In complex systems, it is impossible to know the whole current system, the whole change that will happen, or the future state at any point in time, because the world is VUCA.
Yet we can survive and thrive: S&T Happens.
Teal Unicorns at work
This page is a work in progress. Amended since the book was published:
- Clarify that strategy is not related to any time horizon: it is about how to execute, not what the goals are. (I have been reading Good Strategy, Bad Strategy by Richard Rumelt)
- Clarify which meaning of “plan” we are using.
Here is a one-hour video discussing many of the ideas here and their context.
We can adopt new patterns of planning, based on the pattern of the (Toyota) Improvement Kata:
- Vision further out, and more about who we want to be that what, and more about what kind of thing, than specifics about what and where. Maintain a regularly refreshed strategy to get there. Understand that any thinking about this Far Zone is a bet, nothing more.
- Accept the VUCA nature of the current state. Adopt sense making tools to get the best understanding of it. Determine what outcomes to do right now in response to needs, problems, or threats, with a general direction set by our vision.
- Use scenario analysis or other methods to developed a portfolio of options we can draw on if need be in the future in the second horizon, the Zone of Uncertainty. Determine what outcomes we can do right now to prepare those options.
- Set targets only as far ahead as we have good visibility, in the first horizon, the Foreseeable Future. (The rigidity of building big physical systems forces us further out). Understand our strategy of how to get there, Outcomes not outputs, what not how. Determine what outcomes they specify.
- We now have three sets of outcomes we want, for Now, Options, and Targets. Prioritise them in a backlog. Don’t have fixed plans to get to the outcomes. Probe and sense by doing experiments.
For the last century of management (of government and industry), we used an approximation of the world that said it was simple and linear: a known input gives a known result. Even as we understood more about the complex nature of the world, the approximation worked so long as change was slow enough that the lag between input and output didn’t cause huge errors; and the world was calm enough that we had some clarity about the future.
No other concept in our writing gets more pushback than the idea that we cannot see the future AT ALL. We are not psychic. We don’t know until we get there.
There is a saying that we cross the river by feeling the stones under our feet. We can see the other side of the river but we cannot see where our next steps are going: we must explore our way by testing each step, by experiment. When the river is calm and low we can often see where our next steps are going to be as we move forward, for a certain distance ahead, but we still cannot see every step of the way to the other side of the river. When the river is moving fast and high, it is opaque with mud and we can only probe and feel. And there is heightened danger of being knocked over and swept away. We must test each stone before we put our weight on it to make sure it won’t roll. If you are trained for this, you know you should never do this alone but always in a team, so that when one person inevitably stumbles, we are linked at the shoulders and the others hold them up.
The idea of simple predictable linear systems no longer works. “Define Once, Execute Perfectly” is a fallacy. The future is unknown. The only way to know is to do.
I banned the phrase from my kids: “I thought you said….”
Yes. Yes I did. That was then. Things change.
There are popular sayings that are variations of “planning is essential but plans are expendable”. It would be more efficient for us to admit that planning is waste and never create the expendable plan at all.
𝘐𝘧 𝘺𝘰𝘶 𝘩𝘢𝘷𝘦 𝘵𝘩𝘦 𝘤𝘢𝘱𝘢𝘤𝘪𝘵𝘺 𝘧𝘰𝘳 𝘳𝘦𝘴𝘱𝘰𝘯𝘴𝘦 𝘵𝘰 𝘵𝘩𝘦 𝘶𝘯𝘦𝘹𝘱𝘦𝘤𝘵𝘦𝘥, 𝘵𝘩𝘦𝘯 𝘺𝘰𝘶 𝘥𝘰𝘯’𝘵 𝘩𝘢𝘷𝘦 𝘵𝘰 𝘱𝘭𝘢𝘯 𝘧𝘰𝘳 𝘪𝘵. 𝘛𝘩𝘦 𝘪𝘮𝘱𝘰𝘳𝘵𝘢𝘯𝘵 𝘵𝘩𝘪𝘯𝘨 𝘵𝘰 𝘥𝘰 𝘵𝘩𝘦𝘯 𝘪𝘴 𝘵𝘰 𝘤𝘰𝘯𝘵𝘪𝘯𝘶𝘰𝘶𝘴𝘭𝘺 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘦 𝘵𝘩𝘦 𝘤𝘢𝘱𝘢𝘤𝘪𝘵𝘺 𝘵𝘰 𝘳𝘦𝘴𝘱𝘰𝘯𝘥 𝘵𝘰 𝘸𝘩𝘢𝘵𝘦𝘷𝘦𝘳 𝘰𝘤𝘤𝘶𝘳𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘧𝘶𝘵𝘶𝘳𝘦.
