Session 7 Neo (Hao Qiang)

The scenario planning for NOG

According to GBN, scenario planning has five basic steps:

Stage 1: determine a focal issue or critical decision to ‘anchor’ the process.

Stage 2: identify and analyze the internal and external driving forces after the decision (these drivers are usually categorized into ‘predetermined elements’, those which we have a good idea about how they will play out over time – for example, demographics, and ‘critical uncertainties’, those which we have no real understanding of how they will develop into the future).

Stage 3: build scenarios (using inductive or deductive approaches).

Stage 4: identify robust potential strategic options and implications, and determine strategic options.

Stage 5: identify drivers and other issues that need to be monitored over time (these are often called ‘early warning signals’ – to see whether something identified in a scenario is ‘coming true’ or is less likely to happen). This last step is often neglected, but it is critical in terms of embedding strategic thinking in the organization.

However, before applying the 5-step analysis to NOG, two important points should be mentioned about scenario planning.

The first point is what Richard Slaughter (2004) suggested in the book Futures Beyond Dystopia: scenarios planning should not focus too much on ‘out there’ (what is happening outside the organization) at the expense of ‘in here’ (what is happening in the organization). Otherwise, it may result in a focus on exploration of alternative futures that bears little resemblance to reality, and can’t be linked back to the strategic decisions that need to be made today.

The other point is the danger of neglecting linking the alternative futures back to the real world. Future scenarios are not the end product of scenario planning, but the beginning of the current strategy for future development.

The scenario planning for NOG will follow the inductive model.

Step 1: Identifying Focal issues of NOG

Scenario 1: Growing competition in educational training market.

Scenario 2: Gradual brain drain of NOG due to staff’s dissatisfaction about NOG

Scenario 3: Possibility of current business style change

Step 2: Identify and analyze the internal and external driving forces relevant to focal issues

1. Growing competition in educational training market.
Internal factors	External factors
Many talented staff resigned from NOG to start their small business of educational training, or to join other competitors due to the dissatisfaction with salary & welfare of NOG.	The continuous failure of public education: Public education system is continuously proven even in preparing students for tests. Educational training market grew rapidly in recent years. Many competitors joined educational training field for profit.

2. Gradual brain drain of NOG due to staff’s dissatisfaction about NOG
Internal factors	External factors
Stake holders of NOG are seeking for immediate and continuously growing profits. Staff would like to see better salary and welfare. The NOG keeps lowering staff’s welfare to meet stakeholders’ demands, which arouse many staff’s dissatisfaction.	Educational training market grew rapidly in recent years. Many competitors offered more tempting treatment to staffs.

3. Possibility of current business style change
Internal factors	External factors
Current NOG business style is selling courses as educational products to students.	Traditional business model of selling training courses as products still goes well right now. The Internet is promoting knowledge share; though Internet in China is tightly controlled by the regime, shared knowledge and information online still influences people’s learning. It is estimated that the trend may finally influence education training market.

Stage 3: scenarios construction

1. Growing competition in educational training market: The market share of NOG will be further narrowed.

2. Gradual brain drain of NOG due to staff’s dissatisfaction about NOG: NOG will disappoint its customers due to the failure to provide continuous qualified training courses.

3. Possibility of current business style change: Training courses are turned partially into free products. More refined and personalized educational service will be more welcomed by students.

Step 4: identify strategic options

For 1. Growing competition in educational training market & 2. Gradual brain drain of NOG due to staff’s dissatisfaction about NOG:

The management staff of NOG needs to persuade stakeholders to be more patient for long-term profits, and lower the annual profit goal of NOG. More money could be used to give talented staff more incentives. By retain better human resource, the possibility of remain the quality of education products would be bigger.

For 3. Possibility of current business style change:

The strategy of providing relevant free online high quality educational products should be implemented. The free products could be a very advertisement of NOG, and attract more students to buy face-to-face instruction course in the real world.

Step 5: identify other issues that need to be monitored

1. The market share of NOG

2. The turnover rate of staff

3. The effects of free online products as advertisement

Reference: 

Slaughter, Richard A. (2004). Futures Beyond Dystopia: Creating Social Foresight. London: RoutledgeFalmer.