Scenario planning for Indian politics
Nov 01 2013
Political parties must assess what they can control in the event of variables changing intensity
In the 1960s, SP was devised by corporate strategists to manage uncertainties in oil prices. Since then, it has become an essential strategic planning component for global companies dealing with different kinds of complexity in different parts of the world. They do so by using state-of-the-technology tools, including social media and Big Data for data mining and deep slicing the markets and segments for understanding patterns of behaviour, non-linear approaches rather than simplistic assumptions of cause-and-effect, and computer simulations and modelling about alternative futures. The idea is to have a back-up strategy in place, not be irrevocably committed to a particular course of action, and not be caught by surprise.
For example, corporations worried about the global economic conditions, terror threats, interest rates, currency fluctuations, and energy prices resort to scenario planning to better understand the possible courses of action under a given scenario across different time zones and horizons.
The degree of predictability of election results hinges on many endogenous and exogenous variables — what Donald Rumsfeld colourfully dubbed as ‘known unknowns’ and ‘unknown unknowns’. Political parties have to deal with an array of uncertainties due to a large number of known and unknown unknowns (including, for example, onion prices and the role of 24X7 media)! If the interdependence and intra-action effects of the variables are added, then we have an extremely complex and risky system in operation that is also dynamic and continuously evolving. This probably made Harold Wilson — the former British prime minister — to claim that ‘a week is a long time in politics’.
In the context of the coming national elections, the starting point for a political party would be to make ‘valid’ assumptions about the actions and reactions of different players, their effect on the electorate, and the behaviour of the electorate itself (depending on a huge set of existing and emerging variables). This is to be done at three time horizons, viz. immediate (1-3 weeks), intermediate (1-3 months), and time closer to the elections (5-8 months).
SP factors in new vulnerabilities and risks by a combination of variables on the entire ecosystem. It is essential, therefore, to have the feedback and monitoring loop that allows new information to filter in for fresh evaluation. Note that that the primary task of SP is to provide better understanding of the existing and potential uncertainties and not to predict the future! The central idea is to develop a decision-framework that is robust enough to withstand challenges under a wide range of possible futures.
In India’s case, the confirmation of Narendra Modi as BJP’s prime ministerial candidate and his oratorical skills has had a galvanising effect on the main national and regional parties, and on the mindsets of electorate that longs for a government free from corruption and which is credible on its development promises.
Depending upon where the stakeholder is sitting, this has created new perceptions of threats, opportunities and uncertainties. The larger of the regional parties see here a chance for themselves to pitch at the national level and at the same time, prevent erosion of their main turf. As a response, should Modi respond directly to the vicious accusations and allegations by these parties, or simply side-step, or even shrug them off so that the main objective of reaching the magic number at the Centre is not diluted? Or should BJP re-assure the state-level parties of non-intervention (and even support) should they come to power (Congress party has perfected this in an age of alliances)?
It is said that Obama as the president of the US is a child of the times. Had there been no Bush, no Iraq, and no big lies that alienated the masses and allies within and outside the US, it is unlikely that there could have been a black president with a middle name as Husain in the White House.
People were simply fed up with the existing system of lies, hubris, misinformation, and wanted a change which Obama capitalised quickly with a perception of honesty, spontaneity, and impeccable reputation. But hidden behind was Team-Obama, which used variety of technologies to quickly form a response strategy to continuously tackle new emerging challenges.
In SP, a probability value is assigned creating a matrix of most-to-least likelihood of a scenario, its timing, and intensity of impact. Each scenario is assessed in terms of likely payoffs and costs. Effective strategy depends on not only understanding the environment, but also the key assumptions made. Political parties must assess the validity of the key assumptions and what they can control in the event of variables changing intensity. SP can lead to better proactive and response strategies in order to reach the final goal. There is a solid basis to say that politics attracts strange bedfellows and that there are no permanent enemies!
(The writer is a professor of strategy and corporate governance, IIM-Lucknow)