Beyond the Haiti and Chile Disasters: 10 Scenarios Every Business Should Plan For
The once-predictable business cycle has become highly disrupted. Could any business have anticipated Y2K, 9/11, the wars in
Iraq
and
Afghanistan
,
the Asian Financial Crises (and Bird Flu), Hurricane Katrina, tsunamis,
Mad Cow, the Sarbanes-Oxley Act, the U.S. liquidity crisis, and
triple-digit fluctuations in energy and raw materials prices? What
other disasters (natural or otherwise) loom ahead?
"Because
volatility has become the norm, future scenarios must be considered,
debriefed and planned for," says business strategist Marc Emmer.
He recommends business leaders engage in scenario planning, so that an
organization can attempt to predict future events and anticipate new
markets for products and services.
According to Emmer's book "Intended Consequences," here are ten scenarios that could occur in the next 10-20 years:
1.
The U.S. government takes on even more extraordinary national debt (as
high has 100% of GNP by 2019), or even defaults. Runaway interest rates
and the declining U.S. dollar leads to the return of sharply higher
energy prices in the short term.
2. Leading oil-producing countries such as Saudi Arabia
will shift resources to solar power, thereby leveraging the extreme
climate to produce clean and sustainable energy at low cost in the long
term.
3.
Drought and a global fresh water shortage are rampant in developed and
undeveloped countries. Water will be the currency of the next decade.
4. A significant food-borne illness kills thousands of people and threatens the food supply.
5.
Technological advances in medicine will dramatically reduce the number
of invasive surgeries. Stem cell research will facilitate the natural
replacement of teeth and organic tissue.
6. Counterfeiting and emerging technologies lead to a cashless society.
7.
The failing of the Social Security and Medicare systems will put more
pressure on the Baby Boom generation to redirect their investments,
potentially straining global markets and liquidity.
8.
The U.S. will build "smart infrastructure" including smart roads and
smart grids that control the flow of traffic, identify bridge failures,
etc.
9.
Shareholder contempt will lead to significant changes in corporate tax
law and governance. Government agencies are reorganized to provide much
stricter oversight.
10. Much higher taxes on the wealthy with the highest marginal rates as high as 50%.
Emmer advocates that every business should consider scenarios and have a contingency plan.
"It
is beyond comprehension that Countrywide, IndyMac and other lenders did
not plan for the possibility of a collapse of the U.S. housing market,
that airlines did not prepare for volatile oil prices, or that
automobile manufacturers were not prepared for a spike in demand of
fuel-efficient cars," adds Emmer. "Converging factors can bring about
change quickly."
"Intended
Consequences" is packed with practical and proven methods used in the
creation of breakthrough strategies, challenging the underlying
assumptions about how strategy is formed and executed.