scenario planning

Unlearning linear planning to relearning scenario PLANNING

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Strategy development to developing annual operational plans is often approached as developing a series of objectives, plans, assessing potential risks and then focus on execution. That part is right, however, strategy and planning is often taken as deterministic – if I do x I will get y and linear – each year if we do x we will get y. (for example by moving x MT at y grade with xy recovery and cost, we will deliver x million profit). The strategy and plans developed are based around the sequence of steps to deliver the desired outcome.
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Sensitivity analysis is often applied to factor in a margin of error or upside. Sound familiar? Millions of companies, managers and leaders think like this. Particularly when we have been trained in engineering and finance for example (sorry engineers and accountants – we have some unlearning to do!).

Linear or traditional planning has its place – when there is low uncertainty and often involving short time periods. However, we live and work in a rapidly changing, dynamic environment as you are about to explore.

Activity 1 – Strategy development lessons learnt

Reflect on your involvement in the strategy development and operational planning process at Ok Tedi and list what’s done well and what could be improved in the process.

Improving strategic thinking skills

Strategic thinking skills are any skills that enable you to use critical thinking to solve complex problems and plan for the future. They often involve drawing upon your analytical skills, communication skills, problem solving and management skills. These are broad capabilities, however Module 3 will help you develop, practice and apply your strategic mindset. This is about learning how to think rather than what to think. With a little practice and a shift in mindset, it can have a profound and transformational impact on your performance and Ok Tedi’s performance.

How to develop your strategic thinking skills

Activity 2:

future focus and thinking

How much time do you spend consciously thinking, reading and researching about the future – future trends shaping the world, the economy, technology, energy transitions, PNG, mining and Ok Tedi’s future – as examples?

Whether you think about the future regularly or not , as a senior leader becoming more future focused and looking outside of Ok Tedi is an important part of your role while you simultaneously manage your operations inside the business. This is an important capability because we are scanning the market and the world for signals of change – both opportunities and risk.

How to do strategic planning like a futurist

for reflection

Ask yourself, as a senior leader – if you’re not actively thinking about (and managing) the future of Ok Tedi, then who is?

  • How can you schedule time into your busy life to think, read, research and scan the future?
  • What could you stop doing to create 15 minutes a week to read, watch and think more about the future?

From deterministic thinking and linear planning to scenario planning

Let’s come back to strategy and operational planning. How often do your strategies and plans play out exactly as you planned them to? At what confidence level can you predict the future in 3 months, 6 months, 1 year, 3 years and 10 years? In reality, we set plans and the future is hard to predict because of dynamic events outside and inside the organization.

For example, a fire breaks out in the processing plant, the left wall slips into the pit, or:

 

covid-19

COVID19 comes which no one saw coming (a black swan event), stops production and resets the way we operate.

Water

We run out of water due to a once in a  30 year dry weather event

Electric vehicles

Targets are set in the UK and China to transition to electric vehicles pushing up demand and prices of copper and new economy minerals

Protests

The community protests and blocks the runway demanding better conditions

These events represent both risks and opportunities. The point is we operate in a dynamic environment with ever changing internal and external forces. While scenario planning is applied in some areas of Ok Tedi, as leaders it is your job to identify, monitor and prepare the business to adapt to these opportunities and risks to enable the delivery of agreed targets. We need a more agile, proactive way to both develop strategy, plans and manage the business.

In life and in running a mine (along with 99% of all businesses) it doesn’t happen in straight lines. So we need to unlearn how to plan based on forecasting in straight lines and shift to scenario planning and systems thinking. Scenario planning and systems thinking enable smart, agile companies and leaders plan and prepare for multiple futures, monitor sign posts of change and shift their strategy and plans ahead of market forces that could be both a threat or an opportunity. Some of the world’s great companies are alive and thrive today because of these capabilities. Put simply, shifting from reactive to a proactive way of working will be key to The Ok Tedi Way.

