Sadly, relief is not a plan. We may hope that there will be storytellers who can tell the tale of how their business reacted successfully years ago, and survived.
Schwartz says that he has “never seen such uncertainty “as today. But, interestingly, when he discusses today’s specific instabilities, they curiously reprise yesterday’s – the disruptions of 2007-2008. the oil crisis of the 1970’s, the unexpected rise of technologies such as the Internet.
Sound familiar? What is the Ukraine situation if not an encore of the Cold War? We have strangely similar uncertainties, and some of our disruptions are disturbingly déjà vu. As Marshall McLuhan once said, we only driving rapidly into the future—with our eyes fixed on the rear view mirror.
What is novel, perhaps, about our current problems is that they are a “confluence of crises.” Schwartz rightly observes that our current crises are not independent. They interact. Lockdowns today predictably lead to inflation tomorrow. China’s lockdowns led, predictably, to supply chain disruptions without and political disruption within.
Such predictability can be valuable. Schwartz alludes to the new impact of Woke and ESG on what he calls “economic rationality.“ Disney’s losses should have counseled Bud Light about the risks of mixing politics and commerce. It did not. Bud Light’s virtual collapse should have counseled Target about the risks of mixing politics and commerce. It did not. Target’s losses should have counseled Ben & Jerry’s about the risks of mixing politics and commerce. Ben & Jerry’s is down $2 billion.
Can corporations learn? With examples like these, we can be excused for thinking not.
But one of the best things about the Peter Schwartz interview is how thoroughly Schwartz disagrees. This futurist is brimming with optimism about the future. Now nearly eighty, he is still in business, still a thought leader to follow, and as you listen to him speak you see a face that is positively radiant. I can’t think of a more buoyant and positive figure, and that alone is reason enough to view this marvelous video.
Peter Schwartz seems to have an invincible faith that reason and creative imagination can improve our situation, whatever our situation. And why not? Born to Holocaust survivors, drifting from country to country with a family of stateless emigrants, he’s risen to the commanding heights of world industry through thoughtful insights and compelling ideas alone. Is there a more inspiring or compelling story than that?
Yes, he seems to say, there have been crises after crises, but we have risen above them all and we are better poised and armed than we have ever been to resolve them. We have new tools, remarkable people, deeper experience, creativity and imagination. With all that, how can our we fail to shape our future into a magnificent story?