Conversation: Expanding Stratfor's Analytical Aperture

5 MINS READDec 30, 2014 | 23:08 GMT

David Judson: Hi. I'm David Judson, editor-in-chief here at Stratfor. Today I'm joined by Dr. Jay Ogilvy, the cofounder of the Global Business Network, former professor at Yale and Williams and a practitioner of a related discipline: scenario planning, which is much different than the geopolitical forecasting that is at the center of what we do. Thanks for joining us, Jay.

Jay Ogilvy: My pleasure.

David: Today we wanted to have a conversation about 2015 as we kind of expand the aperture and look for new ways to expand our thinking and our offering to our users and readers. In the New Year, we've come around to a conversation with Jay, whose life work has been around scenario planning, which is kind of a second cousin to what we do, as I mentioned. Can you explain a bit on that? Then we can contrast some of the details.

Jay: Sure. We're working the same beat: the globe and nothing less. We're coming at it dealing with a lot of the same variables from economic growth rates to energy prices. We're in the same sandbox, but the contrast between what Stratfor does and scenario planning is that a lot of your work looks for the convergent solution, the forecast, whereas scenario planning is divergent thinking. We're always asking, "what if?" There may be an official future, a preferred scenario, but we're always trying to keep our ears to the ground and our eyes open for the off-ramps from that preferred scenario.

David: One of the things that our model, geopolitical theory, does certainly allow for is that it's not dogmatic, and black swans do occur. In the next week or two, we'll be publishing our annual report card on what we got right and what we got wrong. I think there are some intersections to what we do as well as points of diversion, and I'm looking forward to what those are.

Jay: I think one of the main points of intersection is acknowledging that for almost every team you find in the C-Suite, if you do enough interviews and scratch for the assumptions, you'll usually identify what we would call not so much a forecast as much as an official future, the future that is assumed in the C-Suite. Your work is mostly devoted to reinforcing that certainty about where a company wants to go. Our work is largely about challenging that certainty and saying, "well what if things don’t work out exactly as you expect them to?" But in both cases, we've got to respect the facts. We've got to do the research, and we've got to respect what we do know in spite of what we don't.

David: I think another point I'll look for as collaboration unfolds to exploring is — and we talk about this a lot internally — is the changing "geo" in geopolitics. I'm not necessarily talking about climate change, although that's part of it. It's how urbanization changes certain imperatives and certain assumptions in the way that the pieces of the geopolitical model are put together. Maybe you could think about the "geo" here.

Jay: Sure. Let's stretch out the "geo" to "geography" and acknowledge that the field of geography now is going through some changes. You have people not just looking at Earth literally as the globe we see from space or through the Mercator projects or the maps we have of countries with their boundaries, but there is a new kind of geography done by, for example, the massive three volumes by Manuel Castells called the information age, where he is saying, "Ye shall know them not just by their location on the globe, ye shall know them by their FedEx bills." So he comes up with this concept that he calls "the space of flows." We'll still take a geographical perspective, but redefine the geography through this different lens of how many bits and bites are flowing between which centers.   

David: Yeah. A little while ago, we were meeting with the analysts when you used the phrase from your realm of thinking about the world: "seeing the world through many eyes" and the more screens though which you're peering at the world in its nature and its changing nature. The more accurate your forecast, your understanding in sum becomes. Is that an accurate characterization?

Jay: And different scenarios. We were just talking about the differences in point of view. You can take a geopolitical perspective, you can take a more economic perspective and you can take a more Hegelian kind of historical perspective of looking for mega-trends. Those are different perspectives from a kind of sectorial purview, but what we find when we build three or four different stories about the next 10 years is each of the stories will contain all of those sectors. It will have the social, political, economic, the environmental. Each of those stories will contain all those perspectives, but because each of the stories is fundamentally different — one being a success story, one being a failure story, one being an innovation story and one being a muddling through story — if you've got these stories at your disposal, you're able to see more. You're able to identify and recognize more.

David: In that spirit and exploring what we agree on and what we disagree on, we can have some interesting times in 2015 as we go ahead here, and we can come back in 2016 and see how we did. So, happy New Year, Jay. And thanks for joining us here in Austin.

Jay: Thank you.

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