Bio- and regenera- tive Medicine as an important growth Market

10 HHL RESEARCH REPORT 2012 STRATEgiC And inTERnATiOnAL MAnAgEMEnT 11
“I think companies
should think more
in scenarios and not
longer rely on a plan
for business development.”
rethinking their personal views and
therefore considering factors which
they had previously not taken into
account . It is precisely because of this
symbiosis with external stakeholders,
who can be but do not necessarily
have to be consultants, that the 360°
Stakeholder Feedback is so important
when dealing with environmental
changes .
Do you agree, Prof. Dr. Schwenker?
Prof. Dr. Schwenker: Changes in the
macro-environment such as increasing
complexity and volatility are creating
more insecurity – this can be seen in
the global economic crisis and individual
countries’ debt crisis . In the past
few years, we have learned that prognoses
are difficult to make and often
fail . The classic business planning
cycles do not function anymore and
the usual strategic tools have become
un reliable, although the need for
planning has remained the same .
The macro-environment today, however,
has a far more central significance
for companies, since they are increasingly
active on the world markets . If
change takes place quickly, companies
have to anticipate them, design plausible
images for the future, i .e . scenarios
looking at various options and prepare
for them to happen . Scenario planning
compensates for the deficits of conventional
planning tools . Having external
consultants makes sense, as they can
identify blind spots; those influencing
factors considered very important
externally but underestimated internally
. External consultants can also
point out so-called weak signals early
on – these are important influencing
factors which have not been perceived
on the inside . Consultants do not have
to be with the company permanently .
With the Scenario Cockpit, we have
developed a monitoring tool which
enables companies to keep an eye
on major developments and react if
necessary .
Prof. Dr. Burkhard Schwenker
Academic Director of the HHL
Center for Strategy and Scenario
Planning, and Chairman of the
Supervisory Board of Roland
Berger Strategy Consultants
What is in your toolbox for scenario
planning?
Prof. Dr. Schwenker: We are collaborating
closely with HHL within the
framework of our Roland Berger School
of Strategy and Economics and together
we have developed a clearly structured
process for creating scenarios . The
process is more than just a toolbox: it
includes a holistic scenario approach
with well-described process steps and
various tools that were developed or
adjusted for every single one of these
steps, e .g . the Scenario Cockpit or the
360° Stakeholder Feedback . The latter
is a special two-tier survey approach
not only identifying and assessing the
influencing factors relevant to scenario
planning, but also making it possible
to recognize the blind spots and weak
signals mentioned above, since it addresses
both internal and external
stakeholders . Various companies
operating internationally are already
using our toolbox to prepare scenarios .
Unfortunately, I cannot give any names .
Prof. Dr. Wulf: In a larger context, the
360° Scenario Feedback is part of our
jointly developed scenario approach,
which includes a total of six steps and
seeks to make company planning more
flexible to better prepare for volatile
environmental changes . In order to
simplify use of the method in business
practice, we have developed a tool for
each step of the process which can be
applied quickly and easily . In doing so,
we managed to bring the execution time
of the process down to four to six weeks .
This meets the needs of the companies
far better than older scenario processes .
What role does scenario planning as a
whole assume in a company?
Prof. Dr. Wulf: A very important one .
In times of increased insecurity and
because of the growing complexity of
environmental changes, I think companies
should think more in terms of scenarios
and no longer rely on fixed plans
for business development . Scenarios
offer an excellent methodical basis for
this . And many companies we speak
to are using this instrument more and
more these days .
Prof. Dr. Schwenker: The environmental
changes mentioned above – the
increasing volatility and complexity –
make long-term planning like that done
in the past virtually impossible today .
Therefore, scenario planning plays an
increasingly important role as a planning
tool since it allows companies to
be flexible . They can be run not just on
the evidence of the managers’ own eyes
but are also able to prepare for various
developments in the framework of a
specific planning horizon . Scenario planning
means identifying opportunities and
preparing for threats . The principle and
the procedure are always the same, the
difference lies in the extent of the planning
horizon: it is obviously much wider
in the commodity industry than for fastmoving
consumer goods .
