Planning for uncertain futures: building commitment through scenario planning

Business Horizons, May-June, 1990 by Manuel Werner

Planning for Uncertain Futures: Building Commitment through Scenario Planning

Arguments in favor of scenario planning usually rely on the notion that it is far easier to predict what might be than what will be. However, although these technical arguments are compelling, a scenario planning system that does not also give sufficient attention to the political and cultural realities of an organizations is unlikely to be efficient. It will yield neither the best possible picture of the future nor, more importantly, full commitment from all members of the organization to carry through its plan.

It is not infrequent--or surprising--to hear subdued remarks expressing serious doubts about how an organization is being positioned to survive and prosper in the future. What is surprising, however, is that these are often expressed by senior officers whose opinions have probably been solicited during the development of the enterprise's plans. Indeed, it is also very likely that their opinions have actually helped shape these plans. What, therefore, is the source of this conspicuous paradox?

Apparently, soliciting views for an exercise as complex as planning in a large organization may not be enough to foster commitment. In a world where it is often the case that what is best for the individual is not necessarily good for the organizations, the impact of individual contributions to the making of plans may have to be far more obvious. Plans that are clearly influenced by opinions promoting both personal and organizational gains are far more endearing than those that emerge at the end of black boxes through which opinions lose their identities.

These considerations are of paramount importance if we believe that the central task of a scenario planning exercise should be to leave those with responsibility for the organization's continued prosperity, let alone survival, with a sense that they are able to deal coherently with an uncertain future. The elegance of the underlying techniques, the forecaster's track record, or even the apparent common sense of a particular view are usually not sufficient to lock in unanimous commitment to a particular strategy.

To develop strong commitment to particular strategies, based on a sense of being in control of an organization's future, the scenario planning exercise should embody the following minimum set of characteristics:

* It must be geared to assemble and use the information residing in the collective wisdom of the organization.

* It must provide a medium for choosing risk/return preferences with which the organization is politically and culturally comfortable.

* It must provide a medium for the choice of sensible hedging strategies.

* It must be designed to keep obfuscation at bay by focusing attention only on core issues.

Why scenario planning instead of other approaches? To the extent that it is concerned with what might be, scenario planning turns out to be admirably suited to an exercise where the object is to show individuals that their opinions count. Other techniques including both the quantitative and qualitative varieties, can also be used. However, at some point most of these tend to rely more heavily on black boxes to generate usable results, thus diluting the very important characteristics of being able to demonstrate how individual opinions influence the development of plans.

Before going on, it is also useful to note that while the central thrust of this paper is to emphasize the political and information aspects of a scenario planning system, there is no intent to minimize the importance of technical excellence when dealing with uncertain futures. Indeed, unless the plans that emerge from a scenario planning exercise can overcome the growing disillusionment with our technical ability to look into the future, their ultimate usefulness will be considerably diminished. Such skepticism is evident in the popularity of models that disguise the need to forecast with an oxymoron such as "let us see where we want to be today rather than try to plan for where we want to be in the future. (Ackoff 1981). To know where we want to be today, we must plainly have some idea of what we will face tomorrow. The need for a future view is still inevitable.

COMMITMENT AND COLLECTIVE WISDOM

Even in those circumstances where opinion to shape planning is actively solicited, it is not uncommon to find serious doubts actually holding back full commitment to the direction of an enterprise. Why would such reservations persist? This is not to suggest that reasonable doubts are not healthy or can ever be entirely eliminated, only that they can and should be minimized. If they remain profound and persistent, it is unlikely that the organization's resources can ever be fully engaged. And in today's environment the reality is that a less than maximum effort could make a substantial difference in competitive advantage.

The issue may turn out to be, as organization development professionals are discovering, not a lack of consultation, but rather an absence of feedback mechanisms and formal models that clearly show how individuals and collective wisdom help shape emerging strategies. Indeed, a great deal has been written on the importance of participative management toward building commitment. To the extent that planning falls under the general rubric of management, participation in this area is clearly of considerable importance when building commitment. In this regard, scenario planning can provide the medium for good feedback mechanism, ensuring that participants realize their opinions actually count.