Reader,

A few weeks ago (MindPrep 308) I introduced this cycle and provided some comments about the first stage of intercepting the future – scanning. I promised to jump into the second phase but was sidetracked about my IdeaQuake musings.

Nonetheless, I’m back on track and have a few comments about the need to guess where the future is taking us. I say “a few comments” because the work associated with guessing about the future is hard work and we don’t have time for that in a MindPrep Refection issue.

Let’s start with an example.

Bill’s Coffee Shop

This was used in a workshop I facilitated for the Estes Park Chamber of Commerce this past year. It was easier to use an example rather than dig deep into theory.

Purpose, Scope, and Focus Question

• Purpose: To prepare the coffee shop for growth and resilience in a changing business environment over the next 3 years.
• Scope: Focus on key factors like tourism trends, local economic conditions, competition, and customer preferences.
• Focus Question: “What strategies can we adopt to ensure growth and resilience in the face of changing local and external conditions?”

Identify Driving Forces

Key factors influencing the coffee shop's future:

1. Tourism Trends: Visitor numbers and seasonal fluctuations.
2. Local Economic Conditions: Growth or stagnation in the Estes Park economy.
3. Consumer Preferences: Shift toward sustainability, premium offerings, or budget-friendly options.
4. Competition: New coffee shops or chains entering the market.
5. Climate and Weather: Impact on seasonal tourism patterns.

Identify Key Uncertainties

From the driving forces, identify the most uncertain and impactful factors:

1. Tourism Trends: Will visitor numbers increase or decrease due to external factors like the economy or park regulations? Will this result in a strong or weak economy for Estes?
2. Customer Spending Behavior: Will customers prioritize premium, experiential offerings or gravitate toward budget-friendly options?

Build Scenarios

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Scenario A: "Boomtown Cafe"

• High tourism and customer spending create demand for premium, experiential offerings.
• Implications:
  • Offer artisanal coffee, premium pastries, and in-store events like tastings.
  • Build a strong social media presence to attract upscale visitors.

Scenario B: "Selective Indulgence"

• Low tourism, but affluent visitors spend on high-quality coffee “experiences.”
• Implications:
  • Focus on targeted marketing to attract smaller groups of high-spending tourists.
  • Create memorable experiences, like custom coffee blends or unique seasonal drinks.

Scenario C: "It Better be Good”"

• High tourism but low spending habits dominate.
• Implications:
  • Optimize operations for efficiency and affordability.
  • Offer quick, budget-friendly options for tourists on the go.

Scenario D: "Quiet Retreat"

• Low tourism and low spending due to external economic or environmental factors.
• Implications:
  • Rely on local customers with loyalty programs and community engagement.
  • Diversify revenue streams, such as selling beans or baked goods online.

Implications

For each scenario, consider:

• How to allocate resources (e.g., hiring more staff or cutting costs).
• Risks to address (e.g., heavy reliance on tourism).
• Opportunities to seize (e.g., creating an exclusive product line).

Identify Strategic Options

Develop strategies that are robust across multiple scenarios:

• Flexible Menu: Include both premium and budget-friendly options.
• Digital Presence: Build an online store for selling coffee beans, branded merchandise, or subscription services.
• Community Engagement: Host local events or partner with other small businesses to build a loyal local customer base.
• Eco-Friendly Practices: Adopt sustainable practices to appeal to environmentally conscious customers.

Action Plan: TBD!

You tell me. What scenario of my coffee shop should I build?

Building Scenarios

The whole idea about strategic guessing is focused on the scenarios you will use to make decisions that, hopefully, will allow you to intercept the future for your business and/or your career.

Here are the essential elements depicting the work.

• Define the scope and the focus question of your investigation. Note that the focus question will drive your investigation. Make sure that it is specific, decision-oriented, time-bound, and relevant.
• Scan the environment. Go back to Phase 1 and identify the trends and clues applicable to your focus question.
• Identify key uncertainties for your business (idea).
• Develop scenarios based on two uncertainties. This results in a 2x2 matrix identifying four scenarios. (You may want to do this with multiple sets of uncertainties.)
• Explore the implications and options
• Develop an action plan to resolve the focus question.

Six steps – lots of hard work.

Next

To paraphrase Annie Duke (Thinking in Bets), all strategic decisions are bets on the future.

Going back to my cycle, scanning and guessing are intellectual endeavors. Betting on the future is the real work of leaders at all levels. We’ll visit this important work in the next issue of MindPrep Reflections.

The summer is being consumed with selling our house in Colorado and buying a house in the Chicago area. I plan on keeping up with the MindPrep weekly schedule, but “the real world” may interfere.

Cheers,

Bill