Thinking about the future is hard, mainly because we are glued to the present. Daniel Kahneman, the Nobel Prize-winning economist and author of Thinking, Fast and Slow, observed that decision makers get stuck in a memory loop and can only predict the future as a reflection of the past. He labels this dynamic the “narrative fallacy” – you see the future as merely a slight variation on yesterday’s news. A way around this fallacy, we’ve found, is a speed-dating version of scenario planning, one that takes hours rather than months.
Consider the experiment we recently ran with an expert panel to jump-start fresh thinking about the future. Our guinea pigs consisted of life sciences executives from big pharma, biotech entrepreneurs, and academics.
The question we asked: How might a shortage of science, technical, engineering, and math (STEM) talent affect the growth of life sciences companies? The high-speed scenario workshop involved three steps: 1) Identify key story elements or drivers of the STEM talent “story” to be explored; 2) conceive a plausible future by combining the elements; and 3) explore this future to understand its implications for their businesses.
Participants chose three drivers — forces that could be expected to shape the future of the life science industries: Science education, federal investment in life sciences, and private investment. They then identified extremes for each driver that were far from their current state. For example, the group defined the education driver as “the degree to which US elementary through higher education has developed curricula to produce science and technical talent.” Participants decided that in their future story, the US education system would substantially weaken, resulting in relatively few new science graduates, and that government funding, the second driver, would drop precipitously. Meanwhile, the group suggested that large-scale private investment in life sciences would soar.
Building a scenario based on the imagined future state of these drivers, the experts painted a picture of a world in which investor-funded technology companies would transform the traditional life sciences industry. In this world, life-science research draws more on big-data analytics than lab-bench experiments, and virtual talent easily supplants large supplies of scientists married to one location. The result is a more efficient and cost-effective industry.
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By helping the group break free of the narrative fallacy, the exercise allowed them to rapidly build a scenario that stood in sharp contrast to their initial assumptions about the future — that a science-graduate shortage could only harm their industry.
Next, we asked participants to consider the strategic implications of this single future story. Here are a few of the provocative ideas the group advanced:
- Pharmaceutical and biotech firms will make smaller bets, and more of them. Private money – not government grants – will fuel these bets.
- There will be more R&D partnerships between private organizations like the Gates Foundation and biotech firms, as well as Big Pharma. Private foundations will supplement, but not replace, anemic government funding.
- Crowd sourcing will become a fundamental R&D engine. This will allow corporations to continue to pursue R&D at near current levels without but at lower cost.
- Big Data and analytics companies such as Google will re-shape life-sciences R&D, shifting the emphasis from hands-on laboratory experimentation to virtual research facilitated by ever-increasing computing power.
While a two-hour exercise could never substitute for a full-bore, months-long scenario planning activity, our experiment did get participants out of their usual frame of reference, opening their eyes to a possible future that would require very different types of investment and research. That this shift can happen in a matter of hours shows how workshops like this one can unstick executive thinking.
To make exercises like this work, a disciplined facilitator must prepare and guide the participants. They don’t need to be given a formal write-up, but relevant research materials must be handy (in our case, these included a handful short articles on life sciences growth trends, as well as a few news reports on STEM talent); and the facilitator must serve as an editor, pruning and clarifying the flood of ideas the group will generate. Given the tight constraints on such exercises, the facilitator has to carefully balance the time devoted to imagining a future world, and to “living” in it – that is, exploring how the envisioned future might actually affect participants’ businesses and industry.
Obviously, a brief workshop like this one shouldn’t be used to shape strategy; that requires true scenario planning. But we’ve found that such exercises work well to dislodge narrow thinking about the future, neutralize Kahneman’s narrative fallacy, and kick-start a strategy conversation.