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Scenario planning (Verity) :star: (Burt et al Process (Step 1: Identify…
Scenario planning (Verity) :star:
plausible, but contrasting, versions of
the future
idea of optimal strategy becomes irrelevant. In its place, scenario planning develops robust strategy
conditions of environmental turbulence this may be a much more realistic
Weaknesses
substantial demands on an organisation
Flexibility, difficult to define and describe
Matching the methodology and the level of analysis to the business issue and the purpose underpinning the exercise is not straightforward
Managers don’t like to admit uncertainty
danger of paralysis in the face of multiple futures
Strengths
Better decisions about the future
exploration and decision support not mutually exclusive
keep from being locked into one view of the future while sharing a common set of frameworks for discovering new signals (Day and Schoemaker)
scenario planning systematises the hunt for weak signals that may foreshadow fundamental shifts (Day and Schoemaker)
Bood and Postma
Evaluating and selecting strategies
Integrating data
Exploring the future
Promoting increased awareness of environmental uncertainties
Triggering and accelerating organisational learning
Types
Intuitive
stories and qualitative input, and aims to challenge mental maps
learning as the most important outcome
Exploration
think outside of the existing organisational paradigm.
strategies should be tested for their robustness in all the alternative futures
adding probabilities turns the scenarios into forecasts
formal
quantitative inputs to create computer-generated scenarios against which strategies are tested for their ability to withstand future circumstances.
Intuitive disagree that one option should be chosen
Decision support
:Explode: Examples
Previous company buying equipment, forecast changed
keeping strategic options open
assumptions managers used as background to generating their strategies were rarely made explicit or challenged - Porter
use with:
complexity
Porter 5 forces
Build teams of both creative and rational
Burt et al Process
Step 1: Identify areas of concern
Step 2: Brainstorm for key uncertainties
Step 3: Cluster key uncertainties
Step 4: Prioritise uncertainties: the ‘importance/uncertainty’
matrix
Step 5: Develop scenarios
Step 6: Articulate and flesh out scenarios
Step 7: Identify structural insights and potential discontinuities
Step 8: System behaviour