Scenario Thinking: Practical Approaches to the Future

193 Pages·2011·0.824 MB·English

by  George Wright, George Cairns (auth.)

Scenario Think ing
Practical Approaches to the Future
George Wright
Professor of Management, Durham Business School, UK
&
George Cairns
Professor of Management, RMIT University, Australia
Palgrave
macmillan
© George Wright & George Cairns 2011
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First published 2011 by
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ISBN 978-1-349-32261-9 ISBN 978-0-230-30689-9(eBook)
DOI 10.1057/9780230306899
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For Josephine and Jules

Contents
List of Figures and Tables viii
Acknowledgments ix
Introduction xi
Chapter 1 W hy Should the Individual and the Organization
Practice Scenario Thinking? 1
Constrained thinking and the global financial crisis
of the 2000s 3
Societal constraints on challenge and the usefulness
of scenario thinking 5
What are scenario thinking and scenario method? 7
Our approach 10
What are the business credentials of scenario method? 14
Critiques of scenario planning and a defense 15
Chapter 2 W orking with Scenarios: Introducing the Basic
Method 18
Scenario thinking as a way of being 21
Elements of our focal scenario method 21
General introduction and preparation 23
The scenario process in action 28
Beyond scenario development: strategic
decision-making 45
Chapter 3 I ncorporating Stakeholder Values and Facilitating
Critique of Scenario Storylines 47
Availability bias 47
Framing bias 51
Enhancing stakeholder analysis using role-playing 54
G roup decision making research and scenario
development 59
Summary 62
Chapter 4 Understanding Stakeholder Viewpoints 64
Developing shared understanding of what is not
known and understood 64
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The “social construction of uncertainty” 67
Common issue: same interpretation – different reason 69
Common language: same words – different meanings 70
Different place or audience: conflicting messages –
same speaker! 72
Coping with the “multiple realities” of
organizational life 73
Actively seeking further realities: building the “broad”
stakeholder approach 74
Advanced scenario development: value judgments
and the critical scenario method 75
Scenarios as tools for consolidation or for change 80
Summary 81
Chapter 5 A ugmented Scenario Approaches: Delving
Deeper and Stretching Wider 83
Augmented scenario method 1: towards a deeper
understanding of content 84
Augmented scenario method 2: towards a broader
understanding of impact 88
Summary 100
Chapter 6 Scenarios and Decision Analysis 103
Combining scenario thinking and decision analysis 105
Stage 1: formulate scenarios 106
Stage 2: formulate the objectives that you wish
to achieve in your strategic actions 106
Stage 3: design alternative strategies 107
Stage 4: for each objective, rank each strategy
against each scenario from best to worst 107
Stage 5: for each objective, rank all strategy–scenario
combinations from best to worst 109
Stage 6: compute the sum-of-ranks for each strategy
and provisionally select the best-performing strategy 112
Chapter 7 Creating Robust Strategies and Robust
Organizations 116
Hindsight bias 116
The waiter’s dilemma and confirmation bias 117
When the unexpected occurs 119
Contents vii
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Organizational design: lessons from climate-change
researchers 121
Evaluating strategies against scenarios 124
Summary 131
Chapter 8 T he Backwards Logic Method of Constructing
Extreme Scenarios 132
Broadening the scope of constructed scenarios 135
Constructing scenarios using backwards logic 136
Summary 141
Chapter 9 Diagnosing Organizational Receptiveness 142
Interviewing members of the top team 145
Using Janis and Mann’s theory to analyze the
interview material 148
Examples of Scenario Practice 148
Summary 161
Summary 163
Appendix 165
References 168
Index 173
List of Figures and Tables
Figures
2.1 Representative “driving force” presentations 32
2.2 Representative “cluster” model 34
2.3 Representative “Extreme outcomes” record 36
2.4 Impact/uncertainty matrix: relative impact of factors 37
2.5 Impact/uncertainty matrix: relative certainty/uncertainty
of outcomes 38
2.6 Framing and scoping the scenarios 42
2.7 Setting a scenario timeline 44
3.1 Two high-impact, high-uncertainty clusters 49
5.1 Coding extreme outcomes of individual driving forces 85
5.2 Stakeholder analysis matrix 92
5.3 Stakeholder power and politics at work 93
5.4 C ritical scenario analysis: application of Flyvbjerg’s question
framework 99
7.1 The business idea for the high street retailer 125
7.2 The two scenario dimensions 126
7.3 A1B1: the slow, but irresistible, domination of Internet retailing 126
7.4 A1B2: internet shopping for nationally sourced products and food 127
7.5 A2B1: the early domination of Internet retailing 127
7.6 A2B2: the domination of a few Internet retailers who are
focused on selling nationally sourced products and food 128
9.1 Janis and Mann’s Conflict Theory of Decision-Making 145
9.2 A sample page from an interview report produced by the
authors 147
Tables
7.1 Evaluation of strategies against scenarios 124
8.1 Comparison of standard and backwards logic scenario methods 140
9.1 The seven “trigger” questions used to elicit information from
the participants prior to the group meetings 146
9.2 The coding schedule used to re-analyze the pre-workshop
interview transcripts 149
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Acknowledgments
We would like to acknowledge the support and contribution of
a number of people to our work and thinking in developing this
text. First, we thank Paul Goodwin for checking the sense of our
simplified quantitative option appraisal format in Chapter 6, and
acknowledge his contribution through earlier joint publications.
Ron Bradfield provided us with sources of information as we wrote,
and has contributed to our thinking on scenario method over a
number of years. Martyna S´ liwa worked with us in developing the
concept of the critical scenario method (CSM) that we set out in
Chapter 5. We must acknowledge the contribution of Kees van der
Heijden to our early understanding of scenario method during the
time that we worked with him at Strathclyde University, UK.
In developing our thinking, we have drawn upon the earlier work
of a number of scholars. In relation to scenario methods, we have
been informed by the writings of Pierre Wack and Paul Schoe-
maker in particular. In developing our thinking on the integration
of stakeholder analysis, we have drawn upon the thinking of Ed
Freeman. Our integration of stakeholder analysis into a framework
for considering issues of power, business ethics and social respon-
sibility has been further informed and inspired by the writing of
Bent Flyvbjerg.
Whilst all these people have contributed to our thinking in devel-
oping this text, we must take personal responsibility for the final
print – in particular, any omissions or errors that we have allowed
to creep in.
Durham GEORGE WRIGHT
Melbourne GEORGE CAIRNS
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