– 𝐑𝐮𝐬𝐬𝐞𝐥𝐥 𝐀𝐜𝐤𝐨𝐟𝐟
Even in a regular task, the world no longer sits still predictably. The essential element in planning is now how long a task takes, not how familiar it is.
Note: we use a narrow definition of planning to mean defining a specific outcome and a sequence of steps to achieve it, often with a timeframe and milestones. A plan is “this is what we are gonna do”. We are using the first of these definitions:
1. a detailed proposal for doing or achieving something.
“the UN peace plan”
2. an intention or decision about what one is going to do.
“I have no plans to retire”
– Oxford Languages
We don’t mean a strategy, i.e. an approach to the future, which is often called a plan, nor any other open-ended uses of the word. That vision of who we want to be, and what big bets we are willing to take on in the future, and a strategy to get there, are essential. But we don’t call it planning.
So if we don’t plan beyond a near horizon of predictability, the Foreseeable, what do we do? Develop scenarios for the Zone of Uncertainty, some period of time beyond the Foreseeable. Planning is closed; scenarios are open. There is no need to decide a plan. Decide (and execute) at the last responsible moment. Early decisions are waste: work goes stale when the world changes.
So this cartoon isn’t about strategy at all, it’s about the Zone of Uncertainty
Build a portfolio of as many possible scenarios as you can identify, figure out the potential consequences, and prepare options for them. There are an infinite number of scenarios but not so many consequences, so we prepare options for those, creating a corresponding portfolio of options – a hand of cards you can play as needed.
Other approaches are possible other than scenario analysis, such as future backwards, or premortems. What matters is that we come up with that portfolio of possible options to start preparing now.
We start with our converged vision of a Far Future. Then we diverge into all the possibilities in the Zone of Uncertainty. Then we converge onto what to do now.
What is the value of adhering to a plan that was made at the beginning of a project, when uncertainty was greatest?
– Mark Schwartz, Seat at the Table
Predicting the future can only get you into trouble. The task is to manage what is there and to work to create what could [scenarios] and should [vision] be.
– Peter Drucker, 1980
“the traditional ways of planning are outdated. We sense every hour, every day, every week, and react to it.”
– Fernando Gonzalez, CEO Cemex
Here is a thought experiment for you. Some of the more radical thinkers say we should optimise only for now. Do gap analysis only on your current needs, problems, and risks, not future ones. The theory is that you will then automatically follow a best-possible path. This may seem crazy but I can’t fault the logic. Even if we can’t quite cope with that much letting go of the future, it’s an insight. And it may be a glimpse of that future.
Agile planning has a number of characteristics:
- frameworks and tools able to deal with a future that will be different;
- the ability to cope with more frequent and dynamic changes;
- the need for quality time to be invested for a true strategic conversation rather than simply being a numbers game;
- resources and funds are available in a flexible way for emerging opportunities.
- A process able to coordinate and align with agile teams
- A process that makes use of both limitless hard data and human judgment
– Alessandro Di Fiore, HBR
Planning is waste.
Here’s another thought experiment. A corollary to the logic of *plan for now” is that all planning for the future is in some way waste.
Let’s define our term. Plan = sequence of steps with dependencies and timeline, or at least milestones.
It is a well known principle that no plan survives the first encounter with reality. With every step you take you uncover new information. To a greater or lesser extent, new information modifies or even invalidates your planning.
There is another popular saying “Plans are expendable but planning is essential”. What they mean is that even though the result won’t last long, the process of putting it together makes you think about all the possibilities. We don’t quite agree. Distinguish between laying out the steps to be done and scenario analysis. Thinking about possibilities isn’t planning as we mean it. It would be more efficient for us to admit that planning is waste and to focus on the scenario analysis aspect, and never create the expendable plan at all.
So what of all the plans we do now? Why do we do them? It’s theatre. It is an illusion to give us comfort that we appear to be in control, that we have some certainty as a foundation on which we can build, some path to go forward. This feels nice, but it’s a waste of effort and a misleading delusion. I often say to clients “I’ll make up a roadmap if it makes you feel better”.
