Clem Sunter One of the most important things in business is to have an effective radar system, whereby you pick up changes in the environment quicker than your competitors and act ahead of them. Chantell Ilbury and I have spent the last eight years developing such a radar system. There are three steps to it. The first is identifying the trigger events which can tip the future a different way. The second is encapsulating the different futures that may eventuate in plausible and consistent scenarios (which highlight the causal chain in each case). The third is examining the practical consequences of each scenario so that you can modify your future accordingly. It sounds easy, but in our experience very few organisations have effective radar systems because they never look into the future in a transparent, unprejudiced manner. Here are two examples. In June 2001 we published a book entitled The Mind of a Fox stressing how crucial it was - like the animal - to be quick-witted and responsive at all times. The book contained a letter to Mr Bush (when he first became US President) in which we identified his most worrisome trigger event as the quantum leap in tactics and skills of terrorist organisations bent on destroying the West. The scenario which might ensue was a massive terrorist strike on a city on Western soil, transforming him into a wartime president and causing the West to assume a "Gilded Cage" mentality. It happened three months later though in a different way to the one we imagined (we talked of "nuclear terrorism" in the letter); but the security agencies were caught completely unawares. As Pierre Wack, the guru of scenario planning, once said: "It's much better to be vaguely right than precisely wrong". Triggers The second example is even more relevant today. In November 2007, we released the book Socrates and the Fox urging people to use the Socratic Method of self-interrogation in order to strip away their prejudices about the future. We identified four trigger events, two for the global economy and two for South Africa. The first global one was a fall in asset values (principally property) which would end the "Long Boom" and precipitate a "Hard Times" scenario. This would largely occur because American consumers, representing two-thirds of the US economy, would feel a lot poorer and reduce their habit of spending on credit. Well, here we are on the brink of, if not already in, a recession with some of the great names on Wall Street disappearing overnight. Anyone reading our book last November who was also a specialist in the US property market would have recognised the trigger being pulled and changed their personal wealth strategy ahead of the market decline in 2008. It would appear that neither China nor India will come to the rescue in that they will be adversely affected too. Meanwhile, the US has some serious restructuring to do, in order to avoid being the largest submerging economy on Earth. The second global trigger we mentioned was a military confrontation between Iran and America/Israel over its nuclear programme. This would immediately send the oil price into orbit (somewhere between $500 and $1000 a barrel), and plunge the world into a "Perfect Storm" scenario. Globalisation would be indefinitely suspended by military events. The recent testing of long-range missiles by Iran means itchy fingers are on this trigger. Essentially, we would have a re-run of the 1930s and 40s. In other words, Iran is a completely different kettle of fish to Iraq. Competitive The two South African triggers we selected were a drop in our global competitiveness rating and the appearance of internal conflict in one form or another. Well, in the last two years we've slipped a whopping 15 places in the annual World Competitiveness Survey undertaken by the International Institute for Management Development. We are now ranked 53rd out of the 55 nations listed. Moreover, we've recently experienced xenophobic violence as well as increasingly violent rhetoric from some of our more prominent citizens. What were the consequential scenarios we painted in the book? The less painful one was that we would be relegated from the "Premier League" into the "Second Division", simultaneously losing all the fringe benefits we have hitherto enjoyed as the leading economy on the African continent. Another African country like Nigeria or even Angola would take our place in the "Premier League". The more painful scenario was that we descend into a "Failed State" where the world writes us off altogether like Somalia or Iraq. Anyone with talent or capital escapes, and those that remain suffer hideously. But, as Chantell and I are wont to say, Martin Luther King did not persuade people to change by proclaiming "I have a nightmare". So what's the dream? Obviously, it is to get back to the middle of the Premier League where we rightfully belong. In order to do that, we need brave leadership to steer us through the global turbulence that could endure for some time to come. By brave leadership, we mean the kind practised by Lee Kwan Yew in resurrecting Singapore after the Second World War - not the charismatic, populist kind. Secondly, we need to go back to basics and fix the problems which currently deny us the status of being a "winning nation" in the international game. Talked to death We know what the problems are - we've talked them to death. Now action is required. In particular, we have to do far more to promote entrepreneurs who want to make it out of the informal sector into the economic mainstream. China has uplifted 350 million people from abject poverty by cultivating the entrepreneurial spirit. That's more than seven times our total population. Thirdly, and above all, we should seek greater domination in those economic spaces that play to our natural strengths - resources, tourism and being the gateway into a continent which is rapidly opening up for business. Two positive triggers in this regard are the 2010 Soccer World Cup which provides a huge opportunity to market South Africa as the tourist mecca it deserves to be. The second, and much more important trigger in the long run, is the potential turnaround of the Zimbabwean economy which would consolidate our position as a "gateway state". We will leave the tactics to the experts who are much better versed in these matters than ourselves. Our role as scenario planners is to go on identifying the triggers and the possible futures that can flow from them. All in all, South Africa is not a bad place to be to see out the "Hard Times" and possibly dodge the bullets of a "Perfect Storm". We shall keep you posted. Clem Sunter is a scenario planner and chairman of the Anglo American Chairman's Fund. Send your comments to Clem. Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors reserve the right to edit or delete any and all comments received.