Jake Sotiriadis, Ph.D. is the Director of The Center for Futures Intelligence at the National Intelligence University. Sotiriadis and his co-authors have penned an impressive article on the potential for the use of generative AI in scenario planning and foresight strategy – including a simulation run by the authors to inform the insights of the article which was published in November in the Harvard Business Review,
From the HBR article:
Use GenAI to Improve Scenario Planning
by Daniel J. Finkenstadt, Tojin T. Eapen, Jake Sotiriadis, and Peter Guinto
Summary
Generative AI can help organizations overcome inherent shortcomings in conventional processes for performing contingency scenario planning. This article explores how the technology can do that and provides an example: a simulation that the authors conducted.
Businesses are increasingly using strategic foresight methodologies like scenario planning to anticipate and address the escalating organizational uncertainties driven by climate change, global conflicts, and rapid technological advancements. However, traditional approaches to scenario planning have some inherent shortcomings. They include inadequacies in identifying the most relevant trends and external forces, based on varied levels of uncertainty; limits on how many scenarios they can consider in depth; and the lack of direction they provide for how to assess and prepare for multiple highly divergent scenarios simultaneously.
A promising alternative is emerging that can overcome these challenges. It entails enlisting the assistance of cutting-edge generative AI powered by large neural network models such as OpenAI’s GPT and Anthropic’s Claude. They can significantly enhance an organization’s capability to conduct robust contingency scenario planning faster and at a much lower cost than conventional processes. This approach is particularly beneficial for resource-constrained organizations like small and medium-sized enterprises (SMEs) that are operating in highly challenging environments, such as those prone to extreme weather events.
In addressing this topic, we have leveraged our diverse experiences studying and conducting experiments using generative AI for strategic planning in academic, commercial, and government contexts, and advising organizations on contingency strategies in multiple domains, including supply chains, defense, and pandemic response. Our conversations with chief experience officers (CXOs) at over 10 companies and recent feedback gathered from a large conference of chief procurement officers (CPOs) in the United States indicate that many organizations, including Fortune 500 firms, are actively exploring the use of generative AI for strategic foresight, including scenario planning.
Sotiriadis also provided the following via LinkedIn:
Key Takeaways
- Scenario Creation: Generative AI processes vast data sets to frame planning exercises, highlighting key concerns and trends for comprehensive scenario development.
- Narrative Exploration: Beyond creation, it aids in developing memorable narratives, making scenarios palatable to a wider audience and securing buy-in from team members.
- Strategy Generation: Empowered by rich scenario details, Generative AI proposes tailored strategies, fostering interactive collaboration between planners and the tool.
Three Lessons for Strategic Planners
- Data Relevance: AI capabilities hinge on timely and relevant data; without it, exercises may be unhelpful or misinformative.
- Narrative Importance: Detailed narratives simplify decision-making, achieving organizational buy-in for strategic decisions, requiring instructions and feedback from strategic planners.
- AI-Generated Strategies: Best used as raw ideas, complementing human efforts for further thinking, detailing, and refinement.
Why it Matters
Generative AI empowers organizations, especially resource-constrained ones, to conduct robust contingency planning faster and more cost-effectively. As we delve into the future, this tool promises to make companies more resilient and adaptive to emerging challenges.
For the full article, go to Use GenAI to Improve Scenario Planning
Additional OODA Loop Resources
Computer Chip Supply Chain Vulnerabilities: Chip shortages have already disrupted various industries. The geopolitical aspect of the chip supply chain necessitates comprehensive strategic planning and risk mitigation. See: Chip Stratigame
Embracing Corporate Intelligence and Scenario Planning in an Uncertain Age: Apart from traditional competitive challenges, businesses also confront external threats, many of which are unpredictable. This environment amplifies the significance of Scenario Planning. It enables leaders to envision varied futures, thereby identifying potential risks and opportunities. All organizations, regardless of their size, should allocate time to refine their understanding of the current risk landscape and adapt their strategies. See: Scenario Planning
Track Technology Driven Disruption: Businesses should examine technological drivers and future customer demands. A multi-disciplinary knowledge of tech domains is essential for effective foresight. See: Disruptive and Exponential Technologies.
Planning for a Continuous Pandemic Landscape: COVID-19’s geopolitical repercussions are evident, with recent assessments pointing to China’s role in its spread. Regardless of the exact origins, the same conditions that allowed COVID-19 to become a pandemic persist today. Therefore, businesses must be prepared for consistent health disruptions, implying that a substantial portion of the workforce might always operate remotely, even though face-to-face interactions remain vital for critical decisions. See: COVID Sensemaking