The main motivator to planning is reduction of risk. The idea is that we should plan to not fail. What we need to realise is that planning the future is not the most effective way to reduce the risk of the future. Too much happens that we didn’t foresee, and too much information emerges that we don’t currently know. There are better ways to reduce risk. For example:
- Know how you currently function.
- Use sense-making to understand as much as possible about the current situation.
- Be Agile: iterate, increment, experiment, explore.
- Build resilience.
- Create safe-to-fail containment constraints (Cynefin) for changes.
- Simplify. Do less things. Do things less.
- Defer decisions and work until the last responsible moment.
Another thing we need to realise is that zero risk is impossible. You can’t mitigate a risk away completely. It is entirely possible that a seemingly harmless action will start a chain of events that destroys the organisation. Ask Knight Capital. Failure happens the same way as success: in a complex system you can do the same thing twice and get different results . The only way to have zero risk is to not do anything ever (the bureaucrat’s solution). And that creates new risks of its own.
But wait, there’s more. Failure isn’t bad anyway. Failure is inevitable. It happens all the time. In fact, it’s a normal part of work. If we don’t know until we do something, then all work is experiment. And in experiments, we will fail regularly. Failure is an indicator that we are thinking, trying, advancing. Success is found under a pile of failure. Lack of failure should be cause for more worry.
The two keys to valuable failure are a learning culture, to capitalise on it, and resilience, to survive it.
So if we don’t plan, what do we do?
Develop scenarios. There is no need to decide a plan. Decide (and execute) at the last responsible moment. Early decisions are waste: work goes stale when the world changes.
In a conventional world, we plan short, medium, and long term, with a long term vision. VUCA drives a wedge of uncertainty between the short and long term. The more VUCA the world, the wider the gap, so the shorter the short-term planning and the further out the long-term. At Teal Unicorn, pre-cancer-and-COVID we were planning the next year and visioning 2-3 years out. Now we plan only the next 1-3 months, and envision 3-5 years away. tealunicorn.com/planning-horizons-in-a-vuca-world/
So don’t overinvest.
Plan enough to do just enough to learn enough to revise (or invalidate) the plan. Continue/adjust/abandon/pivot on every iteration.
Do minimum viable planning: outcome or goal-based roadmaps, not feature-based roadmaps; stories fleshed out just in time; decisions and work deferred as long as reasonable.
Plan n cycles in the short term.
We can do conventional planning for as many cycles into the future as we can reasonably foresee. “Cycles” might be weeks or months or quarters, depending on context, where n is a very small integer.
How we plan could be anything from Toyota Improvement Kata (preferred), including PDCA Deming Cycle, to Scaled Agile Framework (*shudder*).
Start where you are. Get a deeper understanding of how your value network actually works. Know the flow.
Understand as much as possible about your current situation and environment. Use sense-making to cope with the uncertainty and ambiguity. Research shows that sense-making is a predictor of leadership success. It is an essential skill in a VUCA world. “The pace of change in our world is increasing exponentially, but sensemaking — a necessary tool to navigate these turbulent waters — is unseen, undervalued, and underdeveloped. Not only do leaders fail to properly use sensemaking themselves, but it’s a capability that is often ignored when hiring, evaluating, developing, and promoting leaders. As a result, leaders and organizations aren’t nearly as effective as they could be.” MIT Sloan
Sensemaking is a big domain. In its essence it is
- Learn, by bringing together has many and as diverse views as you can
- Map what you learn, in the broadest sense of mapping through objects, stories and graphics.
- Experiment to validate your learnings.
Optimise for now. Be steered by your vision (see below) to bias your choices, but respond to immediate needs, problems, and risks, not imagined future ones. The necessity for resilience seems to contradict this, as we build future resilience capability, but the need is immediate even if the work stretches out in time. It’s a polarity tension that we just have to work within.
Choose a target state, that is SMART (specific, measurable, achievable, relevant, time-bound) or FAST (frequently discussed, ambitious, specific, transparent) . Dave Snowden calls it an adjacent possible. It must be within the future that we can foresee with high levels of confidence, which isn’t much.
Identify the current bounds, or we like the Snowden term “enabling constraints”. What limits should be taken as given and worked within?
Avoid big works. Projects push us into the uncertainty zone. Break them up as much as possible. Iterate increment experiment explore. Reduce risk, stay out of the VUCA zone.
