Venturing into the Wilderness

We consider ways in which radically uncertain and disruptive events may be introduced into corporate decisionmaking structures. As a foresight concept, “wild cards” refer to trend-breaking/trend-creating events that are very hard or even impossible to anticipate, but that should nonetheless be expected in complex and fast-evolving environments. The discussion is grounded in the experience obtained in two strategic foresight projects carried out in two industries — civil aviation and investment banking. The unique strength of these cases is that they constitute concrete and rare examples of disclosed business foresight studies that, from the start, included an explicit wild card element. Most interestingly, both of these cases are analytically linked to the September 11 event, a severe instance of a wild card. A key rationale for wild card-friendly foresight research is that it is a source of critical inputs for the generation of robust decisions precisely when the organisation is under pressure from unexpected dramatic strategic discontinuities.

Introduction

Wild cards come out of the blue and therefore present a considerable foresight challenge both for decisionmakers and researchers. Past experience provides inexhaustible evidence that the future is forever an ill-defined problem. The unexpected is bound to happen. Wild cards are a label for events that punctuate the evolution of the strategic environment. By unleashing uncontrolled change, such events are among decisionmakers' worst nightmares. In a post-9/11 world, understanding, anticipating and preparing for wild cards constitutes a renewed and urgent challenge. However, as particularly surprising and unsettling manifestations of radical uncertainty, wild cards can be difficult to tame analytically; and, because they are new to the world, these dramatic discontinuities are also very hard to translate into concrete (re-)action guidelines. As organisational evidence and sound advice on this regard is currently limited, a key goal of this paper is to show how the wild card concept can be a workable tool for advancing the practice of the strategic conversation in private organisations and public institutions.²

A proposed approach to these difficulties consists of building up a wild card management system.³ This is a flexible policy-formulation principle that tries to assure that an organisation or social group gets both the research and governance dimensions “right” when dealing with wild cards. A key feature of this approach is a methodology aimed at producing anticipatory outlines of major changes and scanning the relevant business and societal landscapes for weak signals, which might announce trend-breaking crises. Our paper focuses on this challenge. The empirical material that is for the first time released in this paper helps to shed some light on this organisational black box: how to take into account strategic surprises that we know beforehand are unpredictable?

This paper provides a clear-cut definition of the concept and extends earlier literature on wild card management by supplying evidence on two recent “wild card-friendly” corporate foresight exercises. Data on “wild card-focused” projects are rare. This is due to at least three issues: first, the secretive nature of such strategic projects; second, wild card analysis is a difficult topic to tackle and is not handled explicitly in most foresight studies; third, since ex post quality control mechanisms of foresight research projects are not yet a standard practice, organisations tend not to keep records of the steps taken in their foresight processes. Thus, the two case studies reported here are pertinent inputs for practice as well as research in this field. They have their origin in multinational companies, one active in a high-tech manufacturing industry, the other in a knowledge-intensive service sector. In the first case, in 1995, Daimler's Aerospace Division concluded a scenario exercise that considered a set of critical disturbances impacting on the air transportation industry. In the second case, during 2000, Baring Asset Management (BAM), part of the ING Group, ran a Delphi survey that included a sub-survey focused on wild card questions. In Appendix 1, we detail the sources and the methodology. Using this material, the paper strives to add value to current knowledge in at least three ways. First, to provide insights into previously confidential foresight experiences for which information is typically not public (moreover, two of the authors of this paper participated in these projects and are able to provide first-hand testimony about how they were developed). Second, wild card analysis is seen through the lenses of two different foresight methods: a scenario and a Delphi study. Third, the case studies cover distinct issues relevant to manufacturing and service businesses that were considered relevant in the first decade of the 21st century.

The wild card components of both projects touched upon an iconic tragedy of contemporary history: the destruction that on September 11 2001 fell over downtown New York, the heart of the US financial system and a city known for its cultural radiation to the rest of the world. Years before the event, Daimler's 1995 scenario project considered the effects of a major terrorist attack on aerospace infrastructures. BAM's Delphi study considered two different wild cards (a war in the Middle East and a major geological catastrophe, e.g. an earthquake or tidal wave, destroying a world-leading financial centre) which taken together formed the basis of a new hybrid wild card used to inform decisionmakers understanding the events that took place in New York. One could hardly conceive of a more extreme example of a wild card than the 9/11 attacks in order to test the effectiveness of wild card-friendly research and governance.

This paper is organised as follows. The next section reviews the notion of wild cards and pinpoints its relevance to the resilience of organisations that operate in environments characterised by the possibility of outlandish occurrences assumed to be improbable, but which would have large consequences for stakeholders. The paper goes on to supply an account of the projects described above, highlighting the particular approach of each to wild card analysis. The following section pulls together both stories in the light of the proposed definition of wild cards with the purpose of discussing the governance factors that make wild card management effective; it also presents questions for further research. The paper concludes by summarising the main contributions of this paper. A short epilogue follows describing foresight lessons to be learned in the aftermath of the September 11 wild card.