Activity 3 – Build your knowledge on megatrends shaping our future

Sustainable Development Goals (SDG)

The Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including poverty, inequality, climate change, environmental degradation, peace and justice. On review of the SDG, you will see the challenges playing out in PNG and your home provinces, in your work at Ok Tedi, even in how Ok Tedi reports its performance (your annual report is based on GRI Global Reporting Initiative which incorporates the sustainable development goals). So your work at Ok Tedi is making a difference on a local, national and global scale.

Review: the Sustainable Development Goals

Optional reading: the impact of COVID-19 on the progress of the SDG

Global Megatrends

The SDG outline the challenges we face globally as humanity. Megatrends are the driving forces that define the world today and that of tomorrow. In other words, they are what we know about a likely future. Megatrends are characterised by being far-reaching, global patterns related to behaviour, mobility and environment. Examples of megatrends are: health, population growth, urbanisation and digitalisation. Megatrends are often quietly shifting beneath our feet – like sand dunes in the desert – they are moving but you often aren’t aware.

Megatrends provide great opportunity and risk. Just like the SDG, they are present in your work, they are impacting Ok Tedi, your home lives, PNG and the world. An obvious and ever present megatrend is technological advancement. A decade ago, smartphones (as we know them by today’s standards) didn’t exist. Remember your first mobile phone and the costs to text or make a call. Three decades earlier, no one even owned a computer. Think about that—the first personal computers arrived about 40 years ago. However 90% of the world’s data was created in the last 2 years. Now look forward and consider the future of technology and its role in how you will work – imagine having the data and what you need to know and do real-time in the palm of your hand (it isn’t as far away as you may think).

We use megatrends to help us consider (not predict) the future to build possible scenarios to help us plan and navigate an uncertain future. We identify “sign posts” to monitor and inform decisions on when and we need to adapt our strategy and plans (how we adapt our strategy and plans has already been considered). By doing so are evolving our strategic mindset as we shift from deterministic thinking to one that is more agile and thinking in multiple scenarios.

This is how we shift from reactive to proactive ways of working and managing Ok Tedi. Ok Tedi has a very forward looking vision and life of mine plan. We are talking about the leadership capabilities. From feeling like you are often operating on your back foot (regardless of how good and capable we are at responding to situations) to being on your front feet, one step ahead, sensing, monitoring and responding to what’s coming. We will explore how to practically do this.

Read: The world in 2030 nine megatrends to watch

Interact: Use the World Economic Forum tool to explore trends shaping mining and how they interact.

Scenario planning

Scenario planning (sometimes called “scenario and contingency planning”) is a structured way for organisations to think about the future.
Scenario planning helps us anticipate change, prepare responses, and create more robust strategies and plans. Importantly, it enables us to communicate uncertainty through scenarios.
In volatile and uncertain conditions (and in normal conditions), it can help avoid overly detailed planning of one plan or strategy alone which can quickly (or over time) turn out to be wrong due to changes in the environment.
It provides an offline opportunity to “rehearse the future”, an opportunity that does not present itself in day- to-day operations where every action and decision counts.

We look for ‘no regret’ decisions.
We identify sign posts to monitor changes.
We adjust or shift to alternative plans already developed.
Scenario planning can be applied to long range strategy development as well as shorter term operational planning. We will apply scenario planning to the development of your 2022 Plan on a Page to develop more agile, robust plans which address potential risks and opportunities.

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Navigating uncertain futures

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Shell’s scenario planning for 2050

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Impact of scenario planning

Scenario planning matters more then ever in mining

The steps for scenario planning

 

ACTIVITY 4 – Driving forces shaping Ok Tedi

 

 

 

 

 

ACTIVITY 5 – Strategic scenario planning and the future of mining

 

 

 

 

 

ACTIVITY 6 – Operational scenario planning

[ ] Hold the date in your diary to participate in the ‘operational scenario planning’ with David Thurston.