Shift the mindset of your organisation to product not project. Build around long lived products not transitory projects. This allows change to be in a stream not lumps.
All advance involves risk (so does doing nothing). We must mitigate that risk (minimise blast radius) by
- Take many small steps
- Iterate through the steps, repeating a cadence of experiment, observe, learn.
- Expect failure. Plan for failure. Use pre-mortems.
- Create containment constraints to protect the organisation.
- Respect all constraints. Work is the art of the possible. Go where progress is easy.
- Test constraints. Try to find ways through them or ways to move them, if it helps.
- Decide at the last responsible moment. Act at the last responsible moment. Anything premature increases risk and waste. News information comes in. Things change. Work goes stale. Employ Real Options theory.
- Explore your way forward together. The future is darkness. Collaborate to illuminate.
This is pure Toyota Kata. Once we reach our n-cycles planning horizon, rethink. If not before, in response to changing circumstances (new information or external conditions).
Use the feedback loop back to design thinking from agile working to adapt and adjust what we are doing.
Vision n years out.
Who we want to be is much easier to think about than what we want to be doing or where we want to be. Those things are almost impossible to predict.
Start with where we have come from. The Māori people see the past before them and the future behind them. You can’t see the future coming but you can see what has passed. Consider the story that led to where your organisation is now. Tell each other that story. It exposes so much about who you think you are and who you aspire to be.
Understand what is good about the past, and what you need to let go of. Tradition is both strength and weakness.
Now imagine what a good day to work looks like. We are still not trying to see the future so much as visualise an ideal now.
- How would we know we are successful? We are the first choice. We can’t count how many people we have helped. We’ve done something nobody else could. …
- What would feel good? Fun. Challenging. Camaraderie. Luxury.
- What kind of thing would we like to be doing? Helping the downtrodden. Changing medicine. Pioneering the deep sea. Funding industry. Making things people want. Spreading beauty. Making travel safe. Improving working conditions.
Simplify. Don’t try to be or do or pursue too many things. Find the essential, the essence of what your organisation represents, what makes it special to you all. That speciality is what will differentiate the organisation: give it a niche, a purpose, and an advantage.
Your vision of yourselves provides the guiding function for the next step, scenario analysis. It is your navigational star in the distance, not somewhere you want to be in a foreseeable future (especially since we just agreed that we can foresee only a very short time ahead.)
We can then use that single vision to imply principles, and from them derive policy and some strategy. Instead of one navigational star we have a constellation. “North Star” or “Pole Star” never resonated for we folk in the Southern Hemisphere anyway. At Teal Unicorn, we use Matariki , the Māori name for the Pleiades, the Seven Sisters, Subaru. Our principles are our matariki.
Have a strategic “radar”, a way of detecting changes in your industry, your environment. Use these to consider the main things your organisation does, and decide how to respond. A good thinking pattern is MAD:
- Magnitude: do it more
- Activity: do it differently
- Direction: do something different
Finally our vision might include some big bets we are taking about where the future is going: e.g banks will be disintermediated from retail money; banks will dominate blockchain; airlines will use outer space; travel to outer space will be banned until it can be carbonless; … I call them big bets becusee they are: you’re betting the survival of the organisation on the belief that you are psychic.
You may find the IFF’s Three Horizons Model illuminating.
Or imagine crazy goals.
I don’t disagree with much of Humanocracy, but “…if your organization doesn’t have a unique point of view about the future, then it doesn’t have a strategy” is wrong. There are many millions of organisations. It’s hard to see how they could all have a unique vision. Executing better has been a successful strategy since forever. In VUCA times, being more adaptable is another.
In between planning and visioning
…is a wide zone of uncertainty. In the space we should understand scenarios, consequences, and options, and the mapping between them.
Scenarios allow us to think about the possible, and expand our minds to those possibilities. Options are a hand of cards we assemble, to play as we need them.
The most important scenario to prepare (not “plan”) for is the Black Swan, the inconceivable.
The second most important is the Zombie Apocalypse, all hell breaking loose.
Only then invest in thinking about the conceivable possibilities.
The number one preparation to make, in our Options, whatever the scenarios, above all others? Resilience.
Number two? Agility.
Perhaps the money we save from not doing unnecessary planning will help to pay for the resilience we need in the face of inevitable failures, and for the multiple experiments required to find a way forward in complexity.
