The Strategy Pathfinder: Extra Live Cases
The Strategy Pathfinder: Extra Live Case - Chapter 1:9
“THINKING THE FUTURE...”
Stephen Cummings and David Wilson
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Scenario planning in commercial organizations is usually argued to originate with the work of Shell
strategists (under the tutelage of Pierre Wack) who took the then unusual step of looking forward
and imagining how things might be very different in the industry in decades to come. The argument
is that such a technique enabled Shell to foresee (in the 1960s), and consequently prepare for, the
possibility of a severe price increase in crude oil coupled with shortages of supply resulting from the
Asian crisis (in the early 1990s). Shell was able to weather this generally unanticipated crisis better
than their competitors because they had designed a contingent strategy to deal with such
eventualities. The competition had not.
Scenario development is an integral part of scenario planning. Whereas scenario planning focuses on
imagining a series of multiple futures to which contingent strategies are then attached, scenario
development is more about the process of imagining how different (and in which ways) the future
might be.
One way of thinking about this is to view scenario development as addressing degrees of uncertainty
that organizations face and grouping different scenarios according to particular degrees of
uncertainty. For example, there are uncertainties that are fairly certain (within prescribed limits).
Demographic trends fall into this category. We can predict with some certainty the number of
people in various age bands that will populate the world 20 or more years hence, other factors being
equal. Then, there is a second category of uncertainties that are much more uncertain. The effects of
wars or terrorist activity on trade systems, or the difficulties in assessing the probability of links
between variables (such as the relative wealth of countries that adopt the euro) are examples.
Thirdly, and for philosophical purposes in the main, there are those uncertainties that take a great
leap of thinking to even begin to comprehend. These are completely new possibilities, such as social
and technological revolutions, that cannot be linked to present realities. For example, Shell’s
scenarios of price rises and oil shortages fall into the second category, but you should be able to
develop other scenarios that might affect the oil industry that would fall into the first or third
categories.
In practice, it is useful for companies to sharpen their scenario planning by developing scenarios in
all three categories. However, work with managers from all sectors and from a variety of
manufacturing and service industries reveals that managers are generally very conservative. The
evidence we have collected suggests that they tend to proceed on the basis of first constructing
relatively fixed parameters and then working on a number of scenarios. This results in scenarios that
fall neatly into the first two categories (and most often into the first). For example, they often
assume relative constancy in what their organization does and the structures and processes it has in
place to achieve this. They then, typically, will develop a scenario in which existing processes are
replaced by more technologically advanced solutions. Communications and interactions via webbased technologies and so-called e-business solutions are often typical of this “fairly certain”
incremental change rather than radical thinking. Also typical is a view that strives to increase the
The Strategy Pathfinder: Extra Live Cases
efficient exploitation of new inventions, technologies, and organizational environments. Efficiency is
defined from the present state of the organization and new technologies (for example) are to be
imported as they emerge.
But, asking the same questions of people not already embedded in such organizational contexts and
processes elicits quite different responses. For example, after 3 years of developing scenarios with
groups of creative and media studies Masters students, it has become clear to us that they come up
with much more creative scenarios – if we measure creativity as an ability to see further, deeper,
and without an embedded set of values or paradigms, into possibilities that the mainstream could
begin to comprehend.
Consistently, these students (who, in the main, run their own businesses in various media activities)
began their scenario development by abandoning the notion that their current organization was
inherently adaptable to future changes, or was necessary in its current form. Here was a key
difference. Managers in traditional organizations relied heavily on adaptability – where specific
changes in the environment elicit changes in the organization, however inefficiently. The media
students rarely pictured the future this way, preferring instead to abandon any fixed points. They
talked in terms of temporary, easily disposable organizations that, rather like butterflies, shine for a
short moment, are successful, and then are gone. There is no set notion here of long-term survival
and adaptability.
They were also not as constrained as managers in traditional industries by sticking to the same line
of business. A magazine publisher, for example, could become a music distributor and a theater
company could dissemble and reform as a consultancy. A key theme in developing scenarios was not
just the extent and scale of the projected changes their organizations would likely face, but was also
the transferability of knowledge and skills learned in one organization to a totally different set of
circumstances. Media students had fewer problems in starting from the idea that total cessation of
current activities was a distinct possibility, and subsequently generated much “wilder” scenarios
(such as abandoning planet Earth and creating a music business in some other uninhabited space).
There may be a fine line between lunacy and genius but it is nevertheless true that the impact and
influence of different ways of thinking about the future will be enormous on current organizational
activities and processes. These differences are worth debating and exploring, since the dominance of
one over the other will certainly affect the way we live in the future, the values to which we adhere,
and the strategy we do or do not follow.