From Just-In-Time to Just-In-Case

An approach to build resilience and longevity in times of uncertainty

As a systems thinker, researcher, strategist and bit-of-an-allrounder, I am always looking for the 'red-thread' that runs through any situation. The key insight that might allow us to choose the right action to start to shift whatever business I'm working with out of a degenerative system to a regenerative one.

The global coronavirus pandemic has many lessons to share with us. About how we care for landscape and habitat. About the need to review and change cultural norms. About community spirit and care. About properly funded health services. About real leadership.

The outstanding reminder for me is the extent to which our economies are designed on the basis of 'just-in-time' instead of 'just-in-case'. Just-in-time is a strategy for predictable times. Just-in-case is a strategy for uncertain times.

Just-in-time first emerged in the late 1980s (in my working world anyway) as manufacturing companies began to re-design to respond to more immediate consumer demand and needs. Just-in-time offered a rapid spike in profits, because you only made what you could sell, and delivered it in the shortest time frame which saved the cost of storage. Whole supply chains re-designed to produce just what was needed, when it was needed. It eventually revolutionised whole industries - like fashion for example which went from two 'drops' a year to the fast-fashion that we know today where you can see in on a screen one day and buy it in a store within a week.

It was a perfect strategy for a relatively stable world with plenty of 'known knowns'. If you know you have a guaranteed supply of cocoa beans, dairy and sugar, you know how much chocolate you can make, and when you need to because you can track against sales and forecast demand. If you know how much oil there is in your reserves, you can turn on the tap at will to manipulate the price on the world market to suit your needs (despite global agreements that may be in place). If you know you can guarantee a wide range of different food products from around the world, you can ship and deliver just-in-time and expand the grocery multiple-store market rapidly at the expense of small producers and dominate the food market. Just-in-time gave global businesses a perfect tool to expand during a period of relative political and economic stability through accurate forecasting. Forecasting became the holy grail of business strategy.

But what happens when the world enters a period of 'unknown unknowns'? Is it as efficient a strategy when you can no longer know what weather patterns - from rainfall to soaring temperatures and fires - are going to do to your ability to harvest a stable crop supply? Is it as practical when you're still in forecasting mode and unpredictable scenarios are playing out in front of your very eyes - like coronavirus? Indeed, is efficiency any longer a viable strategy at all? I remember Margaret Heffernan once saying "Efficiency works really well when you can predict exactly what you're going to need. But when the anomalous or unexpected comes along -- well, then efficiency is no longer your friend. "

During the covid19 pandemic, we have seen just how ineffective the efficient planning within our health service has been. In the UK - unlike some other countries in Europe - we keep the number of intensive care beds we have available throughout the country on the basis of the minimum we might need. We have also produced the minimum (or just-in-time) amount of PPE we need for any given emergency. We didn't base either figure on the kind o complex scenario we are currently experiencing - even though scientists have been warning for many years of the danger of a flu pandemic. It simply wasn't 'cost effective' - in other words profit-efficient - to keep a whole stockpile of kit using up expensive warehouse space somewhere.

Why is forecasting no longer the holy grail of planning?

Forecasting, as we have said, works well in a predictable landscape. The problem is that our world has become increasingly unpredictable - and not just in respect of health threats.

One simple way in which predictability has shifted and economies have not, is in human longevity. For years governments designed economies on a premise that we would live to 75 or so years of age, maybe 80 if we were especially long lived. Today in most western economies, due to vastly improved healthcare, people are living to 85, 90 and soon we can expect the Hundred Year Life to emerge. Our economies - pension schemes, health case systems, aged care programmes - were not designed to cope with these numbers. Given that many of us study longer, people can now be retired for almost as long as they work. We are adapting, but we did not accurately forecast the impact of this shift on our economies.

Our food systems have been massively improved by just-in-time if you consider just efficiency and productivity. We have access to food from all over the world the whole year round. Supermarkets can make vast profits. But let's consider the little island of Jersey in The Channel Islands. It has designed its food economy based on supermarket shopping to the detriment of local food production and farming. This means at any given time that it has 1.5 days food security on the island. If something happens to the shipping and air freight system (think covid19) suddenly it's strategy looks very fragile.

Again, let's take covid19 as an example of how even good scenario planning isn't flawless. Ironically, organisations which have responsibility for developing vaccines and vaccination programmes, like the Coalition for Epidemic Preparedness (CEPI) have been doing a marvellous job of shifting from forecasting to scenario planning. They have known for some time that they can no longer predict which diseases will break out when, nor which vaccines will work. Scientists have also long known that the greatest risk to the global economy would be a flu pandemic of some kind. So they have begun to develop vaccine programmes 'just-in-case' - many of which, they know, may never be used. And yet. Even having shifted to scenario planning, covid19 caught them unawares. They have much greater capacity to respond because of the shift - and it is one reason we can hope for a vaccine much earlier than we otherwise might have done.

Where are we seeing evidence of shifts to scenario planning?

If you look closely at the strategies of global businesses who are taking existential threats like climate change, soil degradation, deforestation, biodiversity loss and ocean acidification seriously, you will see evidence of the shift beginning to emerge. Organisations like IKEA recognising that the future longevity of a home furnishings business depends on healthy forests and regenerative land on which sheep can be successfully farmed are beginning to invest in reforestation programmes, and sheep farming.

Those governments who are taking climate change seriously, are developing diversified strategies for energy, food, water security. Some countries, like the UK, have limited options for a future energy strategy. We don't have hours of sunlight or lots of land, and the land that we do have is mostly used for farming and leisure. So solar energy - though it received initial attention, dropped down the strategic investment ladder in favour of wind as the key renewable energy source. Which was a pity, because there is more we could do with solar. And yet even wind as a renewable energy source cannot provide the current needs of the UK market even if we cover the land, houses, and even the houses of Parliament in wind turbines. So we still face a mix of unsustainable oil, gas and nuclear until renewable technologies improve. But at least we're thinking about it.

