The benefit of the stress test is the sense of urgency it creates and its intuitiveness. This helps to create the necessary buy-in from top management and relevant stakeholders.
In this step, science fiction vignettes, images, and states of the future are used to help think through radically different frames. We may use dystopias or utopians that often involve an exaggeration of current technological capabilities. These images challenge the status quo and current mental models by inciting fear or optimism and reframe our conceptualization of “how things work” (Peper, 2017
). A group exercise to create a business model for a problem described for a fictitious future society can be facilitated. We use passages from science fiction novels and invite others to prototype a business model for a future use case (Schwarz and Liebl, 2013
). As a primer our students listen to the Gartner podcast with Brian David Johnson.
Forecasting future markets
The forecasting future markets block is used to create quantitative estimates about market sizes and analyze the financial viability of new business models. We start with creating a value formula and estimating the values for each variable. In the group, we discuss different approaches to estimate calculations and several ways of running estimate calculations (top-down, bottom-up, and explicit estimates). We aggregate these calculations using the principle of triangulation to produce a future market forecast.
BM Wind Tunneling
Wind tunneling builds on scenarios or trends to test how the business models will perform in different environments. It is important that the scenarios cover all plausible futures and that they are sufficiently distinct from the status quo without becoming unrealistic (van der Heijden, 1996
). Here again, we leverage outputs from the trend audit and identify branching points in the trends that could result in different outcomes and implications. This can be seen as a lean version of scenario planning and wargaming
discussed in an earlier post.
One of the major obstacles in BMI is the difficulty of breaking free from three main cognitive bounds (Gavetti, 2012
- The rationality bound which results from dominant representations shared across an industry or sector, where managers when assessing the world around them, fail to recognize more distant radically innovative business opportunities.
- The plasticity bound which results from inertia. Or in other words firms might fail to act on opportunities because they fail to understand that they could or might lack the resources or capabilities.
- The shaping-ability bound describes the inability to legitimize needed action, where managers fail to secure the necessary buy-in of stakeholders, such as board members of investors.
The table below shows how the five strategic foresight tools contribute to overcoming the three cognitive bounds.