This discussion is depicted as an either/or model: plan for short term, then scenarios after some cutoff. Of course the world isn’t that black and white. There is much grey: we can see some future milestones: goals we set, or states that have such a high probability that we better plan for them.
People and organisations will always want to set goals. It is natural to give ourselves outcomes to strive for. We see moves that would be strategically successful if we could achieve them. We see survival options that we really need to put in place. There is stuff we feel we have to get done.
It’s not wrong to have goals. It is how we treat our goals that matter. They are a beacon on a hill instead of a star in the sky. They give us a direction (which should a line with our distant visions) and we can actually get there within a foreseeable time. Just like a navigational star they don’t prescribe a specific direction or set of steps; they are just an influence on our strategy and planning. We must review constantly and be prepared to abandon them and switch to a different guiding beacon.
When it comes to the tangible non-fungible world of physical objects that are built once, or big changes to highly complicated abstract systems, sometimes the time span of planning has to be longer, i.e. projects. They are unavoidable. There is a polarity tension between the reality that we cannot plan far into the future and the reality that we have to.
Planning can push into the zone of uncertainty. But do it knowingly and recognise the risks of trying to know the unknowable.
There are some strategies to help us
- Make the project management as agile as possible. Many agile practices can be adopted (this website is an amazing resource) even within the constraints of a fixed project. This is happening. Agile Construction is a real school of thought in the industry.
- Break one big deliverable into subcomponents, as small as possible. E.g housing estates have it easy: they can choose to build small groups of houses at a time, then improve and iterate.
- Make it as modular as possible: repeating standardised components.
- Build on the assumption of future upgrades for changing technology. Did you know skyscrapers even upgrade their structural girders?
- Reuse proven solutions as much as possible.
- Find fast techniques. Accelerate learning and feedback. Don’t give the world time to change.
- What we are building may be ohysycual, but make as many tools and artefacts as possible digital, so that they are fungible. E.g. CAD/CAM design, digital blueprint apps, digital twins, building information systems…
- Find parts of the project that can be done fully agile.
- Make it normal practice that all decisions and plans are deferred until the last responsible moment.
- Wherever possible, keep timelines loose as a roadmap not committed as milestones.
- Use the Last Planner®️ System where planning evolves iteratively, and the team who are actually going to do the work do the final fully detailed planning.
The Large Hadron Collider is a good example of a crazily complicated solid thing built as a collaborative iterative project. Michele Zanini wrote a good article about one component, the ATLAS Detector.
No one within the ATLAS consortium had the power to hand down an order. Everyone was a colleague; no one was a boss. And yet, somehow, a disparate collection of scientists and engineers scattered across the globe managed to build a device that could accelerate particles to near light speed, crash them together, and measure the results.
The choice is not an either/or: scalable or not scalable. It is a matter of degree: getting as much scalability as you can into any project, including the least likely ones. HBR
People get uncomfortable that lack of planning seems directionless.
It is not directionless. We have our long-term vision, our goals, and our immediate mission to help direct us. We have principles – what Teal Unicorn calls “matariki” or navigational stars – to guide our decision making.
We are free to set goals or outcomes or what the military call desired effects within the zone of uncertainty, so long as we understand that they are just flags in the ground can be knocked over at any time. We can have a roadmap if it is disposable and flexible.
And finally – as we have mentioned elsewhere – there is a school of thought that there is nothing wrong with being directionless, organically responding to the environment in an optimal way, allowing direction to be emergent and adaptive.
A roadmap provides a sense of direction, and reassurance. The fact is that it is unlikely to come true, so we should make minimum investment, but it serves a psychological purpose, and sometimes exposes dependencies. Build outcome or goal-based roadmaps, not feature-based roadmaps. Show the many decision points and the resultant uncertainty. Don’t draw a “happy path”.
“usually when you draw a roadmap the roads are already built. No navigation system could plot a route from here to there when the terrain is shifting as fast as it does under our feet now.”
There is a perception that if we are constantly changing direction we must be out of control. Actually we are just abandoning the illusion of control. The cruise control on your car does not allow you to lock in the steering direction for the next 5 km. You are constantly adjusting direction in response to the external environment. But you still know where you are going. And you are also always prepared to adjust your destination in response to circumstances as well, e.g. traffic jams, family emergencies, or a better idea.
We develop these ideas – and others – under the banner of S&T Happens: Surviving and Thriving in a VUCA World. Come see the latest here.