Insightful scenario planning does not however, always lead to the best behaviour or outcomes for humanity or the planetary ecosystem. Early in the 'Noughties' it became evident that billionaires, banks and some larger countries were buying up or investing in land over some of the world's biggest aquifers as a personal resilience strategy. After the financial crash of 2009, organisations like JP Morgan, Goldman Sachs, Morgan Stanley, Credit Suisse, Kohlberg Kravis Roberts, and the Carlyle Group were all busily amassing 'rights' to tap groundwater, aquifers and rivers, land with bodies of water on it or under it, desalination projects, water-purification and treatment technologies, irrigation and well-drilling technologies, water and sanitation services and utilities, water infrastructure maintenance and construction, water engineering services, and retail water sector - anything from bottled water to water tankers.

How does the growing need for scenario planning impact skills development?

Scenario planning is a technique for visualising plausible different futures which combines imagination with robust analysis. It's key benefit is that it allows organisations to open their eyes to different ways in which the future might unfold. With those insights, we are more able to design adaptable, flexible decisions about the directions in which you can go, and have more than one Plan B for unknown eventualities. Whilst the unknown will always remain unknown, better decisions can be made today if we spend time imagining the potential outcomes of current trajectories.

It probably doesn't come as much of a surprise that most of the skills required for successful scenario planning find a basis in the pillars of both systems thinking and creativity - two very different skillsets on the surface but which do have in common the fact that we can learn to do both.

Systems thinking helps us to see the important relationships between diverse pieces in a jigsaw puzzle that may be unexpected but are vital to the overall health of the system. Many systems are obvious - like those humans have constructed such as the education, transport and energy systems. Others may be less obvious but are becoming increasingly apparent as we begin to understand more about complex feedback loops - such as the relationship between biodiversity and the food production system; deforestation for timber, palm or farming impacting climate change, urban planning & design affecting flooding and water management in extreme weather - itself systemically related to a whole host of other things. If you can see the interconnected systems you are operating in, you have a greater chance of developing future scenarios from which your resilience, adaptability and capacity to manage the unexpected could be enhanced.

In his retrospective from the future reflecting on covid19 from 2050, leading systems thinker Fritjof Capra speculates: "In the first years of our twenty-first century, Gaia responded in an unexpected way, as it had so often during the long history of evolution. Humans’ clear-cutting large areas of tropical rainforests and massive intrusions into other ecosystems around the world had fragmented these self-regulating ecosystems and fractured the web of life. One of the many consequences of these destructive actions was that some viruses, which had lived in symbiosis with certain animal species, jumped from those species to others and to humans, where they were highly toxic or deadly.  People in many countries and regions, marginalized by the narrow profit-oriented economic globalization, assuaged their hunger by seeking “bush meat“ in these newly exposed wild areas , killing monkeys, civets, pangolins, rodents, and bats as additional protein sources . These wild species, carrying a variety of viruses, were also sold live in “wet markets,” further exposing ever more urban populations to these new viruses."

Creativity and Imagination is something we are all born with and use easily as children. Unfortunately the way in which education and organisational design and culture are built, imagination - particularly lateral thinking and divergence from 'the norms' - is still rarely prized except in innovation and creative sectors. Now is the time to start rebuilding this capacity, not just in business, but right across education and all our social systems.

In 2019 founder of the Transition Network Rob Hopkins write a book From What Is To What If which is the perfect accompaniment to Fritjof's Thinking In Systems. If we can begin to introduce a practice of imagination using the classic innovation question 'what if?' rather than what is (known knowns), we can begin to enliven our capacity for scenario planning. In his travels Rob found not only that imagination and creativity can help with future scenario planning but that it was essential to the core of human existence and potential. He visited places like Art Angels who use art therapy to treat depression, addiction, and many other forms of mental health.

At the time when I read Rob's book, I had just finished my own. There was one chapter that still niggled at me that I didn't feel I had quite captured. It was understanding precisely the relationship between systems thinking and imagination. I had written about the skill creative strategy directors have at joining-the-dots (a less fancy word for systems thinking) - looking at trends, data, and combining those with wide cultural knoweldge and odd intuition to create landmark creative campaigns. At their natural application of change processes like Otto Scharmer's Theory U during the creative process - without even ever having heard of Theory U. But I hadn't understood the biological relationship between creativity and systems thinking - the real reason they are good at both. Rob's book made me go back and dig a little more. The hippocampus has long been recognised as the seat of memory in humans. This little seahorse shaped organ in our brain is also however, associated with context processing and pattern separation - key qualities of systems thinkers. More recently it has been recognised that it also important in our ability to imagine the future. The hippocampus can be more active during imagining future scenarios, than it is when activating memory. The hippocampus, as Rob ssays in his book, represents the vibrant centre of our imagination.

That was when I understood that if we apply ourselves to activating our imagination constantly, we also activate our innate capacity to think, and imagine, in systems.

If we are to meet the challenges of the 21st century, these two inter-related and inter-dependent skills will be among the core skillsets of our future workforce. They are fundamental to shifting from just-in-time to just-in-case. I am sure as we come out of this pandemic, we will review the scenarios we plan for and spend a lot of time discussing what being prepared for 'what if' and 'just-in-case' might look like, and operate, in a changing economy.

If you would like to learn more about systems thinking, it is one of the 5 key pillars of designing a regenerative future that Laura Storm and I are exploring in our forthcoming Regenerators Journey which starts on 30 April. We have only a few places left if you might like to join us.