How can the quality of decisions made
by managers be sustainably improved?
Prof. Dr. Schwenker: By involving them
directly in the preparation of scenarios .
Scenario planning is most promising if
the company executives recognize that
classic planning does not work anymore
and scenario planning is a suitable tool
used to outline various possibilities for
the future and develop measures for
how to react to these .
Prof. Dr. Wulf: There are many ways .
One of them is to use scenario planning .
Over the last few years, we have run
several cognitive experiments with
decision-makers and proven that scenario
planning leads to better-quality
decisions than traditional strategic
planning tools . These results confirm
the importance of scenario planning in
business practice and show how this
method can help managers react to
the challenges of a global and volatile
world .
center For StrategY and Scenario planning
european
aviation
industry
While air travel was mostly open to only
the upper classes in the last century
due to high prices, globalization today
requires a high level of fast and reasonably
priced freight transport worldwide
. This comes with opportunities for
the airlines in the form of growth but
also causes problems: new technologies,
the disappearance of economic
boundaries and regulations leading
to falling prices – and therefore to the
establishment of new low-cost carriers
such as Ryanair, Air Berlin or easyJet .
Therefore, the Center for Strategy and
Scenario Planning under the leadership
of Prof . Dr . Torsten Wulf prepared
four future scenarios for the European
aviation industry within the framework
of a study . They center around
two major factors of insecurity: regulation
within the industry and customer
price sensitivity . The authors firstly
recommend further restructuring and
increases in efficiency to put the brakes
on growing costs in administration and
processes . Secondly, more service and
quality through innovation both in the
air and on the ground to remain competitive
with Asian low-cost carriers .
Since foreign airlines entering the
European market limit the growth of
the EU airlines, institutions on national
and international levels are called
upon to examine the advantages and
disadvantages of the liberalization .
“Detailed strategic recommendations,
however, can only be provided on the
basis of the specific situation in the
respective company,” according to
Prof . Dr . Wulf . He regards the scenarios
prepared as a starting point to develop
company-specific strategies and action
plans for the European airlines in
this highly dynamic environment .
www.scenariomanagement.de
cHair oF Strategic ManageMent and organiZation
Family equity:
Shareholding from
Family assets
coMpanY
FaMilY eQuitY
asset Management of the Family
When investing their private capital,
entrepreneurial families often build
on other companies . It is not about
speculation and the planned repurchase
with a high yield but about maintaining
the indirect influence on the assets
invested and the possibility to continue
to act as an entrepreneur . This is the
conclusion drawn by the “Family
Equity: Shareholding from Family
Assets” study . Entrepreneurial families
therefore assume an increasingly
pax SHare oF BuSineSS
and econoMY claSS
MarKet SHare oF intra
european capacitY
15 %
30%
MarKet SHare oF MediuM-
and long-Haul capacitY
30%
15 %
55%
15 %
40 %
5%
BuSineSS
95%
econoMY
low-coSt
carrier
european
networK
carrier
otHer eu
carrier
aSian and
Middle eaSt
carrier
row carrier
european
networK
carrier
eu low-coSt
and otHer
carrier
active role as shareholders . “As a final
conclusion we can say that family
businesses and/or entrepreneurial
families differ from institutional investors
with regards to shareholding in
other companies,” explains Prof . Dr .
Torsten Wulf . He is one of the authors
of the study compiled in cooperation
with AlphaZirkel (Forum for Family
Entrepreneurs) . Prof . Dr . Wulf expects
the trend of increasing direct shareholding
by companies to continue in the
future: “Entrepreneurial families will
play a more and more important role
as capital providers and partners .”
If the guiding principle of entrepreneurial
families continue in their
shareholdings, advantages and disadvantages
arise . These are to be analyzed
in a subsequent paper . Additionally,
the question whether entrepreneurial
families are the more successful investors
in shareholdings is to be addressed .