The ability to plan for an uncertain future is more pressing than ever for UK manufacturers. Rob Phaal discusses the dangers of putting plans on hold and continuing to use traditional linear planning strategies in a climate of fluctuating international trade policies and rapidly emerging technologies.
British manufacturers are well aware that they will be facing major changes to international trading policies as a result of Brexit and under the new US administration.
There have been a number of reports that companies have been slowing down production or putting future plans on ice in the face of the uncertainty over the direction of Brexit negotiations.
But, with almost two years to go, a deal on access to European markets and sourcing European workers from March 2019 onwards may not be resolved anytime soon.
Challenges posed by the uncertainty surrounding emerging technology trends such as digitalisation and automation have equally far-reaching effects. The real absence of clarity surrounding such critical issues creates challenges for growth.
Organisations – even those that may be regarded as industry leading – are struggling to determine how best they can position themselves and what decisions they should make in terms of their strategic investments.
The pressure resulting from uncertainty is often most acute in senior management roles where strategic decisions that have far-reaching effects and consequences need to be made.
If uncertainty is not approached with the respect and structure it demands, it can paralyse management’s ability to make logical choices or lead to decisions that neither minimise threats nor exploit opportunities.
So, what can senior managers do?
Organisations need to move away from traditional planning and linear forecasting tools in strategic decision-making under these uncertain conditions. These tools become inadequate in complex and evolving environments.
They are generally unable to navigate uncertainty or lead to a flexible, robust and resilient strategy that helps organisations remain on the front foot and adequately respond, as the yet-unknown future reveals itself.
Roadmapping is a planning approach that lends itself well to helping companies make sense of an uncertain outlook and to take appropriate actions. Roadmapping provides a structured ‘lens’ with which to look at a complex situation and deduce action plans.
Its framework and process combine systematic planning with imagination and knowledge creation. Together, these help to interpret ambiguous situations, map out potential consequences, and take appropriate actions in order to navigate towards the future with confidence.
A framework for making sense of complex and uncertain situations
The power of roadmapping lies in bringing together professionals from across an organisation to contribute insights and expertise – developing a visual narrative of the organisation’s future – to arrive at an informed and shared vision, and an agreed plan of action.
In all likelihood, organisations inherently have most of the required knowledge and expertise required to tackle complex situations and uncertainty, they just need a way to bring it together – roadmapping is perfectly placed to provide that platform.
Roadmapping will help to clarify what the current situation (and the immediate past leading up to it) is, determine what the future situation could be (or should be, in terms of setting a vision) and maps a route from the present to the future.
Support for manufacturers
IfM is a world centre of excellence for roadmapping, and has helped more than 300 public and private sector organisations, including companies such as BAE Systems, BP, GKN, the Linde Group, Philips, Rexam and Rolls-Royce, with their strategic and technology innovation planning using its research-based roadmapping techniques.
The IfM has made its roadmap templates, developed through years of research and application, free to use. Download the templates here.
A webinar presented by Rob Phaal and Imoh Ilevbare discussing how roadmapping can be used to plan in times of uncertainty is available to watch online here.
IfM ECS also delivers a portfolio of flexible yet coherent management approaches and techniques that are customised to a company’s needs.
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In achieving this, roadmapping combines various layers or levels of strategic information, both external and internal to the organisation.
Such information would relate to industry, market and technology trends and drivers, as well as organisation value streams, technology capabilities and resources, for the issue under consideration.
This provides a logical framework that enables decision-makers to combine different strands of information, identify relationships and dependencies and understand complex situations.
Adding tools for further clarity
One of the most important benefits of roadmapping is its ability to interface with other methods such as scenario planning and options thinking, which are often better suited to respond to situations of deep uncertainty head-on.
Under high levels of uncertainty, where state, effect and response uncertainty all co-exist, a combination of these methods can be very helpful.
