Using Strategic Scenarios to Embed
Risk Management in Strategy
Development
In-house developed process/tool
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What to Expect
• Know how to scope out and define scenarios.
• Consider how you might transform scenarios into
specific strategic issues to address.
• Be prepared to prioritize issues to balance the
handling of risk and opportunity.
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Agenda
• The LEGO Group
• The Prepare for Uncertainty (PfU) process
• Our scenario builder tool
• Workshop
• Closing Remarks
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The LEGO® Brick
Many Product Lines
 One LEGO® Brick
 One Brand
 One Logo
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LEGO® Group at a Glance
milli
25,382
Danish
2nd
family
largest
owned
toy
company
in the
world
2
on
33%
turnover
2012
operating
margin
employees
Sold in
more than
More than
9 years
of
consecuti
ve growth
13
0
countries
11.755
Average 2013
FTE
60%
of this
year’s
sales are
novelties
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Strategic Risk Management
Ensuring valid and resilient strategies
Prepare for
Uncertainty
ERM
Active Risk &
Opportunity Planning
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Prepare for Uncertainty – Short Process Overview
Purpose
Approach
We do this to “jog” your
imagination and potentially
identify issues you would
otherwise have missed.
We do this by having you
define and address a set of
four plausible, yet different,
potential futures.
Definition
We have/bring a set of
uncertainties, and you may
add some. You are asked to
find those two which are
most important to you.
Establishing the uncertainty
framework for scenarios.
Description
The PfU Process
The uncertainties are placed
in a cross, and the four
corners are defined by key
characteristics, key success
factors and finally a name.
Describe the four scenarios
emerging from “crossing” the
two uncertainties in a 2x2.
Assessment
From each of the scenarios
you identify important issues
which may materialize if the
“world gets to look like” this
or that scenario.
Identify the issues from each
scenario related to or
impacting your strategy.
Prioritization
You prioritize each issue in a
“PAPA model” based on
whether it will materialize
fast or slowly and whether
you think it is likely or not.
Define preliminary and
generic strategic responses
to each identified issue.
Action Planning
You revisit and discuss the
Act issues (and potentially
adapt and prepare issues) and
decide “who does what, by
when”
Define explicit actions,
ownership, timing and targets
on especially “act” issues
We will …
Just to align on roles and
responsibilities
… Let you play … and …
… support the process
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Adapted from Source: ©Teacher & Educational Development, University of New Mexico School of Medicine, 2005
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How to build the scenarios!
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The Prioritization Tool (PAPA)
Speed of Change
Slow
Fast
Overall Strategic Response
Prepare
Act
Park
Adapt
Low
High
Likelihood
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WORKSHOP
Intro to OCTAN Energy
Only trading oil and oilproducts
Oil-company
Entering US market place
Employees 20xxx
Revenue – 200 XX
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Closing Remarks
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