Within this toolset, scenario planning provides a structure to the ambiguous future or situation, and helps to draw out a handful of plausible futures.
Roadmapping can establish and link up necessary activities, infrastructure and resources over time to achieve organisational goals within each potential future, and identify commonalities and differences across them in terms of investment and resource needs.
Options thinking provides direction on how an organisation can optimally position itself and manage its investment and resourcing decisions. Options thinking helps to design flexibility and contingencies into investment commitments, leaving the organisation in a robust position to avoid risks and seize opportunities that emerge as the future eventually unfolds.
This toolset, and other adaptable roadmapping-based toolsets like it, have been developed from evidenced-based research by the Institute for Manufacturing (IfM) at the University of Cambridge to help organisations develop the foresight and robust strategic plans required for uncertain and complex situations.
Results you can expect from this approach include:
- Alignment of R&D and business objectives
- Decisions informed by expert knowledge from across your organisation and agreed through discussion and collaboration
- Consensus-based and transparent outcomes, owned by key stakeholders
- A visual output that can be easily communicated across your organisation.
Case study: IHI Corporation
Using roadmapping to leverage global change opportunities
With an increasingly complex world economy accelerating the demand for information and communications technologies, global heavy industry manufacturer IHI Corporation saw an opportunity to step up its innovation efforts.
IHI is already innovating in the areas of low-carbon technologies and working with robotics, artificial intelligence, and the Internet of Things in smart factories.
IHI has a long and successful tradition of developing innovations, however, the company’s senior executives were looking for further opportunities and felt that IHI could increase its successful commercialisation of R&D by improving strategic dialogue within and between its internal departments and with external stakeholders to align technology push and market pull through co-created solutions.
Dr Hiroyuki Nose, manager at IHI’s Technology Planning Department, explained: “We needed a structured and interactive approach to include key stakeholders of the company in our innovation and strategy planning.”
IHI approached IfM, which identified that the graphical nature of roadmapping would be a particularly useful tool for IHI to communicate and discuss strategies with people from different departments and across different levels of the company.
To fully benefit from roadmapping, the technique needs to be expanded to the rest of the organisation, integrated into its business cycle and readily accessible to all staff and stakeholders.
IfM ECS (Education and Consultancy Services ) provided intensive roadmapping facilitator training to the core team at IHI so that they could introduce and utilise roadmapping and the other complimentary strategies as a tool back within their own departments and across the whole company.
Through the roadmapping process, IHI developed strategic themes for its energy business, which will be used as a foundation in future energy strategy discussions.
It was identified that leveraging ICT to deliver high-value solutions including products, services and systems was a key priority to enable the company to undertake more sophisticated manufacturing.
A key outcome was the recognition that open innovation could potentially increase the company’s ICT capabilities.
Dr Nose says roadmapping is helping IHI make better strategic and innovation decisions by involving interactive learning and communication across key departments of the company and with external stakeholders: “Roadmapping provided a valuable framework to bring the right people together to share knowledge and to transform this collaborative knowledge into delivering better strategy and innovation planning.”
Roadmapping is now supporting IHI to clearly define and prioritise the company’s vision and the different options to reach that vision. As a result, the company has formulated a clear strategy and future directions that draw on its collective strengths, preparing for IHI’s future energy business.
It is also helping IHI to develop a sustainable strategy that can be re-visited on a regular basis to ensure that the company stays on track to fulfil its vision. Roadmapping is being used as a tool to communicate and discuss strategies in a common language within and between departments, between different levels of the organisation and with external stakeholders.
Dr Rob Phaal, Principal Research Associate at the Institute for Manufacturing at the University of Cambridge
Dr Phaal is recognised as a world expert in roadmapping and has more than 15 years’ experience in research, application and delivery of roadmapping and related methods in strategic and technology innovation planning.
A focus of his research has been the development of efficient workshop methods for initiating roadmapping at firm and sector levels, in collaboration with companies and other organisations.